In this issue:

Russian President's Malaysia Trip Cancelled After Bombing

Putin Sees Malaysia as Bridge to Asia and Ally in Struggle for Multipolar World

Franco-Russian Security Talks and Aerospace Agreements

Moscow on Alert After Suicide Bombings

Putin Holds Conference on Economy, Amid Yukos Scandal

Yukos Scandals Breed Turmoil

CPRF Punts on Electoral Coalition Proposal

From Volume 2, Issue Number 28 of Electronic Intelligence Weekly, Published July 15, 2003
Russia and Central Asia News Digest

Russian President's Malaysia Trip Cancelled After Bombing

"In connection with the tragic consequences of the terrorist act in Moscow, which took the lives of Russian citizens, the President of the Russian Federation has decided to cancel his planned foreign visit," the Kremlin said in a statement July 6, the day after two suicide bombers killed 16 people at a concert in Moscow. President Vladimir Putin had been scheduled to fly to Uzbekistan on July 6, and then to visit Malaysia, where he was to have signed three agreements—two programs for cooperation in science, technology and communications, and a $900-million deal to supply 18 Sukhoi fighter aircraft.

Putin Sees Malaysia as Bridge to Asia and Ally in Struggle for Multipolar World

Forced to postpone his planned visit to Malaysia because of the recent grave Moscow terrorist incident, President Vladimir Putin nevertheless presented his views to Malaysians through a July 8 interview with senior New Straits Times editor/correspondent Hardev Kaur. In it, Putin vehemently opposed the concept of "clash of civilizations," saying that he believes that slogan "is a dangerous one. We are human beings and only after that are we of different religions, congregations, races, etc. If we look around at every one of us, there is more that unites us than divides us. So, the implementation of our foreign and domestic policy should be based on human values. Of course, there are people who do not want to admit that and use reasons like religion for their own political goals."

On the United Nations, Putin said: "We believe that the only universal organization that can solve issues of a global nature is the UN. The world is changing and the UN should change with the world if it wants to be effective. But it will be a great mistake to destroy this great organization. Humanity has no other organization of similar character."

Concerning bilateral Russian-Malaysian issues, Putin said: "Cooperation in high-tech and aerospace. We have a number of deals under consideration. We are looking into cooperation not only in the military area and in military aircraft but also in civil aviation. Space exploration is another area. The possibility of a joint flight with the participation of a Malaysian astronaut is being considered. Cooperation in energy is another area. There are areas of mutual interest which take into account Malaysia's very good standards in the production of electronics, especially of home electronic products. At the same time, we should think of creating the conditions and the necessary prerequisites for investments both in Malaysia and in Russia.

"I have outlined the common areas for Malaysia and Russia. It is in these areas and industries that Malaysia can become a bridge for our business activities in the Asia-Pacific region."

Moreover, Russia appreciates very much that "Malaysian leaders strictly abide by the rules of international law and take into account the interests of its partners. I believe that it is a necessary framework for the positive development not only for Malaysia's bilateral relations with other countries but also for the formation of a new and necessary world order for the 21st century."

Franco-Russian Security Talks and Aerospace Agreements

French Foreign Minister Dominique de Villepin and Defense Minister Michele Alliot-Marie arrived in Moscow July 7 for the second session of the Franco-Russian Security Council, as well as other high-level talks. The session focussed on the strategic situation in the wake of the Iraq war, and plans for expanded cooperation at the United Nations and in other international institutions.

Leading representatives of the French and Russian aerospace industry signed two agreements during the visit: one on a broad range of research and development in aircraft and space technologies; another on the joint development of a prototype for a fifth-generation fighter aircraft. Further agreements, such as on the projected EU-Russian space launch site at Kourou, French Guiana, are in the making.

Moscow on Alert After Suicide Bombings

The July 5 blasts that killed 16 people and wounded over 60, occurred at the gates of the Tushino Airfield rock music festival, held each summer in Russia's capital. The two female suicide bombers were in the process of being turned away at the entrance to the airfield, when they detonated their explosive devices. A third explosive device was found nearby and defused by police. On July 9, a Chechen woman was arrested while trying to detonate a bomb outside a restaurant on Tverskaya-Yamskaya Boulevard, a major Moscow thoroughfare. A policeman died attempting to defuse those explosives.

Russian Interior Minister Boris Gryzlov said his agency believes a ring of Chechen suicide bombers is now active in the Russian capital. The Moscow attacks followed a series of suicide bombings in Chechnya, and came less than a day after Russian President Vladimir Putin announced that Presidential elections would be held in Chechnya on Oct. 5.

Putin Holds Conference on Economy, Amid Yukos Scandal

On July 10, President Putin convened a meeting of representatives of political parties and organizations, legislative bodies and regional administrations. The guests included leaders of major groups in the State Duma, such as Communist Party Deputy chairman Vasili Kuptsov, Yabloko chairman Grigori Yavlinsky, and Union of Right Forces leader Boris Nemtsov—some of whom hurried back from vacation to attend the session. Also present were members of the government and of the presidium of the State Council, including prominent regional governors like Aman Tuleyev of Kemerovo Province, and heads of public organizations, including Arkadi Volsky, leader of the Russian Union of Industrialists and Entrepreneurs (RUIE).

The official agenda was "three major topics" emphasized in Putin's annual message to the Federal Assembly in May: how to double Russia's GDP, how to end poverty in the country, and how to modernize the Armed Forces. Hanging over the meeting was the shadow of dramatic events around the major oil company, Yukos, and its parent company, Menatep. Yukos partner Platon Lebedev had been arrested a week earlier, in a Prosecutor General's investigation of the allegedly illegal acquisition of a mineral company in 1994; Yukos chief Mikhail Khodorkovsky has been questioned in that case and on tax matters, being investigated in parallel; so have the corporate leaders of Yukos' prospective merger partner, Sibneft; and, the latest raid on the company, by armed police who seized records at Yukos offices in Moscow, took place while Putin's meeting on the economy was under way.

Putin made no explicit mention of the Yukos case, neither in his opening remarks, nor during the discussion behind closed doors, according to those present. He did say, "A society split into small groups according to their narrow interests, is incapable of concentrating on the implementation of major national projects. Not to mention solving large-scale strategic tasks. But those are what the country is facing." According to sources in the meeting, the President alluded to the use of "extraordinary repressive measures in solving economic problems" as "incorrect," but also said that "basic Constitutional standards" must be fiercely defended. These formulations left uncertainty about where Putin stands on the Yukos investigations. Izvestia's July 12 commentary said that, by all reports from the meeting, "Putin preferred not to become the public arbiter in this new conflict between big business and law enforcement."

Putin reportedly spoke very little during the session, but asked each participant to speak, and took notes. He announced the creation of a "compact working group," under his aide Igor Shuvalov, to address the matters at on the agenda.

Volsky handed the President a letter from the RUIE, the entrepreneurs' organization, described as an appeal to preserve stability in the country. Reports prior to the meeting suggested that RUIE member Khodorkovsky had drafted the letter as a demand for the President to intervene and stop the persecution of Yukos, but that was not publicly confirmed. Volsky did speak up to say that the behavior of Russian law enforcement "does not correspond to international legal practice: In economic investigations, persons are usually arrested after evidence is found against them, rather than before."

Yukos Scandals Breed Turmoil

The Russian Trading System stock index ended the week down 10%, the slide being led by the shares of Yukos Oil, which is under investigation. On July 8, Prime Minister Mikhail Kasyanov spoke out on the Yukos raids, saying that the arrest of Menatep executive Platon Lebedev was "an excessive measure," although any economic crimes should be investigated thoroughly. Earlier, Deputy Premier Viktor Khristenko said he hoped the legal situation around Yukos would be cleared up swiftly, in order that the economy not be damaged.

On July 10, Minister of Economic Development and Trade German Gref issued assurances that the investigation of how Menatep acquired the Apatit company in 1994, did not mean there will be a full-scale "revision" of 1990s privatizations. The same day, U.S. Ambassador Alexander Vershbow officially demanded an explanation of the Yukos affair from the Russian government. Speaking to Interfax, Vershbow hinted that such investigations could wreck the U.S.-Russian bilateral business climate (Khodorkovsky is a big promoter of Russian oil exports to the United States) and the investment climate of Russia in general.

Most agitated about the raids, arrests, and investigations is the Russian press. Nezavisimaya Gazeta headlined that Yukos had been attacked by "the werewolves in epaulets"—the epithet for a network of high-ranking police in Moscow arrested recently for running a protection racket. Izvestia suggested it was a maneuver by Russian oilmen, especially from the state-owned Rosneft firm, to block the power of Jewish oil magnates like Khodorkovsky. Dozens of analysts in the media are expounding Khodorkovsky's own interpretation of the events, namely, as reflecting a power struggle within the President's staff.

CPRF Punts on Electoral Coalition Proposal

A plenary session of the Communist Party of the Russian Federation (CPRF) Central Committee, held June 26, decided against taking up a formal proposal for greatly expanding the electoral coalition, the People's Patriotic Union, of which it is the leading component. The proposal had come from Sergei Glazyev, co-chairman of the Union, who is a leading CPRF vote-getter, though not a member of that party. It was co-signed by prominent CPRF activists, including Gen. Viktor Ilyukhin. Glazyev has been campaigning for an effective opposition coalition in this December's Duma elections, saying it should be prepared to wield power and guide the country, not just to protest.

After the CPRF punted, the daily Nezavisimaya Gazeta carried a story about alleged Kremlin attempts to recruit Glazyev to a controlled opposition alliance, including various patriotic and religious-oriented parties, but not the CP. The supposed goal would be to peel away up to 10% of the CPRF vote. On July 8, however, Glazyev said in an interview to Tovarishch press agency, that he had no intention of "joining a coalition with the People's Party" (of Gennadi Raikov)—mentioned by NG—because the latter is part of the "party of power."

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