Russia Report: February 4, 2005

By Victor Yasmann

Hard on the heels of a humiliating political defeat in the presidential election in Ukraine, the Kremlin is now facing another serious crisis, this one even closer to home. For weeks now, the country has been wracked by growing social unrest in opposition to the government's reform to convert most in-kind social benefits to cash payments, which has been widely criticized as ill considered and poorly implemented.

According to media reports, more than two-thirds of the subjects of the federation have seen protests and demonstrations by pensioners, the disabled, public-sector workers, and other benefits recipients. In some cases, protestors blocked highways and rail lines or took over regional-administration buildings. In many cases, the protests were apparently spontaneous, but the Communist Party has claimed to be organizing the demonstrations.

In addition, speaking to journalists in Moscow on 27 January, Communist Party leader Gennadii Zyuganov said that his party has collected the 90 Duma deputy signatures required to force the chamber's leadership to include a motion of no confidence in the government in the Duma's agenda, gazeta.ru and other Russian media reported. Zyuganov said that in addition to Communist deputies, the Motherland faction is backing the initiative, as well as 15-18 independent deputies.

Although a no-confidence measure has no chance of passing without the support of the pro-Kremlin Unified Russia party, which controls a majority of the seats in the chamber, holding such a vote would put Unified Russia in the awkward position of having openly to support the unpopular benefits reform, gazeta.ru commented on 27 January.

At a recent meeting of the government's Council on Competitiveness and Entrepreneurship, participants concluded that the main reason for the unrest and for the slowdown in economic growth generally is a crisis of confidence, a loss of public trust in the government, "Vremya novostei" reported on 28 January. A similar view was expressed by Higher Economics School head and former Economy Minister Yevgenii Yasin, who was quoted by the daily as saying, "We are seeing a textbook example of how economic growth that seemed to be working so well can be destroyed."

Economist and Institute of Globalization Director Mikhail Delyagin said he thinks the present situation, including the widespread unrest, is the result of infighting between the so-called siloviki, or people connected to the security apparatus, and such liberal ministers as Finance Minister Aleksei Kudrin and Economic Development and Trade Minister German Gref. Delyagin called the latter "liberal fundamentalists" in a 14 January interview with RosBalt. Delyagin added that the dismantling of the social safety net "is not only the result of liberal reforms, but also of the blind aggression of the silovik oligarchy, an aggression that is spreading from the business community to society as a whole." "It is an open secret that a considerable portion of those agencies that we more and more often call 'siloviki' and less and less often call 'law enforcement organs' perceive the citizenry of Russia as a legitimate target for looting," Delyagin said.

Delyagin said that the Putin regime has declared war not only on business and society, but also on the regional elites, which it has stripped of political influence without giving them anything in return. "I think the protests which are continuing all over the country are partly generated by regional administrations, which feel that they have been robbed by the benefits-reform process," Delyagin said. "Since they are afraid to confront Moscow openly, they pretend that the protests are only the voice of the people and are in no hurry to silence it."

National Strategy Institute Director Stanislav Belkovskii told APN on 27 January that the unrest is evidence of a systemic crisis confronting the Putin regime. He said the protests demonstrate how illusory and ephemeral the Russian system of power is, and prove that the authorities can neither govern the people nor communicate with them. He added that the regime has already demonstrated this inability in the cases of the August 2000 sinking of the "Kursk" nuclear submarine, the October 2003 hostage taking at a Moscow theater, and the September 2004 hostage drama at a school in Beslan, North Ossetia. However, he added, the current unrest even more graphically demonstrates that the Putin regime is not unshakable.

Belkovskii added that the response to the protests proves that the regime fears only direct actions of this sort. It is not possible to outmaneuver the country's oligarchic-bureaucratic machine, but only to pressure it, Belkovskii said.

Belkovskii said that in October, a member of the Communist Party of the Russian Federation told him that if Ukrainian presidential hopeful Viktor Yushchenko could bring at least 100,000 people out onto the streets of Kyiv, the issue of power in Ukraine would be settled regardless of other factors. Time has shown that he was right, Belkovskii said, adding that anyone who can bring 300,000 people out onto the streets of Moscow can similarly take power in Russia. Therefore, he concluded, the street will remain the main tool of the political struggle in Russia for the next two years.

The government was unprepared for the protests and chose to treat its own citizens like "cattle," Belkovskii said. He quoted a Unified Russia Duma deputy as saying that "the tougher the laws are that the government adopts, the less people protest against them." Belkovskii said the regime placed its stake on public apathy and was convinced that there would be no massive protests. For this reason, the government is responsible for the crisis and should be dismissed.

Belkovskii added, though, that President Putin does not consider the benefits reform itself a mistake. Therefore, Kudrin, Gref, and Health and Social Development Minister Mikhail Zurabov will remain in government in one capacity or another. However, the president will most likely have to make some sort of gesture to quell the unrest, and the most likely victim will be the cabinet of Prime Minister Mikhail Fradkov.

Demonstrators have already been seen carrying signs calling for Putin to resign and even bearing slogans such as "Putin Is Worse Than Hitler." Although Putin often tries to avoid tough personnel decisions, Belkovskii said, he will need to do something to appease the public. The most likely scapegoat will be Fradkov, Belkovskii said, not because of the reform fiasco itself, but because he has avoided taking public responsibility for the crisis and has thereby exposed Putin to criticism.

By Julie A. Corwin

The hunger strike of five State Duma deputies from the Motherland faction, which began on 21 January, came to end this week. The five legislators, including Motherland leader Dmitrii Rogozin, who were demanding a moratorium on implementation of the law on converting in-kind benefits to cash payments and the dismissal of Health and Social Development Minister Mikhail Zurabov, Finance Minister Aleksei Kudrin, and Economic Development and Trade Minister German Gref, decided to transform their struggle from "the passive to the active stage," "Izvestiya" reported on 2 February. Lawmaker Andrei Savelev was hospitalized on 29 January with low blood sugar, and the party's presidium was expected to issue an order to the strikers to give up their protest for the sake of their health at a presidium session on 3 February.

Typically, hunger strikes attract sympathy for the participants and their cause, but in the case of the Motherland party action, a more common reaction -- at least among the Russian political elite -- has been derision. State Duma Speaker Boris Gryzlov labeled the action "self-promotion." And Lyudmila Alekseeva, chairwoman of the Moscow Helsinki Group, found herself agreeing with Gryzlov. She told politcom.ru on 24 January that public relations was likely at least one of the motivations for the deputies' action.

In an interview with Ekho Moskvy on 22 January, Garri Kasparov, chess master and Committee-2008 chairman, concluded that "quite obviously" Rogozin got news from his patrons in the Kremlin -- that is, first deputy head of the presidential administration Igor Sechin or deputy head of the administration Viktor Ivanov -- that resignations are forthcoming in the government. "One should not doubt that Rogozin's strike is a harbinger of changes in the Russian government," Kasparov said. "We'll wait and we can thank Dmitrii Olegovich [Rogozin] for imparting this information in such a bizarre way to all those able to compare and contrast his action with the information he usually receives from his Kremlin patrons."

Kasparov added that he believes that Kremlin control over Rogozin is "quite high," but Rogozin "no doubt has his own game plan. Sechin's game is to bet on Rogozin and help him in every way, and it's Rogozin's game, at this stage, to pretend and dream that one day he will do to his patrons what Putin did to his."

In an interview with politcom.ru on 24 January, Marat Gelman, the art gallery owner and campaign consultant who worked on Motherland's surprisingly successful campaign during the December 2003 State Duma elections, agreed with Kasparov: "Rogozin has information that he won't be on a hunger strike long. But in my opinion he or his informant is wrong," Gelman said. Gelman also commented that since Duma deputies are now devoid of real power, they are reduced to making symbolic gestures such as hunger strikes. But as gestures go, Gelman figures that Rogozin's gambit is a stronger one than the competition's: Unified Russia is just discussing the benefits reform among themselves, he says, while the Communist party is trying to head spontaneous protests.

Part of the harsh reaction to Motherland's hunger strike could reflect the Russian political elite's attitude toward Motherland's leader, Rogozin himself. Like many federal politicians, Rogozin changes party and coalition membership on an almost seasonal basis. Rogozin is only 41 years old, but he has already either been a member of or aligned with a half a dozen political organizations, including the Union of Revival, the Congress of Russian Communities (KRO), the Fatherland party, the Yurii Boldyrev Movement, the Inter-Ethnic Union, the People's Deputy Duma faction, and the Motherland-Patriotic Union bloc. And his break-ups have often been publicly acrimonious.

Rogozin's first big public fight was with former presidential candidate Aleksandr Lebed. Lebed was No. 1, and Rogozin No. 5 on the KRO's party list for the December 1995 State Duma election. But relations soured quickly after Lebed became Security Council secretary in summer 1996, and especially after he negotiated the Khasavyurt accords that ended the first military conflict in Chechnya.

By the spring of 1998, Rogozin and the KRO were actively campaigning against Lebed in the Krasnoyarsk Krai gubernatorial election. In 1999, Rogozin's KRO was initially aligned with Moscow Mayor Yurii Luzhkov's Fatherland party, but when Luzhkov chose to join forces with the All-Russia movement, headed by Tatarstan President Mintimer Shaimiev and Bashkortostan President Murtaza Rakhimov, Rogozin dropped out of the alliance. Rogozin made a number of unflattering remarks to Luzhkov at the time, and Luzhkov has been unable to forgive him, according to "Profile" on 7 April 2003.

In 2003, Rogozin's name was proposed during a Unified Russia party congress, but Luzhkov blocked his membership of the party, because he "could not forget old offenses," according to "Yezhenedelnyi zhurnal" on 15 December 2003. In December 2003, Rogozin was No. 2 on the party list for the unexpectedly successful Motherland bloc. However, that alliance began to unravel unusually quickly. By January 2004, Rogozin and candidate No. 1 on the party list, Sergei Glazev, were exchanging brick bats in the press, and by March, Glazev was removed as the bloc's faction leader.

Rogozin, a native Muscovite, is the son of Oleg Konstantinovich Rogozin, a military general. Rogozin resisted following in his father's footsteps. According to "Profil" and "Yezhnedelnyi zhurnal," Rogozin almost entered the acting faculty of the All-Russia State Institute of Cinematography, having successfully completely all stages of the application and competition process. However, at the last minute, he rethought his career plans and instead joined the international department of the journalism faculty at Moscow State University (MGU). At MGU, Rogozin participated in student theater.

Now as a mid-career professional, he finds himself participating in a theatre of a more modern variety, reality television. The Motherland deputies' hunger strike was webcast on the party's website (http://www.rodina.ru). Computer hackers shut the site down temporarily, but as of evening of 31 January Moscow time, the show was back on the air. Rogozin was shown conversing with his colleagues, hands tucked in his jean pockets, his once-splendid paunch noticeably less visible underneath his black sweatshirt. According to "Izvestiya" on 2 February, Rogozin lost 8 kilos. But he may have gained much more than a slimmer figure: In a monthly ranking of influential politicians published by "Nezavisimaya gazeta," Rogozin jumped from 57th place to 30th.

On 28 January, RFE/RL's Russian Service broadcast an exclusive interview with Motherland leader Dmitrii Rogozin, who spoke by telephone from his office in the State Duma building where he is participating in a hunger strike against the government's benefits-reform plan. The complete interview in Russian can be seen at http://www.svoboda.org/programs/pr/2005/pr.012805.asp.

During the interview, Rogozin defended the decision to stage a hunger strike and said that the current Duma has become "a sort of farce, in which simply by the command of some director from the majority faction, plus the well-known Russian hooligan [Liberal Democratic Party of Russia leader Vladimir] Zhirinovskii who has stuck himself on to them, [deputies] come and pass whatever decisions are deemed necessary without any discussion and with the most blatant violations of the Duma's regulations." He specifically criticized deputies' rejection of a Motherland-sponsored proposal to give the floor to human rights ombudsman Vladimir Lukin to discuss the benefits crisis.

Rogozin also criticized the "officious" state media, "even the formerly independent NTV television," for waging a conspiracy of silence about the Motherland hunger strike. He said that false statements purportedly from the hunger strikers have been circulated in the Duma and posted on the Internet, and he accused Unified Russia of complicity in this campaign.

Rogozin also categorically denounced a letter that was recently sent by 20 Duma deputies, including several from the Motherland faction, that urged the Prosecutor-General's Office to investigate Jewish organizations on suspicion that they foment ethnic and religious strife.

Although Motherland has always marketed itself as a pro-presidential, nationalist-leaning party, Rogozin called on President Vladimir Putin to take responsibility for the benefits crisis. "We demand that the president make his deeds match his words and, finally, become a governmental leader," Rogozin said, "instead of just appearing on television and saying what people expect." "We believe that [the president] bears total responsibility for everything that is happening in the country," he added. (Robert Coalson)

By Robert Coalson

Although President Vladimir Putin re-nominated Sergei Stepashin to his post as Audit Chamber chairman on 27 January, the political elites in Russia were caught off-guard when Stepashin told a meeting of the Duma's Motherland faction on 18 January that he had submitted his resignation.

Stepashin, whose term was scheduled to end in April 2006, said that he considered it his duty to tender his resignation in keeping with the spirit of a new law on the formation of the Audit Chamber, which stipulates that the president nominates that body's chairman and that the Duma confirm the nomination.

Until Putin reaffirmed his support for Stepashin, there was a frenzy of discussion about what Stepashin's move might mean. Most analysts saw it as a clear appeal for a vote of confidence from Putin, although some doubted whether that nod would come. Dmitrii Oreshkin of the Merkator analytical group told "Novye izvestiya" on 19 January that some within the administration might try to take advantage of Stepashin's move because the chief auditor "is a man with unsatisfied political ambitions who is not caught up in any compromising games."

The announcement of Stepashin's resignation was given additional political gravitas by the fact that the Duma has now three times postponed hearing his potentially scandalous report on his chamber's review of 1990s-era privatizations. On 12 January, Duma Speaker Boris Gryzlov announced that the report would not be put on the Duma's agenda because changes in the legislature's rules had made it unclear what "format" was appropriate for Stepashin's appearance. "Tribuna" noted on 12 January that Stepashin had already appeared in the Duma chamber on 8 December 2004 to present the report but deputies refused to give him the floor. A few analysts, including Lydia Andrusenko, writing in "Politicheskii zhurnal," No. 2, speculated that Stepashin's resignation was a protest to the Kremlin against possible moves to quash the report.

However, at the 18 January Motherland faction meeting, Stepashin told deputies that the Duma's leadership had scheduled his report for sometime "in March or April in the context of a report on the work of the Audit Chamber." He added that he has already submitted the report to both legislative chambers, Putin, and the Prosecutor-General's Office.

"Kommersant-Daily" on 17 January reported that it had obtained a copy of Stepashin's report and that it was characterized mostly by ambiguous conclusions and statements that could be variously interpreted. However, the daily, which is owned by avowed Kremlin foe and former oligarch Boris Berezovskii, wrote that the document could serve "as the basis for the mass reexamination of privatization results" and that "the authorities don't seem to be in any hurry to play this card." Some analysts have raised the concern that the report could signal a qualitative change in the state's assault of private enterprise, inasmuch as the Yukos affair and other high-profile cases to date have centered on the issue of minimizing tax obligations rather than on the core issue of property ownership.

The daily reported that the report repeats longstanding general criticisms of privatization, including that it was conducted without a complete legal foundation; that the State Property Committee frequently failed to register its instructions with the Justice Ministry, making them technically void; and that most tenders were insufficiently competitive and transparent. The report also reportedly includes general conclusions such as that privatization failed to achieve such stated goals as boosting industrial production and economic growth. The report concludes vaguely but menacingly that "it is essential to establish through the courts the violated rights of the legal property owner, that is, the state," the daily reported.

The "Kommersant-Daily" article reports that the main ambiguity in the possible repercussions of the report lies in the fact that it does not really examine specific privatization cases in detail. It surveys the oil and energy sectors, according to the daily, and lingers on Chukotka Autonomous Okrug Governor Roman Abramovich's Sibneft. It also covers the tobacco industry and other sectors, but mostly in order to demonstrate various privatization-related schemes that allegedly harmed the state's interests rather than to point fingers at particular companies or individuals.

KM.ru speculated on 21 January that the Kremlin is benefiting from the uncertainty over Stepashin's report, which the news agency described as "a bomb hanging over" the oligarchs. On the other hand, National Strategy Council General Director Valerii Khomyakov told "Nezavisimaya gazeta" on 20 January that "clearly, some points in the report may not have pleased the Kremlin-linked oligarchs very much." Despite Stepashin's renomination, the fate of the privatization report remains unclear.

Putin met with Stepashin on 24 January and listened to his report on the Audit Chamber's plans for 2005. At that meeting, Stepashin announced that the chamber would "move away from petty topics" and instead study larger matters such as the overall effectiveness of government spending. On 21 January, Federation Council Chairman Sergei Mironov told ABN that Stepashin deserves to keep his post, noting that Stepashin is a "gosudarstvennik," or a person who believes in a strong state, and "that is very important." Stepashin told reporters on 27 January, the day of his renomination, that the government will not pursue a policy of "deprivatization," and he shifted the focus of his criticisms from privatization issues to concerns about the management of state property.

Former Duma Deputy Yurii Boldyrev, who helped write the original law on the Audit Chamber, told derrick.ru, the official website of the Union of Oil and Gas Equipment Producers, on 25 January that the most important thing is neither Stepashin nor even the privatization report, but the fate of the Audit Chamber itself, which has gone largely unremarked. He said that the new law that allows the president to nominate the Audit Chamber's chairman spells the end of its independence and turns it into "a fifth wheel" in the structure of the government. "The Audit Chamber made sense when it operated independently of the president and made public things he wanted to cover up," Boldyrev said.

2-3 February: Foreign Minister Sergei Lavrov to visit Azerbaijan to discuss visit to Moscow of Azerbaijani President Ilham Aliyev later the same month

4-11 February: 60th anniversary of the Yalta Conference, at which British Prime Minister Winston Churchill, U.S. President Franklin D. Roosevelt, and Soviet dictator Josef Stalin discussed plans for post-war Europe

6 February: Second round of voting in the gubernatorial election in Nenets Autonomous Okrug

12 February: Communist Party to organize a day of national protest against the government's benefits reform

16 February: Kyoto Protocol, an international agreement intended to curb the emissions of gases widely believed to contribute to global warming, comes into effect following its ratification by the Russian Federation

18 February: Foreign Minister Sergei Lavrov to travel to Tbilisi

20 February: New patriotic television channel organized by the Russian Defense Ministry to begin broadcasting

24 February: President Putin and U.S. President George W. Bush to hold a summit in Bratislava, Slovakia

March: Terms of Yamalo-Nenetsk Autonomous Okrug Governor Yurii Neelov, Khanty-Mansiisk Autonomous Okrug Governor Aleksandr Filipenko, Jewish Autonomous Okrug Governor Nikolai Volkov, and Primorskii Krai Governor Sergei Darkin to expire

March: Foreign Minister Sergei Lavrov to visit Japan to discuss Russian-Japanese summit scheduled to be held in Tokyo in April, according to many media reports

March: EU external relations commissioner Benita Ferrero-Waldner to visit Moscow

6 March: Parliamentary elections in Moldova

20 March: Legislative elections in Voronezh Oblast

April: Terms of Tula Oblast Governor Vasilii Starodubtsev, Saratov Oblast Governor Dmitrii Ayatskov, and Amur Oblast Governor Leonid Korotkov to expire

April: Russian Soyuz spacecraft to bring new crew to the International Space Station

17 April: Krasnoyarsk Krai to hold a referendum on the question of merging the krai with the Taimyr and Evenk autonomous okrugs

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

2006: Russia to host a G-8 summit

1 January 2006: Date by which all political parties must conform to law on political parties, which requires at least 50,000 members and branches in one-half of all federation subjects, or either reregister as public organizations or be dissolved.