Notebook

Not Again!

Russia faces new banking crisis

In July, the Russian banking sector faced its most serious crisis since 1998. In May, the medium-sized Sodbiznesbank lost its license after allegations of money laundering; rumors spread that the Central Bank was planning to purge the banking sector; the media began to talk of a blacklist of condemned banks. 

Despite vehement denials, Alfa Bank, Russia’s largest private bank, was rumored to be on the alleged blacklist. Panicked depositors withdrew $200 million from Alfa Bank in three days. Alfa management said the crisis had benefited state-owned and foreign banks and blamed the mass-media for spreading rumors and triggering the crisis.

The Central Bank brought the situation under control by cutting reserve requirements twice and urgently introducing a bill guaranteeing deposits up to 100,000 rubles.

Then, in early July, Guta Bank, one of the twenty largest banks in Russia, was forced to close down after depositors withdrew $344 million; Vneshtorgbank later bought more than 85 percent of Guta Bank at the fire sale price of R1 million ($33,000). The Central Bank supported the buyout, extending Vneshtorgbank a $700 million line of credit to cover Guta clients’ deposits.

 

Heads Roll

Military shakeup 

over Caucasus

On July 19, President Putin sacked his 57-year-old chief of the general staff, Anatoly Kvashnin, replacing him with his first deputy, Yuri Baluyevsky (also 57), a Ukrainian-born career soldier. Kvashnin had led the agency since 1997, fighting a relentless battle with the Defense Ministry (headed since March 2001 by Putin’s close ally Sergei Ivanov – the country’s first civilian defense minister) for control of the army. Media said that Kvashnin’s team has repeatedly stalled Ivanov’s efforts to cut down the oversized Russian military. 

In the same move, Putin sacked three generals – General Vyacheslav Tikhomirov, head of the Interior Ministry troops, General Mikhail Labunets, the top military commander in the Northern Caucasus, and Anatoly Yezhkov, deputy head of the Federal Security Service. As well, the commander of the Northern Caucasus Military District, General Vladimir Boldyrev, was replaced by the Volga Military District commander, General Alexander Baranov, whose post was assumed by Boldyrev. Military analysts said the generals were punished for failing to stabilize the situation in the North Caucasus and for failing to prevent the separatist raid on Ingushetia on June 22, in which 90 people were killed. 

 

One Is Enough

Communist party splits

In July, after a poor showing in the spring presidential elections, the Communist Party of Russia split into two factions, each holding a party congress in Moscow on the same day. One congress was staged by the group supporting Communist Party leader Gennady Zyuganov. The second, anti-Zyuganov congress was organized by Gennady Semigin, who was expelled from the (original) party in May. Semigin’s congress elected Ivanovo Governor Vladimir Tikhonov as party leader. But in early August the Justice Ministry declared illegitimate the decisions passed by the “alternative Communists” (Semigin’s faction). 

Notorious Election

Crime pays in corrupted

eastern election

In July, Primorsky krai legislator and businessman Vladimir Nikolaev emerged as the official second-round winner in Vladivostok’s scandalous mayoral election. The 30-year-old Nikolaev, who allegedly has criminal ties, received over 53 percent of the vote; Primorsky krai legislator Nikolai Markovtsev received over 9 percent; 37 percent of voters cast their ballots for “against all.” Just over 37 percent of eligible voters showed up at the polls.

The media reported various procedural violations during the elections and alleged that “against all” actually got more votes than Nikolaev. State Duma Deputy Viktor Cherepkov, who came in second in the first round of voting, said he would appeal the results of the election. A court barred Cherepkov from the second round because he allegedly abused his position as State Duma deputy during the campaign. Cherepkov had also been injured in an assassination attempt during the campaign and was in the hospital when the second round took place.

 

Chekhov’s Report

Raw census data

on Sakhalin to appear

The State Archive of Sakhalin oblast will publish previously unpublished materials collected by writer Anton Chekhov during his travels in Sakhalin. The book will be called Maybe My Figures Will Also Be Of Use. Materials from A.P. Chekhov’s Sakhalin Census. 1890, Yelena Savelieva, head of the oblast archive, told Interfax. Chekhov traveled around Sakhalin from July to September 1890 and interviewed its residents – most of them former convicts, entering their answers on special cards. Chekhov published some of his findings in his book, Sakhalin Island, yet the 7,500 census cards were never published. “As of today,” Savelieva said, “this is the only unpublished material by Chekhov… With the publication of the census materials, Chekhov will have been published in full.”

 

Beer Bashing

Drunk driving, 

ad laws stiffened

This July, senators amended the Code of Administrative Violations, toughening penalties for drunk drivers. In an attempt to prevent bribery, now drunk drivers will no longer be fined, but may have their licenses revoked for one-and-a-half to two years. Under the old law, a license could only be revoked for one year. During the Federation Council session that voted on the amendments, Stanislav Vavilov, head of the Council’s Legislative Committee, noted that already this year drunk drivers were responsible for more than 4,000 deaths on Russia’s roads. 

Meanwhile, the State Duma launched an attack on the beer industry, passing a bill drastically limiting the number of beer commercials on TV. The bill banned broadcasting of beer commercials on television and radio between 7 am and 10 pm and prohibits their using “people or animals” or images of them in advertising. It further requires that at least 10 percent of ad space be dedicated to health warnings. Television and advertising agencies will be the first to suffer the effects of the bill, Kommersant wrote. According to the paper, beer commercials account for an estimated 10 percent of TV ad revenues.

 

Wide Abuse

Mental institutions

imprison 2% of youth

Approximately 600,000 Russian children – about 2 percent of the country’s minors – are living in mental institutions, the St. Petersburg Times reported, citing the local branch of the international nongovernmental organization, Citizens Commission for Human Rights (CCHR). “It is a widespread practice for children to be sent to a mental institution simply for bad behavior and after an examination that usually lasts no longer than five minutes that finds them to be mentally ill,” CCHR St. Petersburg representative Roman Cherny said. He said that a recent Human Rights Watch report on Russia’s mental institutions documented inhumane punishments, including the punitive use of psychotropic drugs. Cherny said that staffers in institutions often pay no attention to their wards, meaning that children who are institutionalized often do not learn to read or write. (RFERL Newsline)

 

Polishing Russia

Diplomatic shuffles and

a call to defend Russia’s image

In July, President Putin shuffled (and trimmed) the deck at the Foreign Ministry. The number of deputy foreign ministers was reduced from 12 to 7, the number of Foreign Ministry departments from 42 to 35, and the central staff of the ministry decreased from some 3,500 to 3,048 people. Russian First Deputy Foreign Minister Valery Loshchinin is now Foreign Minister Sergei Lavrov’s only first deputy. Vyacheslav Trubnikov, who served as a first deputy minister, has been named ambassador to India. Eleonora Mitrofanova left her first-deputy ministerial position to head the Foreign Ministry’s Agency for Relations With Russians Abroad. Andrei Denisov, who was a deputy minister, now heads Russia’s Mission to the United Nations. Former deputy minister Sergei Razov became ambassador to China. 

Meanwhile, at a meeting with 160 Russian ambassadors in July, various media reported that Putin urged diplomats to respond to attempts from abroad to “discredit” Russia. “The image of Russia in the countries [you work in] is far removed from reality,” Putin said. “Quite often there are managed campaigns aimed at compromising our country and the damage from such campaigns is obvious both for the state and Russian businesses.” Putin added that the priorities of Russian foreign policy remain the CIS, the European Union, the United States and the Asian-Pacific region. As far as the CIS is concerned, Russian diplomacy should reject the notion “that nobody except [Russia] can lay claim to leadership in this area,” he said. Such ideas are both “illusory and mistaken – the extension of the EU and NATO create a new geopolitical reality” that must be considered in formulating Moscow’s foreign policy. Putin added that good relations with U.S. officials are not enough for a “sustainable partnership” and called for cooperating with “broader circles” of the American public. (RFERL Newsline and other sources)

 

Freedom of Sp— 

NTV continues drift

Kremlinward

This summer, the newly-appointed General Director of NTV, Vladimir Kulistikov, who was previously General Director of the news program Vesti (on RTR), used the slow summer season to rid NTV of its vestiges of politically controversial and live content. 

In July, the live show Svoboda Slova (“Freedom of Speech”), where the country’s best-known politicians, activists and journalists discussed current political topics, was pulled off the air. The show’s host, Savik Shuster, was transferred to the post of NTV’s deputy director for documentaries. In canceling the show, Kulistikov said the show’s declining ratings and negative bias towards the state were the reasons for its shuttering. “Often, the show saw itself as an elitist club trying to prove one thing: That Putin isn’t the head [of the country]. The voice of the majority there was almost inaudible,” Kulistikov said in an interview with Kommersant. Kulistikov said that a show like Svoboda Slova might reappear for the 2007-08 elections, but “certainly not in the short-run.” 

In July, NTV also yanked from the air its satirical show, Krasnaya Strela, where a Rabbit and a Pig were portrayed as conductors on the train “Red Star,” and discussed the latest political developments in Russia.

 

Arctic Cleanup

Working together to

“deactivate” the North

Under an agreement between the U.S., Russia and Norway to reduce the environmental impact of military activities in the Arctic, Russia has opened the first facility for primary reprocessing of radioactive waste in Russia, at the shipbuilding plant in Polyarny, on the Kola Peninsula.

The Arctic Military Environmental Cooperation agreement (AMEC), was signed in September 1996, and the new plant’s purpose is “to ensure the radiological environmental safety of work involving the treatment of radioactive wastes,” Viktor Frolov, the plant’s chief engineer, said in an interview with Interfax. The facility can process 500 cubic meters of solid radioactive waste per year. Its temporary storage platform can hold 629 cubic meters of solid radioactive waste. At present, the plant is storing there the solid radioactive waste remaining from the deconstruction of 15 nuclear submarines. Clearly, this is only a beginning. Some 800,000 cubic meters of solid radioactive wastes are stored in the Murmansk region alone. Norway has invested $10 million, the U.S. $25 million, and Russia $6.5 million in various AMEC projects. 

Wipe That Smile!

In early August, as the Olympics approached, President Putin, in a phone conversation with Leonid Tyagachyov, head of the Russian National Olympic Committee, said that he wants Russian athletes to sing the national anthem without chewing gum or smiling stupidly. According to Olympic Committee Press Secretary Gennady Shvets, Tyagachyov passed on Putin’s wishes to the coach of the Olympic soccer team, Vyacheslav Koloskov, who, in turn, passed the presidential wish on to the players. 

“I told them to be more serious about the anthem. Other teams not only sing, but they have expressions on their faces which indicate that they are ready to do anything to defeat their rival. And what about our [sportsmen]? They chew gum and smile,” Koloskov said.

 

World Records

Early this July Svetlana Feofanova, who later turned 24, set a world pole vaulting record of 4.88 meters at the IAAF Super Grand Prix in Heraklion, Greece. Feofanova soared over compatriot Yelena Isinbayeva, who finished second with a height of 4.65 meters. “As far as the 4.90 mark, I think it will soon fall,” Feofanova said. “In addition to myself, Isinbayeva and Dragila can also do this.”

Another Russian made history at this competition. Gyulnara Samitova set a record of 9:01:58 in the 3000 meters steeplechase run. But the 3000 meters is not an Olympic event, so Samitova will compete in the 5000 meters.

 

Grand Slams

Of the top ten seeded Russian women set to play at the US Open August 30-September 12, four of them are Russian, and two have won Grand Slam competitions this year. Anastasia Myskina (see Russian Life, July/Aug 2004) is the top-ranked Russian, in the #4 slot, after having seized the cup at the French Open earlier this summer. Yelena Dementieva, who lost to Myskina in the French Open final, is ranked #6, just above Maria Sharapova (#8), who this year became the first Russian woman ever to win Wimbledon this year. The group is rounded out by Svetlana Kuznetsova, ranked #9.

As would be expected, the US has the most entrants in the tourney, with 15. But Russia, the rising superpower of women’s tennis, has 14.

Meanwhile, on the men’s side of the aisle, the only standout is Marat Safin, winner of the 2000 US Open. He is ranked 8th in the world and the only Russian in the men’s ATP top 20. There are currently seven Russian women in the WTA top 20.

 

{MASTERFUL IMPERSONATION} The St. Petersburg Times reported that a new 10-part TV serial based on Mikhail Bulgakov’s Master and Margarita – considered by many the quintessential Moscow novel, in which the city virtually becomes a character in the story –  is actually being filmed in St. Petersburg. “Much to our regret,” said director Vladimir Bortko, “Bulga-kov’s Moscow of the 1930s is easier to find in central St. Petersburg, because it has been much better preserved.”

 

{NEW RESTRICTIONS} Early in August it was announced that journalists traveling to Chechnya will now be required to apply for permits from the Interior Ministry. Previously, journalist visits to Chechnya were coordinated by the presidential administration. “Now the Interior Ministry is in charge of not only the counter-terrorist operation, but also of controlling the work of the mass-media, which reports on events in the Northern Caucasus,” Kommersant wrote, emphasizing that it will now be up to the Interior Ministry to determine whether a journalist has violated restrictions on reporting from Chechnya. Officially, journalists may not report on the location of Russian troops, their number, types of arms, etc. “In fact the new rules give the Ministry a legal right to remove journalists from Chechnya who say and write things different from what the Interior Ministry leadership wants,” Kommersant concluded. 

 

{Yaponchik Returned} In July, Russian crime boss Vyacheslav Ivankov, nicknamed “Yaponchik” (Little Japanese), was extradited from the U.S. to Russia. Ivankov was convicted in the U.S. in 1997 for extortion and other crimes and sentenced to 10 years in jail. In 1981, Ivankov was sentenced in Russia to 14 years in prison, but emigrated to the U.S. in 1991 after being released prematurely. In Russia, he awaits a new trial for his alleged involvement in the killing of two Turkish citizens. 

 

{Cheburashka to Olympics} The popular animated character Cheburashka was chosen as the Russian Olympic Team’s official mascot. Cheburashka creator Eduard Uspensky granted the team these rights and Cheburashka was set to travel, live, compete and receive medals with Russian athletes throughout the games.

 

{Wait in Comfort} A pre-trial detention facility in the town of Veliky Novgorod has opened two cells equipped with an air conditioner, TV, radio, and refrigerator, Interfax reported. The regional corrections department said that the four-person cells are part of a Justice Ministry pilot project. Inmates who want to live in these “luxurious” cells will have to pay 300 rubles per day. Such deluxe cells are to be opened in pre-trial detention facilities in ten other regions, including Moscow and St. Petersburg. 

 

BENEFITS YES, CASH NO!

Public rallies were held throughout Russia this summer to protest a Kremlin-backed bill to replace in-kind benefits with cash for socially vulnerable groups. The bill cancels transportation, healthcare and other benefits which students, pensioners, army veterans, the disabled and other groups have enjoyed since the Soviet era. Critics fear that the unindexed payments will be eaten up by inflation and leave socially vulnerable groups exposed. “Stop dispossession of the poor!” reads the poster. Early in August, the bill passed both the Duma and Federation Council.

 

HONORING BAIKAL

In late July, a conference was held in Buryatia, “Cultural Ties Between Ancient Siberia and America: Problems, Research, Hypotheses.” During the conference, the Mongol shaman-udagan Lodogin Zagdaa conducted a ritual in honor of Baikal (our story on Baikal begins on page 22).

 

The World Bank will invest from $1-1.5 billion in Russia over next three years 

 

Moscow allocated R161,680,300 for restoration of The Worker and the Kolkhoz Woman monument.

 

It cost Russia R1,550,636,000 for the “functioning” of the President of Russia from January-April 2004. This equals 12.8 million rubles or $441,000 per day. The president’s monthly income (included in this sum) is R146,800 rubles.

 

1,577,000 people live in Tver region. The average pension in the region is R1,762. The state-calculated subsistence wage for the region is R2,240. 

 

The 2004 federal budget allocates R35.6 billion rubles ($1.2 billion) for expenses related to international cooperation. The budget also includes some R186.6 million ($6.4 million) for humanitarian aid to other countries.

 

Russia spends R1 billion per year on car tires, half of them imported. 

 

Over 29,700 illegal aliens were deported from Russia by the Moscow police in the first six months of 2004, nearly 2,400 of them under police escort. This is a 550% increase over the same period last year. 

 

By 2006, Russia may have just 15 different taxes instead of the current 52, when Tax Reform is completed. 

 

A $34.6 million grant will flow to Russia from The Global Fund to Fight AIDS, Tuberculosis and Malaria, to counter the outbreak of AIDS and tuberculosis. 

 

118,700 Russians were reported missing in 2003. This has resulted from a 10-12% annual increase since 2000, Interior Ministry Colonel Yelena Zarembinskaya said. About one-fifth of those missing in 2003 were minors, including about 8,000 infants younger than three years old. Zarembinskaya reported that last year about 64% of those reported missing were found, including 92 percent of the minors. In order to assist in the process of finding missing people, the Interior Ministry has proposed the creation of a national DNA databank. 

 

In June, 10 entities controlled 60% of the Russian stock market. This makes the concentration of wealth in the Russian economy one of the highest in the world, according to a recent World Bank report. Only Germany and the United States have more billionaires than Russia, but the wealth of Russia’s 26 richest persons adds up to 19% of the country’s GDP, while in the U.S. this index is 4%. 

 

3,000 Russian servicemen have been convicted of various offenses since the beginning of 2004. This is up 20% versus the same period last year. 

 

R1 billion is what President Putin can say he saved Russia by marching to victory in the first round of the March presidential elections. R4.3 billion were allocated for presidential elections and the first round is 3.3 times more expensive than the second. 

 

5.8 million people were unemployed in Russia at the end of May, equaling 8.1% of the workforce. 

 

1,300,000 names were included on the first set of CD-ROMs issued by the human rights organization Memorial, which seeks to publish the names of all victims of Soviet repression in this manner. But the effort is being sponsored by the Yukos-funded Open Russia Foundation. And, with Yukos’ difficulties, continued funding of the project is in doubt. A spokesman for Memorial said that about one-eighth of the project is completed.

 

Russia ranked 57th on the United Nations’ human development index – a tabulation of the world’s best countries to live in. The UN called Russia’s jump from 63rd place last year “remarkable progress.” Russia ranks just above Libya, and just below Bulgaria. The list is topped by Norway. In last place (177th) is Sierra Leone. The index is based on a variety of factors, including life expectancy, education level and adjusted real income. It is based on 2002 statistics, the latest available.

 

6.7% growth is predicted for the Russian economy this year, outpacing the rest of the world economy. Inflation is predicted to come in at 6.1% and real income growth at 13.2%

 

STATISTICAL SOURCES

FIGURES (page 11): 1-5. Kommersant Vlast. 6. Profil. 7. Interfax. 8. Deputy Finance Minister Sergei Shatalov quoted by Kommersant Vlast. 9. U.S. Secretary of Health and Human Services Tom Thompson, who also heads the Global Fund to Fight AIDS, Tuberculosis and Malaria, quoted by Interfax. 10. Nezavisimaya gazeta. 11. Interfax. 12-13. Kommersant Vlast. 14. Federal Statistics Service quoted by Reuters. 15. RFE/RL Newsline. 16. APN. RUSSIANS WHO (page 8): 1-2. VTsIOM. 3. ROMIR Monitoring. 4. Levada Center. 5. ROMIR Monitoring. 6. RBK. 7-9. Levada Center. 10. ROMIR Monitoring.

 

 

“If I were permitted to attend the session of the forum section on Fundamental Problems of Integrative Associations, I would very briefly formulate these problems in three or four phrases: great power chauvinism, nationalism, the personal ambitions of political decision-makers and ordinary stupidity, ordinary Neanderthal stupidity.” 

President Vladimir Putin, speaking at the International Forum
on Eurasian Integration in Astana (Interfax) 

 

“The Powers That Be should redouble their conscience.” 

Irina Khakamada, politician (Itogi)

 

“LDPR is not part of the Powers That Be, we are its
special part, which will turn every which way and strike
in any direction.”

 Alexei Mitrofanov, State Duma deputy (Itogi)

 

“Yes, the word ‘oligarch’ has today become a swear word here. And sometimes someone will say about a neighbor, who has traded up from a Zhiguli-1 to a Zhiguli-11: ‘See, our Vaska is so much like an oligarch.’” 

 Andrei Shtorkh, ZAO Renova director for strategic planning (Itogi)

 

“There is money in the country. Distribute it to the people. Let them at least eat their fill of sweet cherries.” 

Vladimir Zhirinovsky Liberal Democratic Party of Russia leader, about replacing benefits for pensioners, the handicapped, etc. with cash (Itogi) – see page 6

 

“Step by step, without a hurry, in a flak jacket,
we will establish order.” 

Mikhail Zurabov, Minister of Health and Social Development, about replacing benefits for pensioners, the handicapped, etc. with money (Itogi) – see page 6

 

“Auto motorways are one of the barriers that stand
in the way of transport.” 

Igor Levitin, Transport Minister (Itogi)

 

“The people’s greatest blessing is still a good, right, balanced legislative act.” 

President Vladimir Putin (Itogi)

 

“The goal [of the country’s leadership] is singular – to make people happy.”

Vladimir Ustinov, Prosecutor General (Itogi)

 

“I have no doubt that beer is an alcoholic beverage.” 

Boris Gryzlov, State Duma chairman, regarding the debate
over beer sales and advertising (Itogi) – see page 8

 

Russians who:

 

agree that various Russian TV
news programs have become more
and more alike 65%

... disagree 23% 

 

plan to buy housing with their savings
in the next 3-5 years 6%

... will try to get mortgage 3%

... plan to borrow money for this
from friends or family 2%

 

think that a family (if it has sufficient means) should have: 

four or more children 13%

three children 35% 

two children 43%

one child 7% 

no children 1% 

 

no longer feel hatred for the
WWII Axis powers 91%

... versus three years ago 86%

 

do not remember who the
USSR’s allies were in WWII 24%

 

remembered that the US was an ally 60%

... the UK 57% 

... France 33%

 

feel the quality of medical services 

at district [state] hospitals is 

low or likely low 87%

 

are in favor of banning smoking 

in public places 77%

... are against 20%

... do not care 3% 

 

feel it would be good for Russia to join
the World Trade Organization 58%

... feel it would not 22%

... undecided 20%

 

feel closer relations with NATO is in 

Russia’s interest 33%

... disagree 39%

... undecided 28%

 

feel doing well in school is important
for one’s career 62%

 

do not feel confident about tomorrow 62%

 

think the Orthodox and Catholic Churches should stay separate 69%

 

...think efforts at reunification 

should be made 17%