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Russia Report: April 22, 2002

22 April 2002, Volume 2, Number 13
Russian President Vladimir Putin's annual address delivered on 18 April has inspired reams of analysis in the Russian and Western press, as observers look for clues to the presidential administration's future plans. But even before Putin spoke, Lilia Shevtsova of the Carnegie Endowment for International Peace told RFE/RL that she didn't believe that speech would be an important indicator of Putin's future plans. Simply put, Putin is facing too many constraints in Russia's overall political context. He is two years away from re-election, and Shevtsova argues that Putin doesn't want to "rock the boat." Therefore, according to Shevtsova, he won't be pushing a reform of the housing and communal service sector too vigorously.

At the same time, Shevtsova believes that the continuation of economic reforms is one of four major challenges that Putin faces during the remainder of his first term. According to Shevtsova, Putin needs to reduce the Russian economy's dependence on oil prices, decrease the disproportionate influence of large financial groups, and -- more broadly --"modernize" the economy, removing bureaucratic obstacles so that small and medium-sized businesses can develop. Putin must come to "eventually understand that there can be no economic freedom without political freedom" and that integration with the West is dependent on success or at least progress in these areas. An additional challenge Putin faces is addressing the situation in Chechnya, Shevtsova argues: "He won't be re-elected unless he resolves this."

After the speech, Andrei Ryabov of the Carnegie Moscow Center discussed the address with RFE/RL's Moscow bureau. Ryabov believes that although foreign policy was not a major theme of his speech, Putin will continue to pursue the same pro-Western course in foreign policy that he has been pursuing. "I think that it is possible that Putin, like [Soviet leader Mikhail] Gorbachev 12 years ago, has the support of the leaders for world powers and -- in a broad sense -- of Western political and business circles. This support will help his position inside the country." Ryabov continued that "the more active Putin's foreign policy, the stronger his influence on domestic policy." According to Ryabov, it was "not accidental" that Putin did not dwell on foreign policy in his speech as some "Moscow political circles had expected." Putin "understands that this kind of legitimation from his pro-Western course raises -- to put it gently -- unpleasantness not only in the State Duma but in a significant part of [Russian] political and business circles," Ryabov said.

Ryabov also noted that he was struck by Putin's manner in delivering the speech: "Occasionally one got the impression that the person who was speaking was not a national political leader, who was trying to mobilize, to orient [a large group of] people, giving them priorities and possibly even instilling in them moral values, but the chief manager of some large corporation, who is putting forth some tasks. Here it is necessary to do this, there we must do that, etc., etc. It is this kind of technocratic-pragmatic approach, that differentiates this speech from the previous addresses of Vladimir Putin." (Julie A. Corwin)

As with any leader's major speech, sometimes what wasn't said is as interesting as what was. Peter Rutland of Wesleyan University below discusses some noticeable absences in Putin's speech and also looks forward to what challenges Putin faces in the remainder of his term. (Julie A. Corwin)

RFE/RL: [Lilia] Shevtsova [of the Carnegie Endowment] thinks that Putin doesn't want to "rock the boat" before the elections and won't really be pursuing any reforms, such as that of housing, too vigorously. Do you agree?

RUTLAND: Putin doesn't strike me as someone who is particularly worried about elections that far ahead. At the same time it's clear that the housing/utilities reform is a third rail in Russian politics that can cause all kinds of trouble -- street protests, horror stories in the press, parliament protests, etc. -- whether or not an election is taking place. Raising rents or prices too quickly at any time is political suicide.

The answer to reform [of that sector] probably lies in strengthening local government budgets, since they bear the burden of cross subsidies -- and making sure that they use the money to subsidize housing and not on other schemes. Given the influx of oil/gas money into the federal budget I don't see any crippling problem here.

RFE/RL: In his speech, Putin seemed to hint that he was thinking about augmenting the powers of his presidential envoys in the federal districts -- and he mentioned specifically financial monitoring. Do you think perhaps he is thinking about using the "polpredy" (presidential envoys to the seven federal districts) to monitor how regional budget money is spent -- to make sure that budget money isn't spent on new construction projects but on paying electricity bills?

RUTLAND: Could be. It sounds like he is thinking of some kind of major overhaul of the administrative system. There has been a tremendous increase in the number of state officials since 1991, and I haven't seen any really good analyses of why. Possibly there is some kind of rational explanation. Perhaps a number of officials were once on the books of the large industrial enterprises and now have become state officials, and the actual number of officials working has not gone up. Or perhaps there is some real pork-barrel politics going on and new patronage networks are being created at the local level. Perhaps there is some kind of process of creeping de-privatization going on around the country and there are all kinds of construction units or whatever now on the public payroll.

RFE/RL: Do you really think there will be a significant trimming of the federal bureaucracy? He's talked about de-bureaucratization before and trimming the state apparatus before, but the state seems to just keep growing and growing.

RUTLAND: The trimming of the bureaucracy has to be part of a wholesale administrative reform, something that Putin sounds like he is keen on doing, but it will take time. And the first steps were to get legal codes, judicial system reformed. I don't think anyone really knows what all those bureaucrats do. He mentions the ongoing inventory of state property -- it would be good if that was followed up by an inventory of bureaucrats

RFE/RL: I remember last year some interesting analysis of what Putin didn't say during his address. Were there any topics that particularly stand out in your mind that he didn't address?

RUTLAND: He was very silent on political parties. And he didn't talk about civil society at all which was a big theme of the 2000 speech. And there were actually significant things to report, the Civic Forum that was held, the law on political parties [that was passed]. I was also really surprised by how silent he was about the U.S. and NATO. There was only one fleeting mention of the U.S. compared to a whole section on the CIS.

RFE/RL: Perhaps because that's a sore subject in some quarters?

RUTLAND: Yes, yes, but he didn't try to defend his policies. It apparently was his strategy just to ignore things that are problematic. He spent much time discussing the WTO (World Trade Organization), and there is significant opposition to Russian accession to that organization by a number of different groups, who are putting up a pretty fierce resistance. But he did explain why it's important and necessary for Russia to move forward with the WTO accession process.

He also didn't talk about pension reform. He talked a bit about health care and health care reform. Some people have been hoping that he would just drop the idea [of pension reform] and perhaps he has.

RFE/RL: What about over the next two years? What do you see as Putin's main constraints and challenges?

RUTLAND: In the area of foreign policy, WTO is a major concern. Putin is hoping for early entry but negotiations could drag out for a long time. I'm relatively pessimistic about this one.

On the domestic front, a key area is reform of the natural monopolies. He passed over this subject quickly in his speech, with only vague suggestions for action. Russia needs to build a better mechanism for regulating tariff levels. I don't know what to do -- but even more worrying it's not clear that he knows what to do.

RFE/RL: So you don't think it's a case of him not having enough power to push through a plan, but that there isn't a clear concept at all?

RUTLAND: Yes. Or both to some extent. But I don't even think that they have gotten to that second stage yet.

The State Duma approved a bill on alternative military service in its first reading on 17 April, Russian agencies reported. The vote was 245 in favor, according to RIA-Novosti. Deputies considered three versions, one drafted by Union of Rightist Forces (SPS) Deputies Eduard Vorobev and Aleksandr Barannikov, Russian Regions Deputies Vladimir Lysenko and Oleg Shein, and independent Deputy Yulii Ryabov; another by Deputy Vladimir Semenov (SPS); and the other by the government. Deputies opted for the government's version, which requires youths to serve four years of alternative military service compared to the other versions calling for only two years. However, under the government version, those young men who have received a higher education must serve only two years of alternative military service. In addition, the government bill stipulates much more rigid requirements for enlistment in alternative service than the other proposals. Defense Minister Sergei Ivanov told RIA-Novosti on 17 April that he is satisfied with the bill, although he believes that the term of alternative service should be six years rather than four. The current term for conventional service in the Russian army is two years. JAC

Another element in the presidential administration's reform of the legal system cleared a legislative hurdle when State Duma deputies on 18 April approved the law on lawyers' activities and lawyers in its second reading, RIA-Novosti reported. The vote was 294 in favor with 108 against and two abstentions. Deputy Chairman of the Committee on State Construction Oleg Utkin (Unity) told ITAR-TASS that more than 470 amendments were offered to the bill, of which 240 were recommended for acceptance. He added that the main innovation of the bill is that it provides the opportunity to form federal and regional chamber of lawyers, which will provide more qualified legal help to poorer members of the population for free and will defend lawyers' interests in organs of state power. On 19 April, deputies gave their preliminary approval to a bill which amends the new Criminal Procedure Code so that to make an arrest police need the approval not only of a prosecutor but also of a court. According to Interfax, the amendments were prompted by a 14 March Constitutional Court decision requiring that the code be amended. JAC

The presidential bill on citizenship passed in its third and final reading in the State Duma on 19 April, Russian agencies reported. The vote was 252 in favor, with 152 opposed and two abstentions. Under the bill, to earn Russian citizenship persons must have lived in Russia for five years without interruption after receiving a resident permit, according to Interfax. Candidates also need to have a legal source of income and know the Russian language. Yabloko and the Union of Rightist Forces voted against the bill in part because they opposed the Russian-language requirement. Also passed in its third reading was a bill banning cloning of human beings for a period of five years. The vote was 365 in favor, according to Interfax. Under the legislation, the ban may be extended or lifted depending on what scientific knowledge is accumulated, Interfax reported. Deputies also voted on 19 April to approved a bill raising the minimum monthly wage index from 300 rubles ($) to 450 rubles a month, Russian agencies reported. The bill was passed in all three reading on the same day. The bill will come into force the day it is signed by President Putin, according to ITAR-TASS. JAC


Name of Law_______________Date Approved________# of reading

On citizenship in the Russian____19 April______________3rd

On a temporary ban on_________19 April_______________3rd
the cloning of humans

Criminal Procedural Code_______19 April______________1st

On the minimum measure of_____19 April____________1st, 2nd, 3rd
wage payment

On alternative civil___________17 April______________1st

On lawyers_________________17 April______________2nd

IN: Dmitrii Bednyakov will represent the legislature of Nizhnii Novgorod selected in the Federation Council. Anatolii Kozeradskii, who had been representing the chamber, was recently named chief federal inspector for Nizhnii Novgorod Oblast by presidential envoy to the Volga Federal District Sergei Kirienko. Bednyakov had been chairman of the oblast's legislature during its previous convocation but failed to be re-elected during the 31 March ballot because there was insufficient voter turnout in his district, Interfax reported on 11 April.

IN: Oleg Vyugin, a former first deputy finance minister who most recently worked at Troika-Dialog, has been nominated to serve as first deputy chairman of the Central Bank along with Andrei Kozlov, who was previously first deputy chairman at the Central Bank from 1989 to 1998, according to Also nominated was Nadezhda Ivanova for the board of directors of the bank. Ivanova is director of the economic department of the Central Bank.

IN: Sergei Vyazalov, who previously headed Lenenergo, has been nominated for the post of first deputy finance minister, "Kommersant-Daily" reported on 16 April.

IN: State Duma Deputy Petr Shelishch, who had been independent after leaving the Yabloko faction, has joined the Fatherland-All Russia faction RIA-Novosti reported on 16 April.

TRANSFER: Anton Zlatopolskii has been appointed general director for the Russian Television (RTR) channel and Pavel Korchagin was named RTR's chief producer, Interfax reported on 16 April. Zlatopolskii previously served as first deputy director of VGTRK, a position he will retain. Korchagin was most recently executive director of TV-6. He had worked at RTR previously before becoming general director of TNT, according to the agency.

22 April: State Council will hold a hearing on the buying and selling of agricultural land, according to Interfax on 17 January

late April: Summit of five Caspian states to be held in Ashgabat, Turkmenistan, according to First Deputy Foreign Minister Viktor Kalyuzhnyi on 24 January

28 April: Presidential elections to be held in the Republic of Karelia

28 April: Second round of presidential elections to be held in Ingushetia

1 May: Deadline by which commissions for organizing the nationwide census should be formed in each of the seven federal districts, according to Interfax on 15 April.

14-15 May: Foreign ministers of NATO countries and Russia will meet in Reykjavik

17 May: Egyptian Foreign Minister Ahmed Maher to visit Moscow

19 May: By-elections to be held in Altai Republic for State Duma seat left vacant by newly elected Altai Republic President Mikhail Lapshin

19 May: Gubernatorial elections in Smolensk Oblast

20 May: International press center for the 300th anniversary in St. Petersburg will open

23-26 May: U.S. President George W. Bush to visit Russia

28 May: World Bank's Board of Directors to discuss its Russia strategy

29 May: Russia-EU summit to be held in Moscow

31 May: CIS summit to be held in Chisinau, Moldova

First half of June: Communist Party will hold a party plenum, according to Interfax on 19 April.

June: Shanghai Cooperation Organization summit to take place in St. Petersburg, ITAR-TASS reported

June: Baltic Sea State Council meeting to be held in St. Petersburg

June: Government will have drafted a federal program for putting Russia's armed forces on a professional basis, according to Prime Minister Mikhail Kasyanov on 7 December

June: Russia and the U.S. will have drafted an agreement on radical cuts in strategic offensive weapons, according to Defense Minister Sergei Ivanov on 18 December

9 June: Repeat elections for legislature of Primorskii Krai

23 June: Presidential and parliamentary elections scheduled for Buryatia

26-28 June: Group of Seven summit to be held in Canada

1 July: Russia will complete its withdrawal from the military base in Cam Rahn, Vietnam, the Russian Foreign Ministry announced on 18 April

12 August: Second anniversary of the sinking of the "Kursk" submarine

September: Symposium and investment fair for atomic power plants to take place in Vladivostok

10-11 September: The fourth annual conference of the regional administrations of countries in Northeast Asia will take place in Khabarovsk

9-16 October: All-Russia census

26-27 October: Asia-Pacific Economic Cooperation summit to be held in Las Cabos, Mexico

7 November: Day of Reconciliation and Agreement.