July 18, 1997   

This Date's Issues:   1059  •1061•  

Johnson's Russia List
#1059
18 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. Reuter: US to Seek Share of Russian Energy Market.
2. Reuter: Oleg Shchedrov, Russian Orthodox Church backs 
new religion draft.
3. Reuter: Martin Nesirky, Russia grasps military nettle 
but lacks sting.
4. Julie Moffett (RFE/RL): Russia: U.S. Senate Votes To Halt 
Aid If Religion Law Passes.
5. Paul Goble (RFE/RL): Peace In The Caucasus?
6. Journal of Commerce: S. Enders Wimbush, On Eurasia's 
crossroads. (Georgia).
7.The Straits Times (Singapore): Deerek da Cunha, Is Russia's 
economic breakthrough for real? 
8. Rossiyskaya Gazeta: Andrey Fedorov (member of the Collegium 
of Directors of the Council on Foreign and Defense Policy, 
"Russia and the Baltics: What Is in Prospect?"
9. Argumenty i Fakty: Poll Shows Lack of Trust in Yeltsin, 
Government.
10. Komsomolskaya Pravda: Lessons of Nizhniy Novgorod Poll 
Discomforting for Kremlin.
11. Itar-Tass: Government Pledges To Resume Conversion 
Financing.]

********

#1
US to Seek Share of Russian Energy Market

WASHINGTON, July 17 (Reuter) - U.S. Energy Secretary Federico Pena said
Thursday he would seek cooperation from Russian officials and members of
parliament in opening up the country's energy markets to U.S. investors
when he visits Moscow next week. 
"This is big business and U.S. companies should have a good shot at
winning a share of it," he told reporters at the National Press Club.
Pena leaves Saturday for a five day trip to Russia during which he said
he would also discuss accelerating efforts to reduce the threat of nuclear
weapons or nuclear-grade materials falling into the hands of terrorists or
rogue states. 
He said that Russia and other parts of the former Soviet Union had 650
tonnes of nuclear material and noted that it took only 8 kilograms to make
a nuclear device. 
"That's enough to make 40,000 nuclear bombs and that's 40,000 reasons
for us to pursue this issue," he said.
Pena's trip will lay the groundwork for an energy summit that the Group of
Seven industrialized countries and Russia plan to hold in Moscow next year. 
He said he would suggest four topics for the meeting -- the market
outlook through 2015, capital formation, cross-border concerns and
sustainable development. No date has been set for the session but Pena said
the Clinton administration preferred sometime in February, March or April. 
Pena planned to meet later Thursday with representatives of U.S.
companies interested in investing in Russia's energy market. He said some
estimates put the value of foreign investment over the next few years at
$60 billion. 
"U.S. companies should be given the opportunity to compete for this
business," he said. 

********

#2
Russian Orthodox Churc backs new religion draft
By Oleg Shchedrov 

MOSCOW, July 17 (Reuter) - The Russian Orthodox Church urged President
Boris Yeltsin on Thursday to sign into law a bill that would favour its
registration above minority religions and which the Catholic Church has
strongly criticised. 
A statement by the leadership of the Orthodox Church, quoted by
Itar-Tass news agency, asked Yeltsin to approve the draft saying: ``We are
sure that a rejection of the draft law would lead to a further spiritual
destabilisation in Russia.'' 
Russia's parliament approved earlier this month the bill entitled ``On
Freedom of Conscience and Religious Association,'' which would give a few
major confessions, such as Orthodoxy, Islam, Judaism and mainstream
Buddhism, strong advantages over minority religions. 
Yeltsin can either sign it now or veto it, but his veto could be
overruled by a two-thirds majority in each chamber of parliament. 
The authors of the draft have said that it was prompted by the need to
defend the traditional confessions, undermined by decades of atheistic
communist rule, in the face of aggressive sects operating from abroad. 
Under the new legislation, only religions which have operated in Russia
for more than 15 years have the chance to be registered and gives strong
advantages for groups which have more than a 50-year history in Russia. 
Foreign religious activists will only be able to work in Russia if
invited by one of the registered religious bodies. 
The new legislation has prompted angry reaction in the West as well as
among Russian liberal campaigners. 
Russian liberal groups insist that the draft violates the constitution
by curbing human rights and introducing double standards. They vow to
challenge it in the Constitutional Court. 
Pope John Paul told Yeltsin on Thursday that the bill threatened the
survival of the Catholic Church in Russia. 
In a letter released by the Vatican, the Pontiff said he was ``seriously
worried'' by the bill and urged Yeltsin to change it. 
``This text...would constitute for the Catholic Church in Russia a real
threat to the normal development of its pastoral activities and even its
survival,'' he said. 
The U.S. Senate voted earlier this week to cut off aid to Russia if
Yeltsin signed the measure. 
The threatened curb on new assistance was approved as an amendment to
the $13.2 billion foreign aid bill now moving through the Senate. The bill
contains about $200 million in funds for Russia. 
But the communists, who dominate the lower chamber of parliament, the
State Duma, appeared unimpressed. 
``There is a clear attempt to squeeze out the Russian Orthodox Church,''
said on Thursday communist Viktor Ilyukhin, a senior member of the Dumas. 
``The presence of Western confessions with enormous funding is a serious
threat to Russian confessions.'' 
``The West is using religion as a means to influence the minds of the
Russian people, in fact as a means to control the people,'' said Ilyukhin,
who heads the Duma security committee. 
A Kremlin spokesman said he had no comment and added that Yeltsin had
not signed the bill yet. 

********

#3
Russia grasps military nettle but lacks sting
By Martin Nesirky 

MOSCOW, July 17 (Reuter) - Russia's decision to grasp the potentially
dangerous nettle of military reform underlines the belief of its revamped
cabinet that without it, economic change cannot succeed. 
"This is absolutely essential," said Andrei Piontowsky, head of the
Centre for Strategic Studies in Moscow. "The Soviet armed forces existed to
prepare for World War Three. Just from an economic point of view Russia
cannot support such an army." 
President Boris Yeltsin announced the military shake-up from his
northwest Russian holiday retreat on Wednesday, issuing a series of decrees
on merging branches of the vast armed forces, slashing troop numbers by
500,000 and holding down Defence Ministry and general staff administration
costs. 
"The president has decided he can no longer treat the army with a course
of medication and has gone for the scalpel," NTV television commented. 
Military analysts feel Yeltsin finally means business after years of
false starts. But they say there is still not enough detail, not least on
where the cash will come from to dissect and reshape the once-mighty but
now demoralised armed forces into a smaller and professional outfit of 1.2
million men. 
Some Western and Russian experts even feel the Kremlin has been too
hasty and piecemeal rather than too slow off the mark. 
"The president is pushing the pace. It's not the way to do it," said
Alexander Zhilin, a former military man who is now a commentator at the
weekly newspaper Moscow News. "No one can explain to me how the state will
cope with hundreds of thousands of officers being paid off. It is a very
dramatic situation." 
No one is predicting widespread military unrest at this stage but they
say half-considered plans could irritate rather than placate middle-ranking
officers who stand to lose most, and could lead to a "hot autumn" in a
nascent market economy already saddled with vast domestic debts and social
inequalities. 
Dmitry Trenin, a defence analyst at the Carnegie Endowment for
International Peace, said there was a clear pattern emerging that started
with Moscow paying off arrears to pensioners. 
The government, spearheaded by dynamic first deputy prime ministers
Anatoly Chubais and Boris Nemtsov, then announced it would pay wage debts
to the armed forces by September and to other public sector workers by the
end of the year. 
"The reformers have agreed that without military reform, the whole
structure of reforms and the progress achieved so far may be in danger,"
said Trenin. "Chubais and Nemtsov are not necessarily interested in
military matters but they see this as a key part of the total reform agenda." 
While the government sees the military reform as vital for market
changes, for Yeltsin it is a political must. The ex-Soviet army has been
disgruntled for too long. 
A hasty withdrawal from Eastern Europe, a humiliating defeat at the
hands of Chechen separatists, NATO's expansion towards Russia's borders,
infighting and corruption among the top brass are all too much even for a
patient Russian soldier. 
It is small wonder that Yeltsin, who has an unerring ability to sniff
out danger even before it materialises, has publicly announced that
military reform is now his top priority. 
Yeltsin's latest military decrees -- as yet unpublished -- will be
supplemented by next Friday with plans for those branches of the armed
forces so far untouched, Defence Council Secretary Yuri Baturin told Ekho
Moskvy radio on Thursday. Only after that would an overall concept be
finalised. 
"Somebody seems to have decided 'let's go with what we've got'," said
one Western diplomat. 
Piontowsky said he believed a major unresolved element was the lack of
transparency in the defence budget, but that he expected the State Duma
lower house of parliament to be presented with much more detail when it
reconvenes in September. 
Defence spending for 1997 was originally set at 88.3 trillion roubles
($15.3 billion) out of total spending of 530 trillion roubles. But these
sums have since been sharply reduced by budget cuts and officials say the
military have so far received only 22 trillion roubles. 
Zhilin said other drawbacks were what he saw as a poorly-defined view of
Russia's geopolitical role in the post-Cold War era and insufficient
planning for a safety net for officers who will lose their jobs. 
But if there are differences on the approach, all seem to agree military
reform is unavoidable if Russia is to succeed. 
"They have to grasp the nettle," said one Western military expert. "But
it's a big nettle. Someone is bound to get stung." 

*********

#4
Russia: U.S. Senate Votes To Halt Aid If Religion Law Passes
By Julie Moffett

Washington, 17 July 1997 (RFE/RL) - The U.S. Senate has overwhelmingly 
approved an amendment that would cut off financial assistance to Russia 
if a restrictive religion bill is signed into law by Russian President 
Boris Yeltsin. 
Ninety-five senators out of 100 Wednesday voted for the amendment to the 
U.S. Foreign Operations Appropriations bill for fiscal 1998, beginning 
on Oct. 1. 
The legislation was introduced by Senator Gordon Smith (R-Oregon), who 
said he believes the Russian bill "severely discriminates against 
religious minorities" and undermines religious freedom in Russia. 
Smith said the amendment would cut off some $200 million in American aid 
to Russia, adding that it would be the "clearest and strongest message" 
the U.S. could send to Russia in objecting to the bill. 
The amendment would also require the U.S. president to certify annually 
to the U.S. Congress that Russia has not enacted any legislation 
discriminating against religious minorities in order to release 
financial assistance. 
It additionally states that Russia cannot violate international human 
rights agreements to which it is a signatory. 
During the Senate debate, in an emotional plea for support, Smith said: 
"I realize, as do all senators, that Russia is a sovereign country. We 
cannot tell Russia what to do as a country. We can, however, elect not 
to send foreign aid to a country that would discriminate against 
religious beliefs in so fundamental a way." 
Smith said that among other things, the Russian law would terminate the 
normal legal status of all religious organizations except for those 
which were officially registered with the Soviet government at least 15 
years ago, at a time of official state-sponsored atheism. 
Smith also said he is alarmed by the law's provision to set up a 
commission of state experts to review doctrines and practices of groups 
applying for registration. 
Smith said: "I know some may argue ... that we should not take these 
kinds of actions, that we are trying to help Russia build democracy. We 
are and we want to do those things. But I would say to them that 
religious freedom is the cornerstone of democracy. Indeed, a democratic 
foundation without that cornerstone of religious freedom is a democratic 
foundation built on sand." 
Smith was strongly supported by several other senators who also took the 
floor to express their concern about the Russian law. 
Senator Tim Hutchinson (R-Arkansas) said the Russian bill was 
"irreconcilable" with the concepts of liberty and religious freedom. 
He added: "This is potentially the greatest retreat on religious freedom 
and human rights since the fall of the Soviet Union and it is an ominous 
sign about the future of that republic. We must forcefully signal our 
grave concern." 
Senator Mitch McConnell (R-Kentucky), Chairman of the Appropriations 
subcommittee on Foreign Operations, said he had long been an 
"enthusiastic supporter" of aid to Russia. But he added that after 
reviewing the Russian religious bill, he had developed serious concerns 
about the direction the country was taking. McConnell said: "We ought 
not to be giving assistance to a country that ... purports to be a 
democracy, but which seeks to grant religious favoritism to certain 
kinds of religions at the expense of the others." 
The entire appropriations bill and its amendments was expected to be 
approved by the Senate Wednesday night. It will then go to the House of 
Representatives. Delegates of the two chambers will spend some time in 
conference to reconcile differences they may have over its provisions 
before the bill is sent to President Bill Clinton to be signed into law. 

**********

#5
Russia: Analysis From Washington -- Peace In The Caucasus?
By Paul Goble

Washington, 17 July 1997 (RFE/RL) - The United States has stepped up its 
efforts to resolve two long-standing conflicts in the Caucasus in order 
to promote stability there and to gain access to the oil of the Caspian 
Sea basin. 
Despite these efforts, the parties involved in the disputes over 
Abkhazia and Nagorno-Karabakh appear unlikely to agree to settlements 
anytime soon. 
But even if some of the parties involved do announce agreements, those 
accords are unlikely to be implemented. On the one hand, the 
international community has repeatedly indicated that it is unwilling to 
provide the forces needed to keep any peace there. 
And on the other, the number of conflicts and the ability of any of the 
many parties involved to torpedo agreements are both so large that any 
accord not supported by peacekeepers would almost certainly prove 
shortlived. 
Nonetheless, both the United States and some of the countries in the 
region have indicated that they would like to be able to announce 
accords on two of the Caucasian conflicts. 
American efforts to promote an agreement on Nagorno-Karabakh have been 
the more obvious. Last Sunday, Armenian President Levon Ter-Petrossian 
said that the OSCE Minsk Group, of which the U.S. is a co-chairman, had 
offered a new compromise plan on Nagorno-Karabakh. 
As earlier leaked to the press, that plan would call for an Armenian 
withdrawal from Azerbaijan, heightened autonomy for Nagorno-Karabakh and 
the deployment of an international buffer force around that disputed 
region. 
Ter-Petrossian suggested that the compromise represented a step forward, 
but he indicated that Yerevan would never support it unless the ethnic 
Armenian authorities in Nagorno-Karabakh also agree. Because the latter 
are unlikely to do so, no accord appears likely anytime soon. 
But later this month, Azerbaijani President Heidar Aliyev will be in 
Washington to press for a settlement of this conflict. He will do so 
both because he wants Caspian oil to flow Westward and because he wants 
direct American support on other issues. 
On both counts, he will have support from powerful American oil and 
business interests. But he will also face the obstacles to any agreement 
that have plagued the region since the collapse of Soviet power there in 
1991. 
But even before Aliyev is scheduled to come, Georgian President Eduard 
Shevardnadze arrives in Washington this week to press for American 
assistance in reaching a settlement with the Abkhazian secessionists, an 
accord that would facilitate the flow of oil across his country. 
Like Aliyev, Shevardnadze is likely to enjoy support from American oil 
interests and also from the U.S. Administration. 
Indeed, Deputy Secretary of State Strobe Talbott is scheduled to give 
what has been advertised as a major speech next Monday at Johns Hopkins 
University on Washington's expanded interest in the Caucasus and Central 
Asia. 
All this diplomatic activity is likely to lead to speculation that one 
or another settlement is imminent. But there are three major reasons to 
be skeptical about that. 
First, many of the most important parties with an interest in these 
conflicts are not going to be involved in the current talks. 
Among these are Russia, which has pursued a policy of frozen instability 
in the region, backing now one and now another side in each of these 
conflicts to maintain or extend its interests there. 
While some in Moscow have indicated that they would like to have a 
settlement that would allow oil to flow, others in the Russian capital 
remain opposed to such a possibility and retain their ability to pursue 
an independent course. 
Another party not represented in these current efforts to find a 
settlement is Iran. Tehran, of course, has powerful reasons for opposing 
any agreement that would strengthen Azerbaijan or weaken its Russian 
ally in the region. 
And still others unrepresented in Washington are some of the smaller 
ethnic groups in the region who in the past have indicated their 
displeasure when they feel they have been ignored. 
Second, each of these has the ability to subvert any agreement either 
directly or through proxies on the ground. Given the depth of suspicions 
in this region about such a possibility, even a relatively small 
incident could destroy any possibility for an accord reached by others 
to survive very long. 
And third, the United States and its Western allies appear ever more 
reluctant to provide the peacekeepers that would make such an agreement 
more sustainable. 
Not only has the West been unwilling to challenge Russia in the Caucasus 
in the past, but public reaction to NATO's recent effort to arrest 
accused Bosnia Serb war criminals suggests that few Americans would be 
willing to put any American lives at risk. 
For all these reasons then, any prediction coming out of Washington in 
the near future about imminent breakthroughs on Nagorno-Karabakh or 
Abkhazia are likely to prove premature. 

*********

#6
Journal of Commerce
July 18, 1997
[for personal use only]
Guest Opinion
On Eurasia's crossroads
BY S. ENDERS WIMBUSH
S. Enders Wimbush is assistant director of the strategic assessment 
center of Science Applications International Corp. in McLean, Va. He was 
director of Radio Liberty in Munich from 1987 to 1992. 

Eduard Shevardnadze, who this week began his first official visit to 
Washington as Georgia's president, deserves much of the credit for 
initiating and directing his country's transition to the (very) short 
list of economic winners among the former Soviet republics.
Mr. Shevardnadze's achievement goes beyond reviving his small nation 
(population: 5.5 million). He also has articulated a coherent vision of 
central Eurasia in the post-Soviet world. He deserves the full support 
of the United States.
In the short term, Georgia is likely to become one of the main 
passageways for Caspian oil and gas to international markets. A series 
of pipelines from Baku to the Black Sea, and thence to Turkey, are 
planned, and have received strong U.S. backing.
Caspian energy will never replace Persian Gulf energy, which is vastly 
more voluminous. But as energy demand grows, especially in Asia, and 
demand on Persian Gulf resources increases, Caspian energy will become 
increasingly attractive as a source of supply.
The recent war in Chechnya and the ongoing conflict in Nagorno-Karabagh 
are graphic evidence that the Caucasus is a rough neighborhood, and that 
the security of Caspian energy cannot be taken for granted. Mr. 
Shevardnadze is a strong proponent of Caucasian cooperation. He has 
championed projects to create mechanisms to dampen conflict and 
encourage growth among the nations of the region.
He also has proposed closer political ties and more comprehensive 
economic relations with states like Ukraine, Uzbekistan, Turkey, Iran, 
and somewhat more distantly, with Israel. His years at the head of 
Soviet foreign policy were not wasted. Mr. Shevardnadze sees a broader 
canvas and understands its details and their implications more clearly 
than most Eurasian leaders.
In the longer term, Mr. Shevardnadze is positioning Georgia to be a 
vital part of the developing Eurasian Transport Corridor. This 
transformation of the north-south character of the Soviet Union into the 
rapidly emerging east-west orientation of the new Eurasia is one of the 
fundamental political shifts of our time, with important consequence for 
how planners think about U.S. strategic interests from Europe to China. 
The corridor is a platform for expanding communications and commerce 
(freight, pipelines, telecommunications) between Asia and Europe. 
Potentially it will link commercial and political groupings that either 
exist already or are being formed along its route.
More than a new "Silk Road," the corridor will embrace a wide swath of 
societies and states from Asia to Europe through a series of regional 
mechanisms. For example, it will embrace the activities of the Economic 
Cooperation Organization (Pakistan, Afghanistan, Iran, Turkey, 
Uzbekistan, Kazakstan, Kyrgyzstan, Turkmenistan, Tajikistan); the Black 
Sea Economic Cooperation group (Ukraine, Bulgaria, Romania, Russia, 
Georgia, Turkey); and, more recently, the Danube Free Economic Zone 
(Ukraine, Moldova, Romania). China also has very large expectations for 
the corridor.
With Black Sea ports and expanding road and railway networks east and 
south, Georgia is set to become an essential element in corridor 
activity because of its advantageous geography. Relations with Turkey, a 
leading trade partner, are particularly close and rewarding. Trucks 
bound for Central Asia and Russia from Turkey, the Balkans and the 
Middle East now stream through three border posts between Georgia and 
Turkey. 
A new railway link from the Georgian capital Tbilisi to Kars in eastern 
Turkey is planned, which will give Turkey rail access to Central Asia. 
Germany and Ukraine have become strong trading partners; Russia remains 
one.
Few observers in 1992 anticipated Georgia's return from the dead. 
Then-current wisdom scoffed at the notion that the former Soviet 
republics could survive the demise of the U.S.S.R. Georgia, fact, has 
survived as a vibrant democracy.
Still, much remains to be done, and U.S. support is vital. Sen. Mitch 
McConnell's Foreign Appropriations subcommittee recently earmarked $100 
million in aid for Georgia, a significant increase, and a strong 
endorsement of current trends. And Sen. Sam Brownback, chairman of the 
Foreign Relations Committee's subcommittee on Near Eastern and South 
Asian affairs, has begun to explore the significance of the Eurasian 
Transport Corridor. These are encouraging signs.
In Mr. Shevardnadze's vision, Georgia is an important element of 
European and Eurasian security. Located at a point where Europe meets 
Asia. where Russia meets the Middle East and where Christianity meets 
Islam, Georgia is a logical and natural partner for the United States in 
a region of profound change and volatile forces. 

*********

#7
The Straits Times (Singapore)
July 17, 1997
[for personal use only]
Is Russia's economic breakthrough for real? 
By Derek da Cunha
The writer is a senior fellow at the Institute of South-east Asian 
Studies. He contributed this article to The Straits Times. 

THE breakthrough has already happened, declared Mr Boris Yeltsin in a 
radio address on July 5 to the Russian people. The Russian president was 
referring to the first signs of growth in the Russian economy after five 
straight years of decline. 
During that period of transition from a centrally-planned to a 
market-oriented economy, millions of Russians have been left 
impoverished. 
The market reforms that Mr Yeltsin introduced in 1992 have seen the real 
incomes of Russians fall by 40 per cent. Many other socio-economic 
statistics paint a bleak picture: the International Labour Organisation 
estimates that more than nine million Russians are unemployed, and this 
is despite government statistics suggesting that the figure is merely 
three million. 
Death rates are up sharply: in 1995, some 2.2 million Russians died but 
only 1.4 million were born. The average life expectancy of Russian males 
has fallen from 65 to 58 years over the past five years. 
And the bad news does not end there. In the process of switching the 
orientation of the economy towards market forces, corruption has become 
endemic and income inequality more apparent, especially in the urban 
centres. To add to the woes, the Russian mafia, said to consist of 
several thousand gangs, control up to 40 per cent of the national 
economy. 
Yet, amidst such a bleak picture, the breakthrough that Mr Yeltsin spoke 
of has the appearance of reality to it, even if it is largely specific 
to various aspects of the economy. For instance, inflation has been 
reined in, according to government figures, and the Russian rouble has 
attained a semblance of stability, attracting increasing amounts of 
funds from foreign portfolio investors which, in turn, has led to a 
stock market boom over the past 18 months. 
Rouble stability is also beginning to see a return of some of the more 
than US$60 billion (S$84 billion) in capital which had fled Russia for 
safer havens in the West between 1991 and 1996. 
Mr Yeltsin's economic reforms have also seen some 80 per cent of 
industrial enterprises transfer into private hands. Foreign companies 
have committed to Russia some US$9 billion in direct investment, with US 
companies accounting for about a third of this amount. It remains to be 
seen whether there will be greater inflow of foreign investment as many 
Western companies appear to have adopted a wait-and-see attitude for 
further signs of economic revival. 
The figures on inflation and the growth of private enterprise do seem to 
have impressed others though, such as the international lending 
agencies. In March last year, the International Monetary Fund agreed to 
extend to Russia a three-year US$10.2 billion budget support loan; while 
in June this year the World Bank approved loans to Russia of US$884 
million, with a promise of up to US$6 billion over the next two years. 
As of the middle of this year, Russia's international reserves had grown 
to a record US$23.8 billion and, barring unforeseen circumstances, is 
expected to continue growing. 
The bottomline of Mr Yeltsin's bold effort to transform the Russian 
economy is that after contracting for the past five years, that economy 
will begin to grow this year. Government economists are predicting that 
gross domestic product will grow by a modest 1.5 per cent. Private 
sector economists however believe that the government's statistics do 
not capture fully the significant growth which the service sector and 
the informal economy has been experiencing lately and that overall GDP 
growth could well be more robust. 
The key question in all this, however, is whether the recent signs of 
improvement in the Russian economy are the result of real structural 
change or are merely quasi-cyclical in nature and, therefore, 
unsustainable? 
Whatever the answer, the one major factor that could derail any further 
economic improvement is political instability, which is an ever-present 
danger. It would seem that the fog of uncertainty continues to shroud 
Russia's economy, and is not expected to lift anytime soon. 

*********

#8
Future of Russian-Baltics Relations Viewed 

Rossiyskaya Gazeta
July 15, 1997
[translation for personal use only]
Article by Andrey Fedorov, member of the Collegium of Directors of the
Council on Foreign and Defense Policy: "Russia and the Baltics: What Is
in Prospect?" -- first four paragraphs are introduction

It would seem that at the height of the vacation season political
activity should be close to zero but it is not, this summer has peaked amid
an overabundance of political and diplomatic events, visits, and talks. 
This is particularly true of the past few days after the NATO session's
decision to open its doors to three new members -- Poland, Hungary, and the
Czech Republic.
Immediately after the session Western politicians made important
visits to the countries of Eastern Europe, the Baltic, and Russia. U.S.
Secretary of State Madeleine Albright's trip has attracted attention. In
Vilnius she stated that she can give no guarantees that the Baltic states
will be admitted to the alliance as early as
In turn Russian President Boris Yeltsin described "the fact that
NATO is considering the question of admitting the three Baltic republics to
its membership as dangerous." He stressed that he sees these intentions as
a threat to Russia's security and thus will resolutely oppose their
admission to NATO. The problem of Russia's mutual relations with the
Baltic countries is now at the center of international attention. The
following article deals with these relations.
As is well known, Latvia, Lithuania, and Estonia are expressing a
desire to become NATO members which is arousing a negative reaction from
Russia. The North Atlantic alliance's decision on the admission of the
Baltic states, Russian Federation Foreign Minister Yevgeniy Primakov has
noted, could influence the character of Russia's relations with them.
Russia and the Baltic countries. How are relations to be formed in
the future? Andrey Fedorov, member of the collegium of directors of the
Council on Foreign and Defense Policy, now considers this.
Unfortunately, the search for a rational solution to the normalization
of relations between Russia and the Baltic is often nullified by one side's
ill-considered moves. The Baltic states often do not evince a desire to
take a calm and sober view of the possibility of reaching agreement on the
key questions in the light of Russia's interests and the politial realities
that exist there.
First and foremost we re dealing with the persistent attempts by both
the legislative organs (for example, the Latvian Saeima) and the executive
to demand from Russia recognition of the "occupation" of the Baltic by the
Soviet Union in one documentary form or another. In the Soviet Union's
history, of course, there were episodes which must be attentively analyzed
and assessed accordingly but this must be done with a cool head and without
political hysteria.
The territorial claims by Latvia and Estonia on Russia are not helping
the normalization of relations. Even though in most instances this
question is expressed in more restrained form today, it must be understood
that placing it on the agenda will only lead to deadlock.
Progress is being held in check by the extremely powerful anti-
Russian campaign that is being waged in the Baltic countries aimed at
appealing to the West as a defender and savior. You only have to cite the
words of Estonian President Lennart Meri: "Russia has always been a
conqueror for us.... We are the most pro-U.S. region in Europe."
The image of Russia as the enemy is not being fostered as actively
anywhere in the post-Soviet today as it is in the Baltic. Of course the
Baltic states are very afraid of being left as a "gray zone" between Russia
and Western Europe as happened to some extent before World War II. Hence
the heightened desire to accelerate the acquisition of NATO membership. In
the Baltic, however, they must be well aware of Russia's possible reaction.
I am ready to assume that Latvia, Lithuania, and Estonia will become
members of the North Atlantic alliance in three to five years. However,
the consequences of this move for Russia's relations with NATO and the
Baltic countries could be extremely adverse. Bloc membership could lead
not to the strengthening of the Baltic countries' security but to
confrontation.
The processes of "softly-softly ethnic cleansing" are also not
conducive to normal relations, especially with Estonia. Today they affect
hundreds of thousands of people (in Estonia alone 200,000 people are
"noncitizens" with all the restrictions that this entails). Various
diplomatic obstacles are constantly being created. Incidentally, Estonia
has not ratified the 1993 European Convention for the Protection of Human
Rights and Fundamental Freedoms.
The solution of the problem of citizenship and ensuring human rights
demands not unilateral steps but a well-planned, phased policy involving
Russia. The infringement of the rights of the Russian-speaking population
in Estonia and Latvia (in Lithuania this problem is less relevant) is
shaping a negative image of the Baltic states in Russian society and often
provokes quite harsh statements and actions from Russian politicians.
You often hear the claim that the Baltic countries could easily manage
without their eastern neighbor if they gave priority to developing their
ties with the West. Fortunately realism has begun to prevail recently. 
This is understandable because the Russian transit of freight via the ports
of Tallinn or Ventspils currently produces extremely significant foreign
currency earnings and in Estonia almost one-third of firms are linked one
way or another with Russian raw materials and oil.
It is not in the interests of the Baltic states or Russia to destroy
the existing mechanism of trade and economic relations. On the contrary,
there is a real opportunity for raising them to a new level because the
Baltic will be of strategic significance for Russian exports to the West
for a number of years to come. There is a whole package of measures which
could quickly enhance the effectiveness of trade cooperation. But they
require serious support at the level of our states' leaders.
Y es, I believe that despite all the existing difficulties and
disagreements it would be expedient to institute the practice of regular
top-level meetings as happens, for example, with Finland. That country's
president and prime minister have the opportunity for constant dialogue
with Russia's top leaders.
Much, of course, also depends on the Russian side, which sometimes
seems to be waiting for these problems to resolve themselves. The talks
with Latvia and Estonia on many questions have been suspended or simply
left without the proper leadership and dozens of practical agreements
already coordinated by the sides have been left unsigned.
I believe, however, that unless Russian policy toward the Baltic is
activated in the coming months our relations could end up in long-term
"stagnation" with all the ensuing consequences.
Finally, Russia must continue the practice of the differentiated
approach to each of the Baltic states. But it is necessary also to conduct
dialogue on individual areas (specifically on regional security problems)
with all three countries. Generally speaking, Russia today faces the
obvious task of elaborating a long-term concept of relations with the
Baltic in the light of the various possible developments of events.

********

#9
Poll Shows Lack of Trust in Yeltsin, Government 

Argumenty i Fakty, No. 29
July 1997
[translation for personal use only]

An opinion poll shows that 61 percent of Russians do not trust
President Boris Yeltsin and the same percentage doesn't trust the
government. Furthermore, 55 percent of them don't trust the State Duma. 
The Armed Forces and the Orthodox Church enjoy the confidence of far more
people. The poll shows a rise in support for the Communist Party of the
Russian Federation (CPRF) and Grigoriy Yavlinskiy's Yabloko bloc as well as
a drop in support for Vladimir Zhirinovskiy's Liberal Democratic Party of
Russia (LDPR) since the parliamentary elections of 1995. It also indicates
a substantial rise in the number of people opposed to all political parties
and blocs.
The poll is commissioned from the Nugzar Betaneli Institute of
Parliamentary Sociology to examine which institutions and political parties
the Russians trust. The poll was carried out between 1 and 5 July and
surveys a sample of 6,000 people from 62 of Russia's constituent parts and
all 12 of its economic zones, including Moscow. The margin of error in the
results was plus or minus two percent.
The results are presented in two tables, the first indicating levels
of trust in various institutions and the second in political parties.
Russian President: 11 percent trust him; 61 percent don't trust him;
9 percent knew nothing about his activities; 19 percent unsure.
Russian Government: 12 percent trusted it; 61 percent didn't trust
it; 13 percent knew nothing about its activities; 14 percent unsure.
Russian State Duma: 10 percent trusted; 55 percent didn't trust; 15
percent knew nothing about its activities; 20 percent unsure.
Russian Armed Forces: 48 percent trusted; 21 percent didn't trust; 14
percent knew nothing about their activities; 17 percent unsure.
Russian Federal Security Service: 29 percent trusted; 27 percent
didn't trust; 27 percent knew nothing about its activities; 17 percent
unsure.
Orthodox Church: 44 percent trusted; 20 percent didn't trust; 16
percent knew nothing about its activities; 20 percent unsure.
The second table shows the level of support for a list of 10 political
parties at the 17 December 1995 parliamentary elections -- for which the
information was supplied by the Central Electoral Commission -- and
compared it with voting intentions among the poll sample.
Communist Party of the Russian Federation: Support in December 1995
-- 22.3 percent; support among poll sample intending to vote -- 34.73
percent.
Liberal Democratic Party of Russia: Support in December 1995 -- 11.18
percent; support among poll sample intending to vote -- 6 percent.
Russia Is Our Home: Support in December 1995 -- 10.13 percent;
support among poll sample intending to vote -- 8.73 percent.
Yabloko: Support in December 1995 -- 6.89 percent; support among poll
sample intending to vote -- 15.11 percent.
Women of Russia: Support in December 1995 -- 4.61 percent; support
among poll sample intending to vote -- 4.98 percent.
Communists-Working Russia-For the Soviet Union: Support in December
1995 -- 4.53 percent; support among poll sample intending to vote -- 1
percent.
Congress of Russian Communities: support in December 1995 -- 4.31
percent; support among poll sample intending to vote -- 8.53 percent.
Party of Working People's Self-Government: Support in December 1995
-- 3.98 percent; support among poll sample intending to vote -- 2.7
percent.
Russia's Democratic Choice-United Democrats: Support in December 1995
-- 3.86 percent; support among poll sample intending to vote -- 1.8
percent.
Agrarian Party of Russia: Support in December 1995 -- 3.78 percent;
support among poll sample intending to vote -- 1.53 percent.
Other electoral associations and blocs: Support in December 1995
-- 19.75 percent; support among poll sample intending to vote -- 3.78
percent.
Against all parties and blocs: In December 1995 -- 2.77 percent;
among poll sample -- 11.1 percent.
An unattributed article accompanying the tables observes that the
thing that most worries Russians continues to be failure to pay wages on
time.

*********

#10
Lessons of Nizhniy Novgorod Poll Discomforting for Kremlin 

Komsomolskaya Pravda
July 15, 1997
[translation for personal use only]
Article by Aleksandr Gamov under the rubric "View From the Sixth Floor"
and the general heading: "Nizhniy Elected Its Governor..."

Long before the distribution of political forces became apparent in
preelection Nizhniy [Novgorod] and the "nationwide" opposition's agitprop
machine started cranking up, it was clear that this "irregular"
gubernatorial election might cost Russia dearly. This time it was not new
forms of management that were being tried out on the test ground of reform
but the card of the next presidential election that was being played.
The opposition did not conceal this. The official regime, either out
of "military guile" or for some other reasons, displayed Olympian calm,
making out that everything was going to plan. Nemtsov, who more than anyone
should have shown an interest in the outcome of the vote, sluggishly
remarked roughly one week before the first round: Why support Sklyarov,
for he will win anyway.
He did indeed win, but with a minimal margin -- just over 3 percent. 
It was only after this that jitters and panic began in the corridors of
power. They brought the "heavy artillery" up out of the main command's
reserve. It was this that tipped the scales.
Several conclusions at once stem from the "Nizhniy Novgorod rehearsal"
for the next presidential election, and they are not comforting to the
regime.
First conclusion. The opposition has in no way resigned itself to
having lost to Yeltsin last year but continues to occupy offensive
positions. If it has gone into hiding, this is certainly not out of
desperation. It is simply biding its time and is ready at any moment to
make use of the merest blunder by the powers that be to take revenge by
storm.
Second conclusion. The opposition's regiments, if viewed in a
preelection context, are not as weak as they seemed only yesterday. They
have in their arsenal a long-range, powerful, and well-tuned election
machine.
Third conclusion. To achieve its ends, the opposition's vanguard
-- the Communists -- is prepared to ally itself with any forces. In
Nizhniy they did not disdain even links with the leaders of youth
organizations with a fascist coloration.
Finally, the last point. Of course, Sklyarov's win strengthens the
positions of the new government team. But it must not be forgotten that,
despite the congress of politicians and variety stars loyal to the regime,
only half the registered voters participated in the Nizhniy Novgorod
election. The rest were either warming themselves in the sun or digging
their truck gardens, or maybe they simply boycotted the "dress rehearsal." 
This is probably the most important result of Sunday's vote, which should
be weighed thoroughly and examined carefully from all sides....

********** 

#11
Government Pledges To Resume Conversion Financing 
By ITAR-TASS correspondent Liliya Kuznetsova

Moscow, 15 July -- A decision to resume financing of conversion
programs within Russia's defense industry was taken today at a sitting of
the Russian Federation Commission on Urgent Issues, which was chaired by
First Deputy Prime Minister Boris Nemtsov.
It was particularly noted at the sitting that the conversion program
for 1995-8 had more or less ground to a halt due to insufficient financing.
According to Finance Ministry data, financing of conversion programs this
year has not yet started. As a result, 370 enterprises of the 700 defense
industry enterprises involved in conversion are currently insolvent.
In connection with this, First Deputy Prime Minister Boris Nemtsov
pointed in his speech to the need for the Finance Ministry and the
Economics Ministry to draw up, within a ten-day period, and present to the
cabinet a schedule for financing conversion programs. Moreover, he noted
the extreme lack of effectiveness of these programs, which, in his opinion,
could be improved if the proportion of private capital involved in their
implementation was increased from 30 to 50 percent or more.
Boris Nemtsov also demanded that an inventory of the conversion
programmes should be carried out, proceeding from the criteria that
extrabudgetary sources and enterprises' own funds should be involved. He
also pointed out that it was not the enterprises but the programs
themselves which needed financing.

**********