Russian diary \ N60

1. NEWS FROM RUSSIA
LEADERSHIP OF RUSSIA SHOWS CONCERN FOR DEVELOPMENT OF SPORT

2. DIPLOMACY
RUSSIA-AUSTRIA: NEW VERSION OF THE VIENNESE WALTZ

3. ECONOMY
RUSSIAN GOVERNMENT PLANS FOR 2002

4. COMMENTARY OF THE DAY
WHO IS IT WASHINGTON HARBORS A GRUDGE AGAINST?

LEADERSHIP OF RUSSIA SHOWS CONCERN FOR DEVELOPMENT OF SPORT

     By Raisa ZUBOVA, RIA Novosti

     A meeting of the State Council - a consultative body under the president of the Russian Federation, consisting of the heads of the Federation's entities - was held in the Kremlin under the chairmanship of Vladimir Putin at the end of January. The meeting, the first in the year of 2002, was devoted to the problems of physical culture and sport development in Russia and of a healthy way of life.

     Opening the meeting and explaining the importance of the theme under discussion, Vladimir Putin expressed grave concern over the unpardonably low life expectancy in Russia and the fact that every year millions of inhabitants of Russia formalise their disability to work. In the president's opinion, the matter concerns not simply physical culture but the quality of the population's life.

     Putin recalled that for a whole decade physical culture and sport in Russia had been abandoned and undergone no qualitative changes. The lower level of the nation's physical health and hence the direct and indirect losses in the economy became the price of this lack of attention on the part of the state, the president pointed out.

     The following statistics were voiced at the meeting: the number of sports facilities in Russia has diminished by 20 per cent as against the year 1991. As Vice-Premier of the government who answers for the development of sport Valentina Matviyenko said, "when the West was running away from infarction and tobacco, we turned stadiums into markets and trade establishments". Only 8.7 per cent of the population of Russia now goes in for sport, the respective figures for the USA and Germany being 40 and 60 per cent.

     A working group of the State Council in cooperation with the government prepared a concept of development of physical culture and sport in Russia till the year 2005 and proposed adopting a corresponding federal programme. In keeping with the concept, concern for the future of the nation - children - forms the basis of the improvement of its health. The concept envisages "a golden plan of Russia" - setting up one thousand fitness centres all across the country within four years. Construction of a sports centre of this kind will cost 30 million roubles (one million dollars).

     The whole five-year programme is estimated at 40-50 billion roubles (1.3-1.7 billion dollars). According to the working group's plan, the state, the regional authorities and big business must provide money. As the president of Russia noted, the sports services market in the country is now inaccessible to broad masses of the population: "Either expensive, or very expensive services are offered to people." The head of state separately highlighted the problems of Big Time sport. Though Russian athletes are still in the elite of world sports - both winter and summer ones, the professionals encounter many problems. The main problem is the insufficient conditions for preparation for world-level sports competitions, the shortage of training bases, sports centres, high-quality sports equipment, etc. For this reason, almost all the best sports professionals of Russia have to prepare for competitions abroad.

     Preparation of the reserve is another question of paramount importance. The Soviet system of sports schools for children and youth has fallen into decay over the past decade, young athletes are not groomed in the country, and very soon, when the veterans retire from competition sport, this will tell on the achievements of Russian sport. President Putin is confident that "top-flight sport is not only a question of national prestige but is also serious, profitable business".

     The participants in the debate proposed forming a Physical Culture and Sport Council under the president, and Vladimir Putin backed this idea. They talked of the necessity of setting up a federal sports TV channel and of boosting the presence of sport on TV channels, no matter whether private or state-owned ones. The politicians declared to be for "all-out and aggressive propaganda of sport".

     Vladimir Putin proposed reviving the Soviet-time tradition to hold Sparta games - a sports event with the largest circle of participants, something like national Olympics. As it was decided at the meeting of the State Council, the first Sparta games of the peoples of the Russian Federation will take place in 2003, a year before the Olympic Games in Athens.

     It was noted at the State Council meeting that the number of sports halls and facilities had grown in the past few years, and the quality of health-building services had been improving. "To be healthy, to adhere to a healthy way of life gradually becomes prestigious and fashionable," the president said. In Putin's opinion, Russian businessmen now give examples of this new attitude to sport, seeing direct connection between a success in business and good physical health.

     Furthermore, the politicians noted that the country's leaders, ministers, deputies and governors must by their personal example inspire the inhabitants on Russia to take up sport, encourage them to cling to a healthy way of life. As is known, president Putin goes in for judo and Alpine skiing. Leader of Communists Gennady Zyuganov plays volleyball, Vice-Premier Valentina Matviyenko likes cross-country skiing, and mayor of Moscow Yuri Luzhkov goes in for equestrian sport, winter swimming, football and ice hockey. To all appearances, there is ample reason to expect that members of the government and parliament who do not actively participate in sport yet, if such still exist, will soon also take up jogging, swimming and sports games.

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RUSSIA-AUSTRIA: NEW VERSION OF THE VIENNESE WALTZ

     Boris PETROV, RIA Novosti analyst

     Russia's clearly outlined intention to assist the construction of a European system of security and cooperation, as well as growing realization of the fact that without Russia integrated Europe would be just a colossus with feet of clay, have found new proof during Austrian Chancellor Wolfgang Schuessel's visit to Moscow.

     Results of talks held during the visit have accounted for the abundant praise the sides heaped on the level of Russian-Austrian relations. As Russian President Vladimir Putin put it while welcoming the high Austrian guest, bilateral political contacts "are rapidly developing in all aspects." Further on, the Russian leader stressed that Moscow attaches equally great importance to bilateral relations in the context of Russia's cooperation with the European Union, and duly respects Vienna's effort to push for Russia's membership in the World Trade Organisation.

     The chancellor's visit became a demonstration of the sides' unanimous belief that a security system must be one for everyone. Yet Moscow and Vienna have different approaches to certain aspects of the European security system.

     Despite its willingness to cooperate with NATO, Russia stresses the impossibility of ensuring security on a bloc basis by means of enlarging the military union. On the other hand, Austria's recently approved security and defence doctrine identifies NATO enlargement as "a contribution to the effort to strengthen security and stability." Moscow has also repeatedly criticized attempts at "gradual dismantling of Austrian neutrality." While acknowledging the right of the Austrian nation to choose its own future, Russia nevertheless points out that the European security system "is impossible without the constructive role of neutral countries." But such differences are all quite natural. Moscow is well aware of the worries plaguing Austria. "We all want to live in a safe, predictable and stable Europe," emphasized Russian Premier Mikhail Kasyanov during his meeting with the Austrian chancellor.

     But, with all the talk of global security-related issues, business cooperation between Russia and Austria still remains a major issue for both countries -- consider the fact that the Austrian chancellor arrived accompanied by a delegation of more than 100 businessmen.

     What must be done to create favorable conditions for this cooperation and attract more investment from Austria to Russian economy was discussed at length during the chancellor's visit. Apparently, both sides are optimistic about this particular aspect of joint activity.

     Pointing out the marked growth of commercial exchange between Russia and Austria, President Putin said it was important to diversify economic relations between Moscow and Vienna. It needs to be mentioned here that commercial exchange between the two countries reached $1.9 bln in 2001 and that the growth was mostly achieved thanks to the Austrian side, which is not bad because it helps eliminate a certain disbalance in trade /as of today, deliveries of Russian gas make up 90% of the Russian-Austrian commercial exchange, so the main task facing Russian industry is to increase deliveries of other domestic goods to the Austrian market/.

     Moscow has handed over to the Austrian side a list of investment projects and another list of Russian producers of high-technology products, wishing to expand business activities on the Austrian market.

     Russia is ready to develop cooperation with Austria in the spheres of power engineering, oil and gas industry, metallurgy, mechanical engineering, aircraft and automobile industries, space exploration, medicine and pharmaceutics, and ecology.

     Moscow believes the commercial exchange between Russia and Austria can be doubled in the course of the next five years, partially with the help of the concept of a Russia-EU common economic space, partially by means of developing cooperation between small and medium-sized enterprises from both countries.

     Thus, it will be no exaggeration to say that during Wolfgang Schuessel's visit to Moscow the sides made a huge leap towards realization of joint projects, in the sphere of bilateral relations as well as in the context of the general European situation on the whole -- it was agreed that the sides would make a joint effort in this direction.

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RUSSIAN GOVERNMENT PLANS FOR 2002

     Raisa ZUBOVA, RIA Novosti

     In late January, after all the holidays and ministers' winter leaves, the Russian government held, as Prime Minister Mikhail Kasyanov put it, "a day of programme planning." At that session the Cabinet defined and adopted priority tasks for 2002.

     As followed from the speeches at the session and from the news conference given by the Prime Minister, the emphasis in the activity of the Cabinet in 2002 will be laid on, first, the dynamic continuation of the reforms (to keep the pace) and, second, the execution of the decisions adopted in 2001. The decisions of 2001, pointed out the head of the government, form the basis for the work this year and for a medium-term prospect of development. Some of the decisions were carried out in 2001, the Prime Minister reminded the Cabinet - the tax, pension and judicial reforms, the plan for restructuring the natural monopolies and the military-industrial sector, the initial measures to uproot red-tape in the economy.

     Russia's economic record in 2001 looks impressive against the background of the world economic recession. The Gross Domestic Product has grown by 5.6 percent. This is the third result in the world after India and China. The government intends to keep this pace in 2002 too.

     "It is very important to prevent a lag in reforming economic branches, otherwise the reforms may get bogged down. The execution of the decisions will be a priority task for 2002," underscored Mikhail Kasyanov. This means that the tax legislation will continue to be perfected; the pension reform will be further developed- the main thing here is to finalise the draft law on investing the accumulated pension funds. In the run-up to Russia's entry in the World Trade Organisation, the Customs Code of the country will be brought to conformity with the norms and rules of this organisation. This will unify the customs space of Russia and Europe.

     One of the new slogans of the day is: the state must contribute as much as possible to the development of small business. Hence, encouragement of rivalry and reforming the banking sector of the economy. As was pointed out by the Prime Minister, the share of small business in the Russian economy "is nearing zero," while in the industrialised countries small business accounts for some 80 percent of the Gross Domestic Product. In 2002, the government should propose and the parliament should pass laws on simplifying taxes on small business. The de-bureaucratisation programme, the implementation of which will continue in 2002, will pursue the same goal.

     The government plans to analyse the results of the state property management, that is, how efficiently it is run. In the opinion of the Prime Minister, there are too many state unitary enterprises in the country. The reduction of the state's participation in the economy must be one of the main trends in the economic development of Russia in 2002. As a matter of fact, this means that the government has announced a policy towards selling or at least reducing the state packages of enterprises' shares. The size of the state packages will not generally exceed 25 percent.

     This measure, as is planned by the government, will most radically affect the banking sphere where the state intends to leave for itself the packages of the shares of five or seven Russian banks, the participation in which will be recognised as necessary. The rest of the banks, in which the state's participation amounts to less than 25 percent, will be privatised. At the present time the state has shares in fifty banks all over the country.

     The ministers intend to assign priority to the development of socially important economic branches - the insurance business, including the creation of a modern and efficient system of medical insurance, to streamlining mortgage crediting which, despite all the efforts, has not yet started working in full in Russia.

     At this session the Russian government re-iterated its adherence to market reforms and the liberal economic policy. This fact will certainly not make happy the Russian Left-wingers who have intensified their criticism of the President and the government in the past few months.

     However, the ambitious plans of the Kasyanov Cabinet are likely to produce a favourable impression on Western public opinion, Western politicians and businessmen, the more so that the Prime Minister will soon address the Davos World Economic Forum in New York.

     The Russian government's programme for 2002 must convince the West that Russia is a country with a market economy. Apart from this, it must show that the situation has changed for the better and that foreign investors will have the opportunity to not only derive profits from their capitals in Russia but also feel safe here.

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WHO IS IT WASHINGTON HARBORS A GRUDGE AGAINST?

     Alexei BOGATUROV, professor, deputy director of the Institute of USA and Canada Studies of the Russian Academy of Sciences, RIA Novosti

     Serious differences still exist between Russia and the United States concerning the reduction of offensive armaments. The USA continues to uphold the idea of stockpiling nuclear warheads removed from the carriers, asserting that they are sort of guarantee reserve which can be used in case of necessity. However, the Russian side believes that the warheads which have to be reduced should not be stockpiled after their removal from carriers, but should be scrapped and destroyed, and the carriers themselves should be brought in such a condition which would not make it possible to use them any more. In other words, Moscow stands for a real reduction of the nuclear armaments, while Washington - for a formal one, because in fact it wants to preserve these armaments, not to destroy them.

     A natural question arises: For what purpose or, to be more precise, against whom does the United States intend to carry a knife under its sleeve? There may be two variants of the answer to this question. Either the United States will need these warheads to get indisputable supremacy in nuclear armaments, or they may be used for the needs of the national missile defence systems which the USA, apparently, has firmly decided to start building if it has withdrawn from the ABM Treaty of 1972. In both cases Washington is entering a dangerous path, at least considerably complicating the conclusion with Moscow of a new Treaty on the Reduction of Strategic Armaments (START-3) or even maybe making it impossible.

     As was again stated in the course of the Washington consultations, Russia consistently adheres to the principle of equal security of the sides and the predictability of their nuclear policies. It insists on a comprehensive consideration of the issues concerning both offensive and defensive strategic systems. This is the question of the balance of interests, of preserving a strategic stability in the world. One gains the impression that Washington does not need all this and does not intend to disarm at all.

     The circumstance that the US Senate has not yet ratified the Comprehensive Nuclear Test Ban Treaty testifies to that as well. Apart from that, a number of officials from the Washington administration spoke recently about the possibility of resuming nuclear weapon tests, though they perfectly well know the firm and consistent position of Moscow which does not intend to violate the moratorium on this kind of tests. The conclusion is obvious - Washington intends to perfect nuclear weapons, having laid emphasis on creating tiny explosive nuclear devices. The aim is obvious - to receive a possibility in practice of locally using nuclear weapons on a limited scale without a threat of a global war breaking out.

     In short, Washington wants to have a military superiority, to have a full freedom of action and to do whatever it wants, ignoring the opinions and the legitimate interests of other powers. This strategic line perfectly corresponds to the decision of the United States to withdraw from the Moscow ABM Treaty. However, this is a dangerous policy which rests on the conviction of the priority of the law of force. By following this course, Washington does not make an effort apparently to stop and think about its consequences - the inevitable negative reaction on the part of the biggest leading powers of the world, first of all Russia, China and India - which may result in a new round of the arms race. But it should have thought about it!

     The new tendencies in the US policy have become especially apparent in the past year, with George W. Bush coming to power. Even in the period of the election campaign he promised to be a stronger president than his predecessor - Bill Clinton, and to prove that the Republicans can uphold the national interests of the United States better than the Democrats. George W. Bush believes that all existing agreements in the sphere of controlling the armaments are the products of the Cold War. But if that period is no more, he reasons, the agreements signed at that time must be annulled, because they do not correspond to the new period of time. The logic of the American president is the following: if we and Russia are no longer enemies, but allies, it is not necessary to conclude any written agreements or treaties. We should trust each other and settle all the matters by directly exchanging views between the two leaders.

     A strange logic, to say the least. It does not at all correspond to the USA's wish either to stockpile the warheads removed from missiles and not to destroy them, or to the refusal to ratify the Comprehensive Nuclear Test Ban Treaty, or to the attempts to upset strategic stability by creating a national missile defence system. The principle - I do whatever I wish and only then inform you - cannot be used in relations with the allies. This means that the epoch of relations between Russia and the United States as between true allies who trust each other has not come yet. If this is so, the treaties and agreements are still valid and remain important, more so if they can prevent the arms race, limit the proliferation of nuclear arms and toughen control over them.

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