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Security Watch: October 22, 2003

22 October 2003, Volume 4, Number 42
RUSSIAN PRESIDENT SETS OFF FOR NINE-DAY ASIA TOUR... Presidential foreign-affairs adviser Sergei Prikhodko announced on 15 October that President Vladimir Putin began a tour of Asia that will take him to Malaysia, Thailand, and Kyrgyzstan, Russian media reported. In Malaysia, Putin participated in a summit of the Organization of the Islamic Conference (OIC) in Kuala Lumpur on 16-17 October and held meetings with leaders from Pakistan, Iran, and Turkey. Putin then went to Bangkok and took part in the annual forum of Asian Pacific Economic Cooperation (APEC) countries on 19-20 October. While there, he held talks with U.S. President George W. Bush, Chinese President Hu Jintao, and Japanese Prime Minister Junichiro Koizumi. On 21-22 October, Putin will make a state visit to Thailand, and on 23 October he will travel to Kyrgyzstan to participate in the opening ceremony of a new Russian Air Force base in Kant. Prikhodko noted that Putin will be out of Russia for nine days, making this the longest foreign trip of his presidency so far.

...EMPHASIZES IMPORTANCE OF OIC SUMMIT... Speaking in the Kremlin on 15 October with Patriarch of Moscow and All Russia Aleksii II, Putin said that Russia's participation in the OIC summit is very important for the country, RTR and ORT reported. The Malaysia summit is the first that Russia will attend, after having been invited to attend as an observer during Putin's visit to Malaysia in August (see "RFE/RL Newsline," 6 August 2003). Putin said there are 20 million Muslims in Russia and they have the right to be part of the global Islamic community. OIC participation is a way for Russian Muslims to communicate with other Muslims and for Russia to better appreciate what is going on in the Islamic world, Putin said.

...AS MEDIA SAYS RUSSIA'S OIC PARTICIPATION COULD SOFTEN SUMMIT'S TONE. RTR commented on 15 October that Russia is the only major European country invited to participate in the OIC summit, which will be attended by 57 Islamic countries. The Kuala Lumpur meeting is the first OIC summit since the 11 September 2001 terrorist attacks against the United States, and it is expected that some radical forces will call for an oil embargo and a boycott of the U.S. dollar. Russia's participation could moderate those voices, the television station commented. Putin will also use the opportunity to advance Russia's political and economic interests in the Islamic world, RTR added.

PUTIN REJECTS ATTEMPTS TO EQUATE ISLAM WITH TERRORISM... President Putin on 16 October addressed a summit of the Organization of the Islamic Conference (OIC) in Malaysia, saying that the millions of Muslims in Russia are "a full-fledged, full-blooded, integral part of the Russian people," ORT and RTR reported. He called Muslims "an asset" and a part of Russia's "wealth." Putin said that interconfessional and interethnic conflicts are among the main threats in the modern world. He said that some forces use religious slogans to wage an aggressive campaign against legitimate authorities and to incite separatism and terrorism. Other forces, Putin added, are manipulating this situation for their own ends, which have nothing to do with Islam or human rights. He added that Russia condemns efforts to identify Islam with extremism or terrorism. "Attempts to provoke 'Islamophobia' in Russia have failed utterly," Putin said. He said that during Russia's religious revival of the last decade, the number of mosques in the country has grown from 870 to more than 7,000. Putin urged that the financial, scientific, and human resources of Russia and OIC member countries be combined in order "to make [the organization] a factor in world politics."

...WHILE AT OIC SUMMIT WITH LARGE MUSLIM DELEGATION... President Putin traveled to the OIC summit with an impressive delegation that included Foreign Minister Igor Ivanov and many Muslim officials in the federal government, as well as representatives of Russia's predominantly Muslim regions. Among those traveling with Putin were Chechen President Akhmed-hadji Kadyrov, Bashkir President Murtaza Rakhimov, Kabardino-Balkarian President Valerii Kokov, Tatarstan's State Council Chairman Farid Mukhametshin, Tatar presidential administration deputy head Jaikhan Pollyeva, and Tatarstan's Property Relations Minister Farit Gazizullin. Although Russia has expressed a desire to join the OIC, it can only lay claim to observer status because OIC rules restrict full membership to countries with populations that are at least 50 percent Muslim, have a Muslim head of state, or that are governed by shari'a law, NTV reported.

...AND DOWNPLAYS ANTI-SEMITIC TONE OF HOST'S SPEECH. While at the OIC summit on 16 October, President Putin ignored anti-Semitic remarks made by Malaysian Prime Minister Mahathir bin Mohamad, who focused his speech on the perceived conflict between Muslims and Jews, international media reported. Mahathir alleged that "Jews rule the world by proxy, and get others to fight and die for them," according to a text of the speech in the "Malaysian Star" on 17 October. His speech included many other overtly anti-Semitic comments. Asked about Mahathir's speech, Putin told NTV on 16 October that "there were some extreme, controversial opinions and it is worthwhile to know what they are." "We will take them into account when our diplomats determine our political course," Putin said. "There is no need for Putin to travel half way around the world to hear that 'Jews are to be blamed for everything,'" commented on 16 October. "He can hear the same nonsense right here at home."

PUTIN: RUSSIA AND JAPAN HAVE COMPLICATED PROBLEMS TO SOLVE. Speaking to journalists after his meeting with Japanese Prime Minister Junichiro Koizumi on the sidelines of the APEC summit in Bangkok, President Putin said on 19 October that relations between those two countries "remain complicated," Western and Russian news agencies reported. Despite that fact, Putin added, dialogue with Japan continues on all issues, including consultations on signing a peace treaty. He conceded that Japan is concerned by Russia's delay in deciding on the construction of a major oil pipeline to the port of Nakhodka, "which has practical importance for Japan." Russia will make its decision only after all calculations connected with the project are complete, Putin said. "Russia will determine the final route of the pipeline only after it takes the volume of discovered oil reserves into account," Putin added. The Russian president also said he and Koizumi decided to create a sort of Russian-Japanese "Council of Elders" of respected public figures to tackle complicated problems. For the Russian side, the group will be chaired by Moscow Mayor Yurii Luzhkov; for the Japanese side, ex-Prime Minister Yoshiro Mori will lead the council.

RUSSIAN PRESIDENT GIVES AL-JAZEERA INTERVIEW. In an interview with satellite channel Al-Jazeera on 17 October, President Putin said Russia and the United States have very different positions on Iraq but that his good personal relations with U.S. President George W. Bush have helped to maintain good relations between Moscow and Washington, RIA-Novosti and other Russian media reported the same day. Putin also said the latest Security Council resolution on Iraq -- introduced by the United States and passed on 16 October -- is "not enough." Responding to an Al-Jazeera question alleging that the UN role was diminished due to a "diktat" from Washington, Putin said: "Is the UN an organization that has managed to solve every problem before? If so, why has it not solved the Palestine problem?" Asked by the station about potential targets of a recently amended Russian military doctrine that seemingly allows for preventive military strikes (see "RFE/RL Newsline," 10 and 14 October 2003), Putin said: "We are not very interested in who it might be. Anyone who threatens us should know that the response will be adequate."

PUTIN SAYS TERRORISM A SOURCE OF GLOBAL ECONOMIC WOES... President Putin said in a commentary published simultaneously in several newspapers worldwide on 17 October that global gross national product fell 1 percent as a result of the 11 September 2001 terrorist attacks against the United States, reported. In the commentary published in media outlets of the leading countries of the APEC, including "The Wall Street Journal," Xinhua news agency, and the "Hindustan Times," Putin said terrorist acts in Indonesia and other countries in Southeast Asia have seriously harmed tourism and stymied the development of other sectors. According to Putin, terrorist threats and political instability in key energy-producing regions have placed in doubt the uninterrupted supply of energy to the Asian-Pacific region and in the global market as a whole. Russia supports joint measures to confront terrorism, he said, including eliminating terrorists' financial sources and strengthening the security of trade and transport communications. Russia is also offering military and intelligence cooperation, and has proposed -- through the UN -- to improve insurance and stabilization mechanisms used to pay compensation for material damage resulting from terrorist acts, Putin said. Following his appearance the APEC summit, which wrapped up on 21 October, Putin remained in Thailand for an official 21-22 October state visit as part of his tour of Asia.

...AND CALLS ON IRAN, NORTH KOREA TO REMAIN NUCLEAR FREE. President Putin said during a 19 October interview broadcast in multiple languages by StarTV that Russia wants the Korean Peninsula to remain nuclear free and will urge Pyongyang to adhere to this policy. The proliferation of weapons, Putin said, "does not solve problems between countries but makes them more dangerous." He noted, however, that aside from North Korea, Israel is also not a signatory to the Nuclear Non-Proliferation Treaty. Speaking about the transfer of Russian nuclear technology to Iran, he said Russia is ready to implement stricter control in this area, but wants "to act very accurately and avoid pushing Iran's leadership into extreme decisions." Putin also complained that there are Western sanctions against Russian companies involved in nuclear cooperation with Iran, but there are no sanctions against West European and U.S. companies he claims cooperate with Iran in this field. According to the Russian presidential press service on 20 October, Putin has expressed satisfaction with his tour of Asia, and has reached an audience of 1.5 billion people through the media.

PUTIN URGES FOR MORE ASIAN INVESTMENT IN RUSSIA. In his 19 October address to APEC business leaders, President Putin called on APEC members to increase investment in Russia's Siberia and Far East, RTR and ORT reported. Putin said that Asian Russia, which constitutes two-thirds of the country's territory and has a population of 30 million people, has enormous reserves of mineral resources that are needed in the Asia-Pacific region. Putin called for the creation of a new Asian energy infrastructure based on Russian hydrocarbon resources. He said a new energy configuration would allow countries in the Asia-Pacific region to protect their economic growth and ensure secure energy supplies. Putin mentioned that, bearing this vision in mind, Russia intends to construct one of the world's largest gas-liquefaction plants on Sakhalin by 2007 and is developing other major energy projects in Siberia. Putin also called on Asian businessmen to invest in Russian transport projects, especially the Trans-Siberian Railroad.

RUSSIA-BELARUS UNION LOCKED IN 'STALEMATE.' Russian President Vladimir Putin and Belarusian President Alyaksandr Lukashenka on 14 October participated in a meeting of the Higher State Council of the Russia-Belarus Union in Moscow, and reported. After the meeting, an unidentified presidential-administration source said that Moscow sees the situation within the union as "a stalemate." The two countries failed to reach an agreement about the introduction of the Russian ruble as the union's common currency, a move that is scheduled for 1 January 2005. Minsk continues to insist the two countries first adopt a Constitutional Act, but no draft of such a document that is acceptable for Russia has yet been produced, the source said. He said the deadlock has been produced because Lukashenka is primarily concerned with his own political role within the future union. However, the source said, since no role for Lukashenka is envisioned, all other activity has ground to a halt.

RUSSIA SEEKS INCREASED INFLUENCE OVER COMPATRIOTS ABROAD. A conference titled "The Diaspora Is a Russian Intellectual Resource" and organized by the Russian government opened in Moscow on 15 October, with 300 delegates representing Russian emigre communities in 58 countries, ORT reported. According to the Foreign Ministry there are about 35 million Russian speakers living outside of Russia, including about 27 million living in the former Soviet republics and 8 million living elsewhere. There are about 3 million Russian speakers -- representing four waves of emigration in the 20th century -- living in the United States. ORT noted that Russian speakers play an active role in political and economic lives of the countries where they live, and cited the recent gubernatorial election in California as an example. Governor-elect Arnold Schwarzenegger was reportedly widely supported by local Russian speakers. Addressing the Moscow conference, Moscow Mayor Yurii Luzhkov called for a federal agency to coordinate contacts with Russian communities abroad. Duma Committee for CIS Affairs Chairman Andrei Kokoshin (Fatherland-Unified Russia) said that the government has increased spending for support of Russian speakers abroad by 25 percent in 2003, RTR reported on 15 October.

DUMA APPROVES BILL TO LIFT SECRECY ON DIAMONDS, PLATINUM. The Duma on 15 October adopted in all three readings a draft law that would authorize the release of data about reserves, extraction rates, supplies, and demand of diamonds and platinum-group metals on domestic markets, ITAR-TASS and reported. This information is currently considered a state secret. The bill would maintain the classified status of diamond and platinum-group metal reserves held by the state treasury and the Central Bank. Duma Natural Resources Committee Chairman Aleksandr Belyakov (Unity-Unified Russia) said the bill, which conforms to World Trade Organization rules, will boost the turnover of Russian diamonds and precious metals both domestically and abroad and will increase the market capitalization of Russian companies working in the sector.

RUSSIA TO BEGIN PRODUCTION OF NEW-GENERATION ANTIMISSILE SYSTEM. Igor Ashurbeili, the chief designer of Almaz, Russia's largest air-defense contractor, said on 16 October that a state commission has authorized the serial production of the state-of-the-art S-400 antimissile system, RIA-Novosti reported. The S-400, which is know as the Triumph, is considered the most advanced surface-to-air antimissile system in the world, and will replace the S-300, the analog of the U.S. Patriot tactical antimissile system. The S-400 is able to track and destroy targets at a range of 400 kilometers and to strike both aircraft and missiles flying at speeds of up to 4,800 kilometers per hour, RBK reported on 16 October.

EMERGENCY MINISTRY REFORMS TOUTED. Speaking at a Moscow press conference on 15 October, Emergency Situations Minister Sergei Shoigu said reforms in his ministry have enabled it to eliminate unnecessary personnel, increase salaries, and attract qualified new specialists, "Izvestiya" and other Russian media reported on 16 October. During the reforms ministry troops were cut by about 75 percent, including the dismantling of 16 regiments and six brigades. Shoigu said the ministry now employees 371,000 people, including 86 generals. He noted that proportionally his ministry has about one-third as many generals as the Defense Ministry has. The Emergency Situations Ministry has an annual budget of 17 billion rubles ($530 million), which is just one-twentieth of what the Defense Ministry receives, Shoigu said.

ATHENS REFUSES TO EXTRADITE FORMER NTV OWNER... The Athens Appeals Court on 14 October declined Moscow's request to extradite former oligarch and media tycoon Vladimir Gusinskii, who is wanted in Russia on charges of fraud and money laundering, Western and Russian media reported. Gusinskii was arrested in Athens on 21 August under a Russian-issued international arrest warrant (see "RFE/RL Newsline," 25 August 2003). The court ruled that there is insufficient evidence that Gusinskii committed a crime. It immediately lifted all movement restrictions on Gusinskii and returned his 100,000 euro bond. Gusinskii's lawyer, Aleksandr Berezin, said Gusinskii will leave Greece and divide his time between Israel and the United States, as he has business interests in those countries. Gusinskii and his lawyers continue to insist that Moscow's charges against him are politically motivated.

...BUT MOSCOW STILL WANTS HIM TO STAND TRIAL. The Prosecutor-General's Office on 14 October denounced the Greek court's decision, saying that it will have no bearing on Gusinskii's status in Russia, Interfax and other Russian media reported. The case against him has not been closed, and he continues to be wanted on fraud and money-laundering charges, the prosecutors' statement said. The Audit Chamber on 14 October released the results of its probe into MOST Bank, which was formerly owned by Gusinskii, RIA-Novosti reported. According to the chamber, the bank owes creditors 18.3 billion rubles ($610 million), including 12 billion rubles that it owes to the state. The Audit Chamber has sent its report to both houses of the legislature and to law enforcement agencies.

PROSECUTORS QUERY LAWYER IN YUKOS CASE... The Prosecutor-General's Office on 17 October summoned for questioning Anton Drel, the lawyer of indicted Yukos shareholder Platon Lebedev, reported on 16 October. Drel's office was searched on 9 October by investigators in the latest wave of Yukos-related searches (see "RFE/RL Newsline," 10 October 2003). noted that the questioning of a lawyer is an extraordinary development and means that by law Drel will no longer be able to participate in the case. Moscow Lawyers Chamber President Genri Reznik told a Moscow press conference on 17 October that the prosecutors' action is a violation of attorney-client privilege, which could undermine the legal profession in Russia and entail severe violations of the constitutional right of Russian citizens to a legal defense. He said that the incident should be reported to European and other international organizations.

...AND CHARGE ANOTHER YUKOS EXECUTIVE... Prosecutors on 17 October summoned the chairman of the board of Yukos Moscow, Vasilii Shakhnovskii, to the Prosecutor-General's Office and charged him with tax evasion on 29 million rubles ($950,000) during the 1988-2000 period, and the other Russian news services reported. A spokeswoman for the prosecutor-general said that Shakhnovskii, who is a former deputy to Moscow Mayor Luzhkov, was ordered not to leave Moscow. Shakhnovskii is among the largest shareholders in Yukos, and his personal fortune is estimated at around $1 billion. "Forbes" magazine reported that Shakhnovskii owned some 6 percent of Yukos in February -- a stake similar in size to that of Platon Lebedev, who was arrested for alleged fraud on 2 July, and of Vladimir Dubov and Mikhail Brudno, whose offices were searched on 9 October (see "RFE/RL Newsline," 10 October 2003). Other major Yukos shareholders include Leonid Nevzlin (8 percent) and Yukos President Mikhail Khodorkovskii (9.5 percent). Nevzlin departed Russia for Israel last month.

...AS YUKOS HEAD BLASTS PROSECUTORS. Speaking on Echo Moskvy on 17 October, Khodorkovskii criticized the recent actions of the Prosecutor-General's Office aimed at his company or its executives or shareholders. "The prosecutors want to demonstrate that there is no rule of law in this country," Khodorkovskii said. He charged that Russian law enforcement officials feel they are above the law, but added that this situation cannot continue because Russia is a democracy.

EXPERTS SPECULATE OVER ROOTS OF YUKOS CRACKDOWN. Speaking on an NTV discussion devoted to relations between the Kremlin and oligarchs, ORT commentator Mikhail Leontiev said the Kremlin's desire to sell Yukos to foreign investors lies behind the authorities' apparent crackdown on company shareholders and executives. Khodorkovskii initially wanted to avoid selling his company to foreigners, Leontiev said, and his company came under legal pressure that adversely affected its share price -- and thus its price. He reportedly accused the administration of "doing all it can to ensure that the capitalization of Russian companies continues to fall." However, Mikhail Delyagin, director of the Institute of Globalization and a former economic adviser to Prime Minister Mikhail Kasyanov, said the sale abroad of a Yukos stake would not be a bad thing, provided it was not a controlling stake. The sale of a reasonable number of shares would benefit Russia, he said, since the result would be a transnational corporation that brought increased prestige and tax receipts to the Russian state budget. If a controlling stake is sold, Delyagin said, Yukos will not work in the interests of the Russian economy.