JIM LEHRER: The next stop for President Bush is a meeting tomorrow with Russian President Putin. Special Correspondent Simon Marks reports from Moscow on Russia and its leader.
SIMON MARKS: Fifteen years after the fall of the Soviet Union, Moscow is now a 24-hour town. The night sky is dominated by neon and casinos, and the streets pulse with the kind of big money that was once considered a capitalist abomination. It's largely opportunistic wealth that Russia has enjoyed since the country's oil started selling on global markets for $45 a barrel.
And yet even today in Russia, not all the fruits of capitalism are on open public display. As in Soviet times, if you want to find one of the city's most stylish night spots, a dark Moscow alley leads you there. Hidden away below ground in the converted basement of an apartment building is Chinya, a Chinese teahouse that's open till dawn. Manager Dmitry Kurapov explains that he doesn't advertise the presence of his business because it isn't designed for everyone.
DMITRY KURAPOV (Translated): This place is for people who are cultured enough to appreciate the drinks, the food, the music and the atmosphere. Being underground really works well for us.
SIMON MARKS: The teahouse is one of hundreds of restaurants now catering to the new Russian elite. In the old days, a Communist Party membership card was needed to access places like this. Now patrons just need a healthy bank balance. And in Moscow today, it isn't only some restaurants that are conducting their business in the old style, hidden away underground.
Elsewhere in the city, we visited the fortified and also unadvertised bunker that serves as the headquarters of what is now one of Russia's main opposition political groups, the National Bolshevik Party. The murals on the walls tell the story of the party's ultra- nationalist roots. These people are not cuddly, western-style democrats. But in the past year, following the annihilation at the polls of Russia's democratic reformers, the National Bolsheviks have emerged as one of the few forces willing to challenge President Vladimir Putin.
More than 100 of the party's members have been jailed for participating in what they call a campaign of civil disobedience that has included forcibly occupying government offices and pelting government officials with food. It's a campaign they continue to plan at weekly meetings, where party leaders vow to continue challenging Vladimir Putin's dominance of the country's political scene.
VLADIMIR ABEL (translated): Our goal is to turn Russia into a normal, civilized country, strong and kind to its citizens. At the moment, our main task is to bring back political freedoms and to fight Mr. Putin's regime, because this regime is not sliding, but has already slid toward monarchy.
SIMON MARKS: The National Bolsheviks and other critics of the Kremlin cite several reasons for reaching that conclusion. Their party is not officially recognized and cannot fight for election. And critics point to other developments here that they say shows the Kremlin is diverting from a democratic past.
Mikhail Khodorkovsky, once Russia's wealthiest man remains, jailed after fraud and tax evasion charges were laid against him just as he was funding opposition parties. His oil conglomerate, Yukos, has been dismembered in a government move that even one presidential adviser called "the swindle of the century."
The media landscape has changed here after several once independent outlets fell under state control. Elections for the post of governor in Russia's 89 regions have been cancelled. The governors are now being appointed by President Putin. And demonstrations have grown over the government's handling of changes to Russia's system of social benefits, a move that has led both aging communists and young nationalists to mobilize against the Kremlin.
VLADIMIR ABEL (translated): This is the most important development because ordinary people only take to the streets when they see it can achieve results. Revolutionaries go there all the time, but ordinary people, if they go and see that they can achieve something, they won't leave.
SIMON MARKS: About an hour's drive out of Moscow, Nina Victorovna is one of those ordinary people. Aged 63, she's spending the winter selling home-grown pickles and potatoes on the road outside her home. The changes in social benefits mean that vouchers she was once given for free public transport and access to social services have been replaced by cash handouts. But she says the cash doesn't come close to compensating her for the value of the benefits that were taken away.
NINA VICTOROVNA (Translated): If I have to go somewhere, I now have to pay. Our village is 75 miles outside Moscow, and we have nothing here-- no bathhouse, no hairdresser, no electrical repair shop, no supermarket. There's not even a place to buy a pair of slippers. So now we have to go everywhere by bus, and now we have to pay for it.
SIMON MARKS: It might not seem much, being told you've got to pay the equivalent of a dollar for a bus journey into town. But here, far away from the big money of the capital, each ruble counts. And the simplest of needs in the underdeveloped Russian heartland has the potential to create trouble for the Kremlin.
NINA VICTOROVNA (Translated): I think the authorities are to blame. We used to have a hairdresser's here, but it closed. I wish a hairdresser would come here once a week, but now we have to pay to get a haircut and pay to get there. Of course the authorities are to blame. Who else?
SIMON MARKS: And though the authorities now find themselves facing a wave of protest that have brought the old red flags back on to the streets; a decade ago when Russia's pensioners demonstrated against then-President Boris Yeltsin, they were written off by many analysts as "yesterday's people." Today they find themselves championed for standing up to the former KGB man in the Kremlin.
That Russia's system of cradle- to-grave benefits had to change isn't disputed by economists here. It's widely accepted that the modern Russian state espousing a capitalist system couldn't afford to continue treating its citizens to the same handouts that were designed during the Soviet era. But it's the manner in which change was introduced that's caused so much anger here on the streets and concern among observers about the competence of the Putin administration.
Julia Latynina is a democratic reformer who hosts a weekly talk radio show on Moscow's only independent local news station. Her access to the national airwaves in Russia has ended.
JULIA LATYNINA: I believe these are very great mistakes, and these are mistakes inherent in the regime. For instance, these are mistakes, for instance, due to the fact that Mr. Putin likes to appoint incompetent and corrupt people. It's not just accident.
It's a way he makes decisions, because he believes that if he puts somebody who is incompetent, then he will be loyal. If he puts somebody who is corrupt, then they have the tools to manipulate him because corruption is -- makes him more -- corruption makes him more loyal as well.
SIMON MARKS: But there are also articulate voices in Moscow that defend Vladimir Putin against his critics both at home and overseas. Alexei Pushkov is a journalist whose weekly television program is broadcast to an audience stretching from Ukraine to the far reaches of Siberia. He argues that Vladimir Putin's more authoritarian style of leadership is an understandable and direct response to the Yeltsin era, a decade that Kremlin supporters characterize as economic and political anarchy.
ALEXEI PUSHKOV: This excessive desire to rule, to model, to manage the political process, I think, is a sort of response to the anarchic times of the Yeltsin era. And I think the pendulum will go back. What is the most important thing is that the pendulum does not swing wildly, you know, that with every swing, it loses a bit of its movement, you know. And then finally it will come to the center, where the majority of the so-called established democracies are. It will come there.
SIMON MARKS: And that theory is also supported by government ministers, including Russia's foreign minister, Sergei Lavrov. Formerly Moscow's man at the United Nations, Mr. Lavrov has spent several weeks preparing for this week's summit between President Putin and President Bush. And in an interview with the NewsHour, he indicated U.S. concerns over the state of Russian democracy will meet a pugnacious response.
SERGEI LAVROV: We are a young democracy. We are moving not without mistakes. We are searching for a better solution to the problems which we face now. I mean, it's not for me to try to persuade you that we are moving in the right direction. We are searching for the way which will be the Russian way, which will be European way in the sense that we are part of European civilization.
SIMON MARKS: Is there any irritation when these issues get raised again and again and again?
SERGEI LAVROV: Irritation? No. Questions because actually this campaign in the media-- and I cannot call it any other word but "campaign"-- is circling around basically three things: Yukos, the governors in the regions, mass media. These three things, they either happened long ago or there are answers to this questions, but still every day you read the editorials; you read analytical articles.
Maybe they are editorials and analytical articles because there is no news in it. It's an old story, but is being played again and again, again and again, and I think there must be some stimulation for all this, because as far as the actual news is concerned, there is none.
SIMON MARKS: And other government supporters like television host Alexei Pushkov, who are less constrained by the language of global diplomacy, go even further, echoing the old Soviet adage that the United States is interfering in Russia's internal affairs.
ALEXEI PUSHKOV: In what way, for instance, that if there was trend towards a kind of totalitarian rule in Russia, maybe a huge military buildup or something which would --started to happen. Then I would have understand American worries that it may be a threat to American national security. But the way a governor is appointed somewhere in Russia, I'm not sure that Washington has to worry about this.
SIMON MARKS: Even democratic reformers argue there are limits to Washington's influence over events here because of the changed political circumstances in Russia. With minimal organized opposition and certainly no viable liberal alternative that would win broad western support, they say Vladimir Putin may end up falling victim to a power struggle within the Kremlin rather than any kind of effective challenge from the opposition.
JULIA LATYNINA: If he has no opposition, then this will be maybe not revolution but just a coup d'etat, which may be a very bad thing because somebody comes who is stronger than Putin, who is more cruel than he.
Mr. Putin makes crimes and makes mistakes, but his mistakes are much more numerous than his crimes. So it's very possible that somebody comes who commits more crimes than mistakes, and Russia will be in a very serious jeopardy after this.
SIMON MARKS: So the question in Russia today is whether the pendulum will continue to swing in a calm, measured manner or whether something less predictable lies ahead. It's a big gamble and one on which few Muscovites are currently willing to bet.