The ISCIP Analyst
Volume XII Number 6 (15 June 2006)

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Volume I
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No. 1 (6 November 1996)

Russian Federation

Executive Branch by Susan J. Cavan
Security Services by Fabian Adami

Foreign Relations by Marisa Payne
Domestic Issues & Legislative Branch by Robyn Angley

~~~~~

Caucasus by Anastasia Skoybedo

Central Asia by Monika Shepherd

Western Region by Tammy M. Lynch

~~~~~

RUSSIAN FEDERATION

EXECUTIVE BRANCH

Ustinov departure to spark more shake-ups?

Vladimir Ustinov resigned from the post of Procurator-General (and President Putin quickly accepted that resignation) last week.  Ustinov was "acting" Procurator under President Yel'tsin after the Skuratov debacle in 1999 and was appointed Procurator in 2000, amid a swirl of rumored negotiations among the powerful Kremlin clans of the first Putin term. He had predicted in late May that high level personnel shake-ups were imminent.  On the early crest of high profile corruption investigations, which have already netted several security officials, Ustinov seemed poised to gain further prominence with President Putin's focus on bureaucratic malfeasance. (1) Apparently however, Ustinov either quickly overstepped his bounds (one theory holds that his penchant for investigating Transneft-connected officials did him in), or another official, perhaps a potential Putin successor, envied the spotlight of these corruption investigations and nudged Ustinov out.

The removal of Ustinov has fanned the flames of putative personnel shuffles to come.  Disparate analyses see the move as a prelude to the purge of the remnants of the liberal camp, the beginning of dismissals of select officials from each of a variety of "clans" around the president, or a thinly-veiled power move in the wake of administrative purges in corrupt organizations (namely, the customs office).  (2)  A common thread in many of these reports concerns the ouster of liberal Economic Development and Trade Minister German Gref.  The aforementioned vice-ridden Customs Agency was formerly part of Gref's purview, and his connection to the Kremlin clearly seems to be wearing thin.

In a sign that Ustinov's departure was either rapid or unforeseen, First Deputy Procurator-General Yuri Biryukov has been appointed acting Procurator until a decision is reached on a replacement for Ustinov. (3) 

 

Personnel and administrative matters
The Federal Customs Service also has a new chief.   Last month, Prime Minister Fradkov introduced Andrei Belianinov, a former KGB officer and the former head of Rosoboroneksport, as the new head of the compromised Customs Service.  One analyst noted that a substantial transfer of personnel from Rosoboroneksport to a variety of other fields, including the Customs Office and recently to Berezovsky's old stomping ground, AvtoVAZ in Togliatti, apparently represented some new type of managerial reform. (4)  Sounds rather like a political campaign is underway….

New audit agency
Even the purest ministries are going to run into occasional problems with corrupt officials, so it should be no surprise that the unusually successful Emergencies Ministry is no exception.  Sergei Shoigu, longtime head of the Ministry, called recently for the creation of an "Audit Security Agency to replace the fire safety watchdog service." (5)  Shoigu is requesting that the new audit agency be resolute in reducing "bribery, fraud and corruption in the fire watchdog service;" President Putin has approved Shoigu's proposal.  (6)

Chubais' UES reform plan reaches final approval
It has been nearly a decade in the making, but Anatoli Chubais' hard fought battle to bring market prices to electricity supply contracts with UES passed a major hurdle last week when the government decided to move forward with the price liberalization reforms.  "I feel I've come to the final part before the end of the tunnel," Chubais commented.  "Seven years of preparation have just come to the final stage." (7)

Economic Development and Trade Minister Gref dissented from Chubais' optimistic assessment, concerned about the possibility that freeing electricity  supply prices would increase inflationary pressure.  Normally, Chubais has had to face dissent and stonewalling from UES' Soviet-era managers and other so-called "Red Directors" rather than from another economist representing the liberal wing.

In an oddly timed backhand, President Putin earlier in the week accused UES (and by extension Chubais) of creating a drag on Russia's economic growth, claiming that if UES had paid more attention to the proper development of the energy industry, the country would not be facing a 50 billion kilowatt hour shortfall of production (consonant with excess demand).  "If," Putin claimed, "this lagging behind did not exist, the GDP growth would be five percentage points higher."  (8)

Hack Academy?
What is it about the Russian Academy of Sciences that is so appealing to the current Russian political elite?  At a general meeting held last week, several well-known political figures vied for inclusion in the ranks of the Academy's list of academicians and corresponding members.  Among those competing for election to the Academy at the meeting were former Prime Minister and senior security official Sergei Stepashin; deputies Andrei Kokoshin and Sergei Baburin; former Kaliningrad governor Vladimir Yegorov; former Yel'tsin aide Boris Kuzyk; and former UES Chairman of the Board of Directors, Anatoli Dyakov. (9) 

Interestingly, none of the government or former administration officials, with the exception of Stepashin, made it successfully through the first round of voting at the general meeting.  Stepashin eventually withdrew his name from consideration, claiming that media attention to his candidacy was "capable of doing damage to the [Academy's] prestige." (10)  Exactly what prompted the political onslaught on the Academy is unclear, but it does appear that the members successfully defended their ranks.

The results of this "academic" poll may have had a significant effect:  Representatives of Tver recently introduced legislation in the Duma to remove the "none of the above" ballot option from voters. (11)  Clearly the legislators' concerns about the "dirty tricks" technologies that might be employed to allow "none of the above" to surpass other candidates on the ballot will be stirred by the rejection of the politicos from the Academy.  Even more disturbing is the view of Issa Kostoyev, Deputy Chair of the Defense and Security Committee:  "Apolitical people chose the none of the above option, and it is impermissible to be apolitical nowadays." (12)  Paging Dr. Zhivago.

 

Source Notes:
1)  "Russian Prosecutor went beyond his remit of late," Ekho Moskvy Radio 0700 GMT, 2 Jun 06; BBC Monitoring via Johnson's Russia List (JRL) 2006-128.
2) "Four Minister Face the Ax," Vedomosti 5 Jun 06 via Lexis-Nexis; Gazeta, 7 Jun 06; What the Papers Say (WPS) via Lexis-Nexis; "It's just that the Prosecutor's Office was taken from Sechin," an interview with Georgi Satarov, Novaya gazeta, 6 Jun 06; WPS via Lexis-Nexis.
 3) Interfax, 2 Jun 06; OSC Transcribed Text via World News Connection (WNC).
4) Vremya novostey, 15 May 06; WPS via Lexis-Nexis.
5) ITAR-TASS, 6 Jun 06; OSC Transcribed Text via WNC.
6) Ibid.
7) The Moscow Times, 7 Jun n06 via Lexis-Nexis.
8) ITAR-TASS, 2 Jun 06; OSC Transcribed Text via WNC.
9) Izvestiya, 2 Jun 06 via JRL 2006-129, 4 Jun 06.
10) Izvestiya, 3 Jun 06 via JRL 2006-129, 4 Jun 06.
11) Itar-Tass, 6 Jun 06, 11:22 EST via Lexis-Nexis.

By Susan J. Cavan (sjcavan@bu.edu)

~~~~~

SECURITY SERVICES

Update: Border Guards Service to be “Professional” By 2008
Three years ago, Russia’s Border Guard Service was amalgamated with the Federal Security Service (FSB) by Presidential decree.  Late last year it became evident that a long-term plan to improve Russia’s border protection was about to be implemented. In May 2005, General Vladimir Pronichev, commander of the Border Guards, announced a R15 Billion development program to improve the country’s border fortifications, specifically in the South, along the Georgian border. The program was to include the procurement and installation of satellite imagery equipment as well as radar and video surveillance technologies. (1)
  
In September 2005, a report in Krasnaya zvezda indicated that the Duma would approve a 30% budget increase for the service, raising its budget to over R45 Billion. The newspaper’s report of a budget increase was confirmed the same month, when Pronichev’s Deputy, Lt. General Viktor Trufanov announced that the 2006 budget contained R6.2 Billion for the construction of new border installations. (2) A further R1.6 Billion would be earmarked for the switch-over from conscript to contract troops, a change-over that is already involving the regular Russian armed forces. (3)
  
Late last month, the FSB celebrated “Border Guard Day.” The days before the “celebration” were marked by speeches, interviews and “field trips” given and undertaken by Pronichev and FSB Director Nikolai Patrushev. The purpose of each of these events was clearly to heighten the Border Guards public profile (thereby stimulating future contract recruitment), while highlighting the importance of the agency in securing Russia and protecting it from terrorism.
  
On 22 May, Patrushev traveled to Russia’s border with Georgia. The purpose of his trip was to “familiarize” himself with the implementation of the federal border strengthening program described above, and to meet troops in order to evaluate the “service conditions of contract personnel.” (4) The selection of Kabardino-Balkaria as one of the first recipients of the new funding, as well as Patrushev’s trip were not without symbolism, given the location of the Pankisi Gorge along the Georgian-Russian border. Moscow has asserted for some time that Chechen terrorists have been trained there. While Patrushev’s visit may have lent the border program credence, his presence in Southern Russia also may have served a larger strategic purpose as a “warning response” to the recent noises from Tbilisi concerning energy independence from Russia, (5) as well as the discussion in Georgia of the possibility of withdrawing from the CIS (6) and joining NATO. (7)
  
While Patrushev’s “southern excursion” may have served the "dual" purpose described above, his interview with Rossiyskaya gazeta on 26 May was geared towards the Border Guards’ public profile, as well as explaining to readers how the agency is being restructured, and what role it plays in guaranteeing the nation’s security.  Specifically, Patrushev highlighted the fact that the Border Guards are being decentralized, with directorates and command centers being created in “each federal district.” (8)  Addressing the issue of professionalism, Patrushev noted that as of January 2006, 7 regional commands of the Border Service (including the Ural, Volga and Central regions) no longer deploy conscripts, that as of the fall of this year, no conscripts will be deployed on land, and that, once the "class of 2004" is demobilized, no units on Chechen soil will contain draftees, and that by 2008, the whole service will be professionalized. (9) Not surprisingly, Patrushev noted that “practically all the threats” to Russia’s interests stem from international terrorism and narcotics trafficking. (10) General Pronichev’s comments on the eve of the Border Guards celebration largely conformed to Patrushev’s remarks. Pronichev delineated precisely where the focus of the new federal border program will be—namely the Northern Caucasus, and described more precisely on what projects the funds will be distributed. Specifically, the FSB intends to build seventeen new border posts, each of which will be supplied with the aforementioned technological equipment. The Border Services’ training camp at Anapa (in the Krasnodar region) will be overhauled, and new facilities will be built to house the Border Services’ naval component in the Caspian and Black Sea bases at Kaspiisk, Makhachkala and Sochi. (11) Pronichev intimated that the ‘naval branch’ of the Border Service is to be transformed into a stand alone, fully professional Coast Guard (apparently a "separate" sub-service of the FSB) by the end of 2011. (12)

Whither SVR & GRU: The Beginnings of an Official FSB Takeover?
Later this month, Russia’s Duma is slated to discuss a State Bill that will grant the FSB significantly increased powers in the realm of foreign operations. According to a statement posted on United Russia’s website, the bill will provide for “special operations units of the FSB to be used at the discretion of the President against terrorists and bases that are located outside the Russian Federation.” (13) The bill apparently has the support of enough deputies to pass without major opposition. According to Russian law, foreign intelligence operations fall into the jurisdiction either of the SVR or the GRU, and, as such, the bill is likely to provoke serious battles among the three agencies. (14)  It is evident that this bill is the first “legalistic” step on the part of the FSB to recreate an agency along the lines of the KGB, (15) by which all intelligence functions are controlled in a unified command. If as seems probable, the bill passes, Russia’s intelligence community will bear closer scrutiny in the months ahead.

Security Services “With A Human Face”?
Late in May, top FSB officials met with Human Rights activists representing scientists arrested for treason. According to Anatoli Kucherena, a lawyer employed by the Public Chamber, FSB chiefs promised to be more forthcoming in disclosing information relating to criminal charges and trials against scientists accused of passing classified information to foreign powers. (16)
  
The meeting with activists from the Public Chamber took place on the same day that the FSB leadership met with representatives from the Federal Assembly. Speaking to the press after the meeting’s conclusion, FSB Deputy Director Yuri Gorbunov claimed that the agency was interested in “constructive dialogue with Russian civil society,” about the “essence of security problems and human rights,” and that that “observance of the law” was a “cornerstone” of its officers’ activities. (17)  Given the FSB’s activities against Putin’s opponents (notably Mikhail Khodorkovsky), its alleged complicity in the 1999 Moscow apartment bombings, (18)  as well as its newly acquired powers under the National Anti Terrorism Committee, (19) any claims of adherence to human rights, or liberal-constitutional norms must be taken with a pinch of salt. 

Sources Notes:
(1) The ISCIP Analyst, Volume XII, Number 2 (16 Feb 06).
(2) Ibid.
(3) Ibid
(4) “Russian Security Chief Visits Border With Georgia in Kabardino-Balkaria,” ITAR-TASS, 22 May 06; OSC Translated Text via World News Connection.
(5) Eurasia Insight, 9 Jun 06 via www.eurasianet.org/departments/business/articles/eav060906.shtml.
(6) Eurasia Insight, 10 May 06 via www.eurasianet.org/departments/insight/articles/eav051006.shtml.
(7) Eurasia Insight, 4 Jun 06 via www.eurasianet.org/departments/insight/articles/pp060406.shtml.
(8) “Excerpts From an Interview With Nikolai Patrushev, Chief of the Federal Security Service,” Rossiyskaya gazeta, 26 May 06; ITAR-TASS via Lexis-Nexis.
(9) Ibid.
(10) Ibid.
(11) “To Search For Violators: The Border Guard Service of the FSB Revises its Tasks,” WPS Observer, 2 Jun 06; What the Papers Say via Lexis-Nexis.
(12) Ibid.
(13) “FSB Will Soon Run Operations Abroad,” The Moscow Times, 8 Jun 06, Russica izvestica Information via Lexis-Nexis.
(14) Ibid.
(15) The ISCIP Analyst, Volume XII, Number 3 (17 Mar 06).
(16) “Russian Spy Masters Meet Human Rights Activists,” Agence France Presse, 30 May 06; The Federal News Service Inc. via Lexis-Nexis.
(17) “Russia: FSB Interested in Dialogue With Civil Society on Security, Rights Issues,” Interfax, 30 May 06; OSC Transcribed Text via World News Connection.
(18) The NIS Observed: An Analytical Review, Volume IX, Number 1 (23 Jan 04)
(19) The ISCIP Analyst, Volume XII, Number 13 (17 Mar 06).

By Fabian Adami (fabs_adami@hotmail.com)

 

~~~~

FOREIGN RELATIONS

Periodic table is political fodder
In 2001, Columbia University Professor Robert Legvold noted, "Russia matters to others for three reasons: the atom, the veto and the location." (1) While Russia’s veto power on the United Nations Security Council and its location, spanning over 10 time zones, are, indeed, two ways which Russia has wielded and continues to exert its power, the atom is undoubtedly of utmost importance for Russia, its neighbors and the world at large.

In February 2006, President Vladimir Putin proposed a plan to create an international uranium enrichment center in Russia. At the same meeting, Putin then made plans with the presidents of Kazakhstan and Uzbekistan to mine raw, non-enriched uranium from Central Asia. (2)

In May 2006, officials from Rosatom, Russia’s nuclear agency, met with Kazatomprom, Kazakhstan’s sister company in Almaty to discuss the details of Putin’s proposal to import uranium. Kazatomprom representatives Mukhtar Jakishev and Askar Kasarbekov reported that Russia expressed interest in importing roughly 5,000 tons of Kazakh uranium by 2012. (3) Various other deals are also in the planning stages, many of which involve refurbishing Russia’s outdated domestic nuclear power plants and increasing its uranium reserves, which are said by some to be abundant and by others, depleted. (4) However, Russia has made it no secret that an additional, if not primary, goal is to revive the Soviet-era Central Asian nuclear complex. (5)

In addition to the economic reasoning behind this move to collect Central Asian uranium, there are also political objectives.  Russia sees an opportunity to enhance its dominance over this region. Less obvious, perhaps, but no less important, is that Russia sees this as a possible means to divert Group of Eight (G8) members' attention away from Moscow's use of oil and natural gas supply and delivery as leverage, an issue that has tarnished further Russia's reputation in Europe.

It was just over a month ago that US Vice President Dick Cheney made his now famous speech in Lithuania that the Russian media have dubbed “the beginning of a second Cold War.” (6)  In it, Cheney accused Russia of using its energy reserves as “tools of intimidation or blackmail.” (7)  The Director of Russian and Eurasian Programs at the World Security Institute in Washington, Nikolai Zlobin, reinforced that view, saying, “Putin understands oil and gas are among the few assets that can help him pursue his political agenda.” (8) While the Kremlin has remained rather tight-lipped regarding the accusations, it seemed eager to talk about energy at the G8 finance ministers meeting on June 10.

Before the meeting, Russia’s Finance Minister Alexei Kudrin said, “The question of energy security will be addressed. Work is going full ahead on the issue of energy poverty.” (9) After the meeting, however, Kudrin expressed concern that the discussions ended up revolving around oil and natural gas: “Russia has shared and will continue to share the principles of the Energy Charter, but we are not happy with certain things contained in agreements to the Energy Charter.” Kudrin explained that the Charter failed to address nuclear power development, which Russia, as a nuclear energy supplier, would have preferred. (10)

Meanwhile, ex-Soviet leader Mikhail Gorbachev may be relieved to hear that nuclear energy was left off the Charter. While in England last week, he tried to convince British Prime Minister Tony Blair of the pitfalls of nuclear power saying, “Nuclear power is neither the answer to modern energy problems nor a panacea for climate change challenges.” He added, “There is too much at stake to allow short-term political considerations [nuclear energy] to dominate G8 proceedings.” (11) Interestingly, he directed none of his comments toward Putin’s February plan, which appears to be progressing. Regarding plans with Russia, Kazatomprom's Jakishev said “We start bargaining now.” (12)

Russia’s attempt to go west
Russia, like a wild Hollywood starlet, is hoping to tame its image. And just as an actress trying to revamp her persona hires a new publicist, Russia has gone ahead and hired a public relations firm to spruce up its international image, which Russian officials claim has been unfairly tarnished by a string of misperceived scandals. (13)

Putin’s deputy press secretary, Dmitri Peskov, admitted that Russia has a problem when if comes to representing itself positively to the West:
"The situation surrounding the conflict between Gazprom and Ukraine probably demonstrated most clearly that we are not always understood correctly. Gazprom did not sever supplies to Western consumers, and the argument was with Ukraine only. But many analysts literally refused to understand this, and accused Russia of using its gas and its natural resources as a means to put political pressure on some countries, whereas this is purely a business question." (14)

The gas crisis, according to Peskov, led Russia to seek international help to bolster its image. (Apparently, its December 2005 attempt to project a more positive image of Russia through the propaganda-laden Russia Today television program did not do the job.) One of the world's most prestigious PR and  image consultancies, Ketchum, accepted Russia as a client, a move that will earn the firm millions of dollars. (15)

While at first glance, hiring private public relations firms to manage the image of a government may seem odd, it has become fairly standard practice. The United States, for example, has more than doubled its PR spending in the last four years, which includes contracts with private firms. (16) During President Bush’s first term in office, the government spent $250 million on PR, including $97 million at the most popular of spin doctors – Ketchum. (17)

Ketchum has not made public yet what it plans to do regarding Russia’s image, but it does plan to promote the much-talked-about triumvirate of issues of Russia’s G8 presidency: education, health and energy security. (18)

Russian analysts have heralded the Kremlin’s decision as beneficial. Andrei Richter, the director of the Moscow Media Law and Policy Center, said, “I think it will help. These [PR] companies wouldn’t exist if they didn’t help. After all, I think the situation is not that bad, and any advice, any help, from this type of firm will benefit Russia’s image.” (19)  Nikolai Petrov, a political analyst at the Carnegie Center in Moscow, said, “I think that overall, it is a rather positive thing. Western PR firms can play a very serious role by effectively relaying what the Kremlin would like to tell Western public opinion and the political class, while taking into account the characteristics of the countries where this campaign will be taking place.” (20)

Some analysts see this move as too little, too late. Nikolai Zlobin said of the Kremlin’s hiring of Ketchum, “This act is very limited in terms of time and content. And it has been perceived in Washington as a gesture of desperation – a complete defeat in the image battle.” (21)

While skeptics and cheerleaders both exist, the reality is that the Kremlin does have an uphill battle in terms of creating a new image. And with just over a month until the G8 summit, Russia's effort to transform its authoritarian persona into a democratic beacon may rely on the attention span of its global audience rather than Ketchum's ability to correct misperceptions.

Source Notes:
(1) Legvold, Robert, “Russian Foreign Policy Ten Years After the Fall,” Russia under Putin: US-Russian Relations, Congressional Program of the Aspen Institute, 19-26 Aug 01, p. 2.
(2) “Paper profiles Russian-Kazakh-Uzbek uranium enrichment deal,” 29 Jan 06, Kommersant; BBC Monitoring via Lexis-Nexis.
(3) Blagov, Sergei, “Russia Eyes Central Asia Uranium Deposits,” 6 Jun 06, RFE/RL via www.rferl.org.
(4) Ibid.
(5) Ibid.
(6) Isachenkov, Vladimir, “Russian analysts, media see Cheney’s speech as opening shot in new Cold War,” 5 May 06, Associated Press via Lexis-Nexis.
(7) Ibid.
(8) Putin Commitment to Energy Security Meets Skepticism,” 10 Jun 06, Bloomberg via JRL 2006-#134. Russia contains 27 percent of the world’s natural gas reserves and supplies roughly 25 percent of Western Europe’s fuel demand. Russia pumps about 9.6 million barrels of crude oil, which accounts for more than 10 percent of the world output (Putin Commitment to Energy Security Meets Skepticism,” 10 June 06, Bloomberg via JRL 2006-#134).
(9) Smith, Sebastian, “Energy fears dominate Russia’s G8 finance meeting,” 7 Jun 06, Agence France Presse via Lexis-Nexis.
(10) “Wrap: G8 finance misters discuss energy, poverty, terrorism,” 10 Jun 06, RIA Novosti via Lexis-Nexis.
(11) “Ex-Soviet leader Gorbachev warns Blair against nuclear power,” 8 Jun 06, Agence France Presse via Lexis-Nexis.
(12) Blagov, Sergei, “Russia Eyes Central Asia Uranium Deposits,” 6 Jun 06, RFE/RLvia www.rferl.org.
(13) Bigg, Claire, “Russia: Kremlin Hoping to Speak West’s Language,” 9 Jun 06, RFE/RL via www.rferl.com.
(14) Ibid.
(15) Ibid.
(16) Drinkard, Jim, “Report: PR spending doubled under Bush,” 26 Jan 05, USA Today via www.usatoday.com.
(17) Ibid.
(18) Bigg, Claire, “Russia: Kremlin Hoping to Speak West’s Language,” 9 Jun 06, RFE/RL via www.rferl.com.
(19) Ibid.
(20) Ibid.
(21) Bai, Yevgeny, “Public Relations Won’t Save Russia,” 20 May 06, Novaya gazeta; What the Papers Say via Lexis-Nexis.

By Marissa Payne (mpayne@bu.edu)

~~~~~

DOMESTIC ISSUES AND LEGISLATIVE BRANCH

Regional Review: Siberia– Oil, China, publicity stunts, and Transneft
The primary issue in Siberia these days is oil – and lots of it. The Eastern Siberian-Pacific pipeline, with an estimated capacity of 80 million tons a year, has been the center of much discussion over the last seven years. Recently, the debate has surfaced again. The primary bone of contention has been the pipeline’s endpoint. There were two possibilities, each indicating a different trajectory of potential trade relations. Nakhodka in the Far East's Primorskii Krai would allow Japan easier access to Siberian oil. Daqing, located in China, would funnel Russia’s energy resources directly to its growing neighbor. Nakhodka, with its potential to export to both China and Japan, eventually won out, although the Chinese will receive a special offshoot of the pipeline from the Russian town of Skovorodino.

The situation becomes more complex once one begins to look beyond the foreign policy implications to the oil companies and the personalities behind them. In the mid-1990s Transneft, the 75% government-owned pipeline monopoly, conducted a study to determine the practicality of a Siberia-China pipeline. The pipeline under consideration would originate in Angarsk and end somewhere in China. Determining the project to be too costly, Transneft set it aside.

Several years later, the concept was picked up by Yukos, the company belonging to oligarch-turned-inmate Mikhail Khodorkovsky. Yukos cultivated the contacts it needed in Beijing to build a pipeline from Taishet to Daqing. In September 1999, the CEO of Transneft, Dmitri Savelyev, was summarily dismissed by Fuel and Energy Minister Viktor Kalyuzhny at the instigation of First Deputy Prime Minister Nikolai Aksyonenko as part of a power struggle within then Prime Minister Vladimir Putin's government. The day after the ouster, Savelyev was warned against protesting his removal by the oligarch Roman Abramovich, who masterminded the change in leadership at Transneft and was involved in selecting Savelyev's successor. (1)  The overthrown CEO was replaced by Semyon Vainshtok, previously vice president of LUKoil. Vainshtok was installed in Savelyev's office with the help of a chainsaw-wielding security detail. (2)

Shortly after Vainshtok assumed leadership of Transneft, the company began opposing Yuko's involvement in the Siberia-China pipeline and advocating that the pipeline end in Nakhodka. Ultimately, Transneft won out. At a meeting with representatives of Russia's major oil companies in January 2003, Prime Minister Mikhail Kasyanov announced that the state would not permit private oil companies to build their own pipelines. (3)  In response, Yukos dropped the possibility of building the pipelines and instead agreed to use the pipelines Transneft would put in place. In 2004, after Khodorkovsky had been jailed and Yukos' accounts frozen, Yukos and Transneft reached an arrangement whereby Yukos would pay for the use of the pipelines in crude oil rather than cash. (4) Currently, however, Surgutneftegaz and state-owned Rosneft are slated to be the first companies to use the pipeline once it is completed.

The pipeline is one of the most expensive in the world – in the neighborhood of $11.5 billion. Construction on the pipeline began in Taishet on 28 April and will begin in Skovorodino in mid-June. The decision to commence eastern construction in Skovorodino (from which China will have its own branch of the pipeline) rather than Nakhodka demonstrates the vital necessity, for Russia, of promoting trade with China.

The pipeline’s destination was not the only point of dispute. The route of the project, which would run within 800 meters of Lake Baikal according to Transneft's proposal, is opposed fiercely by environmentalists and academics. Lake Baikal is the world’s deepest freshwater lake and contains one fifth of the earth's fresh water supply. Environmentalists typically have been seen as a hindrance by the state (and Putin) rather than partners in administering Russia's resources. (5)  However, at a highly publicized 28 April meeting on Siberian economic development, Putin ordered the pipeline rerouted to protect Lake Baikal. The pipeline will now run 400 kilometers from the lake’s shores.  Rerouting the pipeline will be more expensive because of the need to address natural disasters endemic to the diversion area such as earthquakes and landslides.

The presidential envoy to the Siberian Federal District is the former Chief of the General Staff Anatoli Kvashnin. Kvashnin became the presidential envoy to Siberia in 2004 following a reshuffle in leadership that resulted from clashes with Minister of Defense Sergei Ivanov. Although Kvashnin's region is currently at the center of a major kafuffle over oil pipelines, Kvashnin has remained largely out of the picture. Compared to an extremely active presidential envoy such as the Far East's Kamil Iskhakov, who beats the drum of economic development with tireless energy, Kvashnin seems more like an absent landlord than a solid extension of the power vertical. With regard to the Eastern Siberian pipeline, the presidential envoy submitted a letter in March protesting the initially proposed route that would pass within a short distance of Lake Baikal. He tendered his protest only after the route had been approved by the Ministry of Natural Resources. (6)

A hand in all the pies
Demonstrating that he is a man of multiple (business) interests, Roman Abramovich is rumored to have purchased Kommersant, one of the last relatively independent large newspapers in Russia. (7)

Source Notes:
(1) Energy Companies Are Tools in Russian Power Struggle, 11 Oct 99, New York Times via Lexis-Nexis.
(2) Power-Saw Entrepreneurs Give Russia Its Reputation, 5 Oct 99, Moscow Times via Lexis-Nexis.
(3) Govt. not to Let Oil Majors Build Private Pipelines, 13 Jan 03, Vedomosti; RusData Dialine via Lexis-Nexis.
(4) Russian oil to come back to China, 29 Oct 04, Russian Oil and Gas Report via Lexis-Nexis.
(5) Ecologists Fret Over Presidential Critique, 22 Jul 05, Moscow Times via Lexis-Nexis.
(6) An in-depth look at the Russian press, 27 March 06, RIA Novosti via Lexis-Nexis.
(7) Fears for a free press as Chelsea boss 'takes over paper, 8 Jun 06, The Times (London) via Lexis-Nexis.

By Robyn Angley (hearthhobbit@hotmail.com)

~~~~~

CAUCASUS

NORTH CAUCASUS

Beslan: “There was a mess, and there were the ‘Shmels’”
On 26 May, after an eight-day “sentence reading,” amidst protests, nervous breakdowns, mutual attacks, and heightened security measures, the only surviving Beslan terrorist, Nurpasha Kulayev, was sentenced to life in prison. Kulayev has been proclaimed guilty on charges of banditry, unlawful possession and acquisition of weapons and ammunition, hostage taking, terrorism, murder of various degrees, attempts on the lives of members of the state services, and various attempted murders. (1) Life sentence came as a minor surprise, for in light of the seriousness of the offences the victims and many officials, including the main representative of Russia’s Prosecutor General in the South Federative Region, Nikolai Shepel, had hoped for a death sentence, as an exception to Russia’s de facto moratorium on the death penalty. (2)

The dissatisfaction with and opposition to the Kulayev verdict was palpable. Several parties decided in favor of an appeal, and recently Kulayev’s lawyer, together with members of an independent organization, “Voice of Beslan,” filed such an appeal with the Supreme Court. (3) Even if their objectives are mutually incompatible, they share an antagonism for the sentence. Both Albert Pliev and the leader of “Voice of Beslan,” Ella Kesaeva, contend that the sentence is unlawful, unfounded, inconclusive, patchy and contradicts the statements of the witnesses. (4) Kulayev’s lawyer maintains that several accusations in the verdict are groundless and have no root in any of the witnesses' statements. Ella Kesaeva argues that these statements were either not taken into account at all, or have been incorporated only partially, i.e. only when they could be used to point at Kulayev’s guilt. Moreover, one of the main issues with the verdict is that it blatantly garbles evidence regarding ammunition and weapons involved, especially in controversial points concerning the use of tanks, grenade launchers and Shmel flamethrowers. The sentence puts Shmels and grenade launchers in rebel possession, arguing that they were found inside the gym and scattered, abandoned by the rebels, on the front grounds of the school. (5) There are numerous eyewitness accounts, photographic and physical evidence that rebels owned no such ammunition, and that grenade launchers and flamethrowers were used by the special forces during the storming. (6) In addition, there were repeated witness accounts of tanks being used at daytime, when the hostages were still inside the gym, and not at night, as the Russian officials maintain. This evidence only fully surfaced during the Kulayev trial, is highly relevant to the larger Beslan case, and thus should not be omitted.

The fact that the sentence states that Kulayev “as a member of a band, was responsible for killing 330 hostages,” and further charges him with wounding 783 people, as well as attributing 34 million 25 thousand rubles of damages to him, (7) clearly presents him as the sole perpetrator and the only remaining guilty party (since all other members of the “band” were allegedly murdered during the operation). This is precisely the heart of the Beslan victims' objection. Kulayev’s case is by no means the most important case to them nor is he the only perpetrator they want punished. All of Beslan's population view the Kulayev case as a springboard for the "general Beslan case," particularly as a source of necessary evidence and witness testimony. This case retains its importance in that it reveals information about those officials and servicemen the victims' families view as responsible for the murderous fiasco of the school storming, and whom they view as the main criminals. Members of both Beslan organizations, “Mothers of Beslan” and “Voice of Beslan,” possess substantial evidence that they claim points to Russian officials and special forces who are responsible for the large death toll. The fact that Russian offences are absent from the verdict is alarming. The Russian government has been trying to impede the progress of the Beslan case, and Kulayev may become both a very convenient scapegoat for the government and the justification for closing out the “general Beslan case.” Clear signs are present already – the only Russian officials who have cases filed against them are three employees of the Beslan police department (ROVD) and several North Ossetian officials, including the head of the presidential administration, Sergei Takoev. There is no case against any high ranking official who was directly responsible for decision-making during the siege. Dmitri Kozak, who arrived in Beslan two days before the official Kulayev sentencing in order to calm the population, has promised the people “substantial changes in the course” of the general case in “one week’s time” (8); no such changes have taken place. The scenario begins to emerge more fully – several lower (read “regional”) officials will be prosecuted and policemen will be charged, while Dmitri Dzasokhov, General Tikhonov, Dmitry Peskov, Petr Vasiliev, General Andreev, and others directly responsible will remain in their respective positions, deemed by the Putin administration too valuable to lose.

“Voice of Beslan” cherishes no ephemeral hopes and realizes that its appeal may not be satisfied, but believes that its denial would justify an appeal to the European Court of Human Rights in Strasbourg (9), which seems to represent Beslan’s last hope for justice. 

AZERBAIJAN/ ARMENIA

Good atmosphere in the frozen conflict
The West has not abandoned its attempts to reach a resolution in the Nagorno-Karabakh conflict, and this year has intensified its efforts. On 4-6 June, the Armenian and Azerbaijani Presidents met on the sidelines of the Black Sea Summit in Bucharest, Romania. The meeting, brokered by the OSCE Minsk Group and attended by all the co-chairs, both Presidents, their respective Ministers of Foreign Affairs, and the Chairman-in-Office of OSCE, Karel de Gucht, (10) constituted the second attempt this year to bring the two sides to some kind of resolution. Despite the good feelings and hopes, expressed by the Minsk Group co-chairs, the meeting failed to reach any kind of written statement (which the OSCE hoped to attain after the Rambouillet fiasco in February) or any other agreement, except for the pledge to continue talks on resolving the conflict and, obviously, to maintain the positive atmosphere. (11)

Western diplomats have failed once again to pressure the two sides politically to reach a resolution. However, since many Western officials have stressed the urgency and importance of obtaining a solution by the end of 2006, (12) it is safe to assume that this is not the final effort of this year. 2006 is marked by political calm for both Armenia and Azerbaijan, as there are no elections scheduled. The international community's sense of urgency springs from the sense that a settlement is possible now since the political environment is free of internal political strains. Additionally, the urgency felt by both Europe and the United States can be connected to the status of the Baku-Tbilisi-Ceyhan oil pipeline. Energy security has become one of the main issues in European and US policy toward the states of the Caucasus; “frozen conflicts” in Nagorno-Karabakh, Abkhazia and South Ossetia endanger the region’s stability. Moreover, US relations with Iran clearly constitute a factor in US policy toward Azerbaijan. The stationing of US troops in order to secure the pipeline, also can be seen as a way to put pressure on Iran. The fact that this sideline summit failed — that neither of the presidents yielded on any of the points, and that the US co-chair Stephen Mann has resigned — is impeding the negotiation process. One thing is certain; the US and Europe will urge both leaders to continue to work toward an agreement.

The two presidents largely have accepted the step-by-step framework of the future peace process; however they are not prepared to implement that framework. Armenia continues to maintain that it will discuss Karabakh and any future settlement plan only when Baku recognizes the right of the Armenian population for self-determination. In response, Ilham Aliev argues that Azerbaijan supports the right of self-determination for the Armenian population, however “believe[s] that self-determination process should not be implemented on the territory of Azerbaijan.” (13)  The personal interests of OSCE co-chairs can hinder the process even further. Azerbaijan, which has been moving closer and closer to the United States, irritates Russia, while Armenia, which still looks to Moscow for support, in turn, has been causing concern for the West. The OSCE Minsk Group is in danger of being seriously divided on this issue, and thus is less likely to be effective in facilitating negotiations. Nonetheless, the West seems determined to find a settlement and keeps pressuring Aliev and Kocharian into further meetings and talks. If the West maintains its determination and persistence, some semblance of an agreement might be reached by the end of this year. However, the actual decision will depend on the Azerbaijani and Armenian leaders, who are to be held accountable for their failure in Bucharest last week.

Source Notes:
(1) Gazeta.ru, 9 Jun 06, http://www.gazeta.ru/2006/05/26/last201150.shtml.
(2) Novaya gazeta, “Iz Tankov Tozhe Kulayev, Vikhodit, Strelial,” 18 May 06, http.www.novayagazeta.ru.
(3) Gazeta.ru, 31 May 06, http://www.gazeta.ru/2006/05/31/last210876.shtml.
(4) Kommersant, “Golos Beslana Obzhaloval Prigovor Terroristu,” 1 Jun 06.
(5) Kommersant, “Nurpasha Kulayev Podozhdet Poslednego Zvonka,” 25 May 06.
(6) Ibid.; Kommersant, “Beslanskie Muzhchini Poshli Po Prokuroram,” 2 Jun 06.
(7) Novaya gazeta, “Delo Kulayeva Budet Rassmatrivat Verkhovnii Sud RF,” 1 Jun 06.
(8) Kommersant, “Nurpahsa Kulayev Snova Vizhil,” 27 May 06.
(9) Gazeta.ru, “Beslan Poshel V Strasburg,” 31 May 06.
(10) De Staandard, 06 Jun 06, OSC Translated Text via World News Connection (WNC).
(11) RFE/RL, “Kocharian, Aliev Talk In ‘Very Good Atmosphere,’” 5 June 2006.
(12) Nezavisimaya gazeta, “Gosdep USA Utanovil Alievy I Kochiarianu Sroki Uregulirovaniya Karabakhskoi Problemi,” 8 Jun 06; Mediamax, 6 Jun 06 OSC Translated Text via WNC.
(13) ITAR-TASS, 6 Jun 06, OSC Transcribed Text via WNC.

By Anastasia Skoybedo (nskoybedo@snet.net)

~~~~~

CENTRAL ASIA

Kyrgyz opposition holds another rally, to what end?

The post-Akaev partnership established between President Kurmanbek Bakiev and Prime Minister Feliks Kulov continues to face serious challenges to its ability to stabilize and unify Kyrgyzstan.  Organized crime, corruption, regional and ethnic tensions, armed border incursions, and deep dissatisfaction among ordinary citizens with the slow process of political and social reform are but a few of the challenges which Kyrgyzstan’s government must overcome.  The fact that both President Bakiev and Prime Minister Kulov are rumored to be linked with rival organized crime bosses could handicap seriously their ability to curb the rising tide of crime and corruption.  Further complicating the situation is the tension between Kyrgyzstan’s northern and southern provinces, which often only seems exacerbated by the Bakiev-Kulov “tandem” --  President Bakiev is from the southern province of Jalalabad and held the post of governor there from 1995-1997 and Prime Minister Kulov is from Chuy Province, in northern Kyrgyzstan, where he was governor from 1993-1997.  (1)  Members of the political elite from both Bakiev’s and Kulov’s home provinces expect to be rewarded justly in return for their support by being given top level positions in the national government and control over the country’s more valuable assets.  Both groups have been jockeying for the upper hand in influencing political and economic policy and thus far, neither group seems to be satisfied with the results.

The latest obstacle facing the Kyrgyz government comes from former supporters of the Bakiev-Kulov partnership many of whom, dissatisfied with the pace of reform, have created their own opposition parties, most of which are now united under the umbrella group “For Reforms!”.   Many of the opposition party leaders are also members of the Kyrgyz parliament, the Jogorku Kengesh, which has repeatedly clashed with President Bakiev over such issues as his choice of cabinet members and constitutional reform. (2)  The president has responded by threatening to dissolve parliament, (3)  while numerous opposition supporters have called for his resignation, as well as that of Feliks Kulov. (4)

Frustrated by the president’s lack of action, the opposition has organized a series of demonstrations in Bishkek, with the latest one taking place on May 27, under the auspices of the “For Reforms!” movement. An Armed Forces Day celebration, which also had been scheduled to take place on May 27 in Bishkek’s Alatoo Square, was postponed to May 29, at which point the rally went off peacefully and was unmarred by any violent incidents or even arrests. (5)  Reports of how many opposition demonstrators actually attended the rally vary widely, with government officials putting the count at only 6,000 and opposition leaders stating that as many as 30,000 persons attended. (6)   One eyewitness account from a representative of an international NGO puts the number of demonstrators at far below the opposition’s count.  An earlier demonstration on April 29, organized by the Union of Democratic Forces party, drew roughly 6,000 participants. (7)  It was at this rally that opposition leaders set the May 27 deadline for the government to make good on its promises for reform, or face another opposition demonstration.  Opposition leaders called for the pace of constitutional and political reform to be stepped up and for the government to implement more effective measures to eliminate corruption and crime, such as barring criminals from holding public office. (8)   The “For Reforms!” movement issued similar demands at the May 27 rally, which were set forth in a list of ten steps for that the government should implement or resign, including President Bakiev’s submission of a draft constitution to the Jogorku Kengesh no later than September.  The demands include constitutional provisions that guarantee freedom of speech and the independence of the media; provide land for the building of more homes and create a fair mortgage system; reform law enforcement agencies and the penal system and take measures to protect businesses from organized crime; and compensate businesses for the losses they incurred during the March 2005 unrest which resulted in Askar Akaev’s ouster. (9)

The opposition’s demands for constitutional reform finally have spurred President Bakiev to take at least some action – in early May he appointed parliament member Azimbek Beknazarov to head a committee charged with drafting three (!) versions of a new constitution, each based on a different form of government.  The president stated that he hopes to have a draft constitution ready by August. (10)  However, the president also warned against proceeding too hastily with constitutional reform, stating that rushing forward with such a process actually could destabilize Kyrgyz society and impede further progress toward democratic reforms. (11)  While it is certainly true that constitutional reform is a weighty process that should be carried out with great care and deliberation, dragging the process out indefinitely can paralyze a country’s political system, which also all too often results in society’s destabilization.  In the wake of President Akaev’s removal from power and the ensuing power vacuum, Kyrgyz society already has experienced widespread destabilization, due to the new government’s inability to address effectively such problems as lack of adequate housing, the increasingly aggressive monopolization of key economic sectors by organized crime groups, ineffective local police forces, rampant corruption, and numerous other problems.  Both the president and parliament need to begin working together in order to rebuild all levels of government, so that there will be a stable and responsive system in place to handle citizens’ problems and disputes at both the local and national level.  Although the opposition parties’ method of organizing one demonstration after another and calling for the Bakiev-Kulov administration’s resignation has raised popular awareness of Kyrgyzstan’s problems and provided dissatisfied citizens with an outlet for their frustration, it has accomplished little else. Perhaps it is time for the opposition parties to employ a different means of getting the president’s attention, a means which will draw him into a real dialogue and elicit not just promises of reform, but an actual plan to achieve it.

Kara-Keche “coal king” finally arrested in Bishkek
Nurlan Motuev, the infamous “coal king” who seized the Kara-Keche coal mines not long after President Askar Akaev’s removal from power in March 2005, and who has defied all demands from the new government to cede control of the mines to the state or even to pay taxes on coal sales, finally has been taken into custody (12) and charged with tax evasion and unlawful property seizure, (13) as well as with causing roughly $1 million in damage to the coal-mining facilities. (14)

The Kara-Keche mining basin is located in Kyrgyzstan’s Naryn Province, located directly south of Bishkek, and prior to Akaev’s ouster, produced a little more than 50% of all coal mined in Kyrgyzstan.  Four of the mines were privately owned and one was mainly state-owned.  After the dissolution of the Soviet Union, the largest mine in the basin was given to a local businessman, Kamchybek Joldoshbaev, who was an Akaev ally. (15)  In June 2005, local journalist and a leader of the People's-Patriotic Movement of Kyrgyzstan (a strong supporter of the “Tulip Revolution,”) Nurlan Motuev, and a small army of his followers seized control of all five mines; (16) the Kyrgyz government in vain ordered him to relinquish control of the mines.  Motuev then began selling the coal at much higher prices, without paying taxes to the government and despite Prime Minister Kulov’s order that law enforcement bodies take steps to normalize the situation, the mines remained in Motuev’s hands because law enforcement personnel refused to confront him. (17)  In January 2006, Interior Ministry units arrived in Jumgal District (where the Kara-Keche mining basin is located).  Motuev and 350 of his supporters responded by gathering in front of the district police headquarters, tried to take over the building and then threatened to burn it down if any attempts were made to arrest him.  Pamirbek Kerimov, head of the Dzhumgal district state administration, then reassured Motuev that the Interior Ministry personnel had arrived only in order to investigate a grenade explosion in one of the mines and not to arrest Motuev. (18)  Kyrgyz authorities finally arrested Motuev on May 23, during one of his trips to Bishkek. (19)

Although it is certainly a coup for Kyrgyz law enforcement authorities finally to have Motuev in custody, hopefully leaving his supporters sufficiently demoralized so that the security services can regain control of the Kara-Keche mines, it does not speak well for the effectiveness of Kyrgyz law enforcement organs or for the law enforcement situation in Kyrgyzstan overall, that Motuev was left largely unmolested until he emerged from the mines and appeared on the streets of Bishkek.  Prime Minister Kulov’s orders to put the mines under state control simply were ignored, indicating that his administration has very little control over its own security forces and giving a green light to any local leader who can muster up enough arms and supporters, to seize whatever assets strike his/her fancy, because chances are that government forces will be unwilling to risk a confrontation.

An additional wrinkle to the Motuev tale is that Nurlan Motuev was an outspoken supporter of Ryspek Akmatbaev, an organized crime boss from Issyk-Kul Province (located northeast of Naryn Province), (20) who won a local by-election for his assassinated brother’s seat in the Kyrgyz parliament on April 9.  Ryspek Akmatbaev was a leading suspect in the murder of an Interior Ministry official and has been linked to President Bakiev. (21) He also is said to be a rival of crime boss vor v alone (thief-in-law – a title which originated during the Soviet era, given to high-ranking members of organized crime organizations) Aziz Batukayev, who in turn, is rumored to be linked with Prime Minister Kulov.  Batukayev is in prison, awaiting trial, but reportedly has no trouble running his business from within the prison walls.  Ryspek’s brother, Tynychbek, was murdered in the same prison where Batukayev is being held, during a visit there in October 2005, the purpose of which was to negotiate with rebellious inmates.  Ryspek placed the blame for his brother’s murder squarely on the shoulders of both Batukayev and Kulov (Batukayev has been formally charged with Tynychbek Akmatbaev’s murder) and began calling for Kulov’s resignation, even going so far as to organize a demonstration in Bishkek, (22) which earned him a personal audience with President Bakiev.  He also was able to overcome the Central Election Commission’s ruling that he was not permitted to stand in the parliamentary by-election for his brother’s seat on the grounds that he did not meet the 5-year residency requirement in Balykchy District, by winning an appeal to Kyrgyzstan’s Supreme Court, just in the nick of time. (23)

Rysbek Akmatbaev was shot and killed on May 10 (24), ending his political ambitions, but raising even more questions about his alleged feud with Batukayev and whether or not Prime Minister Kulov played any role in that feud.  Rysbek Akmatbaev’s death is under investigation, but it’s unlikely that the questions surrounding his death will be answered, especially those pertaining to his relationship with President Bakiev.  However, the fact that he was able to exert considerable influence over voters and prominent politicians and even gain a personal meeting with President Bakiev, (25) following his brother’s murder, in spite of the many criminal allegations surrounding him, as well as the fact that he was a suspect in what in the US would be a capital murder case, speaks volumes and implies that he must have had ties to powerful political figures, in order to climb as high as he did.

Source Notes:
(1) “Kyrgyzstan – A Faltering State,” Crisis Group Asia Report No. 109, 16 Dec 05 via www.crisisgroup.org.
(2) Ibid.
(3) “Majority of Kyrgyz Cabinet ministers resign, President Bakiev threatens parliament,” The Times of Central Asia, 2 May 06 via Lexis-Nexis Academic Universe.
(4) “Crime Boss Murder and Government Shake-Up Impact Kyrgyzstan’s Political Scene,” 15 May 06, Eurasia Insight via www.eurasianet.org.
(5) “Rally Held In Kyrgyz Capital's Central Square,” ITAR-TASS, 27 May 06 T12:11:30Z; OSC Transcribed Text via World News Connection.
(6) Interfax, 27 May 06; OSC Transcribed Text via World News Connection.
(7) Interview with representative of Bishkek-based branch of an international NGO.
(8) Interfax, 3 May 06; OSC Transcribed Text via World News Connection.
(9) AKIpress, 27 May 06; OSC Translated Text via World News Connection.
(10) RFE/RL Newsline, 4 May 06 via www.rferl.org.
(11) Interfax, 4 May 06; OSC Transcribed Text via World News Connection.
(12) RFE/RL Newsline, 24 May 06 via www.rferl.org.
(13) RFE/RL Central Asia Report Week at a Glance, 5 Jun 06 via www.rferl.org.
(14) RFE/RL Newsline, 9 Jun 06 via www.rferl.org.
(15) “Kyrgyzstan – A Faltering State,” Crisis Group Asia Report No. 109, 16 Dec 05 via www.crisisgroup.org.
(16) "Revolutionary-Market Redivision. Southern Kyrgyzstan Seethes Again in Presidential Election Run-Up," Nezavisimaya gazeta, 16 Jun 05; FBIS translated text via World News Connection.
(17) “Kyrgyzstan – A Faltering State,” Crisis Group Asia Report No. 109, 16 December 2005 via www.crisisgroup.org.
(18) AKIpress, 11 Jan 06; OSC Translated Text via World News Connection.
(19) Bishkek MSN, 24 May 06; OSC Report via World News Connection.
(20) “Kara Keche Mines: A Symbol of Kyrgyzstan’s Dysfunction,” Sophia Mizante, 7 Apr 06; Eurasia Insight via www.eurasianet.org.
(21) See The ISCIP Analyst, Volume XII, Number 4 (20 Apr 06).
(22) “Kyrgyzstan – A Faltering State,” Crisis Group Asia Report No. 109, 16 Dec 05 via www.crisisgroup.org.
(23) See The ISCIP Analyst, Volume XII, Number 4 (20 Apr 06).
(24) AKIpress, 10 May 06; OSC Translated Text via World News Connection.
(25) See The ISCIP Analyst, Volume XII, Number 4 (20 Apr 06).

By Monika Shepherd (moshep@bu.edu)

~~~~~

WESTERN REGIONS

UKRAINE

Struggle for future of Ukraine
What will Ukraine be in the future?  Which way will it turn?  Pundits have been asking these questions for almost 16 years, and today it became clear that the answer isn't!  Ukraine's own politicians continue to fight amongst themselves over the future geopolitical direction of the country.

The country has been run by an acting government since the 26 March parliamentary election.  On 13 June, President Viktor Yushchenko's Our Ukraine party officially voted to begin negotiations to create a parliamentary majority with all political parties" in the parliament, including the party of his defeated presidential opponent, Viktor Yanukovich.  (1)

Yanukovich's Party of Regions is intensely pro-Russian, and has voted repeatedly in the past against EU-reform measures as well as procedural changes necessary to enter the WTO.  In recent weeks, it has been one of the leaders of the vitriolic, if small, anti-American and anti-NATO protests in the Crimea, and also has sponsored local measures to make Russian a state language.  President Yushchenko has called these measures illegal and against Ukraine's constitution.

Our Ukraine's vote to negotiate with Regions followed the former's decision to withdraw from negotiations to recreate an "orange coalition" with long-time partners The Yulia Tymoshenko Bloc and The Socialist Party.   Our Ukraine suggested that the demand by Socialist leader Oleksandr Moroz to be named speaker derailed the talks. "We can state that talks are stopped because of a categorical position of the Socialists," Our Ukraine spokeswoman Tatiana Mokridi said.  (2)

However, both Moroz and Tymoshenko claimed that this reason was simply a pretext to legitimize talks already ongoing with Regions at an unofficial level.  This suggestion was given weight by the repeated statements of Acting Prime Minister Yuriy Yekhanurov –number one on the Our Ukraine election list – that he prefers a coalition with Regions, and by the recent creation of an "inter-party alliance" of Our Ukraine and Regions parliamentary deputies. (3)  Most Our Ukraine members in this alliance appear to have business or financial interests that coincide with those of the Party of Regions.

Moroz called Our Ukraine's bluff on 14 June, when he announced that he'd dropped his claim to the speaker's chair.  (4)  He suggested, though, that all posts should then be open for negotiation.  Tymoshenko, who would be prime minister in the format of an orange coalition, then urged Our Ukraine to come back to the negotiating table, suggesting that Moroz's concession had removed all impediments to a deal.

This would seem to be the case, since Our Ukraine had announced earlier that a comprehensive agreement on a program had been finalized by negotiators, and that only the speaker's position remained in dispute.  (5)

However, it appears that Our Ukraine has moved the bar.  Following Moroz's statement, one of the party's most influential members Petro Poroshenko called the concession "positive." But he quickly added, "Now all that's left is for Yulia Volodymyrivna [Tymoshenko] to give up the prime minister's job and we'll have a coalition." (6)

The idea that Tymoshenko would give up the prime minister's seat, as the leader of the largest party by far (22% compared to Our Ukraine's 14% and Socialists 6%) in the proposed coalition, is odd.  This is particularly true given President Viktor Yushchenko's recent statement supporting the idea that the largest party in the coalition should name the prime minister, and statements from negotiators that this point already had been agreed.

Were she to do so, given Moroz's concession on the speaker's point, Our Ukraine then would have its representatives in the president's office, the prime minister's chair, all the "Power" Ministries, and as the head of parliament–all for a party that finished third with slightly under 14% of the vote.

It would seem, then, that the speaker issue was not the only stumbling bloc.  Or at least, it was not the only stumbling bloc that will be found to avoid creating a coalition.

It should be noted, however, that the vote by Our Ukraine's political council to negotiate with the Party of Regions was not unanimous.  In fact, during parliamentary debate, a sizeable portion of Our Ukraine gave Moroz a standing ovation following his statement.

Even more, Mykola Katerinchuk, the head of Our Ukraine's political council, said during parliamentary debate, "To form a coalition with the Socialists and Tymoshenko's bloc might mean that some politician would lose, but to form a coalition with the Party of Regions would mean that our national interests lose." (7) These two actions signal a widening rift in an already porous political bloc.

Given this rift, can Our Ukraine unite behind any coalition? Parliament has until 25 June, according to the constitution to name a majority, or President Yushchenko is entitled to call a new election.

In recent polls, Our Ukraine's support has dropped below 10%, while support for the Socialists and the Tymoshenko Bloc has risen slightly, and support for the Party of Regions has increased significantly.  It is, therefore, in the interests of not only the country but also the members of all "orange" parties to avoid this scenario.

BELARUS

Moscow releases the hounds
On 13 June, Gazprom Deputy Chairman Alexander Ryzanov confirmed that Gazprom had officially proposed an increase in gas price for Belarus from $46.68 to $200 per 1000 cubic meters of gas.  (8) The confirmation follows several reports in Russia's Korrespondent Daily Online suggesting that at least two proposals had been sent to Belarusian authorities in May and June.  (9)

Ryzanov's statements on 13 June underscored that Gazprom was willing to reduce its price–but only in exchange for certain concessions.  "We are seeking a compromise. The Belarusian side could offer us some assets, for example [Belarusian pipeline company] Beltransgaz or Mozyr oil refinery." (10)

Typically of Belarusian President Aleksandr Lukashenko, his response over the last month to any suggestion of gas price increases has been uneven and contradictory.

The RIA Novosti Agency claimed on 2 June that Belarus had begun seizing cargo transiting through Belarus from Russia on the way to Kaliningrad.  (11) This report does not appear to have been confirmed by independent sources, but also was not denied by Belarusian officials.

At the same time, Belarus reminded Russia of the two countries’ close partnership in recent years, particularly with regard to the so-called "Russia-Belarus Union."  In a letter to Russian Prime Minister Mikhail Fradkov, the Belarussian Prime Minister wrote that attempts to increase the gas price for Belarus were "a violation of the very basis of the Union State." (12)  Following this letter, the government apparently sat back and hoped that the presumed fraternity of their countries would end any thoughts of a gas price increase.

But Lukashenko's apparent refusal to negotiate over possible asset concessions was not greeted kindly by Moscow.   The Kremlin, RIA wrote, "regards its right to control Beltransgaz as logical and justified because Lukashenko's election victory was based mostly on an 'economic miracle' paid for by Russia."  According to the same report, Lukashenko's refusal to negotiate led to a Kremlin decision to increase the "proposed" price to $200, instead of an originally planned $147. (13)

It would appear that early suspicions that gas prices had stayed level in Belarus only because of the March presidential elections were correct.

In January 2006, as Gazprom and Russia forced countries like Ukraine, Georgia and Moldova to more than double their gas prices, Belarus received a short reprieve.  But, it seems the respite?similar to that which Ukraine received during its 2004 presidential election?is over.  Now that Russia-dependent Lukashenko has been reinstalled, it is time for Belarus to earn its keep.

Lukashenko, nevertheless, continues playing the "union" card.   "Belarus doesn't expect any preferences from Russia," he said. However, he quickly added, "In the realm of the economy, we'd just like to work as a single country." (14)  Prices for gas, he suggested should be the same throughout the entire "union state."

Within minutes, Lukashenko then announced, "Belarus will never incorporate into the Russian Federation. We don't need it. Belarus is a beautiful and self-sufficient country."  (15)

Russia no doubt is happy to hear this, and continues to press for Belarus to turn over state assets in exchange for cheap gas.  Control of the domestic Beltransgaz pipeline network would, after all, give Gazprom control over a major section of the transport system it uses to deliver gas to Europe.  It also would eliminate once and for all the final piece of leverage available to Belarus against Russian demands.

Given the dependence of Belarus' archaic, Soviet-style economy on Russia, and the country's isolation from most Western organizations and financing structures because of its abysmal human-rights record, the country's leadership will have only one possible response, should they choose to fight: They could simply turn off the pipeline to Europe.

However, Belarus receives up to $2 billion from re-exported Russian gas from EU members every year, and without it, the country's budget would be bankrupt.  Belarus could expect the same effect from a major increase in gas prices.  Therefore, capitulation is likely very quickly.

In fact, it seems that despite certain contrary statements from Lukashenko, Belarus is already planning for this.  "One can expect a joint venture or some other structure to be established this year," Belarusian Prime Minister Sergei Sidorsky told parliament recently.  (16) Gazprom responded happily—suggesting that any structure providing them a controlling interest in Belarus' pipelines will do.

Source Notes:
(1) "Our Ukraine to Team Up With Yanokovichists?," Ukrayinska Pravda, 13 Jun 06 via www.pravda.com.ua.
(2)  Our Ukraine press service, 1319 CET, 10 Jun 06 via www.razom.org.ua.
(3) "About 20 Ukrainian pro-government, opposition MPs join forces," Ukrayinska Pravda, 7 Jun 06 via Lexis-Nexis.
(4) Moroz tribune speech, Verkhovna Rada (parliament), 5 Kanal, 14 Jun 06;  also ITAR-TASS, 1224 CET, 14 June 06.
(5)  Orange coalition has agreed on all items except portfolios, 10 Jun 06 via ForUM.
(6) Associated Press, 14 Jun 06 via Kyiv Post (www.kyivpost.com).
(7)  Verkhovna Rada debate, 5 Kanal, 14 Jun 06;  also Associated Press, 14 Jun 06 via Kyiv Post.
(8)  "Gas price for Belarus to be decided by end summer – Gazprom," RIA Novosti, 2032 CET, 13 Jun 06 via Yahoo! News.
(9) "Gazprom Multiplies Belarus by Four," Korrespondent Daily Online, 9 Jun 06 and 30 May 06 via www.kommersant.com.
(10) RIA Novosti, Op. Cit.
(11)  "Lukashenko faces total isolation," RIA Novosti, 1847 CET, 2 Jun 06 via Yahoo! News.
(12) "Belarus Waiting for the Union to Crumble," Kommersant Daily Online, 26 May 06 via www.kommersant.com.
(13)  "Lukashenko faces total isolation," RIA Novosti, 1847 CET, 2 Jun 06 via Yahoo! News.
(14) ITAR-TASS, 1914 CET, 9 Jun 06 and UPI, 9 Jun 06 via Yahoo! News.
(15) Ibid, ITAR-TASS.
(16)  Energy Business Review Online, 2 Jun 06 via www.energy-business-review.com.

By Tammy Lynch (tammymlynch@hotmail.com)

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