Security Watch: February 19, 2001

PUTIN SAYS AUSTRIA MUST REMAIN OUT OF NATO. During his visit in Vienna, President Vladimir Putin pursued two basic goals: seeking to persuade the Austrians not to join NATO and asking them to help Russia join the WTO, Russian media said. He may have made some progress on these issues -- although he told the Austrians that Russia can't meet all WTO requirements anytime soon, but he did not succeed in getting Austria's agreement to purchase Russian MIGs.

GERMANY REFUSES TO BACK RUSSIA ON NMD... German Foreign Minister Joschka Fischer told Russian officials that Berlin will not side with Moscow on NMD even though Europeans have their own objections to the plan, "Segodnya" reported on 14 February. And despite President Putin's suggestions about the "forming of a Russian-German alliance," Fischer said that Germany will not serve as "a middleman" between Moscow and Washington.

...BUT WILL HELP MOSCOW WITH INVESTMENT. Economic Development and Trade Minister German Gref said after his talks with Fischer that Germany has agreed with at least three compensatory projects as part of a Russian-German economic "shares-for-debts" deal, RIA-Novosti reported on 13 February. These include Russian companies exploring the Barents Sea and also the Russian portion of the joint venture with Scandinavian furniture giant Ikea.

MOSCOW DENOUNCES CIA DIRECTOR. The Russian Foreign Ministry expressed "bewilderment" at a statement by CIA Director George Tenet that Russia poses a threat to American interests, "Rossiiskaya gazeta" reported on 10 February. The statement said that it was difficult to expect the CIA to have "a reasonable attitude about Russia" but that Moscow remains confident that the Bush administration does not view Russia as an adversary.

PUTIN SUPPORTS KUCHMA WITH VISIT... "Izvestiya" on 12 February led the Russian media in declaring that President Vladimir Putin's visit with Ukrainian counterpart Leonid Kuchma gave Moscow the best chance since 1991 to derail Ukraine's movement toward the West. Putin clearly hopes to save the politically weakened Kuchma because any future Ukrainian leader, be it pro-Western Prime Minister Viktor Yushchenko or socialist Oleksandr Moroz, will be tougher for Moscow to manipulate.

...AND GAINS UKRAINIAN CONCESSIONS. The Russian and Ukrainian presidents signed a series of accords that will tie the two countries more closely together and expand Russian influence, Russian, Ukrainian, and Western media outlets reported on 12 February. Among the agreements are ones concerning "the restoration of integrity of the energy systems of both countries," construction of the bridge over the Kerch Straits between the Crimea peninsula and Russia's Krasnodar Krai, and the delineation of the border in the Azov Sea.

MOSCOW MAY PRESS CIS COUNTRIES ON DEBTS... Security Council secretary Sergei Ivanov said that Russia's debt obligations may cause it to press CIS member states to pay Russia what they owe it, RBK reported on 13 February. Since 1992, he said, Russia has paid $18 billion on Soviet debt, but the CIS countries have become $5.6 billion more indebted to Russia. "It will be good to get this money back," Ivanov said.

...AS ZHIRINOVSKY OFFERS PLAN TO AVOID PAYMENTS... Duma deputy speaker and LDPR leader Vladimir Zhirinovsky on 9 February proposed what he said was a legal means of reneging on debt: renaming the country and declaring that it had nothing in common with the Russian Federation, lenta.ru reported on 9 February. "Who can prevent us from officially dissolving the Russian Federation and creating a new state, the Eurasian Federation in the framework already existing alliance Russia-Belarus-Armenia?" he asked rhetorically.

...AND DUMA BUDGET CHIEF WARNS OF 'TECHNICAL DEFAULT.' Duma Budget Committee chairman Aleksandr Zhukov said that government plans to revise the budget in order to pay foreign debts might lead Russia into the position of "technical default," RIA-novosti reported on 14 February. Zhukov said there is little chance that the Duma will approve the government bill as written on the redistribution of the extra revenues for debts. But even if the government does manage to convince the Duma, Zhukov said, Moscow will not be able to meet existing payment due dates.

RUSSIAN AIRCRAFT VIOLATE JAPANESE AIR SPACE. Four Russian aircraft, including two strategic Tu-29 "Backfire" bombers, violated Japanese air space near the island of Hokkaido, Western wire services reported. Russian air force commander Anatolii Kornukov confirmed that his pilots had flown close to the border but said that it was "stupid and absurd" to say that the planes had violated Japanese airspace. Eighteen years ago, Kornukov was the commander of the Soviet air wing that shot down the KAL 007 flight, causing the death of more than 240 people.

SAKHALIN HEAD LAUNCHES TRANSPORT CORRIDOR. Sakhalin Governor Igor Farkhutdinov announced on 14 February that construction of an underwater tunnel linking his island to the mainland and ultimately to Japan will begin this fall, RIA-Novosti reported. He said that President Putin had pushed for this during his meetings in Tokyo last year. Even earlier, Stalin had proposed doing this but plans for this gigantic project were abandoned upon the dictator's death.

RUSSIA TO PROCESS NUCLEAR WASTE FROM TAIWAN. Taiwan announced on 12 February that it had accepted a Russian offer to process and bury in Russia 5,000 tons of nuclear waste, pravda.ru reported. Other countries are also planning to do so given that Moscow has much less stringent environmental rules and thus can process this dangerous material more inexpensively than can other countries.

NEMTSOV OFFERS SPS PLAN FOR CHECHNYA... Union of Rightist Forces (SPS) leader Boris Nemtsov told the 13 February "Itogi" that his party has presented a Chechen peace plan to President Putin. Under its terms, Chechnya would become the eighth federal district with an appointed governor general. The area would be divided into two parts, with the lowlands incorporated into Stavropol Krai and the mountainous area proclaimed a "rebellious territory" and isolated from the rest of Russia. Nemtsov said that his plan would reduce both costs and casualties.

...AND KARAGANOV OFFERS HIS FOR KALININGRAD. Sergei Karaganov of the Council for Foreign and Defense Policy has urged President Putin to put Kaliningrad under direct presidential rule, RTR reported on 14 February. Under the council's plan, the region would be defined as federal land and thus be prevented from ever leaving the federation after Lithuania and Poland join the EU.

GOVERNMENT ALARMED BY DEMOGRAPHIC CRISIS. Russia's demographic situation has become a crisis, and the Russian government has made overcoming it a major priority, NTV reported on 15 February. State Statistics committee head Vladimir Sokolin said that virtually all demographic variables in Russia are getting worse, but the government is calling for expanded in-migration rather than the pro-natalist policies urged by Sokolin. (See "End Note" below.)

DUMA WANTS TO RESTRICT TV ADVERTISING. The Duma adopted in the first reading two bills that drastically curtail advertising on radio and television, Ekho Moskvy reported on 8 February. Both measures were opposed by business, government, and media experts who warned that they could weaken the media and thus weaken the free flow of information.

IS PRO-MOSCOW CHECHEN LEADER A BRITISH SPY? FSB spokesman Aleksandr Zdanovich said his agency will probe information carried on several Russian websites suggesting that the head of the pro-Moscow Chechen State council, Malik Saidulaev, is, in fact, an agent of British intelligence, ITAR-TASS reported on 12 February. He said that FSB took these reports seriously because "British intelligence is very active in Chechnya." But polit.ru reported that the compromising charges may have been initiated by the FSB itself as part of the intelligence war sparked by the publication of books by Vasilii Mitrokhin and Kenneth Tomlinson.

RUSSIAN DEFECTOR WAS SVR OFFICER. The former first secretary at the Russian UN mission in New York, Sergei Tretyakov, who disappeared from the mission and decided to stay in the U.S., was an officer of the Foreign Intelligence Service, "Segodnya" reported on 12 February. He may also have worked for U.S. intelligence, the paper said.

ROGOZIN WANTS TO SUSPEND CONTACTS WITH CONGRESS. Duma International Relations Committee chairman Dmitrii Rogozin said that the Duma will end its relationships with the U.S. Congress and the Swiss parliament if Pavel Borodin is not returned to Russia, RIA-Novosti reported on 13 February. But apparently Rogozin changed his mind again after the Duma failed to support a Borodin support resolution.

PUTIN CALLS FOR STABLE TAX REGIME... Addressing the national conference of tax inspectors and policemen, President Putin said that the 13 percent income tax rate introduced in 2000 will remain unchanged "for years ahead," strana.ru reported on 13 February. But Putin acknowledged that even the low rate had not yet dramatically improved collections since "millions of people think only about how to avoid taxes."

...AS EVASION SEEN MORE THREATENING THAN ORDINARY CRIME. The growth of tax-related crime now poses a greater threat to the country's economic security than do ordinary crimes, Duma Security Committee deputy chairman Aleksandr Kulikov told ITAR-TASS on 12 February. He said that the government is only collecting 50 percent of taxes owed.

KGB VIEWED RICH AS USEFUL. Moscow media are giving extensive coverage to the pardon scandal around fugitive U.S. businessman Marc Rich, just as they did when he was involved in massive illegal deals in Russia and Kazakhstan in the early 1990s. Rich at that time was especially close to Moscow Mayor Yurii Luzhkov, according to the 5 June 1992 "Izvestiya" and the 2 October 1992 "Trud." According to "Izvestiya" on 7 July 1992, Russian intelligence agencies "collected enormous files on Marc Rich but did not move against him because of the damage he was causing to American imperialism."

WHERE HAVE ALL THE WESTERN CREDITS GONE? "Novaya gazeta" said on 13 February that only an official investigation can determine how Western loans have been used. Such a probe, the paper said, could also provide answers to which Russian institutions were involved. It pointed out that such a probe can be launched on the demand of only 90 Duma deputies, but the paper said that it was unclear whether there were that many Duma deputies who have not in one way or another profited from Western loans.

PROSECUTOR-GENERAL UNDER SCRUTINY. President Putin has ordered the control audit department of his administration to look into how Prosecutor-General Vladimir Ustinov obtained his luxury apartment, Interfax reported on 13 February. Yabloko, OVR, and SPS Duma factions had called on the president to launch such an investigation.

A DEMOGRAPHIC THREAT TO RUSSIAN SECURITY

By Paul Goble

A Russian government report says that the country's declining population now poses a serious threat to Russian national security. But the remedy Moscow has proposed -- promoting in-migration of ethnic Russians from other post-Soviet states -- is unlikely to make the contribution to solving the problem that some expect.

According to the report, released on 15 February, Russia's population declined by 768,000 in 1999 and may fall by another 2.8 million over the next three years. Such declines, the report suggests, reflect a low standard of living, inadequate health care, and rising rates of alcohol and drug abuse, trends that have already reduced male life expectancy and the birthrate and increased mortality rates of many age groups.

Speaking at a cabinet meeting at which the report was discussed, Prime Minister Mikhail Kasyanov said that Russia's economic and political future depends on finding a way out. "The decrease of the able-bodied population of the Russian Federation is not just a social problem," he said. "It is a problem of whether our state will develop successfully or not." And he said Russia would be "stuck" if what he called "decisive measures" are not taken now.

Russia has been suffering from these demographic problems for more than a decade, and as they have grown worse, they have made it more difficult to provide workers for factories and soldiers for the military. Moreover, because they have hit some regions more than others, they have had a political impact as well. And they have contributed to a sense of foreboding about the future that has often overshadowed positive developments.

Former Russian President Boris Yeltsin raised this issue several times during his tenure and ultimately sought to address it by naming Valentina Matviyenko to the position of deputy prime minister with responsibility for social affairs. And last summer, President Vladimir Putin spoke about the problem in apocalyptic terms, telling his government that "we are facing the serious threat of turning into a decaying nation."

So far, the Russian authorities have not had much success in trying to reverse the situation, lacking either programs or funding to address the underlying problems. Now, Kasyanov and his government are pinning their hopes on something Russian scholars and officials have talked about in the past but have done relatively little to promote: the attraction of ethnic Russians living in other post-Soviet states.

Kasyanov himself admitted that doing this would not be easy. One report in the Russian press this week noted that Russia has a less than impressive track record in dealing with people the government often calls "compatriots." Not only are Russian authorities now spending less than one cent per ethnic Russian abroad each year, but Moscow has been unable to keep its promises to those who have returned.

But at a recent meeting, the Russian government called for the Federal and Ethnic Policy Ministry to develop a program for 2001 by 1 April and for a larger group of agencies to draw up a new migration policy for 2002-2005 by 15 May. Both documents, Russian media reports suggest, will devote particular attention to providing support for displaced persons.

And Russian officials have suggested this week that such new programs could attract as many as 3-5 million people a year back to the Russian Federation. But analysts and experts have expressed doubts that Moscow will be able to find the funds needed for such an effort unless and until the economy begins to boom and provide jobs for such people.

Anatolii Vishnevsky, the director of Moscow's Center for Demography and Human Ecology, said this week that "in order to compensate for the natural population decline, which will continue for many years, the volume of immigration to Russia would have to be very large." The country "is not ready for that," he said.

Arguing that only a dramatic increase in the birthrate could address the country's demographic decline, Vishnevsky said the government's talk about a quick fix through the promotion of immigration "sows illusions that will not turn into reality in the future." Instead, he and other demographers argue, Russia must turn the corner economically both to help its current residents and possibly to attract new ones.

Consequently, Russia is likely to face many of the security problems rooted in demography for sometime to come. But by suggesting that immigration from the post-Soviet states is the answer, the Russian government may have unintentionally created for itself yet another and more immediate security problem as well.

Russian government calls for ethnic Russians to come back to the Russian Federation from the former Soviet republics and Baltic states appear likely to prompt some ethnic Russians in these countries to hold back from fully integrating into those societies. And such shifts in attitude could in turn create problems in Moscow's relationships with the countries it has declared its primary foreign policy focus.

In that event, Russia could easily become the exception to the rule that demography is destiny only in the very long term and find -- as Kasyanov suggests -- that Russia's demographic situation really is the key security question for his government and country right now.