*EPF306 02/06/2002
Excerpt: CIA Director Tenet on Russia, Balkans Before Senate Committee
(Feb. 6 testimony on post-9/11 terrorism threats) (930)

George J. Tenet, director of the Central Intelligence Agency (CIA), testified before the Senate Select Committee on Intelligence February 6 on the "Worldwide Threat -- Converging Dangers in a Post 9/11 World."

Following are excerpts of his prepared text concerning developments in Russia and southeast Europe:

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WORLDWIDE THREAT -- CONVERGING DANGERS IN A POST 9/11 WORLD

TESTIMONY OF DIRECTOR OF CENTRAL INTELLIGENCE GEORGE J. TENET BEFORE THE SENATE SELECT COMMITTEE ON INTELLIGENCE

February 6

RUSSIA

Mr. Chairman, let me turn now to other areas of the world where the United States has key interests, beginning with Russia. The most striking development regarding Russia over the past year has been Moscow's greater engagement with the United States. Even before September 11, President Putin had moved to engage the United States as part of a broader effort to integrate Russia more fully into the West, modernize its economy, and regain international status and influence. This strategic shift away from a zero-sum view of relations with the United States is consistent with Putin's stated desire to address the many socioeconomic problems that cloud Russia's future.

During his second year in office, Putin moved strongly to advance his policy agenda. He pushed the Duma to pass key economic legislation on budget reform, legitimizing urban property sales, flattening and simplifying tax rates, and reducing red tape for small businesses. His support for his economic team and its fiscal rigor positioned Russia to pay back wages and pensions to state workers, amass a post-Soviet high of almost $39 billion in reserves, and meet the major foreign debt coming due this year (about $14 billion) and next (about $16 billion).

-- He reinvigorated military reform by placing his top lieutenant atop the Defense Ministry and increasing military spending for the second straight year -- even as he forced tough decisions on de-emphasizing strategic forces, and pushing for a leaner, better-equipped conventional military force.

This progress is promising, and Putin is trying to build a strong Presidency that can ensure these reforms are implemented across Russia -- while managing a fragmented bureaucracy beset by informal networks that serve private interests. In his quest to build a strong state, however, he is trying to establish parameters within which political forces must operate. This "managed democracy" is illustrated by his continuing moves against independent national television companies.

-- On the economic front, Putin will have to take on bank reform, overhaul of Russia's entrenched monopolies, and judicial reform to move the country closer to a Western-style market economy and attract much-needed foreign investment.

Putin has made no headway in Chechnya. Despite his hint in September of a possible dialogue with Chechen moderates, the fighting has intensified in recent months, and thousands of Chechen guerrillas -- and their fellow Arab mujahedeen fighters --remain. Moscow seems unwilling to consider the compromises necessary to reach a settlement, while divisions among the Chechens make it hard to find a representative interlocutor. The war, meanwhile, threatens to spill over into neighboring Georgia.

After September 11, Putin emphatically chose to join us in the fight against terrorism. The Kremlin blames Islamic radicalism for the conflict in Chechnya and believes it to be a serious threat to Russia. Moscow sees the U.S.-led counterterrorism effort -- particularly the demise of the Taliban regime -- as an important gain in countering the radical Islamic threat to Russia and Central Asia.

So far, Putin's outreach to the United States has incurred little political damage, largely because of his strong domestic standing. Recent Russian media polls show his public approval ratings at around 80 percent. The depth of support within key elites, however, is unclear -- particularly within the military and security services. Public comments by some senior military officers indicate that elements of the military doubt that the international situation has changed sufficiently to overcome deeply rooted suspicions of U.S. intentions.

Moscow retains fundamental differences with Washington on key issues, and suspicion about U.S. motives persists among Russian conservatives -- especially within the military and security services. Putin has called the intended U.S. withdrawal from the ABM treaty a "mistake," but has downplayed its impact on Russia. At the same time, Moscow is likely to pursue a variety of countermeasures and new weapons systems to defeat a deployed U.S. missile defense. ...


BALKANS

Finally, let me briefly mention the Balkans, the importance of which is underlined by the continuing U.S. military presence there. International peacekeeping troops, with a crucial core from NATO, are key to maintaining stability in the region.

In Macedonia, the Framework Agreement brokered by the United States and the EU has eased tensions by increasing the ethnic Albanians' political role, but it remains fragile and most of the agreement has yet to be implemented. Ethnic Slavs are worried about losing their dominance in the country. If they obstruct implementation of the accord, many Albanians could decide that the Slav-dominated government -- and by extension the international community -- cannot be trusted.

United States and other international forces are most at risk in Bosnia, where Islamic extremists from outside the region played an important role in the ethnic conflicts of the 1990s. There is considerable sympathy for international Islamic causes among the Muslim community in Bosnia. Some of the mujahedeen who fought in the Bosnian wars of the early 1990s stayed there. These factors combine with others present throughout the Balkans -- weak border controls, large amounts of weapons, and pervasive corruption and organized crime -- to sustain an ongoing threat to U.S. forces there.

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(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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