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The NIS Observed: An Analytical Review
Volume VII Number 18 (20 November 2002)

Russian Federation

Executive Branch by Michael Comstock
Security Services by Michael Donahue
Domestic Issues & Legislative Branch by Kate Martin
Foreign Relations by Ansel Thoreau Stein
Armed Forces by Steve Kwast and Dan Rozelle

Newly Independent States

Western Region by Nadezda Kinsky
Caucasus by Miriam Lanskoy

Central Asia by David Montgomery

Baltic States by Michael Varuolo

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Volume I
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No. 1 (6 November 1996)

Winners and losers
The Moscow hostage drama is affecting the careers of several officials as well as their ministries.

Boris Gryzlov's interior ministry (MVD) currently is on the cutting board with proposals for reorganization coming from within the ministry as well as from the FSB and apparently the president. While the proposed changes themselves are not new, since Gryzlov was brought onboard to direct the reorganization of the large and complex ministry, ripples from the hostage crisis can be detected. Police Major General Tatiana Moskalkova, deputy head of the interior ministry's Main Legal Department, has proposed dividing the organization into three entities along the lines of some European law enforcement agencies. Roughly speaking, they would take the form of a National Guard, a Federal and Municipal Police and an Internal Investigation Service. This proposal contrasts with an idea espoused earlier both by the FSB and the Security Council that envisages only extracting the most effective components of the ministry and creating an independent service dedicated to fighting organized crime and corruption.

This move may be viewed as a result of the FSB's increasing influence in Putin's Russia at the expense of other previously powerful security ministries. Indeed, only one year ago the MVD lost its jurisdiction over the penitentiary establishment and the fire brigades. Moskalkova's proposal shows that the MVD's bureaucratic machinery is attempting to control the direction and rate of its decline. (NEZAVISIMAYA GAZETA, 4 Nov 02; via ISI Emerging Markets Database)

Also significant are public calls for Gryzlov to resign in the wake of the hostage drama. The FSB's Nikolay Patrushev has become another focal point of public outrage, but only Gryzlov needs to lose sleep over such trifles. (ECHO MOSKVY NEWS AGENCY, 30 Oct 02; via ISI Emerging Markets Database) However, recent speculation has placed Gryzlov at the head of a very short list to become the next party leader of Putin's Duma faction United Russia. It is not clear whether the rumors emanate from the presidential apparat, or constitute an attempt by Gryzlov to diversify his political portfolio. (NEZAVISIMAYA GAZETA, 15 Nov 02; via ISI Emerging Markets Database)

President Putin publicly thanked Grigory Yavlinsky, the leader of the YABLOKO party, for his loyalty earlier this month. Yavlinsky played a role in the hostage crisis by attempting negotiation and, more importantly, remaining silent afterward, as requested by Putin's administration. The media broadcast Putin's expression of appreciation on all channels, while a clear message was sent to other individuals who, in Putin's eyes, attempted to exploit their role during the hostage crisis. Such opportunism at the expense of the leadership will not be rewarded. Yavlinsky reportedly has been a contender for a high-profile government appointment, and his performance has served to fuel such speculation. Another individual who has been less modest about his negotiating role, Boris Nemtsov of the Union of Right Forces (SPS), has been ignored. However, this oversight may have been influenced by Nemtsov's association with the Yel'tsin-era oligarchs, and by Putin's desire to drive a wedge between the two democratic parties, SPS and YABLOKO. (MOSCOW NEWS, 6 Nov 02; via ISI Emerging Markets Database) Earlier in his presidency, Putin had favored Nemtsov over Yavlinsky.

Moreover, Security Council Secretary Vladimir Rushailo (himself a former MVD chief) has announced a refinement of the security apparatus in the wake of the hostage crisis, with particular emphasis on counter-terrorism, stating that "this work cannot be carried out without defining more clearly the priorities and dividing the functions between relevant departments within the country."

Rushailo informed reporters that "the Office of the Russian Security Council, in line with Putin's instructions, has stepped up the work on the comprehensive analysis of fundamental changes and new threats that have appeared in the security sphere." This applies, he said, to "the existing blueprint of national security of the Russian Federation and the legislative acts regulating the activities of the law-enforcement bodies, the special services and the armed forces," which "no longer fully correspond to today's realities and to the main task of guaranteeing the safety of individuals, society and the state." (ITAR-TASS, 30 Oct 02; via ISI Emerging Markets Database) Rushailo probably is alluding to the Ministry of Defense's assumption of a more active role in Russian counter-terror operations. This role was emphasized as the hostage crisis played out; apparently Anatoly Kvashnin, chief of the Russian General Staff (rather than the directors of the FSB and the MVD, as might be expected), provided Putin with significant inputs. This casts further light on Moscow's power politics; the identity of the persons to whom Putin listens casts light on who is (and who is not) a "player." (STRANA.RU WEBSITE, 30 Oct 02; via ISI Emerging Markets Database)

Those who were directly involved in the denouement of the hostage crisis do not appear to have gained (e.g., the FSB) or seem to be declining (i.e., the MVD). Meanwhile, individuals at the periphery of the crisis who have displayed proper deference to Putin (read Yavlinsky) are being rewarded. Others, such as the Ministry of Defense, seem to be reaping increased influence at the expense of other "power" organizations. The MVD, already on the decline, had little political capital to provide a buffer in the face of obvious failure.

by Michael Comstock (

Toxic gas still obscures the truth
Even on a conventional battlefield, gas dissipates with time, and as it lifts, commanders and observers can reach objective judgment concerning the effectiveness of their tactics and operations. Several weeks have passed since the violent resolution of the Moscow theater hostage crisis, however, and the truth of the event remains obscured by lingering doubts about the gas used in the assault and by the smoke screen put up by the presidential apparat and the security services to conceal nearly every facet of the operation.

Rumors abound regarding the nature of the incapacitating gas used by the security forces that stormed the theater. Responsible for the deaths of at least 120 hostages, possibly many more, Moscow's silence fueled domestic and international suspicion and criticism for nearly a week before it was announced that the gas was a fentanyl-based anesthetic of the kind commonly used in surgery. However, because such a substance normally requires direct inhalation in concentrated doses -- and pumping it into a theater predictably would dilute the effects -- some have surmised that a more sinister substance may have been used. After all, surgical anesthetic gases generally are neither lethal nor potent enough to massacre hundreds in a relatively well-ventilated space. One popular, if sensationalistic, source claimed that the substance actually was a nerve gas based on organophosphorous compounds, designed specifically to paralyze. (AGENCE-FRANCE PRESSE, 4 Nov 02; via ISI Emerging Markets Database) If the FSB indeed possesses nerve gas, one can understand fully why Moscow would be tight-lipped -- such agents are banned internationally. Having killed almost three times as many hostages as terrorists and having captured only a couple of perpetrators, FSB director Nikolay Patrushev acknowledged his service's need for improvement, stating "we will have to correct our work." Indeed, that is putting it rather mildly. Perhaps the FSB leadership ought to be the first item "corrected" -- one poll taken just days after the event showed that 84% of respondents thought that both Patrushev and Interior Minister Gryzlov should be dismissed. (EKHO MOSKVY, 30 Oct 02; BBC Monitoring, via ISI Emerging Markets Database)

In other "successes," the FSB announced that it destroyed 69 illegal oil refineries and detained more than 20 highway tankers loaded with stolen petroleum in Chechnya last week. (ITAR-TASS, 7 Nov 02; BBC Monitoring, via ISI Emerging Markets Database) This exceptionally planned and coordinated operation undoubtedly surpassed all FSB expectations -- the enemy (and its families) now have been effectively deprived of heating oil just in time for winter. A decisive victory in Moscow's war to win the hearts and minds of Chechens everywhere?

Beyond Chechnya, the FSB has sensed an alarming growth in Islamic fundamentalism. Always concerned with the influence of Muslim schools in Russia's outlying regions, the security service has begun to focus on the spread of radical Islam and "Wahhabism" -- the particularly militant branch of Islamic education promoted through schools and directed at impressionable youth. Islamic schools in Russia have long been supported by foreign states, under the guise of raising religious awareness; however, the FSB has become concerned with the growth of such schools and the direction provided by Saudi Arabian and Pakistani clerics, among others. (NTV MIR, 1 Nov 02; BBC Monitoring, via ISI Emerging Markets Database)

As poor as the FSB's counter-terrorism tactics appear to be, and given the real threat that radical Islamists pose to Russia and the world, it is high time for Moscow to focus on these schools. If the FSB does not reform internally, and quickly, it will never be able to cope with this particular threat -- unless of course it simply seals the school doors and "anesthetizes" those inside.

by Michael Donahue (

Resolution 1441 and trouble on the horizon
President Putin welcomed the unanimous adoption of UN Security Council Resolution 1441 on 8 November. He characterized it as an "acceptable compromise" and stated that all permanent members of the UNSC had contributed to its final version. (INTERFAX, 10 Nov 02; FBIS-SOV-2002-1110, via World News Connection) On 14 November, Russian Deputy Foreign Minister Yuri Fedorov told reporters that "The Russian leadership's decision [to vote for Resolution 1441] depended on the degree to which [Russian] concerns would be recognized." (AGENCE-FRANCE PRESSE, 15 Nov 02; via Lexis-Nexis) Despite Putin's often-repeated concern that the dispute be settled without the use of force, Russia's objection to previous versions of the resolution was the freedom of action they would have provided the United States and Britain.

China and France allied with Russia to slow the UNSC process, thus helping Moscow to lay the groundwork for the future delays. These three permanent UNSC members issued a joint interpretation of the vague wording of Resolution 1441. "In case of failure by Iraq to comply with its obligations... Such failure will be reported to the Security Council by the executive chairman of UNMOVIC [United Nations Monitoring, Verification and Inspection Commission] or by the director general of the IAEA [International Atomic Energy Agency]. It will be then for the council to take a position on the basis of that report." (THE WASHINGTON TIMES, 15 Nov 02; via Lexis-Nexis) France, China and Russia apparently interpret this as requiring that reports of problems experienced by the UN arms inspectors in Iraq be presented to the UNSC for APPROVAL. It is not likely that the three countries would approve military action resulting from a "material breach" of UNSC resolutions. In the words of Yuri Fedorov, "any difficulties in [the arms inspectors'] work should be reported to the Security Council, and its members are the only ones who should make decisions.... Any actions bypassing the UN Security Council should be regarded as a violation of international law." (AGENCE-FRANCE PRESSE, 15 Nov 02; via Lexis-Nexis)

France, China and Russia each has its own reasons for opposing American action against Iraq. Certainly, all three would enjoy access to Iraqi markets in a post-sanctions era, although the existence of sanctions has not proven to be a hindrance to them thus far. They also attempt to counter American "hegemony."

Russia's response to the recent North Korean nuclear crisis, however, reveals that the Kremlin's motives for apparently obstructionist behavior extend beyond mere economic gain. Despite the DPRK's admission that it has had a covert nuclear program for a number of years, Russia remains reluctant even to acknowledge the existence of such a program. In the words of Russian Deputy Foreign Minister Aleksandr Losyukov, Russia has "no documentary evidence about the existence of the nuclear program either from North Korea or from the United States." Losyukov followed that statement by recalling that the United States had accused North Korea of continuing its uranium-enrichment program in defiance of the framework agreement of 1994. In turn, he continued, Pyongyang has criticized the United States for failure to honor the agreement, in particular the deadlines for the construction of nuclear power plants in North Korea. Pyongyang argues that it has the right to possess not only nuclear, but other weapons of mass destruction. (ITAR-TASS, 5 Nov 02; FBIS-SOV-2002-1105, via World News Connection) Just as Russia is denying the transfer of nuclear technology to Iran and attempting to obstruct actions against Iraq's arsenal of weapons of mass destruction, it seems poised to hamper any US reaction to North Korea's proliferation efforts.

by Ansel Thoreau Stein (

Stop the presses!
No, the Putin administration does not have a hot news story warranting a different front page; rather, the aim of recent Russian government activity apparently is to halt the publication of hot news stories.

Last month's hostage-taking crisis in Moscow created just the right climate for a further clampdown on Russian journalists. The authorities wasted no time rushing through amendments to the Law on the Mass Media. Prosecutor-general Vladimir Ustinov lobbed the first volley in the renewed fight to curb the press while the hostages were still in the "Nord-Ost" cultural center. On 23 October, Ustinov warned the State Duma that the government wasn't doing enough to counter extremism, then linked increases in extremist activity to inattentiveness on the part of the justice and press ministries. (ITAR-TASS, 0919 GMT, 23 Oct 02; FBIS-SOV-2002-1023, via World News Connection)

The Duma was quick to grasp the connection, and members passed amendments to the Law on Mass Media meant to stop the spread of ideas linked to extremism or terrorism. While some of the law's provisions are entirely understandable - such as a ban on disseminating instructions for making weapons or explosives, on counter-terrorism tactics or personal information about special services staff members without their authorization - other elements of the legislation are not so palatable. Specifically, the media are banned from disseminating information that serves to justify extremist activities, comments from persons hampering counter-terrorist operations, or propaganda concerning the resistance to counter-terrorist activities. (INTERFAX, 0851 GMT, 1 Nov 02; FBIS-SOV-2002-1101, via World News Connection)

Not surprisingly, given the Putin administration's propensity to view as dangerous anything in print that casts shadows on the Kremlin (can anyone say "Nikitin" or "Pasko"?), legislation that officially suppresses the expression of dissent sent shudders of dismay through journalists and members of the international community. Those shudders were enough to unite left and right factions, as the sizable opposition vote on the third reading (231 in favor, 106 opposed) indicated. During the debates, Communist Party Deputy Alexander Kravets warned that such legislation would give the Kremlin "an instrument to cut off the oxygen both to federal and regional media outlets." Members of the Union of Right Forces (SPS) agreed. When the law is promulgated, Andrei Vulf of SPS said, "it will give legal groundwork for the state's monopoly for providing coverage and the assessment of all events, particularly those related to the Chechen problem. This would effectively introduce censorship of coverage of antiterrorism operations." (INTERFAX, 1410 GMT, 31 Oct 02; FBIS-SOV-2002-1031, via World News Connection)

Following passage of the law, the draft was sent to the Federation Council, which passed the bill (145 for, 1 against, with 2 abstentions) on 13 November. A level of legislator cynicism was hard to ignore. MP Nikolai Kondratenko, the former governor of the Krasnodar region, said that "there has been no free press in Russia for a long time, and all journalists work only for money, and therefore the bill should be approved." (INTERFAX, 1022 GMT, 13 Nov 02; FBIS-SOV-2002-1113, via World News Connection) Restrictions could be in place by the end of November. Interestingly, a carefully worded poll was taken to gauge popular support for the measure. When queried whether media coverage of situations involving hostage taking should be censored, a clear reference to the Moscow incident, 61 percent of persons responding said yes. (INTERFAX, 1417 GMT, 14 Nov 02; FBIS-SOV-2002-1114, via World News Connection) However, there is no indication that poll participants were asked about other instances of media censorship, which the amendments would allow.

Proving that paranoia really doesn't mean that no one is after you, Andrei Soldatov, editor of Versiya, said that security officers searched his newspaper offices shortly after the new restrictions of the media were adopted. Soldatov claimed that the search was linked to a forthcoming article on the security services' rescue operation, which resulted in the deaths of many hostages due to the gas used to disable the hostage takers. [Versiya's reporting alleged that the FSB failed to act on warnings about an attack in Moscow from the Foreign Intelligence Service (SVR).] The Organization for Security and Cooperation in Europe (OSCE) representative, Freimut Duve, made the same connection. "This attack against an independent media outlet is especially ominous since it happened 24 hours after the Russian Parliament adopted a number of highly restrictive provisions to the Law on Media," he said. Such activity "raises very serious concerns regarding Russia's commitment to freedom of expression," he added. (AGENCE-FRANCE PRESSE, 1408 GMT, 3 Nov 02; FBIS-SOV-2002-1103, via World News Connection)

Indeed, the only media representatives taking the new legislation in stride are the owners, not the journalists. And even much of that reaction is, at best, disingenuous, and at worst, downright naïve. The Industrial Committee, comprised of owners and senior managers of media outlets, announced its support of the Federation Council's passage of the law. (RFE/RL NEWSLINE, 14 Nov 02) Other representatives, however, tried to view a bad situation in the best possible light. The National TV and Radio Association's president, Eduard Sagalaev, said his group "understands the decision of the State Duma" to pass the legislation in the third reading, since the law would "encourage the media to define its own self-limits" and create a code of corporate rules under which media companies and journalists would operate. (ITAR-TASS, 1827 GMT, 1 Nov 02; FBIS-SOV-2002-1101, via World News Connection) Yet even that "out" would not be acceptable to Press Minister Mikhail Lesin, who explained that the legislation would overrule any code of conduct developed by the press. "When the citizens' security is under threat, uniform rules must be observed. It does not matter what kind of contract a journalist may have signed with the editor," Lesin told a roundtable conference in crisis journalism on 5 November. (INTERFAX, 1624 GMT, 5 Nov 02; FBIS-SOV-2002-1105, via World News Connection)

Meanwhile, Boris Berezovsky, no stranger to government prosecution, is ready to provide aid and comfort to the beleaguered. His Civil Liberties Foundation announced it will provide free legal aid to any journalist who is brought to trial under the new law. (WWW.NEWSRU.COM, 13 Nov 02; via RFE/RL Newsline)

Clearly, the main target of this legislation is reportage of the war in Chechnya, given the administration's announcement of plans to intensify its activities there. Any coverage of the Chechen side of the conflict now can be painted with the "justification of extremism" brush, and punished accordingly. But dissent in Russia is not limited to the conflict in that breakaway region, and the precedents this legislation will allow could have ramifications throughout society. Putin's claim that his was a dictatorship of laws is getting closer and closer to reality, in full view of the international community. While the OSCE has come out against the new legislation, its protest has few teeth unless other Western voices are raised - an unlikely scenario, to be sure, given the international "war on terrorism."

by Kate Martin (

Moscow's military response to terrorism comes too late
On 21 October, Russian Interior Minister Boris Gryzlov announced that in the summer of 2003 the MVD would take control of the antiterrorism operation in Chechnya from the Federal Security Service (FSB). (RFE/RL NEWSLINE, 22 Oct 02) The Moscow hostage drama, two days later, changed everything. Since the crisis, a fundamental shift in military strategy has been evident, a shift from accepting the status quo of Chechnya as a "low-grade fever" to attempting to achieve victory and closure (a victory that most believe to be out of reach).

Two days after FSB forces stormed the Moscow theater, President Putin announced that: "Russia is now paying the price for the weakness of the state and the consequences of its inaction, but the country will make no 'understandings' with terrorists or surrender to their blackmail. We will use the army more actively to combat international terrorism. The new objective for the Russian Armed Forces is to fight terrorism at the global level." (NOVAYA GAZETA, 4 Nov 02; WPS Defense and Security, via ISI Emerging Markets Database) At a subsequent Kremlin meeting with Defense Minister Sergei Ivanov, Chief of the General Staff Kvashnin, Foreign Minister Igor Ivanov, Federal Security Service Director Patrushev and Interior Minister Gryzlov, Putin ordered a total revision of the country's National Security Doctrine that will increase the role of the military against terrorists and those who sponsor or finance them. As part of the reform, the interior ministry's 20 divisions of troops will be transformed over the next few years into a national guard. (RFE/RL NEWSLINE, 30 Oct 02) Additionally, the government's Financial Monitoring Committee will begin investigating financial operations that are allegedly supporting terrorism; allegedly the committee already has found links between the Chechen fighters who took the 800 hostages and foreign countries, including Qatar, Saudi Arabia and Turkey. (RFE/RL NEWSLINE, 5 Nov 02)

These extraordinary steps speak to the level of discomfort the hostage event has brought to Putin as well as his desire to bring some closure. To that end he has cancelled the proposed transfer of responsibility for the Chechen war next summer from the FSB to the MVD. Additionally, he has halted all troop withdrawals from the republic and announced a new offensive. Speaking to journalists in Khabarovsk on 3 November, Defense Minister Ivanov said that Russian troops have begun "large-scale and tough but precisely targeted operations in all areas of Chechnya." (RFE/RL NEWSLINE, 4 Nov 02)

There are many reasons for concern over these developments. First, the massive military clampdown and "mopping-up" operations that this hostage situation initiated constitute just "more of the same." This strategy has been ineffective for the last three years and will continue to be a failure. If Moscow wants its war on terrorism to change, then Russia needs to invest in reform of the military to accomplish such a task. Such reform takes years to organize, train and equip military personnel to act differently than they have for the last 50 years. They can't just shape a new doctrine that resembles US concepts for fighting terrorism and have it be effective overnight. (VREMYA NOVOSTEI, 4 Nov 02; WPS Defense and Security, via ISI Emerging Markets Database) It will also take lots of money, which Putin doesn't have. This reality is compounded by the fact that his forces are already in such poor shape. Currently the government still owes former servicemen of the 58th Army alone 20.3 billion rubles for the first and second campaigns in Chechnya. The payment of this past debt was not funded in the 2003 budget, forcing military personnel to file lawsuits as the only hope to get paid (a great reproach to the government). (NOVAYA GAZETA, 4 Nov 02; WPS Defense and Security, via ISI Emerging Markets Database)

Second, only Chechen civilians are hurt when the estimated 80,000 troops in and around the separatist North Caucasus republic go on rampages to rout out terrorists. The pro-Moscow Chechen Security Council chief, Rudnik Dudaev, has protested against the mopping-up operations, saying that the military was flouting new rules governing the security sweeps that were supposed to avoid human rights abuses. (AGENCE-FRANCE PRESSE, 4 Nov 02; WPS Defense and Security, via ISI Emerging Markets Database) Such fears concerning human rights seem plausible given the history of Russian activity in the area and the conditions the military have on the ground. One Russian Army sergeant said: "[E]very time we arrest a suspect, local officials come protesting and Chechen women stage a rally. This is a real war for us, with explosions and battles every day. But we can do nothing-officially we have only civilians around." (AGENCE-FRANCE PRESSE, 29 Oct 02; WPS Defense and Security, via ISI Emerging Markets Database)

Another concern addresses the fact that this new doctrine gives the military internal "police" powers. One group of influential figures in the armed forces, especially in the General Staff, advocates broader powers for the military in the war against "enemies within." The military even has drafted legislation for a constitutional provision stating that all security structures, including the military, are to be used in response to internal threats. (NEZAVISIMAYA GAZETA, 30 Oct 02; WPS Defense and Security, via ISI Emerging Markets Database) The latest hostage event, and Putin's shift in military strategy, open a door of opportunity for hard-liners to capture enormous powers for the military, setting a dangerous precedent that could ultimately threaten Putin and the government.

Regardless of these concerns, it would be wise for Moscow to step back from this situation and reflect on the root cause of its problems. First, at the root of the Chechnya dynamic are unresolved ethnic and national issues. These problems have grown with the use of military force which, applied conventionally, has precipitated much of the terrorist activity against Moscow. Chechnya's President Aslan Maskhadov explained: "We have nothing to lose by teaming up with hard-line separatists. This war has radicalized us all regarding Russia. I am certain that in the final stage, we will carry out an even more exceptional operation, in the style of jihad, through which we will liberate our land from the Russian aggressors." (AGENCE-FRANCE PRESSE, 1713 GMT, 30 Oct 02; FBIS-SOV-2002-1030, via World News Connection)

Wars in Vietnam and Afghanistan provide historical examples of the military failing to deal with situations rooted in ethnic and national struggles. The military solution will only exacerbate the problem until Putin attacks the root causes of conflict in the region; however, many analysts see that as unlikely since Chechnya has been a convenient vehicle to foster Russian nationalist sentiments and to win elections. (SIYASAT, 26 Oct 02; FBIS-NES-2002-1031, via World News Connection) Still, the hostage crisis might have changed Putin's view and precipitated these fundamental changes in military strategy.

'Mission creep' into Georgia?
Of additional concern is Moscow's desire to increase its influence and access in Georgia. Over the past few months Moscow has taken every opportunity to build up the case that Georgia is harboring terrorists and that Russia would use force to deal with the situation. (THE NIS OBSERVED, 11 Sep 02) Could the increase in military forces in Chechnya and the recent doctrinal and organizational changes be used as a springboard towards future military action in Georgia? The answer lies in the grim reality of Russian military capability both in Chechnya and in Georgia.

The troops in the region are seriously worn out by the war in the Caucasus. Moreover, the reserves of the General Staff have dwindled so much that detachments are being sent to the region that lack a stable structure to fight guerrillas. (NOVAYA GAZETA, 2 Nov 02; WPS Defense and Security, via ISI Emerging Markets Database) Additionally, morale is low, discipline is nonexistent, and frustration with the status quo is high. (THE NIS OBSERVED, 25 Sep 02) Russian armed forces garrisoned in Georgia constitute mostly a symbolic presence. While their presence does provide some advantage, that alone does not mean they have the ability to join any coordinated offensive operation. They are severely limited due to a lack of supplies, equipment and morale. Additionally, they face opposition from their "host country." Georgian Defense Minister Lieutenant General David Tevzadze told journalists in Tbilisi that Georgia would restrict the movement of Russian forces within the country and limit the amount of supplies they bring in to expedite the closure of the two remaining Russian military bases on its territory. He cited the negative effect Russian bases have on Georgia's aspiration to join NATO. (RFE/RL NEWSLINE, 31 Oct 02) Also, after Russia threatened preemptive strikes on Georgia, the Georgian parliament voted to increase defense spending by an additional $5 million. (WWW.CIVIL.GE, 31 Oct 02)

The risk of Putin using his military to strong-arm Georgia is low. Unlike Chechnya, there is too much Western media visibility in Georgia to keep any military operation quiet, and the international outcry would be significant. More importantly, Moscow understands it doesn't have the military capability or horsepower to wage a war on terrorism in Chechnya while simultaneously attacking Georgia.

Putin can announce all the change he wants, but until he can reform his military into one that is properly funded, organized, trained and equipped, he will never win his war or influence regions of the world as he would hope.

by Steve Kwast (

* * * * *

Russia: Armorer of NATO?

Over the last several months Russian leaders have either criticized NATO enlargement or declared it a non-issue. While this may be an ambiguous policy, one thing is certain: The Russian defense industry hopes to capitalize on increased defense spending by NATO's newest members.

Long a supplier to many of the world's more questionable governments (the rogue states or more recently the "axis of evil"), Russia now finds itself being squeezed in its traditional arms market by the United States. Reestablishing and/or expanding cooperation and military sales with many previously embargoed countries for much-needed access has become a necessity for the United States in the war on terrorism. Of particular note are the current or previous customers of Russia's weapons export business, including Azerbaijan, Armenia, Tajikistan and Yugoslavia. (VREMYA NOVOSTEI, 11 Jan 02; What the Papers Say, via ISI Defense and Securities Database)

Of course, with sales to China and India, Russia still has a considerable export business. China's recent arms imports from Russia alone average well over $1 billion per year and, along with sales to India, make up over 60% of Russian weapons exports. (For a more detailed look at Russia's arms export to China and India, see THE NIS OBSERVED, 16 Oct 02.) Yet problems exist. First, Russia itself cannot afford to purchase the products of its military manufacturers, thus forcing almost complete reliance on exports. And Russia's dependence on India and China is substantial. Indeed, Russian Defense Minister Sergei Ivanov recently said that "the Russian defense sector can only be preserved by supplying military hardware to China." Another indication of the problem may be President Putin's decision effectively to disband the monopoly held by Rosoboronexport, Russia's principal arms exporter. (THE NIS OBSERVED, 31 Oct 02) This action may constitute an attempt to invigorate Russia's defense industry. (KOMMERSANT, 6 Nov 02; What the Papers Say, via ISI Defense and Securities Database)

The need to expand its customer base has led (or forced) Russia to pursue new markets, particularly those being created by NATO enlargement. The most obvious are countries that still possess Soviet-era military equipment and are looking to upgrade their armed forces. As Andrei Beliyaninov, managing director of Rosoboronexport, explained, "80-90 percent of the arsenal in eastern and central Europe is Soviet. It has to be supported and maintained." New contracts signed by Poland and Hungary support Beliyaninov's statement. However, even in announcing this success he concedes that there is a problem in "the absence of sufficient domestic purchases" by Russia's own armed forces. (THE FINANCIAL TIMES (London), 1 Nov 02; via Lexis-Nexis)

Greece is top customer
Surprisingly, one of Russia's primary advocates for arms sales to NATO is not a former satellite of the Soviet Union. Greece, the top NATO purchaser of Russian military hardware, has made clear its support for Russian participation in European defense. Russia and Greece have had a military and technical cooperation agreement since 1995 when Greece became the first NATO member to start making large purchases of Russian military equipment. (ROSOBORONEXPORT PRESS SERVICE, 1 Oct 02; PR Newswire European, via Lexis-Nexis) Recent arms sales between the two countries are valued at over $1 billion, and Greece has promised even greater cooperation in both arms production and sales. "We will support development of relations between Russian and the EU, including arms," Greek Defense Minister Yiannos Papandoniou said. Papandoniou's statement is especially significant since Greece is about to head the EU, beginning in January. (IZVESTIA, 5 Apr 02; What the Papers Say, via ISI Defense and Securities Database)

The blossoming military cooperation between Greece and Russia was on full display last month in Athens at the Defendory International 2002 Arms Expo. The Russian manufacturers were considered to be the main attractions at the Expo, which was organized by the Greek defense ministry. There has been a steady demand by the Greeks for Russian arms as they update and reform their military, especially air defense weapons, ships (particularly amphibious and hydrofoils) and anti-tank systems. (ROSSIYSKAYA GAZETA, 3 Oct 02; What the Papers Say, via ISI Defense and Securities Database)

One of the more recent goals of Russia's defense industry has been to join in production of military weapons with European defense industry. (EPENDHITIS, 19 Oct 02; FBIS-EEU-2002-1020, via World News Connection) The benefits here are obvious. The Russians not only would gain access to Western technology and weapon design but also would become a "legitimate" brand name within the European and other Western markets. Strong Greek (and EU) advocacy is a step toward achieving that goal.

Modernizing NATO's newest members
With Greece as a solid customer, the Russian focus is now directly on countries previously part of the Soviet sphere. Poland, Hungary and the Czech Republic, all new members of NATO, must now comply with alliance standards on weapons compatibility and defense spending. Each of these countries possesses large stockpiles of Soviet-era arms and equipment and NATO recognizes that complete replacement would be extremely costly. Modernization of the existing weapons is obviously the more economical choice and is supported by NATO. In fact, updating the military weapons and equipment of these nations is well underway and the Russian defense industry is one of the primary suppliers. (INTERFAX, 21 Sept 02; via Lexis-Nexis)

The most publicized example involves the Russian-produced MiG-29 fighter aircraft. Germany, Hungary, Slovakia, Bulgaria and, most recently, Poland have signed multi-year contracts with a Russian-German consortium for modernization of the MiG-29. The consortium includes the aircraft's Russian manufacturer Mikoyan. Poland alone has 22 of the aircraft and expects to receive another 23 from Germany that were inherited through reunification. At present only 10 are airworthy. The Russian hope is that these initial contracts will lead the countries eventually to consider new MiGs as replacements for the older MiGs instead of US- or European-produced fighters. (NEZAVISIMOE VOENNOE OBOZRENIE, 4 Oct 02; What the Papers Say, via ISI Defense and Securities Database)

The big question is how long Russia will be able to maintain such contracts as these countries gradually shift to a new generation of military equipment. Greece aside, none of these countries has made acquisition of new Russian-made weapons a defense priority. Already Hungary has signed a contract to lease 14 Swedish-made Gripen aircraft beginning in 2005. (MOSCOW NEWS, 2 Oct 02; via Lexis-Nexis) The US and France are also competing to gain sales and have made substantial loans the centerpiece of a proposed sale of fighter aircraft to Poland. The size of the loans ($3-4 billion) will be difficult, if not impossible, for Russia to match. For new members of NATO, and in many cases EU aspirants, the unspoken desire is certainly to acquire the technologically more advanced products of European countries and the United States.

by Dan Rozelle (

Getting personal

While Ukrainian President Leonid Kuchma continues to be politically isolated by the West, the question arises as to the effects this has on Ukraine itself, its political relations and their future developments.

As the November NATO summit in Prague approached, the alliance spokesman, Yves Brodeur, officially stated that Kuchma would not be welcome at the meeting, although he could not be stopped from attending as head of the Ukrainian delegation. (ITAR-TASS, 16 Nov 02; BBC Monitoring, via ISI Emerging Markets Database) The Ukraine-NATO commission session scheduled to take place during the summit was demoted to a foreign minister-level meeting - a move generally understood to be aimed at the exclusion of President Kuchma. While the snub was directed at the president and not Ukraine itself, it is evident that continued strained relations between the country's leader and the West are bound also to have negative effects on Ukrainian relations with the West. One ought to consider the danger that such strained relations could carry over into a post-Kuchma Ukraine if they continue for too long. In this contact, the European Union is also playing its part with lukewarm statements towards Ukraine. The problematic discussions on Ukraine's western border, a future EU border as Poland is approaching membership, are particularly prone to disenchant the Western Ukrainian oblasts, traditionally more pro-Western than the eastern portion of the country.

The danger of blurred lines between the international treatment of President Kuchma and of Ukraine becomes particularly pertinent in view of Kuchma's domestic position vis-à-vis an indecisive and divided opposition. The struggle over the last weeks to decide on a candidate for the post of prime minister has illustrated how the division among political forces plays into Kuchma's hands. Kuchma's dismissal of Prime Minister Anatoly Kinakh and his Cabinet of Ministers on 16 November (UKRAINIAN NEWS AGENCY, 16 Nov 02; Ukrainian News Online, via ISI Emerging Markets Database) followed the failure of parliament to nominate a replacement candidate for the PM post. As Kuchma pushes his candidate, Donetsk Region Governor Viktor Yanukovych, the opposition four (as well as the other parliamentary factions) are undecided about their course both between and within their parties, making for weak opposition. This situation is beginning to ease a smooth path for Kuchma and his candidate, who might well turn out to be a welcome puppet and future presidential candidate in Kuchma's pocket (and could turn out to be a second Pavlo Lazarenko, who is currently standing trial in California).

Kuchma (and with him Ukraine) undoubtedly is facing a large, multifaceted crisis at the moment. However, as the internal opposition front is undermined by its own failure to tread a common path for the time being and international pressure is weighing heavily on the country, one needs to ask whether Kuchma is not in a position to escape less damaged from the crisis than Ukraine itself - and which way Ukraine's international policies would turn in such an scenario.

President Kuchma in fact will be attending the NATO summit. He was listed as head of the Ukrainian delegation in the last participants' list sent to Prague on 17 November. (UNIAN, 17 Nov 02; BBC Monitoring, via ISI Emerging Markets Database) The Ukraine-NATO commission continues to be held at the foreign minister-level, with Ukrainian Foreign Minister Zlenko attending. According to the National Security and Defense Council, Kuchma will participate in the Euro-Atlantic Partnership Council meeting, (NOVY KANAL TV, 16 Nov 02; BBC Monitoring, via ISI Emerging Markets Database) despite NATO spokesman Brodeur's statement that he has not been invited. (ITAR-TASS, 16 Nov 02; BBC Monitoring, via ISI Emerging Markets Database)

A question of ethics

Joining Kuchma on the list of undesirable attendees in Prague is Belarus President Alyaksandr Lukashenka, also known as "Europe's last dictator." As a member of the Euro-Atlantic Partnership, Belarus is also a NATO partner and so could not have been disinvited from the summit. In Lukashenka's case, however, the Czech authorities turned to a highly unusual means of preventing the unwelcome president from attending: denying him a visa to enter the country.

Czech Minister of Foreign Affairs Cyril Svoboda stated on 7 November that "we believe that it is necessary to show certain solidarity with those who fight for human rights and democracy. That is, it is possible not to issue a visa even to a head of state." He went on to state that "it is beyond doubt that Lukashenka's regime tramples human rights underfoot." (PRAVO, 7 Nov 02; FBIS-SOV-2002-1107, via World News Connection)

While expressing indignation at this state of affairs and asserting that it is up to the EU and NATO to be working towards cooperation with Belarus, (INTERFAX, 11 Nov 02; FBIS-SOV-2002-1111, via World News Connection) Lukashenka and his regime have continued to reconfirm their poor human rights record. Belarus ranked an abysmal 124th (out of 139 countries) in the worldwide index of countries according to their respect for press freedom published by French media watchdog Reporters Without Borders. (WWW.RSF.ORG) Despite concern voiced by Freedom House, (RFE/RL MEDIA MATTERS, 25 Oct 02) Lukashenka also signed the contested amendment to the Freedom of Religious Confessions and Religious Organizations Law on 31 October. (INTERFAX, 31 Oct 02; FBIS-SOV-2002-1031, via World News Connection)

The Czech visa discussions are only adding to the problems of Belarus international relations. Relations with the West are undermined not only by the regime's human rights record, but (among other issues) also by its continued flirtations with Baghdad. Further, on 29 October the last member of the OSCE mission left Minsk, (INTERFAX, 29 Oct 02; FBIS-SOV-2002-1029, via World News Connection) although since then the OSCE and Belarus have made some attempts at rapprochement with the encouragement of the EU. In the face of European Union backing for Prague's position, however, Lukashenka made the future of OSCE talks dependent on the outcome of his visa application. (INTERFAX, 14 Nov 02; FBIS-SOV-2002-1114, via World News Connection)

Russian authorities have come out in support of Belarus. Federation Council Speaker Sergei Mironov said that Czech actions concerning Lukashenka's visa have been incorrect, adding that "it's not about Lukashenka, it's about observing the ethical norms of international relations." (INTERFAX, 14 Nov 02; FBIS-SOV-2002-1114, via World News Connection) On the Czech side, Svoboda stated that "certain values must be complied with, foreign policy cannot be purely pragmatic." (PRAVO, 7 Nov 02; FBIS-SOV-2002-1107, via World News Connection) How does one, then, weigh up the ethical norms of international relations and the ethical norms of human rights, and where is the line to be drawn?

by Nadezda Kinsky (

What changes will the new pipeline bring?
Important developments in Azerbaijan have been sidelined in recent months by more dramatic events in Moscow and Georgia. In the meantime, Azerbaijan has begun construction of the Baku-Tbilisi-Ceyhan pipeline and signed an agreement with Russia to define national sectors of the Caspian Sea.

The groundbreaking ceremony took place near Baku on 18 September, attended by the presidents of Azerbaijan, Georgia and Turkey. The international consortium is led by British Petroleum and includes Norway's Statoil, Unocal of the US and the State Oil Company of Azerbaijan (SOCAR). The 1,760km Baku-Tbilisi-Ceyhan (BTC) pipeline is scheduled to be finished by the beginning of 2005, in time for some 450,000 barrels per day to flow from the consortium's main Azerbaijani offshore fields, Azeri-Chirag-Guneshli. (FINANCIAL TIMES, 17 Sep 02)

The construction was delayed for several years because it was not clear whether these fields would yield enough oil to make the project worthwhile. It is projected that in addition to the Azeri oil, some of Kazakhstan's Caspian oil will be directed along this route. Conoco Philips, which owns a portion of Kazakhstan's enormous Kashagan field, bought a 2.5% stake in the BTC pipeline. Three other members of the Azerbaijani consortium (Inpex, Total, ENI Agip) also own stakes in the Kashagan field. (AFX EUROPEAN FOCUS, 30 Oct 02; via Lexis-Nexis)

Russia, which had opposed the pipeline, made one last effort to prevent its construction. The Russian pipeline monopoly Transneft offered lower prices in an attempt to outbid the BTC project. But it became clear that the companies were determined to go ahead. On 23 September, Azeri President Geydar Aliev met with President Vladimir Putin in Moscow where they signed an agreement demarcating their respective segments of the seabed. Moscow had signed a similar agreement with Kazakhstan several months earlier. (ORT, 23 Sep 02; via Lexis-Nexis) On 24 September, Duma Speaker Gennadi Seleznev visited Baku and told the Azeri parliament that the Duma was ready to ratify the agreement. (SPACE TV, 24 Sep 02; BBC Monitoring, via ISI Emerging Markets Database)

The oil routes currently functioning terminate in Russia's port, Novorosiisk, and in Supsa, Georgia. In the first 10 months of 2002, SOCAR exported 2.257 million tons of oil through the Baku-Novorossiisk pipeline. It has persuaded Russia to maintain similar levels in the future. (RIA OREANDA, 5 Nov 02; via Lexis-Nexis) SOCAR also has committed to use of the Supsa line through 2005. According to Azeri spokesmen, that pipeline will remain in demand by companies exploiting Azerbaijan's onshore deposits even after BTC comes online. (TURAN, 24 Sep 02; BBC Monitoring, via ISI Emerging Markets Database)

Azerbaijan also has made provisions to use its oil profits responsibly. The State Oil Fund was formed in 1999 at the behest of the World Bank and the IMF and is supposed to direct oil revenue to social spending. This year the oil fund is expected to spend $45 million (out of $100 million non-oil related spending) to improve living conditions for refugees. Over 200,000 ethnic Azeris became refugees when Armenia and Azerbaijan went to war over the Nagorno-Karabakh region, a part of Azerbaijan that is now overwhelmingly Armenian. Other uses of the fund include infrastructure and communications development. (TURAN, 4 Nov 02; BBC Monitoring, via ISI Emerging Markets Database)

Many analysts have pointed out that the pipeline will alter political alignments in the region -- binding the Caspian states closer to Turkey and Europe, and freeing them from dependency on Russia and Transneft. Certainly in the long term the BTC pipeline will promote Azerbaijan's financial and political independence. However, the pipeline cannot address the two fundamental political challenges facing Azerbaijan at present - ensuring a democratic transition of power after the death or retirement of the current president and peacefully regaining control at least of some of the districts of Azerbaijan now occupied by Armenia.

Aliev's picked successor- his son Ilham - visited Washington on 22 October. Ilham Aliev met with Vice President Richard Cheney, Deputy Secretary of State Richard Armitage and other influential personalities and made a presentation at Johns Hopkins University in which he emphasized the benefits of the BTC pipeline and complained about the continued Armenian occupation of Azeri territory. (For a transcript, see

Aliev's visit attracted less attention than a new lawsuit opened in New York by Czech businessman Viktor Kozeny, who is accusing Aliev senior and junior of fraud and claiming $100 million in damages. (CTK BUSINESS NEWS WIRE, 3 Nov 02; via Lexis-Nexis) Kozeny, who has a shady reputation, [EVENING STANDARD (London), 23 Oct 02] became rich and famous after manipulating the Czech voucher privatization process. But when he tried the same approach in Azerbaijan, he met his match. Kozeny invited Western businessmen to buy into the Azerbaijan privatization process on the expectation that Azerbaijan's company, SOCAR, would be privatized. When the Azeris decided not to privatize SOCAR, the shareholders were left with worthless stock in Azerbaijan's carpet factories. Western firms sued Kozeny, who in turn sued the Azeri government. Previous lawsuits filed in the Bahamas and London failed to persuade the courts that the Azeris had ever promised Kozeny that they would privatize SOCAR.

The US, which has criticized the present government repeatedly for corruption and for repression of opposition parties and popular protests, is much more likely to favor open democratic elections to decide who will rule Azerbaijan than to endorse a backroom deal. The US has some economic levers over Armenia but has always hesitated to use them to secure a resolution to the Nagorno-Karabakh dispute. Instead the US imposed sanctions on Azerbaijan that were only lifted last year.

The Russians are much more likely to look favorably on a less-than-democratic transfer of power and they provide the lion's share of Armenia's weapons and supplies. Over the last two years, Aliev's close relations with Putin have been premised on the expectation that Russia will use its influence with Armenia in Azerbaijan's favor. Although a Russian-sponsored peace accord is unlikely, the recent promises to close down the Nagorno-Karabakh representation in Moscow has given the Azeris some hope. (RFE/RL AZERBAIJAN REPORT, 1 Nov 02)

Over the last decade, Russian politicians have thrown up many roadblocks in the path of Caspian oil development. They are cooperating now because for the foreseeable future Azerbaijan will continue to rely heavily on Russia to overcome its most significant political dilemmas. In the long term, however, the pipeline will give the Azeris more options.

by Miriam Lanskoy (

Oil, economics and the status quo
By far the most significant economic exports of Central Asia are oil and gas. At the center of the business negotiations of Kazakhstan, Turkmenistan and Uzbekistan, and alongside the post-11 September 2001 allied military presence in Central Asia, these exports have been a primary focus of Western policy in the region. While fossil fuels remain the backbone of the generalized economic picture of Central Asia, though, the wealth culled from these natural resources often is not widely distributed; thus other economies gain importance, especially for Kyrgyzstan and Tajikistan. Discussion of developing the economies and the economic culture of Central Asia, therefore, focuses on two main points: On the one hand, there is a status quo failure to diversify production; on the other hand, there is openness to expanded economic cooperation and creative means to deal with debt.

Oil and gas
In efforts to increase their prominence as international oil exporters, Kazakhstan and Turkmenistan both are positioning their markets to meet fossil fuel energy needs. The Russian charge d'affaires, Andrei Molochkov, recently met with Turkmen President Saparmurad Niyazov to discuss facilitating the export of natural gas. According to Molochkov, "Russia would buy 10 billion cubic meters of Turkmen gas a year starting from 2005, and the amount would be enlarged to 20 billion from 2008." (INTERFAX, 1248 GMT, 4 Nov 02; FBIS-SOV-2002-1104, via World News Connection)

In late October, Turkmenneftegaz, the state company which will supply the gas to Russia, announced that the price for next year's export of gas would be $44 USD per cubic meter ($2 US above this year's price) and that the terms would be 50 percent goods and 50 percent hard currency. (ITAR-TASS, 0840 GMT, 27 Oct 02; FBIS-SOV-2002-1027, via World News Connection) This comes at the same time as Turkmenistan's announcement that the proposed trans-Afghanistan pipeline has been postponed indefinitely and that Turkmenistan is willing to begin production at new gas fields should the international market indicate a need to do so. (ITAR-TASS, 1417 GMT, 26 Oct 02; FBIS-SOV-2002-1026, and INTERFAX, 1033 GMT, 28 Oct 02; FBIS-SOV-2002-1028, via World News Connection)

Last Spring, the presidents of Russia and Kazakhstan signed a long-term contract to increase the transit of Kazakh oil through Russia (from 17 million tons a year to 25 million tons). In early November, the director-general of KazTransOil company announced plans to reconstruct the Atyrau-Samara pipeline (from western Kazakhstan to Russia) in efforts to meet the terms of the contract. (ITAR-TASS, 0721 GMT, 6 Nov 02; FBIS-SOV-2002-1106, via World News Connection)

From a Western view, the increased development of these energy markets implies an alternative to reliance on Middle Eastern oil. The US is the leading investor in Kazakhstan, with 2002 investments expected to exceed $6 billion USD. The largest portion of this investment is in the energy sector. (KAZAKHSTAN TODAY, 14 Nov 02; ISI Emerging Markets Database) The deep investment of foreign oil companies, however, has not been entirely welcome. According to Sergei Smirnov, a senior research fellow at the Kazakh Institute of Strategic Studies, "the state has practically lost control over the largest and most promising oil and gas fields." Smirnov further claims that "75 percent of geological reserves of oil and 79 percent of gas reserves are controlled by foreign capital." (EURASIANET, 13 Nov 02; via

Other markets
Oil and gas, of course, are only part of the Central Asian economic picture. Kyrgyzstan is preparing to export electricity to Siberia as well as to provide tin and tungsten through the development of the Sary-Dzhaz deposit. (INTERFAX, 1341 GMT, 5 Nov 02; FBIS-SOV-2002-1105, and ITAR-TASS, 0933 GMT, 5 Nov 02; FBIS-SOV-2002-1102, via World News Connection) Kyrgyzstan relies largely on the extraction of its natural resources and this reveals an economic vulnerability. The Kumtor gold mine, for example, accounts for 38 percent of the country's industrial output and a third of its exports. (KABAR, 6 Nov 02; via This exposes the lopsided nature of the economy and the threat which a fall in gold prices poses to the stability of the country's markets.

These shortcomings can be seen in other countries as well. The proclaimed "failure" of the cotton crop in Turkmenistan, (ITAR-TASS, 1317 GMT, 5 Nov 02; FBIS-SOV-2002-1105, via World News Connection) for example, resulted in greater emphasis being placed on the extraction of natural resources than on diversification of production. Yet another aspect of this failure to diversify is reflected by the presence of "guest workers" who seek employment outside their home country. Russia is a popular destination for these "guest workers" as individuals leave cities such as Andijan and Ferghana, Uzbekistan, to work for indefinite periods in cities such as Novosibirsk and Tomsk, where they can make more than nine times the local Uzbek wages. (EURASIANET, 3 Oct 02; via

Recognizing the need to increase jobs and opportunities, Central Asian countries are increasingly proactive in attracting foreign investors. Kyrgyz President Askar Akaev has encouraged France to increase direct private investments, while Tajikistan recently hosted a trade fair with Iran to indicate expanded economic cooperation between the two countries. (ITAR-TASS, 2033 GMT, 5 Nov 02; FBIS-SOV-2002-1105, and IRNA, 1449 GMT, 30 Oct 02; FBIS-NES-2002-1030, via World News Connection) And while the Uzbek government recently set up a special section within the Cabinet to handle foreign economic relations, (INTERFAX, 1329 GMT, 5 Nov 02; FBIS-SOV-2002-1105, via World News Connection) Kazakhstan President Nazarbaev went one step farther by encouraging the OSCE to create a regional strategy for developing economics, democracy and the environment. Commenting on this need, Nazarbaev said, "We have never had a democratic set-up or a market economy before. Therefore, we categorically reject recommendations on how to accelerate democratic reforms artificially." (INTERFAX, 1310 GMT, 6 Nov 02; FBIS-SOV-2002-1106, via World News Connection)

Nazarbaev's statement emphasizes the need of pragmatism in reform. The World Bank has taken a step toward encouraging such reforms by giving financial incentives for change. The World Bank Environmental Department is discussing writing off debt of some developing countries, including Kyrgyzstan, in exchange for increased attempts to conserve natural resources and protect the environment. (INTERFAX, 1415 GMT, 1 Nov 02; FBIS-SOV-2002-1101, via World News Connection) Most often, however, Central Asian countries are not given real incentives for implementing economic reforms because donor governments are lax in tying aid to economic improvements. (EURASIANET, 11 Sep 02; via Without such incentives, the governments of Central Asia remain less inclined to alter the status quo, opting instead to focus their energies on a few key sectors that are particularly vulnerable to the demands of the world community.

by David W. Montgomery (

'Freedom fighters or terrorists' debate continues
The recent hostage crisis in Russia has sent political repercussions rippling through the three Baltic states. Due to their strong support for the right of self-determination, Estonia, Latvia and Lithuania long have been de facto supporters of the Chechen independence movement; however, Baltic support for Chechnya is coming under scrutiny from domestic forces as the debate of freedom fighter versus terrorist continues within the international system.

The Vilnius-based Chechen Republic of Ichkeria Information and Culture Mission has become the focus of a domestic political struggle between Lithuanian politicians. The political debate surrounding the breakaway republic and the proper level of Lithuanian support began even before the Moscow hostage crisis. Igniting the debate was the desire of the Seimas opposition leader, Vytautas Landsbergis, to attend the World Chechen Congress in Denmark. Landsbergis was not encouraged by the Seimas to attend the congress, which formally disapproved his visit (citing Lithuania's lack of formal recognition of the Chechen republic). (BALTIC NEWS SERVICE, 1550 GMT, 28 Oct 02; FBIS-SOV-2002-1028, via World News Connection)

The parliament, already split by the Landsbergis debate, became more divided over the Chechen issue when the hostage crisis erupted. A special interparliamentary association between the Chechen Republic of Ichkeria and the Seimas went through a series of public vettings. (BALTIC NEWS SERVICE, 1219 GMT, 31 Oct 02; FBIS-SOV-2002-1031, via World News Connection) Some members decided to distance themselves from the association in protest against the hostage taking, while eight other parliament deputies actually requested membership in the association. The new recruits were drawn to the organization by the immense attention devoted to the hostage drama. As Social Democrat Kestutis Krisciunas explained his decision to join, "I want to express my solidarity with the Chechen nation. Every nation has the right to self-determination." But he was quick to add that "terrorist or military actions must not be taken to pursue this aim." (BALTIC NEWS SERVICE, 1219 GMT, 31 Oct 02; FBIS-SOV-2002-1031, via World News Connection)

The admission of eight new members to the interparliamentary association helped to support the opposition of Vilnius municipality representatives to Russian demands for the closure of the Chechen mission. Russia, using the hostage crisis as a pretext to infringe upon Lithuanian sovereignty, demanded on 28 October that the Lithuanian government close the mission and disassociate itself from the Chechen organization, claiming that the mission serves only to facilitate Chechen activities within Lithuania. The presence of MPs in the association bolstered the city authorities' stand to keep the mission open. (BALTIC NEWS SERVICE, 0807 GMT, 29 Oct 02; FBIS-SOV-2002-1029, via World News Connection)

In Latvia, response to the hostage situation in Moscow took the form of tighter borders, as the government stepped up operations along the Latvian and Lithuanian boundary. An earlier arrest of illegal immigrants from Chechnya had increased Latvian fears that a Lithuanian crackdown on illegal immigration might invoke a new round of large-scale illegal border crossings from the approximately 100 Chechens who are detained in Lithuania. (BALTIC NEWS SERVICE, 0657 GMT, 25 Oct 02; FBIS-SOV-2002-1025, via World News Connection)

The hostage crisis made more visible the sharp ethnic divisions in the Estonian parliament, as deputies reacted to motions by pro-Russian political factions. In a letter addressed to Estonian Foreign Minister Kristiina Ojuland, three members of the United People's Party of Estonia - Viktor Andrejev, Jevgeni Tomberg, and Valentina Vossotskaja -- called for the closure of the Chechen Cultural Center in Estonia due to the "international evaluation of recent events in Moscow and on the grounds of the UN Security Council's resolution No. 1373, which bans any kind of support for terrorists." (BALTIC NEWS SERVICE, 1242 GMT, 30 Oct 02; FBIS-SOV-2002-1030, via World News Connection) The letter rapidly received a sharp rebuke from the chairman of the Reform Party, Jurgen Ligi, who stated that "the principles of freedom of speech and ethnic minorities' cultural autonomy are laid down in our Constitution. A democratic state cannot interfere in the activities of citizens or associations of citizens residing in the country on the basis of ethnic criteria alone." (BALTIC NEWS SERVICE, 1653 GMT, 31 Oct 02; FBIS-SOV-2002-1031, via World News Connection)

by Michael Varuolo (

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