July 14, 1997   

This Date's Issues:   1043 •1044  1045 1046

Johnson's Russia List
#1044
14 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. Reuters/Interfax: Reformist Beats Communist in Nizhny 
Novgorod.
2. Reuters: Samara Elects Lebed-Backer as Mayor.
3. Announcement: TURKISTAN-N (TN) is an electronic newsletter 
whose purpose is to report on the "Land of the Turks". 
4. Albert Weeks: Re PBS television series, `RUSSIA'S WAR.' (DJ: I saw the 
first episode last week. Comments welcome. It struck me as somewhat biased,
although of course there's plenty to be angry about in Soviet history.
Genrikh Borovik has certainly evolved far.]
5. The New York Times: Walter Goodman, The Tragic Birth Pangs of the 
Soviet Experiment. (Review of "Russia's War.") 
6. The Economist: A survey of RUSSIA: In search of spring. Part 5:
>From Marx, maybe to market. On a pot-holed road besieged by bandits, 
and many a dead end.
7. Washington Post: Karl Vick, NO COIN OF THE REALM. (Currency 
problems in Russia).
8. Reuter: Albright drives bargain with Russian hat vendor.
9. JAMESTOWN FOUNDATION's PRISM: Aleksandr Buzgalin, RUSSIA'S 
COMMUNIST PARTY: A PARTY WITH A COMMUNIST NAME, GREAT-POWER POLICIES,
AND NOSTALGIC MEMBERS.
10. RIA Novosti: RESULTS OF GUBERNATORIAL ELECTIONS IN NIZHNY 
NOVGOROD "WILL HAVE SERIOUS POLITICAL AND ECONOMIC 
CONSEQUENCES" FOR RUSSIA, BELIEVES MIKHAIL DELYAGIN.]

********

#1
Reuters/Interfax 
July 14, 1997
Reformist Beats Communist in Nizhny Novgorod 
NIZHNY NOVGOROD, Russia -- Reformist Ivan Sklyarov has beaten a communist
rival to be elected governor of the Nizhny Novgorod region, according to
unofficial final results on Monday from an election seen as a test of
Russia's reforms. 
"Fifty-two percent voted for Sklyarov and 42 percent voted for Gennady
Khodyrev," an election commission spokesman said following Sunday's poll. 
Local television Seti NN said: "This result clearly shows that the
population backs government reforms." 
The turnout was 49 percent in the run-off vote. The two rivals finished
ahead of the field in the first round of voting in the region east of
Moscow two weeks ago, but neither won enough votes then for outright victory. 
The official election results will be announced Monday evening. 
"No serious violations of voting legislation have been registered,"
Anatoly Kozeradsky, chairman of the Nizhny Novgorod regional Legislative
Assembly, told Interfax. 
He added that he expects Khodyrev to appeal the election results in
court. "Both sides have made statements that they had documents on crude
violations in the course of the electoral race, voting and vote counting,"
Kozeradsky said. 
The new governor will be inaugurated July 22. 
Sklyarov, 49, has until now been city mayor in Nizhny Novgorod. He was
backed by reformists in the Kremlin including Boris Nemtsov, Nizhny
Novgorod's governor until he was summoned to join the Russian government in
March to boost reforms. 
The opposition communists and some nationalists had backed Khodyrev, a
former regional leader in Soviet times, and the vote had been seen as an
informal referendum on Russia's transition to a market economy. 
Nemtsov, 37, transformed Nizhny Novgorod, a city of 1.5 million people on
the Volga river. The city's streets are full of new shops and crowded cafes
-- a striking contrast to many other depressed and declining regional
centers. 
Nemtsov's success won him an important role in the country's reforms in
his new role as a first deputy prime minister. 
A communist victory in Nizhny Novgorod would have provided the opposition
with ammunition to criticize the government's reforms and dismiss them as
unpopular. 
It could also have dented the image of Nemtsov, who is widely seen as a
future presidential candidate. 

********

#2
Reuters
July 14, 1997
Samara Elects Lebed-Backer as Mayor 
MOSCOW -- A supporter of outspoken Gen. Aleksander Lebed defeated a
Kremlin-backed rival to be elected mayor of the central Russian city of
Samara, Interfax news agency said on Monday. 
Interfax quoted provisional election results as saying Georgy Limansky
had received more than 54 percent of Sunday's vote, compared to the 38
percent received by deputy mayor Anatoly Afanasyev. Turnout was 41 percent. 
Limansky is deputy head of the regional parliament and head of the
regional branch of the Russian Popular Republican Party. 
The party is led by Lebed, President Boris Yeltsin's ex-security aide and
now a fierce critic. 
Lebed ran on a tough law and order ticket in the last presidential
election and is widely expected to enter the next race for president in the
year 2000. 
Afanasyev was backed by reformists in the Kremlin including Oleg Sysuyev,
who was mayor of Samara, 900 kilometers (560 miles) southeast of Moscow,
until he joined the Russian government's reform team in March. 
Afanasyev and Limansky were the front-runners in a first round of voting
in Samara two weeks ago, but neither had won enough votes then for outright
victory. 
Afanasyev's defeat was a disappointment for the Kremlin. But it was
overshadowed by the success of reformist Ivan Sklyarov who beat a communist
rival on Sunday to become governor of the Nizhny Novgorod region. 

*******

#3
TURKISTAN-N (TN) is an electronic newsletter whose purpose is to report
on the "Land of the Turks". By the use of the word "Turkistan" we mean,
in general, lands where Turkic peoples live, without any geographical
restriction and without specific reference to Central Asia or political
boundaries. TN reports on all the the Turkic peoples from Kyrgyz, Kazaks,
and Uzbek to Anatolian and Thracian Turks, but also about much less known
Turkish/Turkic peoples like the Gagauz, Tuvinians, or Yakuts. TN was
established on 9 May 1997 as an initiative of S.O.T.A. Book reviews,
commentaries, articles, and letters from the readers can also be published
in TN. At this moment, TN has more than 950 subscribers.
<<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>>
<<>> To subscribe: send to <majordomo@turkistan.org> the message
<<>> subscribe Turkistan-N
<<>> To unsubscribe: send to <majordomo@turkistan.org> the message
<<>> unsubscribe Turkistan-N
<<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>>
<<>> Send your questions and contributions to:
<<>> owner-turkistan-N@turkistan.org>
<<>>
<<>> Articles from Turkistan-N may be distributed without explicit
<<>> permission if credit is given to Turkistan-N and S.O.T.A.
>Research Centre for Turkestan, Azerbaijan, Crimea, Caucasus and Siberia<
<<>> S.O.T.A., P.O. Box 9642, 2003 LP Haarlem, The Netherlands
<<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>>
<<>><<>> e-mail: <mtutuncu@turkiye.net> or <sota@euronet.nl>
<<>><<>> Turkish World Home :<http://www.turkiye.net/sota/sota.html>
<<>> Crimean Tatars Home: <http://www.euronet.nl/users/sota/krimtatar.html>
<<>> Turkistan-N Archives: <http://www.euronet.nl/users/sota/turkistan.htm>
<<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>>

**********

#4
Date: Mon, 14 Jul 1997 07:47:53 -0400
From: Albert Weeks <AWeeks1@compuserve.com>
Subject: TV Doc for JRLers

David:

You might wish to let JRLers know that an interesting, rare documentary on
Stalin will be aired tonight--Monday, July 14--on many PBS TV stations
nationwide. It is `RUSSIA'S WAR,' produced by Judith DePaul and Aleksandr
Surikov. It's a Russian State Cinematography job, part of a series written
and directed largely by such Russians as Viktor Lisakovich, Tengiz Semenov,
Ilya Gutman, Igor Grigoriev, Genrikh Borovik, Konstantin Slavin, et al. It
seems to be as poignant and unique as an earlier excellent one done by some
of the same people, titled `Messengers from Moscow,' a dupe of which was
sent me by the producer. The latter was aired only once in a limited
number of U.S. cities (incl. N.Y.C.) two years ago. Which is a shame,
because it contained much very rare footage. It includes a segment of
Stalin making a phony speech in the winter of 1941. Though he was supposed
to be standing on the mausoleum in Red Square, you can't see his breath
because he was giving the "speech" indoors. He had to restart the phony
speech several times, possibly because of his unnerved condition.
Too, you might wish to distribute Walter Goodman's review of the
documentary in today's (July 14) NYTimes.

**********

#5
The New York Times
14 July 1997
[for personal use only]
The Tragic Birth Pangs of the Soviet Experiment nyt
By WALTER GOODMAN

You can watch the first two hours of "Russia's War" this week without
hearing much about World War II. Have patience; there are eight more hours
to come. And meanwhile you will get a forceful account of the early decades
of Soviet Russia through gritty photographs, painful memories, historical
detail and, especially, an unsparing assessment of the career and character
of Josef Stalin. 
The narrator notes that in the 1920s and '30s, Stalin had quite a fan
club in the West, nurtured by the propaganda pictures glimpsed here of
happy peasants, muscular workers and Uncle Joe cuddling tots. If any such
feelings of affection still exist, these direly titled episodes, "The
Darkness Descends" and "The Hour Before Midnight," should finish them off. 
Stalin's achievement in blasting his vast country out of feudalism is
not ignored, but Monday night's focus is on the cruel cost; one estimate is
that 20 million people throughout the Soviet Union were annihilated in the
first 30 years of Stalin's reign, not counting the losses in war. 
Forced collectivization brought starvation to millions of peasants; vast
projects took the lives of countless slave laborers; purges depleted the
ranks of sometime comrades, intellectuals and military officers. The record
is described as "Stalin's war against his own people." 
In sum, the dictator is pictured as paranoid, ruthless, an incarnation
of evil. With the rise of Hitler (abetted by irresolute statesmen in London
and Paris), the stage is prepared for something like those comic-book
encounters of cartoon monsters, without the comedy. 
By this account, the Soviet-German pact of 1939, along with being a
rapacious piece of hypocrisy at the expense of Poland ("historic
immorality," one Russian historian calls it), proved a costly
miscalculation for Stalin. While the word "fascist" was deleted from
communist propaganda and Soviet oil went to fuel the blitzkrieg, the
Germans were plotting their assault on the Soviet Union. Monday night's
introduction ends with Stalin rejecting warnings that his ally of
convenience was about to attack the Soviet motherland. 
Next week's smashing battlefield photography delivers the power of the
German invasion and the war's bitterest years, as Moscow was threatened and
Leningrad besieged. The following six hours recall the great battles on the
Eastern front, including Stalingrad, and after a terrible 900 days, the
liberation of Leningrad. The series ends with the fall of Germany, the
beginning of the cold war and Stalin's death in 1953. (A companion book,
"Russia's War: Blood Upon the Snow," written by Richard Overy, a British
historian, and published by TV Books, should be in stores soon.) 
It is a comment on the improbabilities of history that this relentlessly
anti-Stalin documentary is a British-Russian co-production. 
RUSSIA'S WAR
9 p.m. ET Monday on PBS 
Judith De Paul and Alexander Surikov, executive producer; Ms. De Paul,
series producers; Victor Lisakovitch, Tengiz Semenov, Ilya Gootman, Igor
Grigoriev, Igor Gelaine, directors, in association with the Russian State
Committee of Cinematography; Genrikh Borovik, and Konstantin Slavin,
writers in Russia; Donald James and Stephen Pope, writers in the United
Kingdom; Nick Barnard, editor. Presented by IBP Films Distribution Ltd., in
association with Victory Series Ltd. 

*********

#6
The Economist 
July 12th - 18th, 1997
[for personal use only]

A survey of RUSSIA: In search of spring
5/8. From Marx, maybe to market
On a pot-holed road besieged by bandits, and many a dead end

THE most hopeful change in Russia's economy recently may be the fall in
interest rates. It is good news not just for businessmen and other
borrowers. It is also good news for unpaid workers. Last year, when
yields on treasury bills went as high as 350% and inflation dropped to 22%,
giddy real interest rates meant giddy returns. Anyone who could get his
hands on some cash - which meant managers in every kind of enterprise and
bureaucrats anywhere near a budget - simply "borrowed" money and invested
it in treasury bills, known as GKOS. The GKO market more than doubled in
size, to $42.6 billion at the end of 1996. By this spring, however, yields
had fallen to around 30%, vastly reducing the scope for making overnight
fortunes. Workers may reasonably hope that some at least of their wages
will start to be paid.

Falling interest rates (albeit with some wobbles this year) and falling
inflation (on a steadier descent) have helped to make Russia's economy look
more normal. Admittedly, because of the huge backlog of all sorts of
payments and the use of barter - both caused by tight monetary policy- it
still does not look normal enough. Nevertheless, it seems to have gained
the confidence of foreigners. Last November the government went to the
Eurobond market for the first time and successfully sold $1 billion of
sovereign Eurobonds. A second issue of DM2 billion ($1.2 billion) followed
in March, and more are due. The stockmarket has been booming.

The big worries remain the absence of economic growth - the World Bank
expects stagnation this year, though that will mean progress after last
year's 6% contraction-and the poverty it brings for so many. But these are
allied to other concerns.

Smoke, mirrors and the invisible hand
First is the budget. The problem with Russia's budget is not so much that
its figures look alarming (such as the deficit Of 9% Of GDP proposed at the
start of this year) but that they are even more fictitious than other
Russian statistics. Since the authorities are unable to collect anything
like all the taxes due (last year they got only 50-60%), they can not spend
what they want to. So, in the course of the year, the government starts to
slash spending, and the deficit turns out much lower than forecast: 5.4% Of
GDP in 1995, maybe 7% last year, who-knows what this year, given the fierce
resistance in the Duma, the lower house of parliament. The cuts are
generally achieved, however, not only by scrapping maintenance and
investment programmes, but by withholding pensions. This year, for a
change, the elderly at least may be spared: the government says it cleared
all its pensions arrears by July 1st.

A second problem is that Russia has too little investment. Many companies,
of course, have no money to invest. But many more are making profits and
indeed saving: according to Russian Economic Trends, a publication financed
by the European Union, undistributed after-tax profits, in Russia last year
amounted to 22.5% of GDP, compared with 12.5% in the United States. The
trouble in Russia is that it has been more profitable to invest this money
in GKOS than in anything else: the average real rate of return on new
capital for most industrial enterprises is probably no more than 10-15%.

Lots of money, though, has bypassed even the GKO market, and gone abroad.
Plausible estimates suggest that about $65 billion may have left the
country since 1992. Russians have a deep fear of inflation, of a possible
freezing of bank accounts and of uncertain times ahead. Think what they
may of Uncle Sam, they put their trust in his greenbacks. Despite their
wretched poverty, they save, collectively, 22.7% of income - and
four-fifths of that is held in dollars.

They also invest abroad. Russians have taken with zeal to registering
companies in places such as the Bahamas, Belize, the Cayman islands,
Liechtenstein and Luxembourg, and especially in Cyprus. Some 16,000
Russian companies were registered in Cyprus last year. in 1995, $20 billion
from Russia passed through the Bank of Cyprus, three times the island's GDP.

One reason companies are driven offshore is taxation. To comply fully with
the law, or at least with the tax man's interpretation of the law, would by
common consent bankrupt any company. This is at least partly why so few
foreigners are prepared to invest directly in Russia. The government has
drafted a new tax code, which in its current form receives praise from
economists and investors. But it may not when it eventually emerges from
the Duma, where it has had only a first reading.

The overall tax burden in Russia is not excessive; at 31.2% Of GDP in 1994,
it was slightly lighter than America's and considerably lighter than most
West and Central European countries'. But too much of it falls on
companies - not because the profits tax is particularly high, but because
the government finds it easier to screw money out of companies than out of
individuals. Moreover, the tax system is intensely complicated, governed
as it is by about 1,000 separate, and often conflicting, laws.

These laws provide all sorts of intriguing loopholes. One, for instance,
halves the profits tax payable by any company with over half its workforce
registered as disabled. No wonder many enterprises have on their books a
huge complement of the halt and lame, each paid a pittance. Another law, a
double-taxation treaty, gives tax breaks to companies based in - yes -
Cyprus, which explains why one in every four companies registered in Moscow
nominally has its headquarters in that distant island. Another law
exempted a charity, an association for ex-servicemen who had fought in
Afghanistan, from all excise or import duties. The association swiftly
went into the business of importing alcohol and tobacco. This became so
valuable worth a reputed $800m last year - that the squabbles for control
culminated in a bomb explosion in a cemetery last November that killed 14
people.

Thanks to pressure from the IMF, the loopholes for these "charities" have
now been plugged. Plenty of others have not. The World Bank reckons, fbr
instance, that if Gazprom, the giant natural-gas monopoly, were to lose its
tax privileges and fulfil all its tax obligations, it would hand over to
the government revenue amounting to 2-3% of GDP. After much prodding,
Gazprom says that it has now paid off all its debts to the government.

Private, but unchanged

This illustrates yet another problem: that the restructuring of the economy
is far from complete. Despite the sweeping privatisation and the monetary
squeeze, both of which have provided incentives to adjust, huge areas of
even the private sector remain unrefbrmed. Gazprom is just one of three
huge monopolies that behave largely as they choose; the others are the
railways and the electricity company, UEs. Gazprom has said it will shed
100,000 jobs, a quarter of its workforce; and in May it was obliged to
commit itself to firm performance criteria. But, like the other
monopolies, it has a long way to go to root out inefficiency and corruption.

Some companies have done better. In a study of Russia's 100 largest
companies, Joseph Blasi of Rutgers University finds that over half have
changed their general directors since 1992, over a third have brought in
outsiders in their place, and in aggregate they have shed 36% of their
workforce. But, unlike the 18,000 privatised companies classified merely
as large, most of the top 100 are majority-owned by outsiders, meaning
foreign investors, state holding companies or other Russian funds, banks
and enterprises. That is where the pressure for change usually springs from.

Unfortunately, four-fifths of Russian privatised companies are
majority-owned by insiders. A mere 11% are majority-owned by blocks of
investors with large enough stakes (5% or more) to influence the running,
or restructuring, of the company. Although most companies have shed
workers since privatisation, only a quarter of privatised companies have
restructured enough to achieve a significant impact on sales and output.
And even where the general directors have been changed - in about a third
of the country's large and medium-sized companies since 1992-their
replacements have usually been from within the company. Moreover, at 47,
their average age is only three years lower than before.

Pressure not to change comes from all sorts of quarters, helping to explain
why fewer than 1,000 companies had been declared bankrupt by last
September, even though a bankruptcy law had been on the books since 1992.
Often it is the government itself that argues against bankruptcy, knowing
that it will have to shoulder not just the cost of unemployment benefit but
also that of housing, schools, clinics, canteens and all the other services
traditionally provided by large Russian enterprises.

The upshot is that too much of Russian industry - never mind agriculture -
is still doing what it always did: in the words of Vladimir Konovalov of
the World Bank, using raw materials and labour to produce pollution and
tanks. This might seem to offer an opportunity for foreigners to come in
with know-how and capital. in some ways, after all, Russia is a rich
country. in terms of natural resources, there may be none richer: it has
40% of the world's reserves of natural gas, 6% of its oil, a quarter of its
coal, diamonds, gold and nickel, and 30% of its aluminium and timber.
Labour costs are under half Poland's or Mexico's, under a 20th of
Germany's. It has an educated workforce, and 148m consumers.

That is indeed enough to persuade some foreigners to enter the Russian
market: the Pepsis, Bacardis, Milky Ways and McDonald's - not to mention
the Calvin Kleins - are here in strength, and for some of them, such as
Mary Kay cosmetics and Polaroid cameras, Russia is an important market.
But nearly all of these foreigners are selling consumer goods, notably
alcohol, sweets and electronics, and few of them are manufacturing in Russia.

Some, like General Motors and IBM, have gone beyond distribution and set up
assembly plants. But IBM found that the tax code made it impossible to
compete with its own distributors who were able to sell imported personal
computers more cheaply. Other companies have had worse experiences: some
western investors have been elbowed out of joint-ventures, others have seen
their shareholdings more or less confiscated. The fire inspectors in St
Petersburg threatened to close the local Coca-Cola bottling plant and to
halt the building of two factories nearby for Gillette and Wrigley.

In the oil and gas industries, the potential for investment is huge: the
World Bank reckons $13 billion a year is needed just to stabilise oil
production at current levels, and foreign oil majors stand ready to invest
much more than that to get their hands on some of Russia's energy
resources. But the combination of over-regulation, arbitrary
administrative rulings, abrupt tax changes and a primitive judicial
application of business law have frustrated joint ventures. A new
production-sharing agreement is needed to make clear exactly how the spoils
should be divided between foreign and domestic investors. One such
agreement was signed by President Yettsin last year, and the Duma gave its
approval for seven projects last month, but enabling legislation is still
needed. Until foreign investors are given guarantees under civil law, they
will be extremely reluctant to risk their money.

Russians too have an interest in far greater openness in business, in rules
against insider trading, in the straight forward settling of disputes, and
in the general application of the rule of law. According to Professor
Blasi, among the country's biggest 100 companies, "Virtually every firm
reports they are involved in a corporate-governance conflict with their
investors and shareholders of some type." If the Russian economy is ever
to start delivering the goods, literally and metaphorically, it is plain
that some political work will have to be carried out first.

**********

#7
Washington Post
13 July 1997
[for personal use only]
NO COIN OF THE REALM
By Karl Vick
Washington Post Staff Writer

On a jet that used to belong to Aeroflot, a vessel still awash in that 
airline's many, many shades of gray, a Russian flight attendant pushes a 
cart down the center aisle. On it are two things: scratch-off lottery 
cards and a small pile of something shiny. They appear to be pull tabs 
harvested from soda cans.
Russia has its mysteries, but this one is solved quickly enough. When a 
customer gives the attendant a 5,000-ruble note, she hands him a 
scratch-off card, followed by a pull tab. 
For scratching.
There is simply nothing else to use. 
Never mind that when you hear about change in the former Soviet Union, 
it is usually about how hard it is. In fact, change there is not hard. 
It is soft. It is invariably counted out in bills. All folding money.
This is a society almost entirely without coins. It is a small thing, 
but not necessarily insignificant, that six or seven years after 
chucking communism for good, the only way Russia can measure out how far 
it has come is in paper money of huge denominations. 
Everything was rubles when I was in Moscow last month. The ruble is 
Russia's official currency, and these days it takes roughly 5,800 of 
them to make one U.S. dollar. So if, as a convenience store clerk once 
put it, pennies are the backwash of change, what do you call a coin 
that's worth one fifty-eight hundredth of a penny?
You call it a kopeck, but just try finding one. It is not just small 
change. It is microscopic. You literally do not see it.
Oddly, you do not need a coin for a pay phone in Russia. They operate on 
tokens. You can buy one for 1,500 rubles at Metro stations, where the 
so-called turnstiles also operate on tokens, but different tokens. 
("So-called" because to enter the Moscow Metro you do not walk through 
an actual turnstile. You walk through a chute. And if by chance you have 
mistakenly inserted a phone token instead of a Metro token before 
starting down the chute, the machine will alert you to the error by 
sending clamps flying out of either wall and blocking your way, or, as 
often happens, pinning you between them.
(This system was installed by the Soviets.)
But you are unlikely to confuse one token with another because, although 
both appear to be made of flattened cold lozenges, these lozenges could 
scarcely be more different. Metro tokens are the color of Hall's 
Mentho-Lyptus. Phone tokens have the deep enamel brown of Fisherman's 
Friend.
Even more oddly, you do need coins for private phones. The monthly bill 
must be paid in person at the local savings bank. My friend Christopher 
Smart, who has been living in Russia for four years, says the clerks get 
"quite snippy" if you do not bring in exact change. This means tracking 
down coins that, in theory at least, are still being stamped out in 
denominations of 1, 5, 10, 20 and 50 rubles. These can be extremely 
difficult to find. It helps to keep your head down on the street, where 
people drop them as litter.
"I have a bill on my desk for 821,142 rubles," Christopher says. "I am 
gathering the coins now."
It's not like Weimar Germany. You don't see people pushing wheelbarrows 
of currency to buy a quart of milk. There was a time when inflation in 
Russia was astronomical, when the notes kept getting bigger and bigger 
-- not physically, not like that Italian money that inflates in 
denomination until you find yourself folding whole sheets of Bounty into 
your wallet -- but that time is past. A 100,000-ruble note is a thing of 
real value now; that value is approximately 17 bucks.
What amazes foreigners is how many of these notes you need for a hotel 
room in Moscow. Magazines call the city the most expensive in the world 
for business travelers, costlier even than Tokyo. In Stockmann's, a 
supermarket favored by wealthy expatriates, it is possible to buy a Sara 
Lee frozen cake for $45.
Ordinary Russians live far more frugally. And yet how strange to find 
oneself in a recently communist country where everyone -- cabbies, 
little kids, even the stern old women who are known as "Stalin ladies" 
partly because they lived through his reign, and partly because of the 
look on their faces -- reaches into a pocket and pulls out a pimp roll. 
You might take the fat wad of cash as a sign of just how quickly the 
market economy has been embraced here, except that a lot of other signs 
make the point a lot more plainly. They hang from the gilded posts in 
the Red Square department store GUM (now an honest-to-goodness mall), 
adorn most city storefronts and are plastered all over the temporary 
buildings thrown up to replace the stalls that sprouted along busy 
streets, and still pop up each day outside the Metro stations. 
All you seem to need to go into business in Russia is a folding table 
for your magazine collection or a basket for your fresh cherries. In a 
few places you still see people just standing there, single file, 
silently holding out a single object. Six years ago, the last time I 
visited, what they offered broke your heart: an old shirt, a lamp, a 
shoe -- all clearly their own belongings. Now they hold out merchandise: 
a set of batteries still in the package, a bottle of vodka, a turtle (it 
looked new).
On her first trip down the aisle, the flight attendant's cart was 
stocked with magazines. She was not giving them away. She was selling 
them.
Some Russians sell themselves. How many is impossible to say. 
Prostitution in Moscow is a phenomenon that has excited Western 
magazines a good deal in the last couple of years. Just possibly this is 
related to the fact that prostitutes make themselves most conspicuous in 
the hotels where Western reporters tend to stay. In any event I arrived 
in downtown with eyes peeled. 
After a day, I told a friend: "I'm having a hard time telling the 
prostitutes from the regular Russians." 
He said: "I have the same problem in my office."
Russians tend to dress on the formal side, but the range of respectable 
workaday fashion for women includes a sheer black blouse over a white 
bra, to name one popular combination. The matter is further complicated 
by the women gathered in the bar of the Astoria Hotel on a Saturday 
night in St. Petersburg. There were 10 of them, and I have no doubt that 
all were working girls. But they looked like working women. They were 
dressed for success. Double-breasted suits. Muted hose. Brass buttons.
It is a world turned upside down. And nothing falls clattering out of 
the pockets. 

********

#8
Albright drives bargain with Russian hat vendor

TSARSKOYE SELO, Russia, July 13 (Reuter) - After failing to make a
breakthrough in arms control negotiations with the Russians, U.S. Secretary
of State Madeleine Albright had more success bargaining to buy a fur hat from
a street vendor. 
She succeeded in getting a modest discount -- from $110 to $100 -- after
asking the trader whether his asking price was ``the best you can do.'' 
Albright called a shopping break after spotting a row of stalls near the
Catherine Palace, a residence of the Romanov tsars near St Petersburg which
she was touring on Sunday at the end of a 19-hour visit to Russia. 
Officials dug in their pockets for cash after Albright and senior aides
decided to make purchases, borrowing from journalists when their own funds
ran out. 
``They said it's mink, but I'm going to say it's artificial so I can wear
it,'' Albright confided to reporters, apparently wary of the anti-fur lobby
in the United States. 
Albright is an inveterate buyer of local hats. She bought a red Stetson
during a visit to Houston, Texas, in January. 

*********

#9
From
THE JAMESTOWN FOUNDATION
PRISM
A BI-WEEKLY ON THE POST-SOVIET STATES
11 July 1997
Vol.III No.11 Part 3

RUSSIA'S COMMUNIST PARTY: A PARTY WITH A COMMUNIST NAME, GREAT-POWER
POLICIES, AND NOSTALGIC MEMBERS
By Aleksandr Buzgalin
Aleksandr Buzgalin is a Doctor of Economics and a professor at Moscow State
University. In the perestroika period, he was a leading member of the reform
wing of the CPSU, which tried to reform the Soviet Communist Party from
within. He is now one of the leaders of the Democratic Socialist Movement in
Russia and heads the Council of the International Association "Scientists
for Peace and Democracy."

Ever since December 1993, when the Communist Party of the Russian
Federation (CPRF) became the leading opposition force in the State Duma,
analysts have been trying to fathom this organization. It has almost 500,000
members and forms the largest parliamentary faction. Its leader, Gennady
Zyuganov, came a close second in last year's presidential election and
always figures on the list of the country's ten leading politicians. All
this in a Russia that is said to be successfully making the transition to
democracy and the market from "the monstrous totalitarian past."
This situation could be explained in terms of the "enigma of the Russian
soul." But there is also a completely rational explanation, which is that
the situation is the result of a combination of deep social crisis and
popular traditions of conformism, obedience and passivity. The legacy of
Russia's more than 70 years of mutant socialist rule was a solid system of
social guarantees and stability combined with harshly paternalistic
government and the almost total atrophy of the population's "social
muscles." That is to say, the population had lost the ability to organize
itself at grass-roots level and to fight for its rights.
When a systemic crisis was superimposed on the traditions of passivity and
conformity of the average Russian citizen, the only significant form of
opposition that could arise was an organization that perpetuated the
paternalism of the past and sought to defend the interests of the general
population with the help of bureaucratic-corporate structures. Such an
organization had to be radically oppositionist in appearance (otherwise, it
would not have won support from below) but only mildly oppositionist in
substance (otherwise, it would have been prohibited from above). That is
indeed what the CPRF became.
The party's main characteristics are as follows:
(1) The Communist Party's real policies and slogans reflect not so much the
true strategic interests of the majority of workers and pensioners as their
stereotypes in the mass consciousness.
(2) The CPRF is the only political organization in the Russian Federation
which has the support of a broad base of citizens. The figure of half a
million members is clearly an exaggeration and includes everyone who ever
agreed to join the party in any form. The real figure is probably closer to
200,000-300,000. Nonetheless, this makes the CPRF Russia's largest mass
party. Most of the party's members are not able to conduct independent
organizational, political or propaganda work but, at the oblast level there
is often a group of activists who are able to act in the traditions of the
Soviet period, carrying out instructions from above in a disciplined way.
(3) The CPRF has the support of some business and financial structures and
some circles of the regional bureaucracy.
(4) New blood entered the CPRF as a result of the party's success in the
Duma elections of 1995 and in regional elections in a number of oblasts. The
people who came into the party from the lower and middle levels of the
bureaucracy can be characterized as follows:
(a) They tend to be less cynical and corrupt than the people who
support the Yeltsin administration;
(b) They have not made successful careers in business or in the
Yeltsin administration (perhaps because they are not corrupt, perhaps
because they lack entrepreneurial skills);
(c) They are oriented towards the old, paternalist-bureaucratic
style of work.
(5) Since the CPRF is the only real opposition force and campaigns for the
preservation and development of Russian culture, it has won the support of
some members of the patriotically-minded intelligentsia and the Russian
Orthodox clergy.
At the present time, the CPRF is a very heterogeneous organization. Three
main ideological and political tendencies are represented within it.
The social-nationalist (sotsial-derzhavnoe) tendency is the dominant one.
Its main ideologists are Gennady Zyuganov and Yury Belov. In their
ideological and political activity, they rely on organizations such as
"Spiritual Heritage" and the Russian-American University (RAU) Corporation
(both run by Aleksei Podberezkin), though Podberezkin's organizations are
far more nationalist than Communist. The values of this tendency have been
formulated by Zyuganov himself as: great-power nationalism (derzhavnost),
which emphasizes the importance of resolving geopolitical problems; populism
(narodnost) -- a paternalistic government policy, passively supported from
below; and spirituality (dukhovnost) -- in the tradition of Russian
Orthodoxy. In their writings, speeches and policies, the leaders of this
tendency rely not on any of the socialist tendencies, but on the Russian
Slavophile tradition.
The orthodox Communist tendency is the largest in number but it is only
weakly represented organizationally and is hardly represented at all among
the CPRF's leadership. Its main base of support is the "rank and file" CPRF
members educated in Marxism-Leninism, leaders of some regional
organizations, and a narrow circle of scholars -- former university teachers
of Marxism who belong to the organization "Russian Scholars of Socialist
Orientation" (RUSO). Ideologically, this tendency is close to the standards
of the textbook Scientific Communism, published back in Brezhnev's time. It
differs from Zyuganov's position chiefly in its greater emphasis on class
struggle, socialist goals, and Marxist ideology. 
The social-statist (sotsialno-gosudarstvennoe) tendency contains a
pragmatic wing and is represented by a number of members in the
parliamentary faction (most often, these are members of the business
community or of the regional elites). Their main goal is to lobby for the
interests of those who secured their election to the Duma. They combine the
economic ideas of Western social democracy with homespun paternalism and
pragmatism and place less emphasis than, say, Zyuganov on nationalist or
great-power slogans. The part of the scientific intelligentsia which is
closest to the CPRF tends to be affiliated with this tendency. It is not
very influential ideologically, but politically it is very influential.
The CPRF's program was drafted by highly qualified socialist scholars and
is a rather clever synthesis of modern (or relatively so -- on the level of
the 1960s and 1970s) Western socialist and social-democratic ideas with
enlightened great-power nationalist formulae and a number of Marxist
theories. But for the CPRF, as for the CPSU, there is a clear divergence
between words and deeds: the party's actual policy and even its ideology (as
typified by the books and articles of the party's ideological leaders --
Zyuganov, Podberezkin, Belov) are quite different from the party's program
and are characterized by a powerful great-power nationalist bent.
The CPRF's real policy falls into several channels. 
The policy of the parliamentary faction is, for the most part, to
compromise with the center while making a lot of radical statements. During
the period from the end of 1996 to the first half of 1997, the faction
supported the policies of Prime Minister Viktor Chernomyrdin in order to
prevent the radical democrats (typified by Anatoly Chubais and his circle)
from coming to power. This policy ended in failure in March, when Chubais
and his allies entered the government. Meanwhile, it provoked systematic
criticism from rank-and-file party members, regional leaders and orthodox
ideologues, all of whom saw it as insufficiently socialist and a betrayal of
the interests of the country's disadvantaged citizens.
The activity of the CPRF's primary party organizations is, as a rule,
limited to (rather passive) participation in election campaigns, holding
party meetings and, in some places, publishing Communist newspapers and
pamphlets (generally of orthodox-Communist content).
As for regional leaders elected with CPRF support, they vary substantially
from paternalist-socialist to openly pro-Yeltsin. In Russia's "red belt," a
number of CPRF organizations and their leaders conduct a truly oppositionist
policy and defend the interests of the workers and the poorer strata of the
population. In other places, the policies of leaders elected with CPRF
differ little from those of Yeltsin's supporters and represent an almost
total renunciation of pre-election promises. This wide variety may be
explained by the CPRF's bureaucratic nature, the pragmatism of many of its
leaders, and the passivity and lack of organization of the party
rank-and-file.
Relations within the CPRF are consistent with the nature of the party as
described above. The main characteristic of party life is the existence of a
bitter struggle between two lines. On the one hand, there is the pragmatic
great-power nationalist policy of Zyuganov and others in the leadership,
which is oriented towards compromise with the government. On the other hand,
there is the policy characteristic of the party rank-and-file and a number
of regional leaders, which is targeted toward a real defense of the poorest
strata of society but which strives at the same time to maintain ideological
purity. The struggle between these two lines is generally camouflaged and
carried out behind the scenes in the form of intrigues. There are occasional
instances of "letting off steam" during speeches at closed plenary sessions
of the CPRF Central Committee, but these are rare and the voting that
follows is always unanimous. The CPRF forbids not only fractions but even
platforms. For all its seriousness, therefore, the struggle between the
great-power nationalists and the orthodox Communists has been driven
underground.
Although the CPRF is the largest left-wing organization in Russia, it is
not the only one. On the left, it is "propped up" by a radical-Communist
current which supports the restoration of "socialism" according to the
1930s-1960s model. A social-democratic current is forming to the right of
the CPRF, but is still at an embryonic stage and has not yet assumed a
stable organizational structure. The reason for this is that the necessary
social base is still lacking. The "middle class" has only just begun to take
shape in Russia. There is almost no organized workers' movement in the
country.
As for Communist and socialist organizations oriented toward democracy,
internationalism and socialism, these are for the most part small groups of
intellectuals, far removed from the real political struggle and mainly
engaged in propaganda activity. They range in size from a few dozen members
to a maximum of a few thousand. At times, they play an active role in
concrete political actions: defending the White House in October 1993 or
protesting against the war in Chechnya in 1994-1996, for example. Among
these organizations are the Russian Communist Party; the Union of Communists
(which includes influential orthodox Communist groups and, as a rule, forms
a bloc with the orthodox Communists); and the international association
"Scholars for Democracy and Socialism" and the Union of Internationalists
(the author of this article is a member of the last two organizations).
Finally, there are a number of anarchist and Trotskyite groups.
* * *
The CPRF is a very specific type of political structure. Its substantial
difference, not only from "new" mass socialist and Communist parties (such
as the Workers' Party of Brazil) but even from the leftist social-democratic
organizations found in so many other countries, lies in its orientation
toward the strengthening of a unitary, centralized state, and in its
nomenklatura past and present. This is the source of the isolation of the
party's leadership from the rank-and-file, the strong strand of great-power
chauvinism in its approach to the nationalities question, the expansionism
that characterizes its geopolitical thinking, and its support for a strong
state, army and police. There are real foundations (but not justifications!)
for these policies, such as great-power nationalist opinions among the
working class, part of the bureaucracy, and the bourgeoisie, provoked by
Russia's having slipped from its position as a superpower into semi-colonial
status.
At the same time, the nature of the movement's social base requires that a
number of objectively progressive social-democratic slogans be included in
its program documents (once again, it must be stressed that the CPRF's
leadership is extremely inconsistent in carrying them out). Proponents of a
democratic socialist revival in Russia can and should support these slogans
but must at the same time understand the nature of the CPRF bureaucracy.
Moreover, it must be remembered that practice in central and eastern Europe
has shown that when "post-Communist" parties come to power, they often
refrain from implementing the most radical social and democratic proposals
for which they campaigned while out of power.

Translated by Mark Eckert

********

#10
RESULTS OF GUBERNATORIAL ELECTIONS IN NIZHNY NOVGOROD 
"WILL HAVE SERIOUS POLITICAL AND ECONOMIC CONSEQUENCES" 
FOR RUSSIA, BELIEVES MIKHAIL DELYAGIN
MOSCOW, JULY 14 /from RIA Novosti correspondent Natalya
Salnikova/--The outcome of the gubernatorial election in Nizhny
Novgorod "will have serious political and economic consequences"
for Russia. This point was made in an interview with a RIA
Novosti correspondent by Russian economist Mikhail Delyagin. He
noted that the victory of Ivan Sklyarov "will show the
communists the real level of their possibilities and
popularity." In particular, he rules out the likelihood of
attempts at provocations by the radical opposition, aimed at the
dissolution of the Lower House of Parliament in order to get in
the new Duma a greater number of seats.
The analyst stressed that "even if such plans were not
considered by the communists themselves, they were considered by
the potential investors of Russia." In this connection, believes
Delyagin, the very disappearance of such a potential threat
improves not only the political, but also the economic climate
of our country, and the final analysis its investment
attractiveness as well.
In addition, the expert thinks that the victory of
Sklyarov, and the relief with which it has been taken by the
society at large, bear out the high trust Russians have put in
Boris Nemtsov. "The election results in Nizhny Novgorod have
become a victory for the common sense of Russians," Delyagin
stressed. 

********