SOURCE: The St. Petersburg Times
DATE: Issue #794 (59), Tuesday, August 13, 2002
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TITLE: Relatives Remember Kursk Dead
AUTHOR: By Kevin O'Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two years to the day since a torpedo explosion sent the submarine Kursk to the bottom of the Barents Sea, relatives on Monday remembered the 118 sailors who died on board.
Flags were at half mast and prayers said in churches, synagogues and mosques as relatives of the crewmembers gathered in Vidyayevo, whence the submarine made its last journey, St. Petersburg, Moscow and Kursk.
Despite a government commission ruling that Russia's worst peacetime submarine disaster was an accident, feelings remain high among relatives that the true reasons for the sinking have yet to come out.
In the Arctic navy base of Vidyayevo, relatives gathered Monday for the unveiling of a black marble monument in the shape of the submarine's conning tower. They then threw flowers into the Barents Sea.
"This pain will now linger on till the end of our days. It will never die," Lidiya Silagava, mother of one of the sailors, told NTV.
Few relatives were present for a ceremony in Moscow, which attracted criticsm from both relatives and press. A grand five-meter bronze statue was unveiled outside the Armed Forces Museum depicting a sailor, his fist clenched across his chest, as a crippled submarine beside him slips into the sea.
"One of the best submarine crews of the Northern Fleet died," Admiral Viktor Kravchenko, the head of the General Staff of navy, said at the Moscow ceremony. "It is a memorial to courage, heroism and grief."
The museum opened a small exhibit showing photographs of crewmembers and bits of equipment salvaged from the Kursk.
Relatives of the crewmembers complained that hardly any were invited to the ceremony in Moscow. Those attending had to pay their own travel expenses.
"They will not forget to invite the president and the Moscow mayor, admirals and generals. As for the Kursk families: who cares?" Captain Igor Kurdin, chairperson of the organizing committee of the St. Petersburg submariners club, said on Ekho Moskvy radio last week. "The relatives have now been pushed to the background. Priority is now given to publicity."
Other absentees from the Moscow ceremony were President Vladimir Putin, whose initial inaction after the disaster had been heavily criticized, and Moscow Mayor Yury Luzhkov.
"It's not clear to me," wrote journalist Alexander Yemelnikov on the front page of Rossiiskaya Gazeta on Monday, "in the name of what and for what purpose a disproportionate statue of a five-meter sailor and a toy submarine have been put up."
Why, asked Yemelnikov, for an event that arose from "negligence, technical defect, a mistaken decision spiced with 'Russian sloppiness'" should "a statue be placed in front of the main museum of the country that glorifies the victory of Russian arms."
Many of the dead sailors' relatives and a number of Russian newspapers refuse to accept the government's enquiry into the disaster, which ruled that the submarine's sinking was the result of an accidental explosion for which no one was to blame.
The 133-volume report says that the explosion that sank the submarine was due to a faulty torpedo. A leak in the torpedo's propellant - an unstable mixture of hydrogen peroxide - caused the blast. A criminal investigation into the accident has since been dropped.
The report also said that none of the crew could have been saved from the submarine despite remaining alive for hours after the explosion on Aug. 12, 2000. Two years ago, the government had been harshly criticized for its slow reaction and reluctance to call in foreign aid.
A television documentary on Sunday said that the navy knew within hours of extensive damage to the Kursk but officials hid the information for days, prolonging the agony of relatives, Reuters reported. The bungled rescue operation and often callous attitude shown to the relatives highlighted the decline of the Russian navy.
"The more we get to know the official material the more questions we have," Boris Kuznetsov, a lawyer representing 40 families of the dead sailors, was quoted by Interfax as saying Monday.
A poll by the All-Russia Public Opinion Center showed the Russian public divided over what they believed to be the cause of the disaster. Twenty-eight percent seemed to back the state commision's ruling by saying the submarine sank as a result of an accident. Almost the same number, 26 percent, believed that a lack of preparation caused the accident, while 17 percent said that the disaster was caused by a subversive act and 16 percent by the crew's negligence.
TITLE: Floods In South Claim 58 Lives
AUTHOR: By Mara D. Bellaby
PUBLISHER: The Associated Press
TEXT: MOSCOW - Giant cranes hoisted ruined cars and other debris out of the Black Sea on Monday, as the death toll from the torrential flooding that hit the southern resort region rose to 58.
Russia suffered most from the floodwaters that swept across Europe this past week, killing a total of 70 people, destroying homes and washing away roads and bridges.
Cleanup crews, working under sunny skies, scoured the normally crowded coastal beaches, searching for more bodies among the wreckage, said Irina Andriyanova, a spokesperson for the Emergency Situations Ministry. She said 4,000 square meters of coastline had been inspected.
Thousands of tourists who had descended on the Black Sea Coast for their summer vacations were caught up in the surprise flooding. Many remain stranded, their cars swept out to sea by a wall of water that came rushing down from the mountains.
Interfax reported that as many as 4,000 tourists were still trapped in Shirokaya Balka, a scenic coastal village that was devastated by the flooding.
Ivan Aristov, the deputy chief of the administration of the Black Sea port of Novorossiisk, said that all would be offered the chance to return home. But NTV television reported Monday that many tourists were choosing to stay, saying that they had already paid for their vacations.
Meanwhile, Prosecutor Nikolai Buzko said an investigative team was being formed to examine all of the deaths for possible criminal prosecution, Itar-Tass reported. The team was also examining why some buildings had been erected in areas where development is prohibited due to erosion and flooding concerns.
In Germany, Bavaria and Baden-Wuerttemberg states both declared emergencies as weekend rains washed out roads, caused landslides and flooded homes.
Firefighters in the eastern city of Leipzig were called out 300 times in the early hours of Monday morning, as residents tried to protect their homes from rising floodwater.
A police officer died after her car ran out of control and turned over late Sunday night on the way to Wismar on Germany's Baltic Sea coast. Near the city of Jena, another driver was killed in an accident that also injured nine others, officials said.
Austria suffered its first casualty in the flooding when a fire fighter was swept away by a swollen river in the town of Mariapfarr in Salzburg province and was presumed drowned, officials said.
Authorities used helicopters to rescue stranded homeowners from rooftops and 4,000 soldiers joined sandbagging operations Monday.
Officials evacuated dozens of residents from towns and villages in parts of the waterlogged provinces in Austria. In Linz, about 200 kilometers west of Vienna, emergency personnel lowered baskets from helicopters to rescue homeowners, Austrian radio reported.
Water levels in the Danube River, which flows through Vienna, were also being anxiously monitored.
TITLE: Cross-Border Tensions Rising
PUBLISHER: Combined Reports
TEXT: MOSCOW - Tension between Russia and Georgia continued to rise on Monday as Defense Minister Sergei Ivanov claimed that some of the rebels killed recently by federal forces in Chechnya had Georgian refugee-identification cards, while Georgia accused Russian border guards and Abkhaz separatists of illegally crossing onto its territory and firing at a Georgian helicopter.
Ivanov asserted that some Chechen rebels killed after crossing the border from Georgia were men who had been listed as missing by their relatives following search operations in which federal troops question and detain Chechens they suspect of rebel activity. Chechen civilians and human-rights groups say that dozens of civilians are killed every month as a result of the operations, mostly young men who are detained and never seen again.
"I think you clearly understand what the reality was, when the rebels accused federal forces of ... inhumane treatment, atrocities, etc., and, in the meantime, they were quietly leaving for Georgia, where they were trained for terrorist acts, and now they tried to return home," Ivanov said on ORT television.
Ivanov, who was meeting with military officials in Russia's Kabardino-Balkaria region, also said Georgia could not oust rebels from its lawless Pankisi Gorge without Russia's help and "it is no secret that official Tbilisi indulges them."
Georgian officials acknowledge that there may be rebels among the Chechen refugees who have crossed the border into the gorge, but refuse to allow Russian military activity on the ground and blame the problem on Moscow.
"The problem was not created by Georgia. It is the result of one of the tragic problems of Chechnya," Georgian President Eduard Shevardnadze said in his weekly radio address Monday.
Shevardnadze also said that forces from Georgia's breakaway province of Abkhazia had entered Georgian-controlled territory and fired on a Georgian helicopter Sunday. The alleged incursion by the 40-soldier unit followed a separate advance by Russian border guard units into Georgia a week ago, said Emzar Kvitsiani, the Georgian presidential envoy to the disputed region. The Russians left after Georgia complained, Kvitsiani said.
Both Russia and Abkhazia denied the accusations, and an Abkhaz official insisted it was Georgia that invaded his republic's territory.
Abkhazia's Vice President Valery Arshba denied that Abkhaz forces had crossed into Georgian-controlled territory or fired on a Georgian helicopter. "On the contrary, a helicopter from the Georgian side crossed into our territory Sunday," he said. "A warning shot was made. If there is another such case, we'll shoot it down."
(AP, SPT)
TITLE: Census Numbers May Wait
AUTHOR: By Larisa Naumenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The long-delayed census is finally to be held in October, but it seems the government may have to put up with another delay before it can use the data, after the Moscow Arbitration Court on Friday canceled the results of a tender the State Statistics Committee held earlier this year to choose a company to supply the software for processing the census data.
A two-stage tender was held from Jan. 22 until Feb. 11, and four Russian software companies applied to participate: ABBYY Software House, Croc Inc., Intellektualniye Sistemy and Step Logic. During the first stage, the State Statistics Committee was to determine which applicants met the technical requirements, and during the second stage to judge the companies' bids.
Croc was the only company to clear the first stage and consequently won the right to provide the software, which makes it possible to scan information from the paper questionnaires and automatically put it into the database.
ABBYY Software House appealed the decision to the arbitration court on April 16, saying it was unfair and violated the legislation on tender procedures by government agencies.
"The tender was held without an alternative with only one company having been chosen for the final stage," said Aram Pakchanyan, ABBYY's vice president. "The decision resulted in the government spending more of the country's taxpayers' money."
TITLE: Taivanchik Hearing Ordered to Stay Put
AUTHOR: By Andrew Dampf
PUBLISHER: The Associated Press
TEXT: ROME - An Italian court ruled that extradition hearings for Alimzhan Tokhtakhounov, an alleged Russian mobster accused on U.S. charges of fixing Olympic ice skating, will not be moved from Venice to Tuscany, the suspect's lawyer said Saturday.
Lawyer Luca Saldarelli had requested the move, saying that his client had been picked up by police in the Tuscan seaside resort of Forte dei Marmi and should be processed there.
Prosecutors noted that the suspect was formally arrested in Venice and they argue that the attempted move was a stalling tactic.
"The Venice court decided [Friday]," Saldarelli said by phone from his home in Tuscany. "But I'm still awaiting word from a high court in Rome regarding a request I made challenging the initial arrest. They should decide on that next month."
This legal challenge is based on Saldarelli's argument that authorities illegally transported Tokhtakhounov from his Forte dei Marmi home to Venice before officially arresting him.
Court officials and prosecutors were unavailable for comment Saturday.
U.S. prosecutors say Tokhtakhounov, who is nicknamed "Taivanchik," because of his asian appearance, persuaded a French judge to vote for the Russian pairs team at the Salt Lake Olympics, and a Russian to vote in turn for the French ice-dancing team.
Italian police have released limited - and sometimes unclear - transcripts from wiretapped conversations between Tokhtakhounov and various callers including alleged discussions of fixing.
A scandal broke out after Russians Yelena Berezhnaya and Anton Sikharulidze won Olympic gold by the slimmest of margins in pairs figure skating on Feb. 11, defeating Canadians Jamie Sale and David Pelletier. A week after the pairs competition, the ice-dancing team of Marina Anissina and Gwendal Peizerat won France's first gold in figure skating since 1932.
A day after the Russians won, French judge Marie-Reine le Gougne said she had been pressured to vote for them. She insists she had nothing to do with any fixing scheme.
The judging flap, resulted in a duplicate set of gold medals being awarded to the Canadian pairs team.
Italian police say they came across Tokhtakhounov during a wide Russian- mafia investigation. His representatives say he was merely a successful businessman who enjoyed spending time with celebrities and athletes.
Russian sports officials have denied any wrongdoing, and denounced what they called "groundless attacks" on their athletes. French skater Anissina, who Italian police say appears on some of the wiretaps, denies all involvement in corruption and insists it is not her voice on the tapes.
Meanwhile, French newspaper Le Figaro reported Friday that the French Skating Federation chief Didier Gailhaguet believes the FBI may have orchestrated the scandal to have grounds to extradite the reputed mobster.
Gailhaguet said he was questioned by an FBI agent during the Salt Lake City competition, but said in an interview with Le Figaro that he was not asked about Tokhtakhounov.
The affair for which he was being questioned dates from "a while back," he quoted the agent as saying.
"I have to talk to you about the influence of the mob in figure skating, which has existed for a long time," Gailhaguet quoted the agent as saying, Figaro reported. He did not identify the agent by name.
"We talked about money laundering, arms trafficking, maybe terrorism," Gailhaguet told the newspaper.
"But to seek his [Tokhtakhounov's] extradition, a complaint needed to be lodged on American territory. Today, i wonder whether the affair started in Salt Lake wasn't orchestrated for that purpose," he said.
In New York, FBI spokesperson Joseph Valiquette said: "It's absolutely not true."
Gailhaguet said Anissina was introduced into the Russian jet-set in France by Tokhtakhounov and had befriended his daughter, a Bolshoi dancer.
TITLE: Visa Hassles Frustrate Peace Corps Plans
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW - The U.S. Peace Corps program has canceled plans to send a new batch of volunteers to Russia this year, because the government is refusing, without explanation, to issue visas, the program's acting director for the country said Monday.
Jeff Hay said he has received no explanation from Russian authorities. A spokesperson for the Foreign Ministry's operative-affairs division said the ministry would have no comment.
The Peace Corps, which has had volunteers in Russia since 1992, had planned to send 62 new volunteers for two-year stints this fall, but has now abandoned the plans, Hay said. The program opened in Russia a year after the collapse of the Soviet Union.
In addition, 30 of the 64 volunteers who were halfway through their service periods have been refused visa extensions for another year, he said. Seventeen of the volunteers had been waiting in China for extensions, but have returned to the United States. Thirteen others, who were working in western Russia, will depart by Aug. 21, Hay said.
Peace Corps volunteers previously had problems with Russian visas, but those difficulties were attributed to bureaucratic snags.
This time, "I think it's bureaucratic, but I'm not sure it's inefficiency," Hay said.
He noted that, over the past year, a number of newspaper articles had criticized Peace Corps workers as unqualified for their duties - primarily teaching English - and called the criticism "outrageous."
The volunteers whose extensions were approved will stay in their posts.
The Peace Corps was founded by the U.S. government in 1961 to help poor and developing countries improve education, health and agriculture and to promote better relations between the United States and countries that were often suspicious of its intentions.
TITLE: Kaliningrad Proposal Panned
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - President Vladimir Putin's special envoy for dealing with the issue of Kaliningrad met with Lithuanian officials Monday, but rejected their proposal to introduce free, multiple-entry documents for its residents, saying it did not solve the problem of unrestricted travel for all Russian citizens.
"Preferential treatment for the residents of one region of our country at the expense of the residents of other regions traveling from [one part of] Russia to [another part of] Russia is completely unacceptable," Dmitry Rogozin, head of the State Duma committee on foreign affairs, told Interfax on the eve of his visit to Vilnius.
Travel between the Baltic exclave of Kaliningrad and mainland Russia promises to become problematic after the region's neighbors, Poland and Lithuania, join the European Union, which is expected by 2004. As EU entry nears, the two countries have been required to tighten border controls and visa regulations in preparation for joining the Schengen group.
Earlier this month, Lithuanian President Valdas Adamkus proposed introducing long-term visas, which could be issued free of charge, to Kaliningrad residents who frequently travel to Lithuania, Interfax reported. However, Rogozin wasn't impressed.
"I regard this [Adamkus' proposals] simply as an attempt to call visas something else without changing the fundamental approach," Rogozin was quoted by Interfax as saying.
TITLE: IN BRIEF
TEXT: Rates Up, Down
ST. PETERSBURG (SPT) - For the first time in ten years, the birth rate in St. Petersburg has gone up and the death rate gone down, the city administration announced Monday, according to Interfax.
Statistics provided by the city's Statistics Committee showed that 44,868 deaths were registered in the city in the first seven months of 2002, compared with 45,389 in the same period of 2001.
At the same time, according to the report, 18,109 births have been reported in the first seven months of 2002. This compares with 29,438 in the whole of 1999, and 31,970 in the whole of 2000.
Sobchak Remembered
ST. PETERSBURG (SPT) - A memorial service was held Monday for the first mayor of St. Petersburg, Anatoly Sobchak, to mark the 65th anniversary of his birth, Interfax reported.
The service, at the Nikolsky Cemetery in the Alexander Nevsky Monastery, was led by the senior priest of St. Isaac's Cathedral, Father Boris.
After the service, Sobchak's widow, Lyudmila Narusova, explained that, while he was alive, Sobchak was never in St. Petersburg for his birthday, since he disliked such celebrations, Interfax reported.
7 Killed in Chechnya
VLADIKAVKAZ, North Ossetia (AP) - Five federal service personnel and two police officers were killed during the preceding 24 hours in Chechnya, an official said Monday.
Rebels attacked Russian outposts 15 times, killing two soldiers and wounding five, an official in the Moscow-backed administration of Chechnya said on condition of anonymity.
Two soldiers died when their truck was shelled and one was killed when a jeep hit a land mine, the official said.
From Picks to Picket
MOSCOW (SPT) - About 50 miners from various regions began a picket of the Energy Ministry on Monday, Interfax reported.
The miners, who occasionally knocked their helmets against the pavement outside the ministry's offices on Kitaisky Proyezd, were demanding the payment of wage arrears and the continuation of a government program to resettle workers in closed mines in the Far North to central Russia.
"The state should finally pay attention to the mining industry," said Viktor Semyonov, a trade-union leader from Vorkuta who is one of the organizers of the picket.
He said that after three days of picketing the ministry, the miners planned to move to the White House. They requested a meeting with President Vladimir Putin.
A Question of Taste
MOSCOW (SPT) - President Vladimir Putin has exasperated local architects by ordering a multimillion dollar residential and office complex to be constructed in Yekaterinburg for his envoy to the Urals Federal District, Pyotr Latyshev.
"It will be a humiliation for Yekaterinburg," the head of the city's public architects' council, Gennady Belyankin, said by telephone Monday, complaining that the complex's design is outdated.
Belyankin said the project was developed by a Cypriot company Ni and approved by the presidential administration without consulting with Yekaterinburg authorities.
TITLE: Power Struggle Breaks Out at Local Agricultural Concern
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Raisa Streis was reelected as general director of Leto at an extraordinary general meeting on Monday, the company's press service reported. The vote to oust Streis came after a three-month struggle for power at Leto, one of the region's major agricultural concerns, with an attempted hostile takeover coming from the Faeton financial group.
Leto is the largest company operating greenhouses in the Northwest Region, producing over 12,000 tons of vegetables per year and employing 1,300 people. According to the firm's press service, the Imperia group started buying Leto shares in May, with reports in the local press maintaining that Imperia was acting on the behalf of Faeton, a petroleum concern which is reputed to be selling off its petrol-related assets in St. Petersburg and the Leningrad Region and looking to move into other sectors.
At present, Faeton has acquired about 40 percent of shares in Leto, at a cost of around $1 million, while the staff of Leto and an investment company, Evrika, collectively hold another 55 percent. According to a business-development plan approved last week by the company's management, Leto requires $1 million in investment in order to improve the profitability of its production facilities. The firm's press service has said that the staff and Evrica are ready to invest that money. According to press reports, however, Faeton intends to raise the necessary investment funds by selling off some of the company's assets, with experts valuing its land on the Pulkovskoe Shosse alone at up to $20 million.
Having insisted on the extraordinary general meeting on Monday, Faeton failed to replace the company's general director. In an official statement issued by Faeton at the end of last week, the concern said that in the event of it being unable to replace the general director, it would not carry on pursuing this goal. Nevertheless, at Monday's meeting, Faeton and Evrika called for another extraordinary general meeting to vote on the replacement of Leto's general director and the oversight board. That meeting has been scheduled for October.
Leto said on Monday that 73 percent of the shares were represented at the extraordinary general meeting and that 87 percent of votes cast were in favor of Streis. The firm's press service described the meeting as having been "fair" adding that "future cooperation between old and new shareholders will be discussed in the near future."
Faeton representatives could not be reached for comment on Monday.
The management and employees of Leto have already protested against the attempted hostile takeover, with the staff expecting major layoffs in the event of Faeton obtaining a controlling stake. In June, the Federation of Trade Unions asked the St. Petersburg administration to take action in the dispute. As a result, both Governor Vladimir Yakovlev and the presidential representative to the northwestern region, Viktor Cherkesov, have held meetings on the issue.
Alexander Sazhin, spokesperson for the St. Petersburg administration's Economic Development, Industrial Policy and Trade Department, said in a telephone interview on Monday that "Our position is that Leto's profile remain as it is, but we can't prevent Faeton buying the shares." He added that Yakovlev had given the city's property committee (KUGI) instructions to consider the possibility of the city administration acquiring a controlling stake in Leto. As yet, however, there has been no comment from KUGI officials on these plans.
According to Leto, extraordinary general meetings are not the only approach being used in the struggle for control at the company. In a telephone interview on Monday, a spokesperson for Leto said that an arbitration court has frozen the company's accounts and property, following legal actions brought by creditors. The company's general director Raisa Streis said in an interview last week that "The work of the company is being paralyzed by legal actions initiated by structures affiliated to Faeton."
TITLE: Kudrin Submits 2003 Budget
AUTHOR: By Victoria Lavrentieva and Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Alexei Kudrin submitted the final version of his Finance Ministry's 2003 draft federal budget late Thursday, officially opening debate on the election-year spending bill, which is notable for a sharp rise in debt payments and a disproportionate jump in allocations for defense and law enforcement.
The bill, which will be debated by the cabinet on Thursday and submitted to parliament Aug. 26, calls for a 19.6-percent jump in state spending to 2.33 trillion rubles (about $68.5 billion at the ministry's ruble-rate projections) and forecasts revenues of 2.4 trillion rubles, 12.9 percent higher than in 2002.
The basic parameters include an inflation target of between 10 percent and 12 percent for the year; an average ruble rate of 34 to the dollar; and a planned surplus, for the third consecutive year, of 0.6 percent of gross domestic product, which was revised down from 0.77 percent.
The Finance Ministry expects to record a surplus, despite paying all its debt obligations, which peak at $17.5 billion next year, $5 billion more than the average over the past several years. The ministry also expects gross-domestic-product growth to reach 3.4 percent, or 12.85 trillion rubles, while revenues are expected to equal 18.45 percent of GDP.
Finance Ministry officials have stressed that their main priority is fostering stable macroeconomic indicators amid the debt-payment crest but, aside from creditors, the regions and the defense industry are slated to gain the most.
At first glance, social spending looks set to rise 54.2 percent, but the number is deceiving, because nearly 90 percent of the proposed 53-billion-ruble hike is for higher pensions for military and law enforcement personnel. Additionally, law enforcement/national security is slated to receive 45.9 percent, or 77 billion rubles, more than it did last year.
Other key spending hikes include the judicial system (up 33 percent), culture (up 35.5 percent), education (21.5 percent), science (21.3 percent) and health (21.1 percent).
In ruble terms, the biggest winners will be the regions, with an extra 102 billion rubles, and the Defense Ministry, which is in line for a 26-percent jump in funding, to 357 billion rubles, or about 15 percent of the entire budget.
The emphasis on defense reflects the steady growth in funding that the sector has received since President Vladimir Putin came to power and made it a priority.
In January, Putin approved an armament program that defines the state's weapons and equipment requirements through 2010. The 43-volume program is secret, but analysts note that a good chunk of defense spending will likely revolve around research and development and modernization until 2005, since General Anatoly Kvashnin, chief of the General Staff, has said that Russia will not embark on any major new arms procurements until 2005 to 2008.
According to Kudrin, who is also deputy prime minister, roughly a third of all defense spending in 2003 will go to R&D and procurement.
Currently, the most ambitious R&D project is the fifth-generation fighter, which AVPK Sukhoi is leading.
"It's important that the allocation for research and development is increasing, but the main issue is whether it will be realized," said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies. "Otherwise, we will either have to buy arms abroad or rebuild the industry from scratch, like in the 1930s."
R&D and procurement programs have been chronically underfunded in the past decade. In 1998, for example, such programs received just 12 percent of what was stipulated in the budget.
Defense-industry problems aside, budget watchers at home and abroad say the biggest test for the government will be hitting its macroeconomic targets, which will be more difficult than ever due to the debt peak. And one of the biggest questions that remains to be answered is whether Russia will have to borrow abroad again to do so.
"But any additional relaxation of fiscal policy in 2003, however small, will make it difficult for the Central Bank to prevent the strong balance of payments from causing a real appreciation of the ruble," said Poul Thomsen, head of the Moscow office of the International Monetary Fund, which monitors the government's budget process.
TITLE: U.S. Report Puts Russia At World No. 2 in Arms
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - When it comes to selling arms, Russia holds a firm second place after the United States, according to a new report by the U.S. Congressional Research Service.
In 2001, Russia secured $5.8 billion in arms deals, about half of the $12.1 billion signed by the United States, according to the report titled "Conventional Arms Transfers to Developing Nations, 1994-2001," a copy of which was obtained by The St. Petersburg Times.
Russia does not release annual figures on arms deals.
However, Andrei Belyaninov, head of state arms trader Rosoboronexport, said in July that Russia ranks in third or fourth place.
The country signed more than 1,300 contracts last year, according to Rosoboronexport Deputy Director Viktor Komardin.
The U.S. report, released annually for the past 20 years, tracks global arms deals with a primary focus on deliveries to developing countries.
The report said Russia last year sealed $5.7-billion worth of arms deals to developing countries, while the United States inked $7 billion. Since 1998, Russia has signed deals worth $19.8 billion, or 22.6 percent of all sales to developing countries, while the United States has $35.7 billion, or 40.8 percent.
The 2001 figures for worldwide sales showed a drop from the previous year amid a global economic downturn. The report said Russia clinched deals worth $8.4 billion in 2000, while the United States had $18.9 billion.
Overall, $26.4 billion in deals were struck in 2001, compared to $40 billion the previous year, the report said. The figure is close to an eight-year low of $25.4 billion seen in 1997.
France came in third place with $2.9 billion, followed by Germany with $1 billion, China with $600,000 and Britain with $400,000.
While coming in second in the number of contracts signed, the report ranks Russia third in deliveries. In 2001, Russia delivered arms worth $3.6 billion, of which $3.4 billion went to developing states. The United States made deliveries worth $9.7 billion ($6 billion to developing nations), and Britain $4 billion.
The report cites a number of big contracts signed in 2001, among them a $700-million deal for delivery to and licensed production of T-90C battle tanks in India, a deal worth more than $1.5 billion for nearly 40 Su-30MKK fighters and $400-million worth of S-300PMU2 air defense systems to China, MiG-29s for Myanmar and Yemen, and a $600-million deal with South Korea to deliver helicopters and other military equipment in exchange for Russian debt.
Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies think tank, said the report's figures for contracts were close to his center's estimates of $5.6 billion, while deliveries were just $100 million short of the official government figure, which is $3.7 billion.
The report does raise some questions that it does not answer. For example, it increased 2000 contracts to $8.4 billion, from $7.7 billion in last year's report.
Some analysts said last year that the sum was inflated by around $2 billion.
"Every single year, it is revised from scratch," Richard Grimmett, the author of the report, said by telephone from Washington.
"Individual numbers are based on information at the time the report is prepared," he said.
He said the upgrade to $8.4 billion may in part account for deals signed with Iran that only later came to light. He said Russia is Iran's main arms supplier, winning $900 million of the $1.2 billion in deals Tehran has signed since 1998.
Grimmett would not elaborate on the deals but stressed he had access to U.S. government information unavailable to the general public.
Arms trade with Iran remains a sticking point after Russia said in 2000 that it was bailing out of a 1995 agreement that obliged it to end military and technical cooperation with Tehran.
TITLE: India, Pakistan and Global IT
AUTHOR: By Thomas Friedman
PUBLISHER: New York Times Service
TEXT: BANGALORE, India - Two months ago, India and Pakistan appeared headed for a nuclear war. Colin Powell, the U.S. secretary of state and a former general, played a key role in talking the two parties back from the brink. But, here in India, I've discovered that there was another new, and fascinating, set of pressures that restrained the Indian government and made nuclear war, from its side, unthinkable. Quite simply, India's huge software and information-technology industry, which has emerged over the last decade and made India the back-room and research hub of many of the world's largest corporations, essentially told the nationalist Indian government to cool it. That's right - in the crunch, it was the influence of General Electric, not General Powell, that did the trick.
This story starts with the fact that, thanks to the Internet and satellites, India has been able to connect its millions of educated, English-speaking, low-wage, tech-savvy young people to the world's largest corporations. They live in India, but they design and run the software and systems that now support the world's biggest companies, earning India an unprecedented $60 billion in foreign reserves. But this has made the world more dependent on India, and India on the world, than ever before.
If you lose your luggage on British Airways, the techies who track it down are India. If your Dell computer has a problem, the techie who walks you through it is in Bangalore, India's Silicon Valley. Ernst & Young may be doing your company's tax returns with Indian accountants. Indian software giants in Bangalore, like Wipro, Infosys and MindTree, now manage back-room operations - accounting, inventory management, billing, accounts receivable, payrolls, credit-card approvals - for global firms like Nortel Networks, Sony, American Express, HSBC and GE Capital.
You go to the Bangalore campuses of these Indian companies and they point out: "That's G.E.'s back room over here. That's American Express's back office over there." G.E.'s biggest research center outside the U.S. is in Bangalore, with 1,700 Indian engineers and scientists. The brain chip for every Nokia cellphone is designed in Bangalore.
So it was no wonder that, when the State Department issued a travel advisory on May 31 warning Americans to leave India because the war prospects had risen to "serious levels," all these global firms went nuts.
"That day," said Vivek Paul, vice chairperson of Wipro, "I had a C.I.O. [chief information officer] from one of our big American clients send me an e-mail saying: "I am now spending a lot of time looking for alternative sources to India. I don't think you want me doing that, and I don't want to be doing it.' I immediately forwarded his letter to the Indian ambassador in Washington and told him to get it to the right person."
No wonder. For many global companies, "the main heart of their business is now supported here," said N. Krishnakumar, president of MindTree. "It can cause chaos if there is a disruption." While not trying to meddle in foreign affairs, he added, "what we explained to our government, through the Confederation of Indian Industry, is that providing a stable, predictable operating environment is now the key to India's development."
This was a real education for India's elderly leaders in New Delhi, but, officials conceded, they got the message: loose talk about war or nukes could be disastrous for India. This was reinforced by another new lobby: the information-technology ministers who now exist in every Indian state to drum up business.
"We don't get involved in politics," said Vivek Kulkarni, the information technology secretary for Bangalore, "but we did bring to the government's attention the problems the Indian I.T. industry might face if there were a war ... Ten years ago [a lobby of I.T. ministers] never existed."
To be sure, none of this guarantees there will be no war. Tomorrow, Pakistani militants could easily do something so provocative that India would have to retaliate. But it does guarantee that India's leaders will now think 10 times about how they respond, and if war is inevitable, that India will pay 10 times the price it would have a decade ago.
In the meantime, this cease-fire is brought to you by G.E. - and all its friends here in Bangalore.
Thomas Friedman is a columnist with The New York Times, to which he contributed this comment.
TITLE: A Vodka Shot in the Arm For Putin's Power Vertical
TEXT: LAST week, a search was launched to find Yury Shefler, the vodka magnate and head of S.P.I. Group.
Shefler owned the Stolichnaya and Moskovskaya vodka trademarks. A year ago, the state confiscated them and transferred ownership of the brands to the state enterprise Soyuzplodoimport headed by Vladimir Loginov, the former co-owner of Russky Sakhar and, later, a deputy agriculture minister. Even with the advantage of Russia's "strange" court system, the state hasn't been able to prove that the brands were transferred in a legal manner. Then Loginov claimed that Shefler had threatened to have him killed, and the search order for Shefler was issued.
Shefler acquired the former Soviet food-and-beverage import/export agency (also called Soyuzplodoimport) in 1996. At the time, the company was carrying $50 million in debts and had squandered its rights to just about everything, including the Stolichnaya and Moskovskaya trademarks. Shefler restored to the company the rights to these brands and, by doing so, he managed to rub a number of underground vodka producers the wrong way, since they had been raking the money in, palming off industrial spirit as Stolichnaya vodka. These producers complained to their business partners - high-ranking Interior Ministry officials - who, in turn, paid Shefler a visit and offered him their protection. Shefler wasn't overwhelmed by the offer, so he declined.
Then, in 1999, a report landed on the desk of then-Prime Minister Vladimir Putin, signed by then-Interior Minister Vladimir Rushailo, unmasking Shefler; and the RUBOP, which was under Rushailo's control, stepped up its search operations at Shefler's office. At the time Rushailo, as a protege of "the family," had powerful enemies among the St. Petersburg chekists. The chekists were raring to restore the "executive vertical of power" and to purge the Interior Ministry of all of its rotten elements. They offered to help Shefler, but, as with the Interior Ministry offer, he declined. That turned out to be a mistake: Once an entrepreneur has managed to attract the attention of the "racketeers in epaulets," his days are numbered. And, when Rushailo was removed from his post at the Interior Ministry, the St. Petersburg chekists continued to stalk Shefler.
What is so striking, though, is the futility of the whole exercise. The lion's share of earnings from Stolichnaya are generated by sales in the West. While Shefler was being pursued, the licenses to produce vodka were sold to Western companies, and any attempt to export state-produced Stolichnaya vodka to the United States, for example, would result in a multimillion-dollar lawsuit not only against Soyuzplodoimport, but against Russia as well.
It is hard to view Loginov as an independent player. He is clearly going into battle on orders from above. Over his head hangs the sword of Damocles in the form of $100 million of Russky Sakhar debts to the state and a handwritten confession to having given bribes to the tune of $200,000 to former Justice Minister Valentin Kovalyov.
By and large, the interests of the executive vertical of power are defended by a specific breed of entrepreneur, recruited on the same principle as informers were in the 1970s. The more dirt there is on them, the shorter the leash they can be kept on by the security organs.
In this country, there is an ongoing battle for control of property. However, when oligarchs are waging a war, criminal charges are little more than a footnote in the general onslaught. And the war ends with the oligarch seizing someone's business.
When the St. Petersburg chekists wage war, they have no ammunition other than criminal charges. And as a result, the battle ends with the destruction of the business. The Petersburgers aren't after profit - their main goal is to make an example of a few entrepreneurs so as to put the frighteners on the oligarchs: "If you don't pay up, we'll rip you to shreds like we did with Shefler."
The rationale is that if you do in 10 entrepreneurs, then the 11th will cough up. And that, in a nutshell, is strengthening the executive vertical of power a la russe. From now on, you don't have to be a Gusinsky or a Berezovsky to be a target - it's sufficient just to have a business.
Yulia Latynina is a journalist with ORT.
TITLE: Economists Should Learn From Mistakes in Third World
AUTHOR: By Mark Weisbrot
TEXT: THIS week's trip to South America by Treasury Secretary Paul O'Neill is Washington's latest response to growing discontent about economic failure in the developing world. O'Neill, who has become known for his blunt remarks about economic policy, should take an honest look at what has happened to most low and middle-income countries during the past 20 years. For these countries, the last two decades of the 20th century were witness to the worst economic failure since the Great Depression.
Consider this: Income per person in Latin America grew by 75 percent from 1960 to 1980. From 1980 to 2000 it grew by 7 percent, or hardly at all. Africa fared even worse, with a decline - some 15 percent - in income per person during the past two decades.
Of course, there are some important exceptions: China registered the fastest growth in world history during the past 20 years. But even including China, weighted by its enormous population of 1.3 billion, the developing economies as a group have grown at half the rate they had achieved during the previous two decades.
It is really just a historical coincidence that U.S. political leaders have not even had to acknowledge this drastic economic failure, let alone account for it. The movement that burst onto the world stage in Seattle just over two years ago had other priorities. The protesters and their organizations have focused on the usurpation of governmental authority by undemocratic, unaccountable bodies such as the World Trade Organization, the International Monetary Fund and the World Bank. They rallied against the environmental damage caused by the reckless globalization these institutions and their corporate allies have led. And they have called attention to the worsening distribution of income at home and abroad.
Worthy causes all. But economic growth also matters. For example, if we look at the countries where poverty has increased during the past 20 years, or where progress toward reducing poverty has slowed, the main cause is not a change in the distribution of income or wealth: It is the slowdown in growth.
In fact, the past two decades have also seen significantly reduced progress on major social indicators such as life expectancy, infant and child mortality, literacy and education. This is exactly what we would expect in a period of sharply reduced economic growth. So we are not just talking about dry economic statistics here: It is the lives and health of hundreds of millions of people that have been stunted.
Before the 1980s, it was common for low and middle-income countries to pursue a country-specific development strategy. This has been replaced, in most cases, with a formulaic set of principles involving opening up to international trade and financial flows, privatization of state-owned industries and other deregulatory measures. These "Washington Consensus" policy prescriptions have not fared well in practice, and they have led to a number of economic disasters in recent years. The Asian economic crisis of 1998, for example, was brought on by reckless opening to "hot money" from abroad. Financial and economic crises in Mexico, Russia, Brazil and Argentina also have taken their toll on global economic growth.
Searching for good news, partisans of the Washington Consensus (such as the World Bank) point to countries such as China and Vietnam as successful "globalizers." But China's banking system is mostly state-owned, its domestic markets highly protected and its capital flows strictly controlled. Most of Vietnam's investment is undertaken by the state.
These Washington economists do not seem to notice the irony in their argument: "Our brand of neo-liberalism seems to have failed, but the Commies are doing great!"
O'Neill's Treasury Department controls the most powerful institutions that enforce the rules of the Washington Consensus: the IMF and the World Bank. Our government also has the biggest voice in the WTO, whose rules are widely seen as stacked against developing countries. The prolonged economic malfunctioning of the past two decades is the elephant sitting in the middle of their conference rooms, and they are trying to ignore it. But an honest debate over the causes of this failure is long overdue.
Mark Weisbrot is co-director of the Center for Economic and Policy Research. He contributed this comment to The Washington Post.
TITLE: Natural Resources the Last Stage of Putin's Plan
AUTHOR: By Boris Berezovsky
TEXT: AT the end of July, Dmitry Kozak, the deputy head of the presidential administration, proposed an amendment to the law on subsoil resources which, if passed, would fundamentally alter the economic system that is taking shape in Russia. What we are talking about is the nationalization of oil, gas and all other natural-resource companies. The essence of the amendment can be summed up very simply: to convert existing natural-resource production licenses into concessions. In other words, going over to the form of relations between capitalists and the state that Vladimir Lenin bequeathed to us ("A concession is an agreement between the state and the capitalist. The latter becomes a leaseholder rather than an owner.").
Just about everyone with the slightest understanding of how a market economy works immediately started commenting on and criticizing the idea. As a result, 10 days later, in early August, Kozak appeared to back down from his initial position, presenting "an entirely new version of the law on subsoil resources."
The newspaper Vedomosti, in this connection, published an article under the reassuring headline "They've Changed Their Minds," with the subtitle "The Kremlin no longer wants to nationalize natural resources." In the article, however, it was written that Kozak, in his "entirely new version," was still insisting on the conversion of licenses to concessions, although now with the inclusion of a load of provisos more favorable to natural-resource companies than the initial version had been.
So, did the Kremlin really rethink its position and was Kozak thoughtlessly acting on his own initiative, or has the Kremlin finally decided to supplement "managed democracy" with a controlled economy?
Since the countless journalists servicing the Kremlin will no doubt adduce a plethora of arguments to support the version that this is just another case of inadvertent stupidity by just another bureaucrat, I will not pursue this avenue of inquiry.
I will put forward another version, arguing that the Kremlin actually wants to nationalize the raw-materials sectors of the economy. Moreover, I believe the authorities have no real choice in the matter. Establishing a vertical chain of command in the economy is the logical conclusion to the reconstruction of a fully fledged authoritarian state in Russia.
In order to understand the Kremlin's logic - or to be more precise the logic of President Vladimir Putin - it is necessary to look at the initiative from Kozak, a high-ranking bureaucrat (but still a bureaucrat) in the context of preceding events.
The first stage was accomplished in the spring and summer of 2000 and was called "restoring the executive chain of command." This stage proved largely painless for the authorities - with the exception of a few governors kicking up a fuss and one "madman" giving up his seat in the State Duma by way of protest.
The second stage was reinstating a chain of command in the mass media. After all, how can one have managed democracy without the media being subordinate to the state? This stage, however, provoked a major scandal, as the Kremlin had to wheel out the heavy artillery - the Prosecutor General's Office, Interior Ministry and FSB - as well as availing itself of Interpol. The operation to reinstate a chain of command in the media proved much more painful and took almost two years to complete. Nevertheless, the desired result was achieved.
However, the project remains unfinished. The final stage in constructing any authoritarian regime is securing state control over the main sectors of the economy and over finance - without the completion of this stage, the whole thing is futile.
Big business always tries to influence government, and this is the case throughout the world. Governments, for their part, always try to resist this influence. If there are no checks on the state in the form of democratic institutions, civil society and independent media, then big business is the only counterweight preventing the overwhelming concentration of power in the hands of the state. For an authoritarian regime, it is absolutely crucial to bring big business under control so that the whole of society can then be brought under control without hindrance. Therefore, Putin has no choice but to institute an executive chain of command in the economy.
The first part of this third stage has been the easiest. It simply involved appointing loyal people to top posts in key state-controlled enterprises: Gazprom, the Railways Ministry, banks, etc.
The second part has been the redistribution of private property. First up were the national television networks NTV and TV6. Then came Sibur, followed by the alcoholic-beverage sector (the Stolichnaya and Moskovskaya vodka brands) and others.
Finally, the authorities turned their attention to the most important target: the natural-resource sector. This is the third and final step in the construction of a vertical chain of command in the economy.
For those slow on the uptake - which turned out to be the majority of Russian politicians and businesspeople - Putin spelled it out in one of his speeches to the Federation Council: "[S]ome of our companies have [natural] resources for the next 10, 15, 25 or even 30 years. And some companies are already prepared to trade these resources, boosting their capitalization at the expense of the country." In other words, according to Putin, raising the capitalization of Russian companies does not mean raising the country's capitalization but, on the contrary, decreasing it.
Putin not only voiced his innermost thoughts but also indicated how they could be realized: The problem should be resolved through legislation (hence the Kozak initiative) but without fuss, "so as not to put our companies in a difficult position." It doesn't get much clearer than that.
So the bill prepared by Kozak is the execution of a direct order from Putin. In essence, it is an attempt to complete the final stage in constructing a fully fledged centralized, authoritarian - and thus unconstitutional-state.
Will this third stage be completed?
Russia's history provides an answer to this question, and it is in the affirmative. The only question is: At what price?
Privatization in the 1990s, i.e. transferring state property to private ownership, was an extremely painful process but did not entail major bloodshed or a civil war. State property (which belonged to no one) was transferred to private hands with the assistance of bureaucrats (i.e. in return for bribes). Bureaucrats did not reach for their guns because they never considered state assets to be their own private property.
The Revolution in 1917 also involved the redistribution of property, but in reverse. Property was seized from private individuals and handed over to the state. The result was that millions of owners, deprived of their houses, land, mines, factories, plants, shops, and stores, reached for their guns. The ensuing civil war took the lives of tens of millions of people.
Of course, traditions of private ownership, prior to the Revolution, had developed over the course of centuries. During the years of Soviet rule, these traditions were razed to the ground and have only started to revive in the past 10 to 12 years.
This is probably why Russia's young property owners have yet to mature - they have no family estate, bank or factory handed down from generation to generation. And the vast majority of Russian citizens lack a firm grasp of the concept of private ownership.
Putin has conclusively made his choice for Russia's future.
Now it is important that he and other citizens comprehend and evaluate all the consequences resulting from this choice for themselves.
Boris Berezovsky, a co-chairperson of the Liberal Russia party, contributed this comment to Vedomosti.
TITLE: Moscow Turning Up the Heat on Georgia
AUTHOR: By Pavel Felgenhauer
TEXT: FOREIGN Minister Igor Ivanov declared earlier this month that international terrorists based in Georgia had committed acts of aggression against Russia. This harsh statement was followed up by Federation Council Speaker Sergei Mironov calling for Israeli-style cross-border raids to smash the aggressors. (Under the Constitution, the Federation Council is responsible for authorizing the use of troops outside the country's borders.)
Last week President Vladimir Putin issued a demand, which sounded very much like an ultimatum, that Chechen armed rebels who crossed into Georgia after fighting Russian troops in the Caucasus Mountains be immediately returned to Russia for punishment. Putin said that the Kremlin would judge the seriousness of Georgia's commitment to fighting international terrorism by how fast "these criminals" ended up in the former KGB Lefortovo prison "in the hands of Russian justice."
The sudden flare up of tensions on the Russian-Georgian border happened after a lull of more than two years. In spring 2000, Chechen rebels were forced out of Grozny and suffered heavy casualties as they sought shelter in the mountains. Warlord Ruslan Gelayev and his defeated rebels fled south together with thousands of Chechen civilian refugees and established a base in Georgia in the Pankisi Gorge - just south of the Russian border and inhabited by ethnic Chechens, who welcomed their kin.
Since then, Gelayev and other Pankisi-based rebels have not participated much in the armed conflict in Chechnya. Caucasus mountain passes are covered by heavy snows for more than half of the year and are virtually impassable. Georgia turned out to be a strategic dead end for the Chechen resistance. The Pankisi Gorge, which the weak and corrupt Georgian government does not control, has been used as a long-time shelter area by rebels and also, allegedly, by some al-Qaida-connected Muslim extremists.
Since 2000, Chechen resistance has continued in Grozny and the surrounding, heavily populated, agricultural area. Virtually all the arms and munitions used by the rebels in their guerrilla campaign are purchased from corrupt Russian service personnel in Chechnya and from other garrisons in the North Caucasus. It is much cheaper to buy armaments directly from the Russian military and bring them into the combat zone on trucks, bribing one's way through checkpoints, than to carry them on horseback from Georgia. From time to time, during the summer months when the mountain passes are open, small details of rebels have infiltrated back into Chechnya from Pankisi. A group of several dozen guerrillas apparently moved into the Chechen mountains from Georgia last week. There was some fierce fighting with Russian border guards who control southern Chechnya.
There have been casualties on both sides. Fourteen rebels (half of them wounded) fled the fray over the border into Georgia and were detained by the local authorities. Now Putin is demanding they be extradited immediately as "criminals" and "terrorists." Of course, under international law, combatants of a separatist, internal armed conflict can be interned if they cross over into a neutral country, but they cannot be sent back for punishment. Fighting the armed, uniformed Russian troops does not make Chechen rebels terrorists or criminals under the Geneva Convention.
The Georgian authorities have asked Moscow to produce solid evidence that the detained rebels were directly involved in terrorist or criminal activities, such as attacking civilians. But, instead of producing evidence, the Russian military may use the controversy as a pretext for attacking the Pankisi Gorge.
The atrocities constantly committed by Russian troops in Chechnya are the main reason that the resistance is still continuing against all odds. However, many generals believe that rebels in Georgia are the last significant organized contingent of the resistance and if they are wiped out the war will end.
A serious discussion is going on in the top echelons of power in Moscow about whether to go into Pankisi to "mop up" the rebels, or to continue pressuring the Georgians by diplomatic means. It is obvious that undisciplined Russian troops can only make the situation much worse if they parachute into the Pankisi Gorge. But the uncompromising public stand that Moscow has taken makes some kind of action virtually inevitable.
There are a couple of months left before snow covers the mountains again. Until then, it's bloody showtime in the Caucasus.
Pavel Felgenhauer is an independent defense analyst.
TITLE: Global Eye
TEXT: Darkness at Noon
Every day, the war drums beat their restless tattoo from the sun-blistered scrub brush of Crawford, Texas. Attack Iraq! Attack Iraq! Attack Iraq! they cry, relentlessly, maddeningly, driving the tribal elders to frenzy in the ritual dance around the fire. The War Leader, chest smeared with blood, face blazing with slashes of vibrant paint, emerges from his sacred cave and bellows: "I will not wait! He will not stand!" The elders, drunk with sound and fury, strip off their loincloths and colored robes and nakedly bray their oath of fealty to the Leader, to his righteous war of conquest, and to the great one-eyed god burning in the noonday sky.
In other words, just another typical week in U.S. politics, as the Chief Vacationer and those wiggly invertebrates known as Congressional Democrats continue to build the "bipartisan consensus" for America's first openly declared aggressive war.
The urgency to depose Saddam Hussein seems a bit curious. True, he's a tyrant who deals in political murder, ethnic cleansing, mass repression and aggressive war - but the United States generally likes that in a foreign leader. Witness this week's decision by Bush to resume cozy ties with the Indonesian military, lately guilty of, well, political murder, ethnic cleansing, mass repression and aggressive war in East Timor in 1999. Not a single top Indonesian officer has faced charges for that attempted genocide: Indonesia's second holocaust in East Timor. The first occurred in 1975, with the official blessing of U.S. President Gerald Ford. But War Leader Bush likes the cut of the Indonesians' bloodstained jib, so he's opening up the spigot again, t he Los Angeles Times reports.
But, unlike the American-blessed tyrants now holding sway in Egypt, Saudi Arabia, Pakistan, Syria and other enlightened nations where Bush is sending his captives to be tortured, Saddam Hussien sticks in the craw somehow. True, he runs an odious regime. In fact, he has run it - in part or completely - for 34 years, without managing to destroy the entire world and Crawford, Texas, too. Yet now, suddenly, he must be "taken out" - apparently because some shaman told the War Leader that after almost four decades of wealth and power, Hussien is about commit suicide by attacking the nuclear-armed nations of the United States and Israel. (It's funny what those drums - and a few cups of haoma - can lead you to believe.)
But odious as it is now, Hussein's regime was certainly every bit as odious back in 1983, when the Reagan-Bush administration sent a special envoy to the tyrant, pledging American support for his war of aggression against Iran, as Jeremy Scahill reports on Commondreams.org.
The envoy assured The New York Times that Hussein "was not interested in making mischief in the world." American aid - including material for those sinister "weapons of mass destruction" - poured into Iraq. The envoy returned to Baghdad a few months later, to better coordinate the new alliance. While he was there, breaking bread with the Iraqi murderers, the UN confirmed that Hussein had begun using chemical weapons against the Iranians.
The envoy said nothing. The alliance continued. The war went on. A million people died.
Now that envoy - a little minion named Donald Rumsfeld - is preparing another trip to Baghdad, this time at the head of a conquering army. Who knows? Maybe another million people will die. The envoy won't mind. He's seen it all before.
Heavy Traffic
And surely the Iraqi regime was equally odious in 1989, when George Bush I signed an executive order mandating closer U.S ties with Hussein - including the sale of WMD technology - just months after Hussein had been accused of gassing his own people. Or in 1991, when a mere two weeks before Iraq's much-telegraphed invasion of Kuwait, Bush's ambassador, April Glaspie, assured Hussein: "We have no opinion on Arab-Arab conflicts like your border disagreement with Kuwait."
Can you spell "green light"? Hussein could. But then Saudi Arabia - cradle of the Taliban, business partner of the Bush Family - perceived a possible threat to their sacred oil fields and called in their palace guard: the U.S. military. Bush duly dispatched thousands of young Americans to kill and die for his princely pals.
The rest, as they say, is history - except, of course, for all the facts being buried in the sound and fury of frenzied barbarians howling for war.
Dead Reckoning
Especially this fact: The odious Hussein regime is no more or less dangerous now than it has been for decades. America's rulers know this. They've always used the murderous tyrant for their own political purposes, foreign and domestic, supporting him or demonizing him as they see fit.
If the Soviet Union hadn't collapsed in 1991, taking with it the rationale for the American elite's vast military expenditures and profitable empire-building, Saddam Hussein would be regarded as nothing but a minor irritant today, like Libya's Moammar Gadhafi - or even a staunch ally, like the "reformed" killers in Indonesia.
But the elite needs a big enemy, and Osama bin Laden's little band of box-cutters (the FBI says they have dwindled to less than 200 members) just won't do - not if you're looking for long-term returns on military pork, and constant diversion from injustice, inequality and wholesale corporate looting at home. And so an "Axis of Evil" is concocted; failed states are magnified into dire threats; the war drums never cease - and the contracts keep coming. First Iraq, then Iran, then ...
Louder, drums, louder - so we won't hear the screams.
For annotational references, please see Global Eye in the "Opinion" section at www.sptimesrussia.com.
TITLE: Relations Warming for Koreas
AUTHOR: By Paul Shin
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea - North and South Korea indicated Monday that significant progress was being made in high-level talks aimed at reviving the stalled reconciliation process on their divided peninsula.
"You may think optimistically," Kim Ryong Song, the chief North Korean negotiator, said with a smile after the first day's meeting ended in 70 minutes at a Seoul hotel. "There are prospects that the fruit can grow bigger and bigger."
Kim, a cabinet councilor, declined to elaborate but, even before the talks started, he gave an upbeat forecast, saying that "I am a man who usually brings many presents and leaves them behind when I leave."
The South Korean side said it emphasized during the talks the need to implement agreements made before the reconciliation process stalled rather than trying to make new promises. A flurry of agreements were reached when reconciliation was first launched after a historic North-South summit in 2000, but they ground to a halt amid U.S.-North Korean tension last year.
South Korean officials were also optimistic after the start of the talks, which continue this week.
"We had no problems at all," said Lee Bong-jo, a spokesperson for the South Korean team, adding that his government "expects the talks will progress well."
South Korea, Lee said, proposed that work resume promptly to complete the construction of a cross-border rail line within the year and help stage a reunion for separated family members around Korean Full Moon Day, or Chusuk, which falls on Sept. 21.
The cabinet-level talks, the first in nine months, came as the communist North also appeared to be moving toward a resumption of dialogue with the South's chief ally, the United States.
Jeong Se-hyun, the chief South Korean delegate, said the four major powers with keen interest in the Korean peninsula - the United States, Japan, China and Russia - as well as the European Union will closely watch the talks to decide how to formulate their policy toward North Korea.
"In this sense, we should make specific promises at these talks, rather than attempting to make new promises," he said before the talks.
North Korea's Kim concurred, saying: "Yes, I agree. Producing an agreement is important, but more important is implementing it."
The two officials expressed hope that the Seoul talks would build upon a historic inter-Korean summit accord reached on June 15, 2000. That agreement opened the way for a host of contacts and exchanges between two nations that have yet to overcome the bitter legacy of the Korean War, which lasted from 1950 to 1953.
The talks this week marked the resumption of dialogue after a long period of heightened tension that reached a peak when North and South Korean naval boats clashed off their peninsula's western coast on June 29.
Last month, North Korea expressed regret for the deadly clash, setting the stage for the talks this week.
Relations had also deteriorated in January after U.S. President George W. Bush branded North Korea, along with Iran and Iraq, as part of "an axis of evil" trying to develop weapons of mass destruction.
A 100-member North Korean civic group was scheduled to visit Seoul for joint celebrations of the peninsula's independence from Japanese colonial rule on Aug. 15, 1945.
TITLE: Iraqis Reject Inspections As U.S. Tests Opposition
PUBLISHER: Combined Reports
TEXT: CAIRO, Egypt - UN weapons inspections in Iraq are over, Iraq's information minister said Monday, in the clearest rejection yet of UN demands to allow inspectors to resume their work after a four-year standoff.
Mohammed Saeed al-Sahhaf told Arabic satellite television Al-Jazeera in an interview that the administration of U.S. President George W. Bush was "confused," and making inspections into an issue in an attempt to use it in the latest crisis between Washington and Baghdad.
"This is a lie," he said of Washington's insistence that Iraq still possesses weapons of mass destruction. "Inspections have finished in Iraq."
In Washington, meanwhile, U.S. Vice President Dick Cheney and U.S. Defense Secretary Donald Rumsfeld held talks with Iraqi opposition leaders Saturday, as the Bush administration began to mobilize Saddam Hussein's opponents and prepare for the day when the Iraqi leader falls from power.
In the opposition's highest-level session with U.S. officials in recent times, Cheney said the administration is committed to ousting Hussein and supporting a democratic and multi-ethnic government that would abandon Hussein's totalitarian ways. Cheney and Rumsfeld urged the fractious and historically ineffectual opposition groups to toil together, declaring that the United States will work with them.
The vice president, speaking by video hookup from Wyoming, asked a series of specific questions about Iraqi morale and the likely response of the Iraqi military and civilian population to a U.S. assault, according to people who listened. Rumsfeld, in a short visit, told the group that the United States is motivated by the goal of seeing Iraq, an enemy since the Persian Gulf War, free and peaceable.
The meeting was a key part of the administration's effort to invigorate the anti-Hussein forces at a time when Bush has announced that he wants to unseat Hussein, but has not decided how or when. The appeal to the Iraqis reflects the conclusion that the mission could benefit from a credible alternative to Hussein, and that Iraqis themselves must be prepared to rule Iraq once Hussein is gone.
Bush described the oil-rich country on Saturday as "an enemy until proven otherwise." As for Hussein, who boasted last week that invading troops would be "buried in their own coffins," Bush said he has "deep concerns about this man, his regime and his desires to have weapons of mass destruction."
"I have constantly said that we owe it to our children and our children's children to free the world from weapons of mass destruction in the hands of those who hate freedom," Bush told reporters during a golf match near his ranch in Crawford, Texas. "This is a man who has poisoned his own people. I mean, he's had a history of tyranny."
Iraqi opposition leaders arrived in Washington last week, at the administration's invitation, to demonstrate solidarity against Hussein. The six organizations represented - including the Iraqi National Congress (INC), two Kurdish groups and an Islamic organization based in Tehran - have made a show of declaring their commitment to pluralism and unity.
At the opening of Saturday's meeting, they even read a joint statement to Cheney, declaring their determination to work together and their support for the U.S. policy of ending Hussein's dictatorship, said INC member Nabeel Musawi.
But the groups' record of rivalry is formidable, and skepticism within the administration remains high. Likewise, previous U.S. administrations have themselves lost focus after pledging loyalty to anti-Hussein forces. Bush administration officials who have dueled over which opposition groups to support - and how - say they are working to present a united front of their own.
An Iraqi opposition figure "made the point very tellingly that we've done this before and things kind of fell apart," a U.S. official said Saturday. "But, right now, we sense that this is a special moment. The re-energizing of this process is important, and it's what's happened. We have to progress."
(AP, WP)
TITLE: WORLD WATCH
TEXT: Murderer Sought
NORFOLK ISLAND, Pacific Ocean (AP) - Behind white curtains in makeshift booths, police on Monday began fingerprinting the entire adult population of this tiny tourist island, an Australian external territory about 1,500 kilometers from Sydney, hoping to solve the first murder here in almost 150 years.
Janelle Patton, a 29-year-old hotel employee, was found March 31, stabbed to death, wrapped in plastic and dumped near a picturesque waterfall. Police say they have suspects in the case, but hope a fingerprint match will provide enough evidence for an arrest.
"Norfolk is a place like Australia was 10 to 15 years ago - you don't lock your car, you don't lock your house and women feel a lot more confidence walking around here," said Brian Purss, as he waited to be "inked" by police Monday. More than 1,600 of the island's 2,100 residents have been asked to provide prints, as have about 680 tourists who were visiting when Patton was killed.
Patton, a Sydney native, had been living on Norfolk Island for two and a half years, managing a hotel dining room.
M.D. Spoke Too Soon
PARIS (AP) - A 68-year-old man was mistakenly declared dead last week and placed in refrigeration at a funeral parlor where a worker noticed he was alive, a Bordeaux hospital said Monday. The man has since died.
The unidentified man, in the final stages of cancer, was declared dead on Friday at a rest home near the southwest city of Bordeaux. A doctor called to the home issued a death certificate.
The body was then sent to a funeral parlor in nearby Macau, where it was refrigerated for five hours.
An employee at the funeral parlor discovered signs of life, however.
"When I ... opened the cover, I saw that his stomach was moving," said Laurent Besson on France-2 television.
The man was quickly transferred to the Bordeaux University Hospital and placed in intensive care, where he died at 10 p.m. local time Sunday, according to the hospital statement.
TITLE: British Open Nets Webb First Super Slam
AUTHOR: By Robert Millward
PUBLISHER: The Associated Press
TEXT: TURNBERRY, Scotland - Karrie Webb added another series of records and milestones to her stunning collection by capturing her third British Open on Sunday in a come-from-behind triumph that almost seemed inevitable.
Collecting her sixth major in four years, the 27-year-old Australian made up three strokes on the third-round leaders to post a 66 and finish two ahead of the field with a 15-under total of 273.
As well as being the first player to win the title three times, her triumph meant she became the first to win the LPGA's Super Slam of five majors.
By winning the du Maurier, the the Nabisco Championship, the U.S. Open and the LPGA Championship, she had already completed the old Grand Slam. By adding this year's British Open, she completed the Super Slam.
Her victory at Turnberry also means that the same four players - Webb, Se Ri Pak, Juli Inkster and Annika Sorenstam - have won 16 out of the last 19 majors. Webb has six, Pak four, Inkster four and Sorenstam, who failed to make the cut here after a Tour-leading 74 tournaments, has two.
"It's one of the best rounds that I can remember," said Webb, who also won the title in 1995 - her rookie year - and 1997. "The first major I won, the [1999] du Maurier Classic, I shot 66 in the final round as well, and I birdied four out of the last five holes so it wasn't as solid a round as it was today.
"Just right from the word go I was hitting good iron shots and making a lot of putts," she said.
Webb brushed aside a talented, but young, group of rivals to romp to her sixth major and 33rd career title.
Runners-up Paula Marti of Spain and Michelle Ellis of Australia and the other four players behind her seemed powerless to stop her on the rainsoaked Turnberry links.
From the moment she had birdied three of the first holes to draw level with third round leaders Carin Koch of Sweden and Jenny Rosales of the Philippines, it always looked like it would be Webb's title.
Making few mistakes off the tee, she moved ahead with a 6-meter birdie putt at the 10th and was two ahead after a 5-meter putt at 12.
Although Ellis and Marti briefly got within a stroke of her, they each dropped shots after missing the greens and Webb's relentless charge became complete with another 4-meter birdie putt at the 17th.
By that time she was three ahead of the field and, although Marti and Ellis both birdied 17, Webb was already in the clubhouse anticipating yet another career victory.
Ellis carded a 68 and Marti a 69 as they wound up 13-under on 275. Rosales finished tied for fourth at 11-under after a one-over 73 and Koch wound up tied for eighth at 10-under after a 74.
TITLE: European Leagues Underway Again
PUBLISHER: Combined Reports
TEXT: BERLIN - Newly promoted Arminia Bielefeld topped the Bundesliga on Sunday, after a 3-0 home victory over nine-player Werder Bremen completed a surprise-filled opening weekend.
Bielefeld captain Bastian Reinhardt led by example and opened the scoring in the 16th minute. He headed home a loose ball after teammate Christoph Dabrowski's effort at nodding in a Detlev Dammeier free kick was cleared off the line by Bremen keeper Pascal Borel.
Borel, making his first-team debut, managed to keep the home side from adding to its tally until the 90th minute, when Massimiliano Parcello set up Artur Wichniarek in the box for a simple tap in.
Parcello himself made it three with a curling free kick in injury time after Bremen's Razundara Tjikuzu had joined teammate Fabian Ernst in the dressing room for a second bookable offence.
Hanover 96, in the top flight for the first time in 13 years, also appeared to be on its way to a shock victory over Hamburg after going ahead through a Dariusz Zuraw goal, after the home side's offside trap failed disastrously.
But two late goals, including one from the penalty spot by midfielder Joerg Albertz, restored Hamburg's pride.
Bielefeld's victory completed a weekend of surprises which saw VfL Bochum, also back among the elite after a prolonged spell in division two, winning 3-1 at Nuremberg.
Defending champion Dortmund was held 2-2 at home by Hertha Berlin, while title-favorite Bayern Munich drew 0-0 away at Borussia Moenchengladbach.
England. Last year's double-winner Arsenal added the Community Shield to its bulging trophy cabinet on Sunday when Brazilian World Cup winner Gilberto Silva gave it a 1-0 victory over Liverpool at the Millennium Stadium.
Off-season signing Silva, a second-half substitute, crashed the ball past Liverpool's outstanding Polish goalkeeper Jerzy Dudek in the 69th minute, to secure Arsene Wenger's side a deserved victory in the traditional curtain raiser to the new Premiership season.
Thierry Henry had earlier struck the post for Arsenal, which showed it has no intention of relinquishing the domestic dominance that brought it the Premiership and FA Cup last season.
"Winning trophies is a good habit to have," said Wenger afterwards.
Liverpool was left frustrated after having a number of penalty appeals turned down, the strongest when Arsenal captain Patrick Vieira appeared to fell its new Senegalese signing El Hadji Diouf 18 minutes from time.
Russia. Two goals in two minutes from Alexander Spivak and Dmitry Makarov set Zenit on the way to victory over Uralan Elista on Saturday, although the away side poached an equalizer eight minutes from time to ensure a nervous finale.
Spivak scored after 72 minutes, and 19-year-old Makarov grabbed his first of the season a minute later. Dmitry Semochko scored for Uralan.
On Sunday, Vladimir Beschastnykh scored a last-minute equalizer to save defending champion Spartak Moscow from defeat at last-place Sokol Saratov, as it came from two goals down to salvage a 2-2 draw.
Alan Sakiev scored for Sokol, which is fighting desperately to avoid relegation, at 23 minutes and Ruslan Baltiyev doubled its lead 10 minutes later.
Brazilian defender Moises Pineiro started Spartak's comeback with his first goal for the Moscow side in the 62nd minute and Russia striker Beschastnykh, the club's leading scorer, salvaged a point with his 10th goal of the season.
Scotland. Dutchman Mark de Vries scored four times on his home debut as Hearts humiliated Hibernian, 5-1, in the Edinburgh derby on Sunday.
De Vries, the Surinam-born striker signed on a free transfer in the off-season, struck after 40 and 66 minutes and then pounced twice in the last two minutes to take Hearts into second place.
Celtic, which beat Aberdeen 4-0 on Saturday, is already the only club with a 100-percent record after two wins from two games.
Italy. Former Italian international defender Pietro Vierchowod is to coach the club now called Fiorentina 1926, new owner Diego della Valle said in an interview on Sunday.
Della Valle told La Gazzetta Sportiva. "We are working to return Fiorentina to the position it deserves as quickly as possible."
Vierchowod, 43, was a player for Fiorentina in 1981-1982 and, in a 20-year Serie A career with a variety of clubs, played 562 games in the top flight, a figure exceeded only by ex-Italian national coach and Juventus keeper Dino Zoff, with 570.
He was also part of three Italian World Cup squads, including the victorious one of 1982.
(Reuters, SPT)
TITLE: Bonds Joins Elite Club With 600th Homer
PUBLISHER: The Associated Press
TEXT: SAN FRANCISCO - The morning after Barry Bonds joined one of baseball's most exclusive home run clubs, he wandered through the San Francisco Giants' clubhouse carrying a large wicker basket.
"You guys want some pot stickers?" Bonds asked, lifting the lid to reveal an incredible number of the Chinese appetizers.
There were a variety of responses at Pacific Bell Park to Bonds' 600th homer, which put him in the company of Hank Aaron, Babe Ruth and Willie Mays as the only major leaguers to reach the mark.
Bonds, his wife and his father all felt relief. Jay Arsenault, the man who got a bloody face while catching the ball, saw dollar signs.
The Giants' front office responded with pot stickers, a meat-filled delicacy. The fans simply appreciated it, blanketing Bonds with cheers on Friday night and Saturday, when Bonds stayed in the Giants' lineup to contribute to their playoff chase despite a torn hamstring that prevents him from sprinting.
"We all need to play," Bonds said. "We're down to the part of the season where it's gut-wrenching time. ... I don't worry about the history right now."
The atmosphere from Bonds' latest magical night hadn't evaporated on Saturday - and neither had his penchant for making history.
Bonds broke Willie McCovey's major-league record for intentional walks in a season, drawing three against Pittsburgh to give him 46 this year. McCovey had 45 in 1969 with the Giants.
At Pac Bell, the emblem on the left-field wall honoring Bonds' homer achievement will be a constant reminder of his 128-meter solo shot in the sixth inning against right-hander Kip Wells, who got the win in the Pirates' 4-3 victory.
Bonds rounded the bases against a backdrop of roars and fireworks.
"I see myself in 50 years talking about this - talking about Barry, and what I saw," said Shawon Dunston, Bonds' teammate and friend. "I'm glad he did it. He was starting to press a bit in each at-bat."
"People just don't appreciate him. You need to appreciate him. This is old-time baseball. This is Babe Ruth, Willie Mays and Hank Aaron, Mickey Mantle, Frank Robinson, Joe DiMaggio. He deserves to be honored like them," he said.
Bonds has now seen so many pitchers and so many pitches that he doesn't need to consult scouting reports. He simply looks for pitches to drive - and with reflexes that only a few men in history have matched, he does it over and over again.
"I have a zone, and, if you hit it, I'll hit it," he said simply. "I was born to hit a baseball."
TITLE: Moya Beats Rain, Hewitt for Title
PUBLISHER: Combined Reports
TEXT: CINCINNATI, Ohio - Carlos Moya managed to overcome a rain delay and Lleyton Hewitt on Sunday to clinch the Cincinnati Masters title with a 7-5, 7-6 win in a classic baseline battle.
"I'm very happy with the way I've been playing and I didn't expect to win the tournament because, even though I was playing well, I knew that so many players are playing well," he said.
The victory was only the second hard-court title for 25-year-old Moya, and his first on the surface in a Masters Series event.
The Spaniard has now won four titles this year, and eleven in his career, including the 1998 French Open and Masters Series Monte Carlo in 1998.
Moya also becomes the first Spaniard ever to win in Cincinnati and did so without dropping a set.
Hewitt made the early running in the first set, moving to a 3-1 lead over the top seed before being broken back for 3-3 under rapidly darkening skies.
The heavens opened at 4-4 after just 34 minutes of play and, when it resumed two and a quarter hours later, Hewitt's serve faltered again at 5-6 under the weight of Moya's destructive forehand.
World No. 1 Hewitt took firm control of the second set, racing to a 5-2 lead, only for Moya to claw his way back with the aid of some indifferent serving from the Australian and some sustained aggression of his own.
It was that aggression which helped him save set points at 3-5 down.
In an edgy tiebreaker, the pair exchanged mini breaks three times before a Hewitt double fault gave Moya a match point, which he won with a booming serve.
Moya was world No. 1 for two weeks in 1999, after he reached his only previous Masters Series hard-court final, in Indian Wells. Since then, he has battled long-term back and shoulder problems.
q
In Manhattan Beach, California, Chanda Rubin's comeback from her second knee surgery in 13 months was already going well. Now she can call it spectacular after victories over three top-10 players and a tournament title.
Rubin capped a big week, in which she ended the 21-match winning streak of top-ranked Serena Williams, with a 5-7, 7-6 (5), 6-3 victory over ninth-ranked Lindsay Davenport in the JPMorgan Chase Open on Sunday.
I was really pumped up after beating Serena,'' Rubin said. "I felt that the [title] was just as easily mine as anyone else's.''
Davenport served for the match leading 5-4, 30-15 in the second set. But she double-faulted, then missed a backhand wide to trail 30-40. She missed another backhand and Rubin broke to tie the set at 5-all.
I thought my chances were pretty dismal at that point,'' Rubin said. "I had to accept the challenge, make her win the match and scramble for a few shots, which I did, and take the chance again when I got it.''
Rubin held for a 6-5 lead, then Davenport fought off two break points to hold at 6-all and force the tiebreaker. Rubin won the tiebreaker 7-5 when Davenport dumped a forehand into the net on Rubin's serve.