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Russia Report: February 26, 2001


26 February 2001, Volume 1, Number 6
KREMLIN & WHITE HOUSE
JUST DOING WHAT'S MOST POPULAR. The perception that the agenda of administration of Russian President Vladimir Putin is driven by opinion poll findings appears to be becoming more widespread. Earlier this month, "Novoe vremya" (issue no. 5) suggested that the Kremlin's "effort to maintain popularity changed from a routine task into an obsession," and that the administration is now afraid to step on "any major toes" (see "RFE/RL Russian Political Weekly," 9 February 2001). During the debate over adopting a new national anthem, state flag, and coat of arms, some analysts suggested that Putin had opted in each case for what had the greatest public backing. And last week, Aleksandr Budberg writing in "Moskovskii komsomolets" argued that a high presidential approval rating "has become an end in itself." Without reference to sourcing, Budberg reported that many in Putin's circle believe that a rating of 40 percent is not high enough, and that the decision has been taken not to risk lowering it on "apparently unpopular measures." The problem, Budberg concluded, is that while the president wants "to remain above the fray," "reforms in Russia are impossible without the president's participation." "Moskovskii komsomolets" is considered close to Moscow Mayor Yurii Luzhkov.

"Kommersant-Vlast" in its issue of 20 February does not touch on the Kremlin's attitude toward polling; however, it also suggests that the president is loath to make tough political choices. According to the weekly, which is controlled by Boris Berezovskii, Putin is demanding that the cabinet sort out the problem of paying Russia's debts to the Paris Club and at the same time increase wages to state sector employees (see item below). However, "all this requires big money and strong political will which the cabinet does not have." The weekly concludes that the problem can be resolved only "by reforming the presidency": Putin must explain "which path he is choosing: either market reforms or a policy of strengthening state intervention." JAC

A SINGLE LEGAL SPACE REPLACED BY CHECKERBOARD. On 21 February, President Putin appeared to opt for a regionally differentiated approach to the issue of land sales in Russia -- essentially choosing the easiest solution politically -- even if it is at odds with his oft-declared goal of creating a single legal space in Russia (see also "RFE/RL Russian Political Weekly," 2 February 2001). In a speech to the State Council that day, Putin declared that Russia's regions should be "given maximum freedom in setting the land problem within the framework of basic law." Putin gave the government deadlines of 1 May to prepared an updated version of the draft Land Code for submission to the State Duma and 1 June to work out a concept for a framework law on agricultural land. Last month, members of the State Council recommended that farmland be excluded from the new draft Land Code.

Before Putin's speech, some regional leaders again expressed their opposition to agricultural land sales. Both leftist Governor of Tula Oblast Vasilii Starodubtsev and Stavropol Governor Aleksandr Chernogorov warned against them, with Chernogorov alleging that some 60 percent of farmland in his region has been snapped up by non-farmers, according to Interfax. On the day of Putin's speech, Nobel Prize-winning author Aleksandr Solzhenitsyn also spoke out against free trade in agricultural land. Instead, Solzhenitsyn called for the creation of regional land banks that would hold available farmland and offer farmers low-interest loans to buy the land as agricultural holdings, according to AP. However, Putin appeared to address at least part of Solzhenitsyn's concern by suggesting that farm workers will never be driven off the land and that one way of preventing this is "to recognize the right of present land-users to own the land," ITAR-TASS reported.

That Putin revealed his intentions concerning land reform before the State Council perhaps suggests that this advisory body will continue to serve as a kind of "launching pad" for new presidential initiatives. Last month, Putin made his pitch there for the legislative package on new national symbols. During its short six-month existence, the State Council already seems to have functioned as a rubber stamp for presidential decisions. Meeting in the Kremlin's Aleksandrovskii Hall, it is likely a more controlled and controllable forum for the government and the Kremlin to present new legislation than either of the two bodies which under the Constitution have the right to approve legislation, the State Duma and Federation Council.

And in keeping with expectations, key members of the State Council appeared to react positively to Putin's speech. Federation Council Chairman Yegor Stroev declared that "the quicker the Land Code is approved, the better for Russia's agricultural sector and its farmers." Tatarstan President Mintimer Shaimiev echoed Stroev's call for quick passage of land legislation, while former Tyumen Oblast Governor Leonid Roketskii, who is still a member of the council, predicted that the legislation will be approved before the end of the year.

None of them raised the question of how the checkerboard approach to land sales, with some regions having quite liberal legislation and others not, is all that different from the current situation. Or how such an approach represents the solution that both foreign and domestic investors have been seeking. Steven Wegren, a specialist on Russian agricultural reforms at Southern Methodist University, told RFE/RL that "assuming Putin pursues a 'states' rights' approach, regional variations in legal provisions are unlikely to be removed and in fact may endure for quite some time." In fact the policy, rather than smoothing out regional differences, may intensify them. According to Wegren, even without regional legal variations, there are wide differences in the development of regional land markets that are unlikely to be diminished owing to vast differences in economic and political climates as well as [variations in] land quality, resource bases, and level of [economic] development." JAC

DUMA
CRUSHING BLOW OR FAILED GAMBIT? Last week, the government of Prime Minister Mikhail Kasyanov managed to win changes to the 2001 budget, although these were not exactly the ones they had been seeking. On 22 February, the State Duma passed in its third and final reading amendments to the 2001 budget that would direct the first flow of additional revenues of up to 41.2 billion rubles ($1.4 billion) towards payments for foreign debts owed to the Paris Club. All additional sums after that will be split 50-50, with one half going toward debt payments and the other half toward raising the wages of state sector workers and other social needs (see "RFE/RL Russian Political Weekly," 19 February 2001). The bill now goes to the Federation Council, where the Budget Committee head Konstantin Titov has predicted it will be approved, according to Interfax. An amendment to lift the ban on privatizing large enterprises that was sought by the government and sponsored by Unity, Union of Rightists Forces, and People's Deputy was rejected. According to "Nezavisimaya gazeta" on 23 February, the government was seeking to sell stakes in Chelyabenergo, Kuzbassugol, and West-Siberian Metals Plant in order to generate revenues worth some 15 billion rubles.

Some Russian media outlets such as strana.ru, "Vremya MN," and Western media outlets such as Agence France Presse have painted the government's acceptance of the Budget Committee's version of the amendments and the Duma's rejection of an effort to raise more revenues through privatization as a crushing blow to the government of Prime Minister Kasyanov. According to strana.ru on 22 February, the government "suffered a big defeat, the first one during Vladimir Putin's presidency," while the same day AFP intoned dramatically that a "potentially fatal blow" has been delivered to Kasyanov's career.

While Kasyanov's future at the helm of the government may not be ensured, it's difficult to imagine that the government or the Kremlin was counting on persuading the lower legislative house to permit more privatizations. Just two months ago, deputies had approved a law prohibiting the government from conducting any more large-scale privatizations until a full-scale government program for privatization had been hashed out (see "RFE/RL Newsline," 4 December 2000). It seems more likely that the government simply thought they would give it a try. The lack of support from presidential envoy to the Duma Aleksandr Kotenkov for the effort could mean, as "Nezavisimaya gazeta" suggested on 23 December, that "the Kremlin wanted to find out if the cabinet could cope with the task set by the president" on its own. Alternatively, it might indicate that the Kremlin, which rarely asks the Duma to approve legislation that it is already not likely to pass, decided not to associate itself with a bill that was likely to fail -- particularly when only 15 billion rubles of the 183 billion rubles needed for the Paris Club was at stake.

At the same time, while the Kremlin may not have pushed details of the government's agenda, it appeared to give the cabinet its general support. It again dangled the threat of depriving the Communists of their key committee chairmanships. After the Communists walked out of the 22 February session to protest the budget amendment, Kotenkov told reporters that he does not rule out the question of relieving Communist Party members of leadership positions on some key State Duma committee posts. The Kremlin made this threat less directly during the lead-up to December's vote on legislation on state symbols such as the new national anthem. Before the vote, a number of newspapers of varying political allegiances carried stories attributed to anonymous Kremlin sources discussing a pending plan to reorganize the Duma's committee postings to the Communists' detriment (see "RFE/RL Newsline," 8 December 2000).

In addition to walking out of the Duma's hall, the Communist faction has announced that it will submit to the Duma Council on 6 March a petition supporting a call to put a vote of confidence in the government on the lower house's legislative agenda. Some 107 signatures have already been gathered supporting the effort, according to Interfax. Most analysts think the effort will fail to muster the required 226 votes. And in an informal survey of top political analysts in Moscow published in "Vremya novostei" on 21 February, many seemed to attribute the action to an internal struggle within the Communist Party. For example, Andrei Ryabov of the Moscow Carnegie Center suggested that Zyuganov has orchestrated a kind of "PR-action" in order to boost his own authority within the party. JAC

DEPUTIES TINKER WITH PENSIONS, PROFIT TAX. In addition to approving amendments to the 2001 budget, the Duma on 22 February approved in its second reading a bill amending the law on the profit tax, Interfax-AFI reported. The previous day deputies approved four bills and rejected two. The Duma passed a bill amending the Criminal Code, the Criminal Procedure Code, and other federal laws. The bill had been rejected by the Federation Council on 31 January and had been subsequently revised by a conciliatory commission. The legislation is aimed at reducing prison overcrowding by limiting the amount of time a suspect can be held in pre-trial detention from 18 months to 12, unless the detainee is suspected of committing a grave crime, "The Moscow Times" reported on 22 February. Also on 21 February, the Duma approved three bills amending the law on government pensions, according to Interfax. One bill calls for a gradual increase in the individual coefficient for pensioners, while another raises the coefficient for residents of the Far North and extends it not just to industrial workers. A third bill allows medical workers with a long service record to receive their pension even if they continue to work. Pension Fund head Mikhail Zurabov spoke out against the first bill, saying that it would significantly increase the fund's expenditures, according to ITAR-TASS. On 21 February, deputies also rejected two versions of a bill on personal documents, which would have introduced a new type of passport, according to "Kommersant-Daily." Only 174 votes were cast in favor, some 52 votes shy of the 226 needed, according to ITAR-TASS. JAC

Legislation Name of Law__________Date Approved________# of reading

Amendments to 2001 Budget___22 February___________1st
regarding additional revenues_______________________2nd
______________________________________________3rd

Amendments to the law_____22 February_____________2nd
on the profit tax

Amendments to Criminal___21 February_______conciliation version
Code (articles 158-160)

Amendment to the law on___21 February_____________2nd
pensions (article 4, coefficient hike)

Amendment to law on______21 February__________Overcame veto
pensions (art. 112, northern coefficient)

Amendment to the law on___21 February____________1st
pensions (art. 87, medical workers)
_____________________________________________2nd
_____________________________________________3rd

FEDERATION COUNCIL
SENATORS REJECT LAW ON PRECIOUS METALS. The Federation Council met on 22 February in what "Izvestiya" described as an unusually truncated session lasting only 90 minutes. Senators approved the authority of new members of the Council and passed a bill setting their salaries at the same level as Duma deputies, 10,800 rubles a month ($377). They also approved a number of other bills passed earlier by the State Duma such as one amending a 1997 agreement with the IMF. Senators rejected a bill amending article 20 of the law on precious metals and stones, which would have allowed their export in unfinished form, according to Interfax. JAC

PARTIES
YABLOKO TO REMAIN A 'SYSTEMATIC' OPPOSITION... At a political council meeting in Moscow Oblast on 17 February, Yabloko's leadership apparently decided to step up its criticisms of the Putin administration. Before the meeting was held, Deputy Chairman of Yabloko's Duma faction Sergei Ivanenko told Interfax that the council members would discuss the party's position regarding a number of political questions, including its relationship with President Putin. Addressing the meeting, Yabloko leader Grigorii Yavlinskii declared that the party is going to remain in "systematic opposition" and oppose the creation in Russia of a "corporate police state," "Kommersant-Daily" reported on 19 February. Yavlinskii also spoke about dangerous trends in politics in Russia today, such as the "absolute intolerance" of authorities for criticism and the corresponding "open, serious pressure on mass media." Other trends he decried were "the practically complete control over the parliament" accomplished by the strategic agreement between the Kremlin and the Communist Party faction and the attempt by the authorities to establish full control over political parties. Yavlinskii also pointed to the emergence of "various imitation citizen institutions" that are in fact initiatives of the authorities, such as the new Media Union which opposes the Union of Journalists (see "RFE/RL Newsline," 1 December 2000). But to demonstrate that Yabloko's opposition is not unconditional, Yavlinskii also praised Putin for a number of things, such as his readiness for "constructive dialogue" and for pursuing a number of wise foreign and economic policies, particularly with regard to tax reform.

In a recent article in "Obshchaya gazeta" issue number 7, Yavlinskii also appears to criticize members of the Union of Rightist Forces (SPS). Yavlinskii writes that with regard to "the so-called 'liberal wing' of the cabinet, I would like to note quite recently a similar 'team' already realized 'particularly large-scale free market programs'...and these people who worship General Pinochet and dream of a 'strong hand,' have now become 'statesmen' as well and are calling on everyone to establish a 'strong state.'" He continues, "and these people are the leaders or inspirers of the Russian political parties which do not even consider it essential to defend civil rights and liberties." Yavlinskii is likely criticizing Unified Energy Systems head Anatolii Chubais and presidential economic advisor Andrei Illarionov although he does not name them. Nevertheless, during Yabloko's political council meeting on 17 February, Yavlinskii suggested that Yabloko and SPS will cooperatively participate in a Democratic Assembly to held in May of this year. Yavlinskii also repeated earlier assertions that the two groups will not merge but rather "form a union of two independent strong parties," "Vremya MN" reported on 20 February. JAC

...AS LEFT FLANK DECIDES TO FORM SHADOW CABINET. On the same day as top Yabloko officials gathered, more than 260 delegates and some 100 guests of the People's Patriotic Union of Russia (NPSR) also met in Moscow for the second stage of their third congress, according to "Nezavisimaya gazeta" on 21 February. According to NPSR leader and Communist Party head Gennadii Zyuganov on 17 February, delegates decided that it is necessary to form a "single left front" on the basis of a wide public coalition, Interfax reported. Zyuganov evaluated the situation in the country as a "systematic crisis" and provided a critique of the government's activities. Zyuganov added that a shadow government of the NPSR must be formed in the near future. According to "Nezavisimaya gazeta," the shadow cabinet will be headed by State Duma deputy (Agro-Industrial group) Gennadii Semigin. NPSR is composed of some 57 groups, including the Congress of Russian Business Circles, Gennadii Seleznev's Rossiya, Spiritual Heritage (but without its former leader Aleksei Podberezkin), and Agropromsoyuz, the daily also reported. JAC

POLITICAL CALENDAR 1 March: Government will submit a new law on privatization to the State Duma, according to Deputy Prime Minister Aleksei Kudrin on 22 February.

Early March: Yabloko activists will launch a campaign to collect one million signatures in a single day in support of NTV as "the last free TV channel independent of the state," "Segodnya" reported on 19 February.

7 March: State Duma to consider five different versions of words for Russia's national anthem, according to "Kommersant-Daily" on 21 February.

Mid-March: State Duma will consider a law allowing imports of spent nuclear fuel in its second reading, according to RFE/RL's Moscow bureau.

14 March: Federation Council to consider amendments to the 2001 budget passed by the Duma on 22 February, according to "Izvestiya" on 23 February.

20 March: Regions to submit their proposals for land legislation to the government (see item above).

April: North Korean leader Kim Jong Il is expected to visit Moscow.

1 April: Ministry for Economic Development and Trade to submit draft land code to the government.

1 May: Government's deadline to submit updated version of the Land Code to Duma.

May: Yabloko, and possibly SPS, to host a Democratic Assembly.

1 June: Government deadline to work out framework law on agricultural land sales.

COMINGS & GOINGS IN: Former Primorskii Krai Governor Yevgenii Nazdratenko has been appointed chairman of the State Fishing Commission, Russian agencies reported on 24 February citing the government's information department. An unidentified government source told ITAR-TASS that Nazdratenko's main goal will be to make the auctions of fishing quotas successful -- a policy which previously the governor has spoken out against (see http://www.nazdratenko.ru/news/news.html). Nazdratenko was recently forced to resign from his post as head of the Far Eastern province following months of electricity and heating outages in the middle of winter and years of corruption allegations (see "RFE/RL Russian Federation Report," 7 February 2001).

IN: The Federation Council confirmed on 22 February Mikhail Beskhmelnitsyn as an auditor for the Audit Chamber, Interfax reported. From 1993-5, Beskhmelnitsyn served as a member of the upper chamber representing Belgorod Oblast.

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