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Russia Report: February 9, 2001

9 February 2001, Volume 1, Number 4
IS PUTIN SUFFERING FROM POST-KURSK TRAUMATIC SYNDROME? This week, two Moscow-based publications asserted that the Putin administration now appears to be waffling, refusing to set priorities or take decisive stands. "Novoe Vremya" argues in its issue number 5 that President Putin's management style underwent a dramatic transformation following the negative public reaction to his handling of the Kursk submarine disaster in August 2000. Before the Kursk disaster the monthly asserts that "the president managed to push through some unprecedented reforms to the system of regional government" as well as new tax laws while the government followed a "very responsible budget policy." It continues, "The arguments at that time were mostly over where the new regime would direct its energy: into modernizing the economy and the state, or stifling liberties. It never occurred to anyone that the regime might suddenly run out of energy." But following the public fall-out "when the danger of losing the people's love was the most obvious, the effort to maintain popularity changed from a routine task into an obsession." The publication suggests that the Kremlin is now afraid to step on "any major toes" and has adopted a more mild approach.

In another article that appeared around the same time (2 February), Vitalii Tretyakov, editor of "Nezavisimaya gazeta," also suggests that Putin is showing a lack of leadership at least with regard to some issues, issues on which "Putin is not responding in word or deed." Tretyakov, though, sees no chronological break in Putin's behavior, noting that "Putin was direct in the matter of the state anthem" and "displayed the same policy of handling the problem of Chechnya once." Putin proffered legislation on Russia's state symbols last December (see "RFE/RL Newsline," 8 December 2000). It's not clear why Tretyakov thinks Putin is showing a lack of leadership, but he hints something about his training as an intelligence officer may partly be at fault. In an earlier article, Tretyakov predicted that Putin's silence on key issues of the day may result in a decline in public support, because Russians no longer understand what Putin stands for. JAC

CAN'T AGREE? FORM A COMMISSION. While acknowledging the urgency of reforming the pension system, the Russian government appears stymied over the details of such a reform. A meeting of top government officials on the topic on 7 February resulted only in President Putin issuing a decree forming a new national council on pension reform to be chaired by Prime Minister Mikhail Kasyanov, "Izvestiya" reported on 8 February. Expectations had reportedly been higher. The previous day, a pre-meeting meeting of relevant government officials was sufficiently tense that its participants preferred to leave the final decision about the shape of new pension system to President Putin, "Vremya MN" reported on 7 February.

However, Putin's comments at the meeting, at least according to news reports, broke no new ground. At the 7 February meeting, President Putin declared that the present pension system has "exhausted itself" and needs improvement. Putin stated that the nation's new pension system must do at least two things, first, provide a minimum pension regardless of the retiree's "earnings or length of service" while additional pension payments above that minimum should vary depending on a person's work and savings. Second, Putin stated that any new system that is adopted "must keep intact all rights gained by today's pensioners and those who have not yet retired." Putin's statements do not differ greatly from remarks made by Pension Fund head Mikhail Zurabov last November in which Zurabov laid out three principles for pension reform, two of which Putin mentioned and a third, calling for the creation of regional pension funds. (Zurabov was speaking to a group of regional deputies.)

It was also not immediately clear from news reports how the 7 February meeting advanced the cause of pension reform past a similar such meeting held last October. At that session, the government decided that a transition from the current system to a system based partially on individuals' retirement saving accounts will begin as of 1 January 2002. Under the current system, employers pay a tax to the state pension fund, which in turn pays pensions. Under the new system, payments from workers' salaries will be deducted and put into some type of bank account that will earn interest. According to "Vremya MN" on 7 February, 1 percent of workers salaries will start being deducted next year for this purpose; in the following year this sum will increase to 2 percent, until by 2009 workers will be saving 9 percent of their wages a month. Meanwhile, employers will start paying a lower pension tariff next year of 14 percent rather than 28 percent, according to Interfax-AFI. By 2025, all Russians of retirement age will begin to receive the new type of pension in addition to the standard type of pension available today. This may be just in the nick of time, since the Russian government is predicting that by 2010 the ratio of retirees to workers will be one to one, "Vremya MN" reported on 8 February.

But important details of the reform apparently still need to be worked out. Among these is where and how to invest the new retirement savings. According to "Segodnya" on 7 February, the Communists, Agrarian and other left-wing groups are likely to oppose investing any part of this money overseas. Another important issue to be decided is how the government will guarantee individuals' retirements savings, "Vremya MN" pointed out on 8 February. Perhaps some answers will be forthcoming in March, when, according to ITAR-TASS, the next meeting on pension reform will be held. JAC

CHUBAIS SENT ON MISSION IMPOSSIBLE. After months of speculation about a personnel purge, President Putin has finally sacked one minister (see "RFE/RL Russian Political Report," 2 February 2001). On 5 February, Putin dismissed Energy Minister Aleksandr Gavrin for his "chronic inability" to resolve the country's heating and fuel crisis. Following a phone call from Putin, Primorskii Krai Governor Yevgenii Nazdratenko also decided to resign (see "RFE/RL Russian Federation Report," 7 February 2001). Just five days earlier, Putin named the Energy Ministry, the Primorskii Krai government, and Unified Energy Systems (EES) as the parties responsible for the heating and electricity outages that have plagued the Far Eastern province since the beginning of the "heating season" in October. Naturally, speculation quickly followed that EES head Anatolii Chubais will be next on the dismissal list; however, Deputy Prime Minister Viktor Khristenko has denied that Chubais's dismissal is imminent. "Izvestiya" on 8 February suggested that the government might be "saving" Chubais's dismissal for some later date since firing him now "would not improve the situation at EES." The "situation in Primorskii Krai has not improved," and later "he can be blamed for absolutely everything."

On 8 February, Chubais was in Vladivostok, where he appealed to energy workers in the krai to try to complete the next 14-15 days without any interruption in heat supplies, because that period is generally the coldest in the region's winter season, Interfax reported. Earlier in the week, Emergency Minister Sergei Shoigu shifted work repairing the krai's heating infrastructure off of an emergency basis, but on the same day the krai's energy supplier issued a gloomy statement about the krai's energy outlook, noting that coal supplies remain low in the region. If Chubais manages to supply heat to all residents' homes all of the time, he will have succeeded where many others, including the usually competent Shoigu, have failed (see "RFE/RL Russian Federation Report," 24 January 2001). JAC

LAW ON PARTIES PASSES FIRST HURDLE... As expected, Duma deputies voted on 7 February to approve the president's version of the law on parties. The vote was 280 in favor with 109 opposed and four abstentions. Four alternative bills to the president's were discussed but none of them attracted enough support. The president's version, which was drafted by the Central Election Commission, was supported by Unity, People's Deputy, Fatherland-All Russia, Liberal Democratic Party (LDPR) Yabloko and part of the Union of Rightist Forces (SPS) factions, while the Communists, Agro-Industrial group, those members of Democratic Choice within the SPS faction, and Russian Regions opposed it. Under the bill's current provisions, political parties are required to have no less than 10,000 members with branches made up of no less than 100 people in more than half of Russia's 89 federation subjects (see "End Note," "RFE/RL Russian Political Report," 26 January 2001). The law bans parties created along professional, gender, national, religious and other lines. Parties attracting more than 3 percent of the total vote will receive state financing.

The bill may change considerably during the second reading -- at least that is what some members of SPS and Yabloko are hoping. According to "Vremya novostei" on 8 February, these groups decided to support the bill because they were assured that the most objectionable parts of the law "will be corrected during the second reading." In particular, they would like to drop the provision on federal funding, they would like to make the provisions on suspending parties and banning them more complex, and reduce the number of agencies that would monitor parties. Yabloko and SPS object to state financing because the acceptance of such financing would require monitoring by a large number of organizations from the office of the Prosecutor-General, Justice and Tax Ministries. However, according to that newspaper, the other factions that supported the bill, such as Unity, People's Deputy group and LDPR favor state financing. LDPR leader Vladimir Zhirinovskii would in fact like to increase the sum that parties receive for each vote from 20 kopeks to 10 rubles (35 cents).

Regardless of the exact provision in its final version, most analysts and critics of the bill expect that it will reduce the number of political groups in the country. State Duma deputy Vladimir Ryzhkov (independent), who co-authored one of the bills, condemned the president's version, telling deputies, "Don't make the mistake made by the Federation Council last summer when it voted for its own dissolution. Approval of this law today will mean a direct blow to the State Duma itself." According to "Novye Izvestiya" on 2 February, the ban on parties based on certain organizing principles would mean the dissolution of the Agrarian Party, Christian Democratic Party, Pensioner's Party, Congress of Russian Communities, and all women's parties. Of course, most of these parties would likely also fail to overcome the numerical and regional requirements. "Rossiiskaya gazeta" on 7 February asserted that one likely consequence of the bill's requirement that parties have branches in at least 45 regions is that the creation of "isolated regional parties" will be discouraged. The government newspaper concluded in that way the bill will buttress Russian statehood. JAC

...AS DEPUTIES VOTE TO CUT TELEVISION AD REVENUE. The Duma passed on 8 February two bills in the first reading that would amend different articles of the law on advertising. Deputies approved a bill proffered by the legislative assembly of Tatarstan that bans the advertising of tobacco products in places where they are sold, print media, on billboards, and in public transport, according to "Nezavisimaya gazeta" on 9 February. The bill was approved with 258 votes in favor, 75 against and one abstention, according to ITAR-TASS. Duma deputies also approved on the same day another bill that would amend the law on advertising by reducing or barring commercial breaks during movies, religious broadcasts, some live public events, and educational and children's programs on television. Under the bill, programs between 30 minutes to an hour would have no more than 2 breaks for commercials, according to "Nezavisimaya gazeta." That vote was 275 in favor, with 73 against. Before the vote, the presidential envoy to the Duma Aleksandr Kotenkov spoke out against modifying the advertising law as did Deputy Media Minister Mikhail Seslavinskii, who warned that the measure would make television channels even more dependent on state subsidies by cutting their advertising revenues. Deputies also approved a bill that would ban the use of electromagnetic, infrasound, or ultrasound weapons. JAC

Legislation Name___________________Date Approved______# of reading
Law on political parties________7 February_________1st
Amendment to the law_______8 February__________1st
on advertising (on commercial breaks)
Amendment to the law________8 February _________1st
on advertising (on tobacco)
Amendment to the law on______8 February_________1st

WILL HE OR WON'T HE? Controversy over the future participation of Sergei Kirienko's New Force in the Union of Rightist Forces (SPS) flared up anew this week, when Duma deputy (SPS) Viktor Pokhmelkin told reporters on 5 February that New Force may join with the pro-Kremlin Unity party. The next day, Unity faction leader Boris Gryzlov fanned the flames further by saying that he is not excluding such a merger. However, SPS faction leader Boris Nemtsov told Ekho Moskvy the same day that he is 99.5 percent certain that New Force will not join forces with Unity. Previously, it was reported that Kirienko did not attend a meeting of SPS leaders to discuss transforming the coalition into a political party and that New Force is not interested in dissolving as is required in order for SPS to become a political party (see "RFE/RL Russian Political Weekly," 26 January 2001).

In fact, according to Pokhmelkin, some supporters of Kirienko believe that the New Force movement, rather than being dissolved, should be transformed into a party. "Segodnya" on 7 February reported that unidentified sources in SPS accuse Pokhmelkin and other members of Democratic Choice of Russia, which is one of the nine groups within SPS, of being unhappy with certain collective decisions made of late by SPS. The one person who could clear up the mystery, Kirienko, who is currently presidential envoy to the Volga region, has so far been curiously silent on the matter. JAC

COMINGS & GOINGS OUT: President Putin dismissed Energy Minister Aleksandr Gavrin on 5 February,

IN: Former Deputy Natural Resources Minister Valentin Shelepov was named Deputy Energy Minister on 5 February

IN: Nazir Khapsirokov was named deputy to presidential chief of staff Aleksandr Voloshin on 1 February. Khapsirokov is a former property manager at the office of the Prosecutor-General and more recently worked at the Mezhprombank in Moscow. According to "Kommersant-Daily" on 2 February, Khapsirokov was dismissed from the prosecutor's office because he accepted a $1 million bribe for dropping charges against Deputy Finance Minister Vladimir Petrov. That newspaper speculates that Voloshin needs Khapsirokov to advise him on the Prosecutor-General's office. In an open letter to President Putin, Duma deputy (Yabloko) and well-known investigative journalist Yurii Shchekochikhin called the appointment of Khapsirokov a "slap in the face of public opinion," RFE/RL's Moscow bureau reported on 7 February.

CALENDAR 13 February: Cabinet will consider changes in the 2001 budget to reflect debt payments to the Paris Club

19 February: Duma Budget Committee will examine amendments to the 2001 budget

21 February: State Council will consider issue of power-sharing between the regions and federal center, according to presidium member and Tatarstan President Mintimer Shaimiev

22 February: Federation Council convenes