Russia Report: December 16, 2004

By Gordon Hahn

In the wake of Chechen-led terrorists' killing of some 340 innocent civilians, including hundreds of children, in Beslan, North Ossetia, in September, Russian security forces suddenly made a rash of arrests of alleged Islamists from the Islamist revolutionary organization Hizb ut-Tahrir Islami (the Islamic Liberation Party).

Hizb ut-Tahrir was founded in 1953 in Jordan, expanded to some 40 countries including Central Asia in the early 1990s, and is apparently based in London. Unlike other revolutionary Islamist organizations, it claims to seek the establishment of a south Eurasian caliphate through nonviolent means. Although it originally rejected jihad, more recently it declared one against the United States. Estimates are that it has 5,000-10,000 core members with supporters, operating in Turkey, Syria, Pakistan, and Indonesia. Its presence in the post-Soviet space had been confined mostly to Central Asia. However, Colonel Begejan Akhmedov from Kyrgyzstan's National Security Service (SNB) recently stated that Hizb ut-Tahrir cells in Central Asia are increasing their ties to Russia-based supporters. In 2003, Russia's Supreme Court declared the party a terrorist organization and banned it in Russia.

After the Beslan tragedy, members of Hizb ut-Tahrir were detained in no less than seven of Russia's regions. Hizb ut-Tahrir members were arrested in Tatarstan and Bashkortostan, it appears, for the first time. On 20 October, Tatar police detained several Muslims during antiterrorism inspections, claiming they were members of the banned Islamic revolutionary organization and in possession of literature of a "recruiting nature."

On 18 November, Tatarstan's prosecutor announced that his office has arrested and brought terrorism charges against Alisher Usmanov, the alleged head of Hizb ut-Tahrir's organization in Tatarstan. Although Usmanov was identified as a native of Uzbekistan, the origin of the others was not noted, suggesting that they are natives of the republic, given the Russian policy of playing up the international aspect of Islamic radicalism in Russia. According to the Tatarstan branch of the Federal Security Service (FSB), Usmanov had been arrested "a couple of months" earlier than the time of the report, which would put the arrest in mid-September, two weeks after Beslan.

The FSB in Tatarstan also reported that this was one of two groups of Islamist extremists uncovered in the republic and that 20 suspects had been detained. It declined to identify the second group. These arrests were accompanied by the alleged discovery of explosives and written materials that indicated intent to commit a terrorist act. Of the 20 arrests, 14 were made in Naberezhnyi Chelny, and the others in Kazan and Almetevsk.

On 14 November, Bashkir police detained 16 people in Ufa, Oktyabrsk, Sibai, and Tuymazi for allegedly distributing Hizb ut-Tahrir leaflets that called for jihad. However, no criminal investigation was launched, and the suspects appear likely to receive only administrative sanctions.

The arrests could mark a turning point in the perception of Tatarstan and Bashkortostan as models of stability, devoid of extremists. The charge of terrorism brought by Tatar authorities is out of step with the organization's self-professed mode of operation in Russia, but consistent with more recent reports of its radicalization. "Vechernie chelny" cast doubt on the veracity of the charges that the detainees were actually militants of Hizb ut-Tahrir, referring to relatives' claims that the young men had merely gathered to read the Koran together. It noted sarcastically that "until recently its members were not being detained anywhere" and "here now suddenly across the entire Volga area they are catching 'people, who are preparing terrorist acts on the territory of Tatarstan.'"

Islam.ru also cast doubt on the efficacy, if not the legitimacy of the arrests, equating them with sweeps conducted in Moscow, which in one case led to 121 detainees, 119 of whom were immediately released and two of whom faced charges that were later dropped. The upshot of such police operations could well be a growing sense of alienation, Islamic self-identification, and communal politicization among Muslims, without any compensating increase in security.

In October, Hizb ut-Tahrir members were reportedly detained in Ulyanovsk Oblast, which borders on Tatarstan and has a significant Tatar minority. In early October, 11 alleged members of Hizb ut-Tahrir were arrested in Nizhnii Novgorod Oblast, which also has a considerable Muslim Tatar minority. On 25 November, the FSB reported that two Kyrgyz citizens and one Russian citizen allegedly linked to Hizb ut-Tahrir were detained recently in Samara Oblast. A grenade, some 200 books and brochures, and more than 700 leaflets in Russian, Uzbek, and Arabic were seized. According to the FSB, the Samara group numbered 15 people.

Hizb ut-Tahrir also suddenly appeared in the southern Urals and even in western and central Siberia. In Chelyabinsk Oblast, a southern Urals region where there are significant Muslim Tatar and Bashkir minorities, the authorities began sweeps of the central mosque after Friday prayers. On 8 October, some people leaving Friday evening prayer services at Chelyabinsk's central mosque were detained. The detainees reportedly were taken to the local headquarters, fingerprinted, videotaped, and released. Two weeks later, the Chelyabinsk FSB department warned Muslims there would be another such sweep. The department's deputy chief, Leonid Golubev, justified the sweeps by noting that police had detected the presence of representatives of Hizb ut-Tahrir in the oblast. Golubev acknowledged that tension was mounting in the oblast's Muslim communities, but attributed this not to the sweeps but to a situation in which "representatives of the traditional faith cannot compete any longer with the young and ambitious muftis who have more influence on youth."

What would explain any increased Hizb ut-Tahrir activity in Russia? First, the harsher Central Asian governments have carried out an aggressive crackdown on the organization. Hundreds of its members have been arrested and imprisoned throughout Central Asia, especially in Uzbekistan. This crackdown is also said to be radicalizing Hizb ut-Tahrir and other previously nonviolent organizations. A logical response to such police pressures would be to temporarily vacate the region for neighboring territories in Russia like the Volga, Urals, and western Siberia, especially given the Russian police's susceptibility to bribery and their less vigilant stance, particularly before Beslan.

Although the Russian law-enforcement officials' claims that the arrested Hizb ut-Tahrir members were preparing terrorist acts contradicts the organization's public claims, Colonel Akhmedov from the Kyrgyz SNB recently said that Hizb ut-Tahrir cell leaders in his country are placing more emphasis on teaching the use of weapons and explosives and that SNB officers now frequently find weapons and ammunition when they make arrests. Another reason for a move into Russia might be that potential members there have higher incomes. As Akhmedov noted, Hizb ut-Tahrir members are required to contribute 10 percent of their earnings to the organization.

A Hizb ut-Tahrir move into Russia also has ideological and political logic. The bulk of Muslims in these areas of Russia are Tatars, known for their moderate Islamic orientation, so this would be an ideologically compatible locale for an organization that publicly rejects violence. Moreover, President Vladimir Putin's political reforms appear to be provoking some increase in Tatar nationalism and undermining the legitimacy of the administration of Tatarstan's President Mintimer Shaimiev and the moderate nationalist Tatar elite that supports it.

Whether the arrests are a response to a real infiltration or whether they are just an attempt to demonstrate vigilance, they are bad news for stability in Russia. To the extent that any of the arrests are unwarranted, Russian authorities risk further alienating Muslims and creating a larger recruiting pool for terrorists. Thus, in response to the arrest of alleged members of Hizb ut-Tahrir in Tyumen, islam.ru reported that the investigation supposedly had run into problems, and it condemned Russian law-enforcement bodies' inaction against skinheads who often advocate violence against Muslims and non-Russians.

On the other hand, to the extent that Hizb ut-Tahrir has adopted a calculated expansionist strategy into Russia, a new shared interest emerges in the U.S.-Russian partnership in the war against international terrorism. Just as the organization's infiltration into Russia poses a threat to Russian national security, Hizb ut-Tahrir's growing presence and radicalism in Central Asia pose a threat to U.S. bases and troops there. Russian intelligence could provide a vital supplement to U.S. and Central Asian intelligence sources on Hizb ut-Tahrir.

The presence of both U.S. and Russian forces in Kyrgyzstan opens up both an opportunity and a danger for both countries. On the one hand, Hizb ut-Tahrir might try to engineer a provocation to set the "infidel" forces against each other. On the other hand, U.S. and Russian forces could begin to cooperate more in the region by jointly combating Islamist extremism in Central Asia. This would make Hizb ut-Tahrir's move into Russia a strategic miscalculation.

Certainly, with Russian forces having their hands full in Chechnya and increasingly throughout the North Caucasus, along with the Russian state's numerous other weaknesses, there is a real question as to whether Moscow has the capacity to withstand a second separatist front. Such a development would be particularly problematic if, for example, a Tatar-led movement was tinged with Islamic extremism or linked to international terrorists. Clearly, Hizb ut-Tahrir's actions in Russia need to be watched closely.

Gordon Hahn is an independent scholar and author of "Russia's Revolution From Above: Reform, Transition, And Revolution In The Fall Of The Soviet Communist Regime" (New Brunswick, NJ: Transaction, 2002).

By Robert Coalson

The Federal Antimonopoly Service announced on 11 December that it has received three bids so far in the 19 December tender for Yuganskneftegaz, the main production subsidiary of Yukos, Interfax reported on 13 December. At first glance, it would seem that the tender will be competitive and legitimate.

However, many analysts and journalists are warning that all three bids "represent Gazprom's interests," as the state-controlled natural-gas giant positions itself to take over the lucrative company and vastly expand its oil-sector activities. Yukos advocates and other observers have long argued that the real purpose for the government's relentless, 14-month-long attack on Yukos was to secure the transfer of its main production assets to Gazprom -- and to state control.

The three bids are from Gazpromneftegaz, First Venture Company, and Intercom. An unidentified source told Interfax that all three bids "represent Gazprom's interests," although little is known about who stands behind either company. RBK and gzt.ru reported on 14 December that Intercom participated with Gazprom on the Blue Stream gas pipeline to Turkey. Intercom has reportedly also worked in the past with Rosneft, the state oil company that is also expected to become part of Gazprom's new oil-sector project (called Gazpromneft).

Lenta.ru reported on 14 December that China's National Oil Company (CNPC) and India's ONGC and IOC, all of which had previously expressed interest in participating in the Yuganskneftegaz tender, have now bowed out of the competition. President Putin visited China in November and India at the beginning of this month.

Gazprom declined to comment on the report that all three bids are controlled by the company, but unnamed analysts told RBK that First Venture Company and Intercom submitted bids merely to ensure that the tender would be declared competitive and that Gazpromneftegaz will win the auction with a bid that is only marginally more than the $8.6 billion starting price. In November, two Gazprom-affiliated companies submitted bids for a 38.35 percent stake in the Kirovo-Cherepovets Chemical Plant, Interfax reported. Moreover, the practice of using noncompeting bids in Russian privatization tenders has a notorious past. Last week, the Audit Chamber reported on its review of the 1990s privatizations and determined that most of the major auctions of that period were carried out under such schemes, lenta.ru reported on 14 December. As a result, the chamber concluded, almost all of them could be voided.

RBK and other Russian media reported on 14 December that Menatep, the main Yukos shareholder, is calling on banks to refuse to finance Gazprom's acquisition of Yuganskneftegaz. Menatep has threatened to file legal action not only against the purchaser of Yuganskneftegaz, but against the financial agents of the purchase as well, RBK reported. Menatep has argued that the government does not have the right to sell off Yukos's production-related assets and that the tax organs have refused to negotiate with the company a plan for paying Yukos's debts. "Whoever buys Yuganskneftegaz is going to be buying themselves a lifetime of litigation," Menatep Director Tim Osbourne told "The Moscow Times" on 13 October.

An unidentified source told RBK that Gazprom is negotiating a $10 billion loan with a consortium of six Western banks, including ABN AMRO, Deutsche Bank, and Dresdner Kleinwort Wasserstein. If those banks are cowed by Menatep's threats, Gazprom apparently has a backup plan that has the government's fingerprints all over it, "Kommersant-Daily" reported on 14 December. According to the daily, an unnamed source within the Central Bank confirmed that state-owned Vneshtorgbank has applied to the Central Bank for permission to increase Gazprom's credit limit in order to help finance the Yuganskneftegaz purchase. Vneshtorgbank has reportedly asked the Central Bank to provide the funds for such an increase.

The daily reported that presidential aide and Rosneft board member Igor Sechin has lobbied for the Vneshtorgbank plan, while presidential-administration head and Gazprom board Chairman Dmitrii Medvedev has spearheaded the effort to attract foreign funding. "Kommersant-Daily" further reported that police investigators on 8 December visited the Moscow offices of ABN AMRO and Deutsche Bank. Although neither the banks nor the police have officially commented on the reports, the daily said a Deutsche Bank employee confirmed them and speculated that such raids could be part of a power struggle within the presidential administration.

By Victor Yasmann

The turmoil surrounding the post-election events in Ukraine -- a campaign in which Moscow openly and unequivocally supported a pro-Russian candidate -- has overshadowed another foreign-policy drive on the Kremlin's part. Following the 20-21 November summit of Asia-Pacific Economic Cooperation (APEC) group members in Santiago, Chile, President Vladimir Putin arrived in Brazil on 21 November. It was the first time that a Russian head of state has ever visited that country, despite 225 years of bilateral diplomatic relations.

With a population of more than 180 million people and the world's eighth-largest economy, Brazil is Russia's second-biggest trading partner in the Western hemisphere. In 2002, Brazil, Russia, India, and China signed the so-called BRIC agreement. Apn.ru reported on 28 October that, according to Goldman Sachs, the BRIC economies hold the greatest potential for economic growth in the 21st century. Earlier in November, Putin visited Beijing, and at the beginning of this month he traveled to India, where he harshly criticized U.S. unilateralism. Analysts believe that Putin hopes that the BRIC group can someday form something of a counterweight on the international stage to the Group of Seven (G-7) leading industrialized countries.

During meetings with Brazilian President Luiz Inacio Lula da Silva, Putin discussed a range of bilateral trade issues, including energy cooperation, the provision of Russian nuclear-power technology, the aerospace sector, and military-technical cooperation. According to media reports, Russia is a leading contender for a $700 million contract to modernize the Brazilian Air Force.

During the talks, Putin spoke out in support of Brazil's bid to become a permanent member of the UN Security Council. While in India on 3 December, Putin similarly endorsed Indian membership of the Security Council. At a 22 November press conference in Brasilia, Putin called Brazil -- like India and China -- a "strategic partner of Russia" and called on the two countries to triple bilateral trade, which currently stands at about $2 billion per year.

Putin's visit to Brazil, however, had more to do with his ambition to restore Russia's status in the global arena than with just boosting trade with the Latin American giant. Putin's visit was a response to a proposal put forward by de Silva in May, urging Russia to bolster the BRIC arrangement and to include South Africa in the emerging bloc, apn.ru reported on 28 October. De Silva, who is known for his left-leaning orientation and antiglobalist sentiments, argued that the bloc could not only counterbalance the G-7, but could also form a united front to counter the status of the European Union and the United States within the framework of the World Trade Organization (WTO).

De Silva's initiative dovetails well with Putin's own sentiments. In an interview with Ukrainian television on 26 October, Putin once again spoke out harshly against the idea of a "unipolar world" and specifically named China, India, Japan, South Africa, and Brazil as "the other poles of world civilization." Foreign Ministry spokesman Aleksandr Yakovenko told apn.ru on 28 October that Moscow is considering de Silva's ideas, which could potentially lead to the creation of a bloc encompassing the lion's share of the world's natural and human resources. Apn.ru further speculated that Moscow would be interested in seeing South Korea, Turkey, Indonesia, and Iran join the new club someday. Putin visited Turkey earlier this month.

There seem to be increasing signs that Russia, having suffered a defeat in Ukraine, is looking for a new, ambitious global project.

On 5 December, RFE/RL's Russian Service broadcast a wide-ranging interview with Duma Deputy Zhores Alferov (Communist), who is a Nobel Prize-winning physicist and vice president of the Russian Academy of Sciences. A complete transcript of the interview in Russian can be found at http://www.svoboda.org/programs/ftf/2004/ftf.120504.asp.

Alferov discussed the state of Russian scientific research in general and proposals for reforming the Academy of Sciences. Specifically, he said that he has submitted to President Putin a proposal for the creation of an Academy University and that Putin has endorsed the proposal. However, he added, the initiative was opposed within the Kremlin and the Finance Ministry. He said that the main problem facing Russian science today is that the Russian economy is not able to exploit the innovations it develops. "We are working for foreign [firms]," he said.

Asked about the current State Duma and whether the Unified Russia majority is reminiscent of the old Supreme Soviet, Alferov said that "the Supreme Soviet of the USSR was more professional." He said that the Supreme Soviet's apparatus did a better job of drafting legislation than the current Duma does. He said that the previous Duma was better than the current one because "discussion was possible." He said that the only thing necessary for a law to be adopted today is that "it be presented by the government."

Alferov also offered extensive commentary on Putin's political reforms, including altering the way the State Duma is formed and ending the direct election of regional governors. (Robert Coalson)

December: A draft law on toll roads will be submitted to the government, according to the Federal Highways Agency's Construction Department

19 December: Presidential election in the Republic of Marii-El

19 December: Government to auction off Yuganskneftegaz, the main production subsidiary of oil giant Yukos. Minimum purchase price set at $8.6 billion

19 December: Mayoral elections in Nakhodka, Severodvinsk, and Komsomolsk-na-Amure

19 December: Second round of gubernatorial elections in Kamchatka and Kurgan oblasts

19 December: Second round of mayoral elections in Murmansk and Petropavlovsk-Kamchatskii

20 December: A board meeting of oil giant Yukos expected to vote on the possible initiation of bankruptcy proceedings

22-23 December: Belgian Foreign Minister Karel De Gucht to visit Moscow

26 December: Presidential election in Ukraine

26 December: Presidential election in the Republic of Khakasia

26 December: Second round of the gubernatorial elections in Volgograd and Ulyanovsk oblasts

29 December: State Duma's fall session will come to a close

January 2005: President Putin to visit Poland for the 60th anniversary of the liberation of the Auschwitz concentration camp

1 February 2005: Former President Boris Yeltsin's 74th birthday

March 2005: Gubernatorial election in Saratov Oblast

May 2005: Commemoration of the 60th anniversary of the end of World War II

2006: Russia to host a G-8 summit.