July 25, 1997   

This Date's Issues:   1082  •1083  1084  1085

Johnson's Russia List [list two]
#1084
25 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. ARGUMENTY I FAKTY: Article Views Lebed's Alliances in Siberian 
Elections.
2. John Helmer: Russia: Audit Agency Says Norilsk Tender 
Illegal.
3. Nezavisimoye Voyennoye Obozreniye: No Funds Available for 
Officer Housing Construction.
4. The Independent (UK): How Armenia won the war but lost the oil
Black gold has transformed an old struggle, writes Phil Reeves.
5. Christian Science Monitor: Stanley Sloan, Steering NATO - 
Not a One-Country Job.
6. Trud: Grain Losses of 'at Least 12 Million Tonnes' Predicted.
7. Business Week: Carol Matlack and Patricia Kranz, IS RUSSIA 
DUMPING STEEL--OR GETTING DUMPED ON?
8. RIA Novosti: LEADER OF THE RUSSIAN COMMUNIST YOUTH LEAGUE IGOR 
MALYAROV REFUTES REPORTS ABOUT HIS ORGANISATION'S INVOLVEMENT IN 
THE ATTEMPT TO BLOW UP THE MONUMENT TO PETER THE FIRST.
9. Nezavisimaya Gazeta: UNEMPLOYMENT REMAINS STABLE.
10. RIA Novosti: STATE TAX SERVICE "FULLY TRUSTS" DECLARATION OF 
RUSSIAN PREMIER VIKTOR CHERNOMYRDIN, ALEXANDER POCHINOK SAYS.
11. Washington Post: Daniel Williams, High Russian Officials Duck 
Anti-Corruption Initiative.
12. Reuters: Aides Defend Anti-corruption Campaign.
13. RIA Novosti: GOVERNORS OVERDUE WITH INCOME DECLARATIONS, 
WARNS KREMLIN.]

*********

#1
Article Views Lebed's Alliances in Siberian Elections 

ARGUMENTY I FAKTY, No. 30
July 1997
[translation for personal use only]
Article by Vladimir Romantsov; from the "Elections-97" column:
"Siberian Dumplings With a Commercial Risk"

When sleepy officials go to work in Moscow, civil servants in Irkutsk
are sinking into after-lunch drowsiness. When the Moscow officials, after
making their first runs around the corridors of power, are preparing to
start administering the country, in Irkutsk they are eating supper of meat
dumplings, drinking strong tea, and watching yesterday's "Vremya" program
on television. What excites the minds of statesmen and the man in the
street in Moscow is the stuff of the previous day in Irkutsk: owing to the
five-hour time difference a huge region lives a separate life not subjected
to the passions of the capital.
Aleksandr Lebed, Gennadiy Zyuganov, Grigoriy Yavlinskiy--those who are
preparing to seize the "crown" of the Russian President in the future--have
joined the election campaign for governors. Lebed has decided to place his
bet on three cards. To begin with, he oriented himself toward Fedor
Serdyukov, head of the Angara petrochemical complex. Nothing came of it. 
Lebed's next card was State Duma Deputy Viktor Mashinskiy, who is for some
reason presenting himself as an officer of the KGB during the election
campaign. Lebed immediately decided against this cooperation. It is most
likely that Lebed was given to understand that the reputation of the
Muscovite, Mashinskiy, in Slavophile Irkutsk was connected with the trading
clan of a certain Caucasian family.
The third in the list was Ivan Shchadov, the son of a USSR coal
industry minister, who was well known in the past. The third card, which
is known not to be a trump card, will bring Lebed success even if he is
defeated. Ivan Shchadov is head of the richest coal basin in Siberia. And
even if the voters do not elect him, Shchadov can in theory generously fill
the general's money box at the presidential elections.
Yavlinskiy has backed Shchadov. So if Shchadov wins and backs both
Yavlinskiy and Lebed at the presidential elections, the Siberians may be
left without their meat dumplings. Irkutsk Region, the richest in Russia
in its natural resources, will give the candidates everything. And the
Siberians have always been hospitable.
Now about the Communist Party of the Russian Federation. The
situation of the Communist candidate, Levchenko, is not an enviable one. 
He has no management experience (he is the director of a construction
directorate). Two years ago he quietly and inconspicuously failed to be
elected to the local legislative assembly. Why is Zyuganov staking on
Levchenko and travelling to Siberia with all the members of his faction? 
Is he taking a risk? After the defeat in Nizhniy Novgorod, Zyuganov cannot
afford to take risks. Has he made a strategic error? Possibly. Once
again we remind you that Irkutsk and Moscow cannot cooperate sensibly.
There is yet another candidate among the leaders. This is mayor of
Irkutsk Boris Govorin. He cannot boast of support from the center--the
Mayor never has large amounts of capital. However, it can be seen that the
circle of "elite politicians" in Moscow is sufficiently narrow and is
limited solely to the persons previously mentioned. So, Govorin has been
left without a guardian.
Naturally the elections will take place and it will turn out yet again
that Moscow's elite politicians will rub their eyes when they wake up, and
the Siberians will be eating their evening meal of meat dumplings and
watching yesterday's news. The capital's passions do not stretch beyond
the Urals mountains. Vladimir Romantsov.

********

#2
Russia: Audit Agency Says Norilsk Tender Illegal
By John Helmer

Moscow, 25 July 1997 (RFE/RL) - Russia's independent state auditor, the
Accounting Chamber, has called for a halt to the government's auction of
Norilsk Nickel shares, terming the tender now under way a violation of a
presidential decree and government resolution. 
The Chamber is sending a letter this week to President Boris Yeltsin
urging him to halt the share sale, which is due to conclude next Friday.
The Chamber has already sent its report on the alleged violations to the
General Procurator's office. 
Valery Mishalkin told RFE/RL "the auction of the state shares [in
Norilsk Nickel] is illegal." Mishalkin is the Chamber official in charge of
an audit of Russia's giant metals producer that was ordered early in the
year by the State Duma, the lower house of the Russian parliament. At the
time, the deputies voted in a non-binding resolution to have the government
halt the sale of its shares in the company until the year 2000. 
Mishalkin says the sale of the state's 38 percent shareholding in
Norilsk Nickel violates the provisions of the presidential decree issued
two years ago, May 11, 1995. It prohibits sale of the Norilsk shares for
three years. 
Mishalkin also says a government resolution of September 18, 1995, bars
accelerated sell-off of state stakes in industries and enterprises
classified as "having strategic significance for the national security."
Norilsk Nickel is explicitly listed. 
The Accounting Chamber has been investigating the Norilsk Nickel
transaction, along with other transfers of state shares for bank loans,
since the start of 1996. 
"From the very beginning," a Chamber inspector reported last April, "the
whole record of the loans for shares scheme did not fit the concept of
privatization, nor the plans of the bodies responsible." 
He said there were violations of the sub-law acts and added: "If there
are violations of the law from the beginning, then all the deals [that
followed] should not be recognized." 
The Chamber's conclusion was that the acquisition of the controlling
interest in Norilsk Nickel by the Uneximbank-MFK group was illegal. 
A leading American lawyer in Moscow, who specializes on privatization
issues, says there have been many flaws in the privatization process. "You
could find a mistake in almost all the major privatizations that could have
serious legal consequences," he said. 

********

#3
No Funds Available for Officer Housing Construction 

Nezavisimoye Voyennoye Obozreniye
June 21-27, 1997
[translation for personal use only]
Article by Vladimir Georgiyev under rubric "A Problem":
"Legions of Homeless Officers: The Ministry of Defense Did Not Receive
a Ruble for Capital Construction During This Year"

The RF Ministry of Defense press service announced that funds
were not allocated to the Ministry of Defense to finance capital
construction in the first quarter of 1997. As of May of this year
RF Ministry of Finance indebtedness to the RF Ministry of Defense
for capital construction was R2.56 trillion, including R1.547 trillion
for the first quarter of 1997.
The RF Armed Forces presently have over 146,000 families who
need to be provided with living space, including almost 100,000
homeless. In addition, 81,600 families of citizens who have lost
ties with the Ministry of Defense are subject to resettlement from
closed military posts from the official spaces they occupy. According
to data of the Russian State Committee for Statistics, as of the
beginning of 1997 158,800 families of servicemen discharged from
the Armed Forces are waiting to receive housing at the chosen place
of residence.
A tense situation over providing servicemen with housing took
shape in the North Caucasus region in connection with the Russian
Army withdrawal from Chechnya.
The problem of settling-in withdrawn military units continues
to be especially acute. Their extremely unsatisfactory financing
comes at the expense of funds released to the Ministry of Defense
for capital construction, although additional appropriations were
envisaged for these purposes in accordance with a decision by RF
Government Chairman V. S. Chernomyrdin of 16 December 1996.
Only 1,300 servicemen"s families were provided with
housing in Samara, Saratov and Ulyanovsk oblasts in 1996. As of
the beginning of 1997 6,000 military did not have their own apartments.
In Moscow only 800 people on the waiting list and in Moscow
Oblast 1,900 families of servicemen were provided with housing in
1996. There were 6,000 homeless servicemen in Moscow and 7,600 in
Moscow Oblast as of the beginning of 1997.
In St. Petersburg 700 servicemen"s families were
provided with housing in 1996 and the number of homeless military
was 6,000 as of the beginning of this year. These figures were 600
and 3,400 respectively in Kaliningrad Oblast.
The reduction in numerical strength of personnel within the
scope of Armed Forces reform exacerbates the problem of providing
housing to homeless servicemen even more. The situation is aggravated
by the fact that up to the present time there has been no success
in reducing the waiting list for housing among civilians previously
discharged from military service and registered to receive housing
in local government institutions, as well as no success in resettling
persons who have lost ties with the Ministry of Defense out of departmental
housing from closed military posts.
The establishment of a reserve [fond] of official living spaces
on closed military posts (in accordance with the RF Presidential
Edict "On Measures for Supporting Military Construction in the Russian
Federation" of 25 November 1996) will help resolve this very acute
social problem. Its formation requires the development of an effective
mechanism for providing housing which would guarantee servicemen
the allocation of official living spaces for the period of military
duty and the assignment of permanent apartments to them at the chosen
place of residence on being discharged to the reserve or retirement.
It also is proposed to adopt a housing savings program as
a mechanism for providing permanent housing to servicemen occupying
official living spaces. In the process of its realization, the necessary
funds gradually will build up in servicemen"s personal
housing accounts.
In addition, the question of issuing a special State Housing
Loan for servicemen for the period of Armed Forces reform is being
examined. The volume of issue of the State Housing Loan will be
around R50 trillion for five years, in which time it is planned
to build and purchase over 230,000 apartments.
With respect to registered housing certificates, it is proposed
to use them to solve the housing problem of a very limited category
of servicemen who have served 15 or more years and who are subject
to discharge to the reserve or retirement in the near future.
The Ministry of Defense presently is preparing the necessary
documents for this and developing proposals having the goal of bringing
housing legislation in force into line with decisions on regulating
the provision of servicemen"s housing.

********

#4
The Independent (UK)
25 July 1997
[for personal use only]
How Armenia won the war but lost the oil
Black gold has transformed an old struggle, writes Phil Reeves 

Yerevan - The President of Armenia keeps an atlas on the table in the 
large room from which he runs his country. But when Levon Ter-Petrossian 
turns the pages to his own region, his permanent frown must surely 
deepen to a scowl. 
His eye will alight unhappily on his neighbour Azerbaijan, with whom 
Armenia has been at war over the mountain enclave of Nagorny-Karabakh. 
The conflict, which cost 25,000 lives, has yet to be finally settled, 
despite a two-year ceasefire. For many of his citizens, the issue is as 
burning a national cause as the 1915 massacre of Armenians by Ottoman 
Turks. So they are alarmed to see their opponents now have a new weapon: 
oil. And new friends: the Americans. 
For Armenians, it is an unhappy reversal of fortune. They receive more 
United States aid than any other country except Israel, not least 
because of the efforts of a highly motivated diaspora. Azerbaijan, by 
contrast, is subject to a ban on US aid. Yet now Washington's eyes are 
straying eastwards, seduced by the riches that lie below the warm waters 
of the Caspian Sea. 
Armenia has always been touchy about its position on the map. It is 
acutely aware that it is a Christian state surrounded on three sides by 
Islam. That sentiment has been deepened by the blockade of two of its 
four borders - with Azerbaijan and Turkey - following the war which not 
only left Armenian Karabakhs in control of their enclave, but also left 
a swath of Azeri land in Armenian hands. Military victory was theirs; 
yet the country has acquired an embattled, solitary air. 
Mr Ter-Petrossian balks at any mention of the word "isolation". The US 
and Russia still have interests in his country, he said in a recent 
interview with The Independent. He does not dispute, however, that there 
are "problems". "Yes, it's true that the US has very serious interests 
in Azerbaijan and these are connected with oil," he said. "And it's true 
that Russia doesn't want to spoil its relations with Azerbaijan because 
of its interests there." 
"Serious interests" is no exaggeration. US oil giants have 40 per cent 
of the leading BP-led consortium developing Azerbaijan's oil resources, 
estimated at twice that of the North Sea. The Azeri President, Haidar 
Aliyev, a former-member of Brezhnev's Politburo, is soon to be feted for 
the first time in Washington by President Bill Clinton. A who's who of 
political heavyweights in the US are pressing for an end to the ban on 
aid to Baku, including two former national security advisers, George 
Bush's Secretary of State, James Baker, and the former White House 
chief-of staff, John Sununu. When it comes to a fight for Washington 
dollars between the Armenia diaspora and the oil lobby, it is an unequal 
contest. The oilmen are the favourites. 
Though still close, relations with the Russians have also changed. 
Moscow's old divide-and-rule policy in the Trans-Caucasus has changed. 
In 1994, Moscow's generals dispatched $1bn of free arms to Yerevan and 
Russian involvement was suspected in assassination attempts against Mr 
Aliyev and Eduard Shevardnadze in Armenia's neighbour, Georgia. Now 
Moscow also smells the bouquet of oil. The Russian company Lukoil has 
been cut into Azerbaijan's Caspian operations. 
For Armenia, the heaviest blow came at the Lisbon summit of the 
Organisation for Security and Cooperation in Europe last December. Every 
country (except Armenia) supported a resolution stating that 
Nagorny-Karabakh should receive the highest level of autonomy - but 
within Azerbaijan. "Ever since then, they have felt that the world is 
ganging up on them," one diplomat said. "There has been a change of 
mentality, a hunkering down." 
Mr Ter-Petrossian, 52, a former academic, has not always helped his 
cause. Immediately after Armenia gained independence, he was seen by the 
West as one of the better behaved new leaders. The economy shrank by 
half and much of the republic slumped into poverty. But he pushed on 
with market reforms. Lately, his reputation has become tarnished. He 
banned an opposition party, and closed several newspapers. Last 
September, a scandal erupted when he was re-elected by a poll condemned 
by international observers as seriously flawed. There was alarm about 
the disparity of 22,013 between voters and the number of coupons 
registered. Mr Ter-Petrossian won by 21,941 votes. 
"Those were not ideal elections," he said. "Yes, there were violations. 
There were technical violations, violations by the electoral 
commissions, violations by the opposition and shortcomings of the law." 
He admits that the elections "did a lot of damage internationally" but 
insists the result was unaffected. His second term will be critical. 
Manoeuvrings over a settlement with Baku over Nagorny-Karabakh are 
underway. There has been talk of giving Armenia, which holds one-fifth 
of Azeri territory, the route for the main pipeline exporting Azeri oil. 
Mr Ter-Petrossian seems to take the proposal seriously, though he says 
he will not allow it to be linked to the Karabakh issue and accuses Mr 
Aliyev of using it as a "weapon" in negotiations. He talks of "special 
status" for Karabakh - one that stops short of recognising it as part of 
Azerbaijan. 
Mr Ter-Petrosian's position is not easy. Without a settlement, this 
nation of 3.5 million risks missing out on the regional benefits of 
Caspian oil and its national sense of being history's whipping boy will 
deepen. But compromise with Baku is certain to be met with a backlash at 
home. Try proposing a toast to "friendship among nations" at an Armenian 
dinner. A harmless gesture? Not in Yerevan. When this correspondent did 
it, the smiles around the table froze. Friendship with Baku - oil or no 
oil - still sends shivers up Armenian spines. 

*********

#5
Christian Science Monitor
July 25, 1997 
[for personal use only]
Steering NATO - Not a One-Country Job 
By Stanley R. Sloan 
Stanley R. Sloan is the senior specialist in international security 
policy with the Congressional Research Service of the Library of 
Congress.

NATO's Madrid summit is now history. The Clinton administration ensured 
that the meeting yielded the list of candidates for NATO membership that 
it preferred.
But the administration's approach to pre-summit consultations created 
some serious frictions in the alliance, and troubled even those allies 
who strongly supported the administration's goals. Now, as NATO enters 
the critical process of negotiating and ratifying the enlargement 
decisions taken in Madrid, the Clinton administration has an opportunity 
to reflect on the leadership style most likely to achieve its policy 
goals in the months ahead.
The issues facing the United States and its allies are not trivial. 
Allied leaders in Madrid rallied together to produce a "successful" 
outcome, inviting the Czech Republic, Hungary, and Poland to join NATO, 
leaving the door open for other qualified candidates, and noting their 
continuing efforts to build a "new NATO."
But the real success of Madrid will be measured by subsequent events. 
The debate in the United States Senate on the candidates nominated for 
NATO membership will likely be an intense discussion of the American 
role in Europe and in the post-cold-war world. President Clinton 
apparently sees the outcome as critical to his place in history. The 
stakes are high. It is not surprising that administration officials are 
focused on ensuring that it all comes out right.
On the other side of the Atlantic, challenging economic circumstances 
and weakened political consensus in many continental nations are making 
life difficult. The US economic model is admired but not seen as 
universally applicable to European circumstances. This fact was made 
clear by several European leaders following the "G-8" economic summit in 
Denver, at which the president had clear bragging rights based on 
current US economic success.
In spite of tough times, European Union (EU) leaders would like to move 
ahead with deepening the Union through the formation of a European 
Monetary Union. They claim to support enlarging the EU to bring in new 
democracies from Eastern and Central Europe. But doing both in the next 
several years will be difficult at a time when economic margins are so 
slim and domestic political support notably fragile. The summit of EU 
leaders in Amsterdam last month clearly put European weaknesses on 
display.

It's not easy being No. 1

Self-confident US behavior has rubbed many Europeans the wrong way. When 
the Clinton administration revealed its choice of three candidates - 
Poland, the Czech Republic, and Hungary - to participate in the first 
wave of NATO enlargement, many allies privately applauded. Even France, 
which is a strong proponent of including Romania and Slovenia, was not 
surprised that the United States and several other allies would only 
support a smaller group.
But the fact that the United States appeared to have abandoned the 
process of NATO consultations in making its choice clear, and then said 
its decision was non-negotiable, troubled even our closest allies. It 
strengthened the hand of those in Europe who claim that the United 
States is acting like a "hegemonic" power, using its impressive position 
of strength to have its way with weaker European allies. One official of 
a pro-American northern European country that supports the package of 
three told me, "We liked the present but were troubled by the way it was 
wrapped."
US officials say that they wanted to keep the issue within alliance 
consultations but that their position was being leaked to the press by 
other allies. They decided to put an end to "lobbying" for other 
outcomes. Their choice to go strong and to go public may be 
understandable and even defensible. However, the acknowledged leader of 
a coalition of democratic states probably needs to set the very best 
example in the consultative process if it wants other sovereign states 
to follow.
Perhaps it is just hard being No. 1. US officials have noted that the 
United States is "damned if it does, and damned if it does not" provide 
strong leadership. Perhaps the style of the NATO decision simply 
reflects a Washington culture in which the bright and brash more often 
than not move ahead in the circles of power. But the style does not work 
well in an alliance of democracies.
Whatever the explanation, US-European relations would have been better 
served by a US approach that allowed the outcome to emerge more 
naturally from the consultative, behind-the-scenes consensus-forming 
process. The final result would have been the same, and the appearance 
of a United States diktat to the allies would have been avoided.

Speak softly

In the months to come, difficult issues will arise in the context of the 
debate on ratification of the first enlargement package. In the United 
States Congress, defense burden-sharing - the relationship between US 
defense efforts and those of its current allies - may be a more 
contentious issue than the credentials of the candidate countries. 
Further, the United States and its allies face the prospect of a 
difficult debate about what should be done in Bosnia after the mandate 
for the current allied Stabilization Force there runs out in June 1998.
Given the volatile nature of these issues the administration will have 
its hands full. Effective United States leadership will be required to 
ensure outcomes that serve US interests. Under these circumstances, 
perhaps US policymakers might wish to reflect on Teddy Roosevelt's 
advice to "Speak softly and carry a big stick."
The United States already has a big economic, political, and military 
stick. It can afford to speak softly.

********

#6
Grain Losses of 'at Least 12 Million Tonnes' Predicted 

Trud
July 23, 1997
[translation for personal use only]
Report by Yelena Berezneva: "Harvest Has Begun With Losses"

First Vice Premier B. Nemtsov had promised to attend yesterday's
conference devoted to the harvest. Alas, he did not come. And the
questions prepared for him by the leaders of the regions, oil companies,
and banking structures (involved by the government in an emergency
procedure to supply fuel and money for the harvest) remained unanswered. 
Yet too many questions have accumulated. For instance, yesterday it became
clear once and for all that the countryside will not receive further
credits without accounting for previous ones. Moreover, banking structures
are simply unable to work with the agrarian sector in this hasty manner: 
The harvest is already under way but the question of credit for the
harvesters has only been raised by the government.
As for the oil companies as before they are asking for a minimum of
1.5-2 tonnes of grain for each tonne of fuel. That means that after
harvesting the majority of agricultural enterprises will once again be left
with empty pockets: With this disparity in prices all the money will go to
pay off their debts. And even the prosperous (against the background of
the others) Saratov agro-industrial complex which is counting this year on
obtaining at least 6 million tonnes of grain, after paying for credits,
fuel, and seeds and giving the people their long-awaited wages, will be
left with nothing.
Meanwhile the harvest still has to be brought in. But it is emerging
that it will be extremely difficult to do this. And although an excellent
grain crop has ripened -- nearly 75 million tonnes (a little over 5 million
tonnes more than last year), grain losses have begun in the 12 regions
which have already embarked on the harvest. In Lipetsk Oblast it is
because of the catastrophic fuel shortage. The reason is the same in
Stavropol Kray where there is half as much diesel fuel and gasoline on the
farms as there was during last year's harvest. Moreover, the Stavropol
grain growers are greatly impeded by the rain. Finally, there is a
shortage of equipment. For that reason they failed to plow several tens of
thousands of hectares in the spring. And now they will hardly manage to
bring in without losses the harvest which has already been grown.
The small sum in leasing funds promised by the government was
allocated recently. And the "idling" combine plants (primarily
"Rostselmash") may perhaps deliver 2,700 combines to the countryside but
only by the fall. Although over 130,000 combines are needed for the normal
provision of the harvest.
Most likely one of the most pessimistic of the agricultural analysts'
forecasts will come true -- grain losses will be at least 12 million
tonnes, slightly over 3 million tonnes more than last year. Consequently
of the harvest of nearly 75 million tonnes that has been raised god grant
there will be 60 million tonnes left to eat. Because steps for the
financial and material and technical backup for the 1997 harvest are being
taken too late.

********

#7
Business Week
August 4, 1997
[for personal use only]
COMMENTARY: IS RUSSIA DUMPING STEEL--OR GETTING DUMPED ON? (int'l edition)
By Carol Matlack and Patricia Kranz 

Russia's Western trading partners are threatening to snuff out one of
the few
bright lights in the bleak landscape of post-Soviet manufacturing. The U.S.
and the European Union are poised to slap duties of up to 185% on Russian
steelmakers, contending that the Russians are dumping cheap steel on foreign
markets. The duties, set to take effect this month, would join a growing list
of antidumping penalties on other exports, from pig iron to potash, that cost
Russia at least $1 billion a year. Russia is negotiating to head off the
duties by agreeing to limit steel exports. Either way, Russian steel mills
will lose a big chunk of foreign sales, which now account for nearly
two-thirds of their business.
Unlike other developing countries that have been hit with dumping
complaints, Russia has no way to prove its prices are fair. It should be
given a chance to do so. U.S. and EU trade laws classify it as a
``nonmarket'' economy. The laws assume that Russian manufacturers are so
entwined with government that their actual production costs can't be
calculated. When a Russian company is accused of dumping, U.S. and EU
authorities study similar companies in a ``surrogate'' country. If the
Russian company's prices are lower, it gets sanctioned.
LOW WAGES. The U.S., for example, recently hit Russia's Severstal steel mill
with a 61% provisional duty based on an investigation of Brazil's steel
industry. That's only one of 18 antidumping actions brought against Russia by
the U.S. and EU in the past few years. True, Russian steel sells for 20% to
40% less than U.S. steel. But low wages are a big reason for the disparity.
Severstal workers earn less than $350 a month, compared with an average
$4,000 for U.S. steelworkers. ``It's high labor costs that price the U.S. and
Europe out of the market,'' says Anders Aslund of the Carnegie Endowment,
which tracks Russia's economy.
Russia is furious at being shut out of foreign markets at a time when free
trade is blossoming worldwide and former communist economies are being
encouraged to open their borders to imports. By building a $4.5
billion-a-year export business, Russian steel mills have kept on humming,
paying their workers while most of the country's other manufacturers are in
shambles. Russian leaders, who are bidding to join the World Trade
Organization by the end of 1998, complained to the Clinton Administration and
EU leaders during several recent high-level meetings. In June, to protest EU
antidumping actions against Russia, First Deputy Prime Minister Boris Nemtsov
refused to meet with a visiting EU trade delegation in Moscow.
Russia has made huge strides by decontrolling prices, privatizing state
enterprises, and liberalizing its trade policies. Steelmakers now pay market
prices for raw materials such as coal and iron ore. But the government
continues to exert control over major sectors of the economy, such as rail
transportation and electric power, and it holds a big stake in some
privatized companies. Russia could petition the U.S. and EU to be
reclassified as a market economy. Poland has done that successfully. But
Russia hasn't asked, probably because it knows it's not quite ready to make
the grade.
What's needed is a new classification that recognizes transitional
economies such as Russia's and lets them be judged on real numbers rather
than false comparisons. The White House likes the idea but hasn't pursued it,
in part because Russia stopped pressing the issue when Boris Yeltsin was
sidelined with health problems last year. The Commerce Dept.'s announcement
of provisional dumping duties on Russian steel has revived discussions in
Washington, but creating a new classification would require congressional
action and would be bitterly fought by domestic steelmakers and their allies.
True, slogging through Russian companies' books wouldn't be easy. Many
companies barter with suppliers or don't pay at all. But antidumping agencies
could be given additional investigative tools to help them ferret out
production costs.
Russia may wind up paying dumping duties under a new system. But having
come so far on the path to reform, it deserves a chance to defend itself in
the trade arena.

********

#8
LEADER OF THE RUSSIAN COMMUNIST YOUTH LEAGUE IGOR 
MALYAROV REFUTES REPORTS ABOUT HIS ORGANISATION'S 
INVOLVEMENT IN THE ATTEMPT TO BLOW UP THE MONUMENT 
TO PETER THE FIRST
MOSCOW, July 25 (from RIA Novosti correspondent Alexandra
Utkina) -- Leader of the Russian Communist Youth League Igor
Malyarov spoke today in defence of its "honest name". He refuted
the report in mass media on his organisation's involvement in
the attempt to blow up the monument to Peter the First. Malyarov
censured the mass media that reported the arrest in connection
with this terrorist act of a certain Pavel Bylevsky, who passed
himself for the first secretary of the League. "This is a
deliberate lie and provocation", he said, "some one benefits by
presenting this in such a light and tarnishing the only real
youth organisation, whose top priority is the solution of young
people's problems, rather making political statements or waving
red banners". "We oppose the government course, yet we are not
idiots to run around with plastic bombs," said the leader of the
Russian Communist Youth League. According to him, Bylevsky has
nothing to do with the Komsomol.
Malyarov holds that there is no Revolutionary Military
Council, which allegedly claimed responsibility for a number of
terrorist acts at all, instead there are small groups seeking to
attract public attention to themselves. According to him, there
are quite a few pseudo-communists and pseudo-Komsomol
organisations in Moscow. In particular, there are two Moscow
condominiums, one of which publishes under the guidance of Igor
Gubkin and "along the channels of the Communist Party" the
newspaper Young Communist, where the Russian Communist Youth
League is constantly attacked. According to Malyarov, the
Russian Communist Youth league "is not of use" to either
Communist Party leader Gennady Zyuganov, who failed to make it a
"pocket organisation" or the "powers that be".
State Duma deputy from the Communist Party and member of
the Russian Communist Youth League Darya Mitina warned that if
within a week all publications which "spread lies about the
Russian Communist Youth League" do not provide refutation, the
League reserves the right to bring an action against them. 

********

#9
>From RIA Novosti
Nezavisimaya Gazeta
July 24, 1997
UNEMPLOYMENT REMAINS STABLE

At present, the 36.2 million working women in Russia
account for 51 percent of the total number of the gainfully
employed population. The employment level of the women in the
able-bodied age equals 75.7 percent. The average age among the
working women is 39.4 years, and among men - 39.7. A fifth of
the working women are young people under 30 years of age;
pensioners account for more than 10 percent. The highest
employment level is among women at the age of 30 - 40; they
account for 86 percent of all women of this age.
The working women have the higher level of education in
comparison with working men. They account for 52.8 percent of
all working people with a higher education, and for 57.5
percent of the working people with a specialised secondary
education.
Forty six percent of the employed women are factory
workers, 54 percent - office workers of whom 27 percent occupy
leading posts.
On the other hand, women account for nearly 70 percent of
all the unemployed in our country today. In the coming two
years the situation in this sphere will not change, experts
believe. The economic growth does not touch upon the industries
in which female labour dominates. 
Apart from that, with the beginning of the reform in our
country women have started to be "ousted" from organisations
both because of the surplus amount of the personnel and 
because traditionally "female occupations" have started
immensely attracting men's attention. 
The less socially protected categories of women - those
who have small children, disabled children, unmarried
mothers, graduates from educational establishments who do not
have experience in work, women in the pre-pension age and wives
of military men who live in cantonments - have found themselves
in the most difficult position on the labour market.
The material is taken from the booklet
titled "Women's Social Security." 

*********

#10
STATE TAX SERVICE "FULLY TRUSTS" DECLARATION OF 
RUSSIAN PREMIER VIKTOR CHERNOMYRDIN, ALEXANDER POCHINOK
SAYS
MOSCOW, JULY 25 /FROM RIA NOVOSTI CORRESPONDENT MARIA
BALYNINA AND NATALYA SALNIKOVA/ -- The check of the State Tax
Service has revealed no additional estate objects and sources of
income of Viktor Chernomyrdin with the exception of those stated
in the declaration, State Tax Service boss Alexander Pochinok
said to dispel rumours published in some mass media about
'rather modest' total income of Chernomyrdin as written down in
the document. 
Pochinok was talking to a press conference at RIA Novosti
headquarters to shed light, in particular, on the situation with
declaration of incomes submitted by state officials.
"We fully trust the declaration submitted by the prime
minister since there are no documents which can deny its data",
Pochinok said.
When asked about whether or not the declaration submitted
by the Deputy Secretary of Russia's Security Council Boris
Berezovski is true, Pochinok said that this is yet to be
checked. At the same time he did not exclude a possibility that
the value of Berezovski's property was made according to the old
estimation, while packages of shares are estimated according to
their nominal value. 

*********

#11
Washington Post
25 July 1997
[for personal use only]
High Russian Officials Duck Anti-Corruption Initiative 
By Daniel Williams

MOSCOW, July 24—Returns are in from one of the government's recent major
efforts to fight corruption, and they are not very promising, Russian
officials said today.
By July 20, a deadline set by President Boris Yeltsin in April,
government officials, including elected regional governors, were supposed
to have filed declarations detailing their incomes and financial worth.
Today, a team of Yeltsin's corruption fighters said that, even in the
central Kremlin administration, not everybody had filed. In the provinces,
there was a virtual boycott: Only a third of the governors made
declarations, which for them were voluntary.
Some of the accountings, moreover, seemed significantly understated.
Russian reporters took skeptical note of the declaration of Boris
Berezovsky, Yeltsin's national security chief, who is reputed to be one of
Russia's wealthiest businessmen.
Berezovsky's total worth in land and stocks was listed as the equivalent
of $39,000, according to documents published in the Kommersant-daily
newspaper. Forbes magazine recently estimated his wealth at $3 billion.
Berezovsky's press secretary said the declaration in Kommersant was
"probably accurate," but he did not strongly dispute the Forbes estimate.
In a telephone interview, he said he did not know if Forbes was right.
Such an apparent discrepancy threatened to make a mockery of a campaign
that is, by media count, Yeltsin's fifth anti-corruption drive. The
response to the call to declare total worth was "not ideal," acknowledged
Alexander Livshits, deputy presidential chief of staff.
At a news conference, Livshits and other government representatives
suggested that even if the collection of financial declarations had been a
success, it might not have had a large impact. "A marriage certificate does
not guarantee marital fidelity. Similarly, the fact of filing a tax
declaration is not . . . a cure-all of corruption," said Georgy Satarov, a
presidential adviser and one of a team of officials trying to implement a
series of anti-graft measures.
Satarov expressed hope that at least by trying to keep track of the
worth of government officials, the extent of corruption could be reduced.
Official corruption in Russia takes many forms: bribery, tax evasion,
embezzlement, sweetheart sales of state property and resources, insider
loans, smuggling. Excused by some as growing pains in the complex
transformation from a centralized economy to an open-market system, the
scale is nonetheless breathtaking. The most recent allegations of
significant wrongdoing center on the disappearance of hundreds of millions
of dollars meant to finance the construction of airplanes for sale to India.
The suspicions that government officials and their friends are profiting
hugely from illicit deals coincide with tales of late and paltry payments
of pensions to retirees, as well as of salaries to soldiers, teachers and
other state employees. As a result, an atmosphere of public cynicism has
arisen in which new decrees and anti-corruption campaigns create little
enthusiasm.
"These measures are unnecessary, because everything worth stealing has
already been stolen," declared Literaturnaya Gazeta, a weekly newspaper.
With tones of disbelief, newspapers recently reported the tax
declaration of First Deputy Prime Minister Alexander Kokh, who included in
his income $100,000 for a book he wrote called "Privatization in Russia:
Economics and Politics." The publisher was listed as a Swiss company, but
the book has never reached bookstores, and Kokh aides said they were not
sure it ever would.
This month, Prime Minister Viktor Chernomyrdin released figures for his
net worth. Including a car, it totaled about $46,000. He listed an annual
income of $8,100. Since Chernomyrdin has longtime ties to Gazprom, the
natural gas monopoly that is Russia's biggest firm, many Russians found the
modesty of Chernomyrdin's stated wealth hard to believe. "I may be out of
touch with the times, but I own no securities or real estate abroad," he
said in explanation.
Yeltsin has issued numerous decrees to combat corruption, but they
usually have lacked teeth. The financial worth decree seems to be no
exception. For example, there is no punishment specified for failure to
file a declaration of wealth and income. Yeltsin will decide later whether
"administrative measures" will be taken against those who refuse to file,
said Yevgeny Savostyanov, a top Yeltsin aide.
Among high-ranking officials who ignored the July 20 deadline for
filing, one said he was on vacation, another said he was ill, and still
another had promised to comply before today's news conference but did not.
Observers complained that the decree contained loopholes, notably the
likelihood that property can be placed in the name of a relative or hidden
in a corporation to evade the requirement to declare it.
"This decree was designed to fail," said Alexander Minkin, an
investigative reporter.
Similar flaws seemed to weaken another thrust at corruption -- a decree
that bidding for government contracts be competitive. The same decree
contained a provision allowing the president to restrict bidding whenever
he wanted to, seemingly opening the way to favoritism. 

**********

#12
Aides Defend Anti-corruption Campaign 
Reuters
July 24, 1997
MOSCOW -- Aides to President Boris Yeltsin said on Thursday many top
officials ignored his orders to declare their property and income under an
anti-corruption drive. 
But they told a news conference there were few legal means of
prosecuting saboteurs and setting tough moral standards for Russian
politicians in the near future. 
"More than 63 percent of Russia's regional leaders failed to meet the
July 20 deadline for filing their declarations," Yeltsin's deputy chief of
staff, Yevgeny Savostyanov, said. "The situation is too bad with the
regional leaders." 
"There are no articles in the criminal code to punish the saboteurs," he
added. "So they could only be punished administratively in a way the
president will decide." 
Yeltsin, 66, ordered top officials to make their incomes public as part
of a drive to root out the age-old scourge of corruption, which he says is
an obstacle to economic reforms. 
Yeltsin has declared his own income, as have Prime Minister Victor
Chernomyrdin and other ministers. 
Alexander Livshits, a Kremlin economic aide, said the first experience
of declaring property and incomes by officials proved confusing but played
a positive role. Critics said many officials have seriously distorted the
price of property they own in a mockery of the whole idea. 
One official put the price of his smart Lincoln Towncar as "less then
120 million rubles ($20,000)." 
"Sell it to me for $30,000 and I will resell it for $60,000 the next
day," one reporter shouted out at the news conference. 
Livshits argued that the problem was not that the official had any
wicked intentions but that it was difficult to assess the values of
possessions in many areas of the nascent Russian market. 
"Of course some of the values cited in the declarations may look funny
but this does not matter," Livshits said. "The main thing is that now we
have some starting point." 
Savostyanov said that although imperfect, the mechanism of property
declarations still encouraged public servants to make honest statements and
would help trace some corrupt officials. 
"It is as simple as that. If an official fails to declare some sources
of income or property he will some day find himself cornered," Savostyanov
said. 
The decision to expose some facts in the personal lives of civil
servants attacks the foundations of the carefully preserved ivory tower in
which bureaucrats have lived since Czar Peter the Great in the early 18th
century. 
Political advisor Georgy Satarov said the concept of a "public figure"
-- an official more exposed than others to public scrutiny and judged by
higher moral standards than others -- was still alien for Russia. 
"We must look at this concept from the historical point of view,"
Satarov said, noting other countries had moved slowly towards accepting the
idea. "Russia is an exception because it is moving towards a civilized
order at great speed." 
"Give us another 150 years and we will settle the problem," Savostyanov
interfered jokingly. 
"No, I think we will come to this faster," Livshits replied. 

*********

#13
GOVERNORS OVERDUE WITH INCOME DECLARATIONS, WARNS KREMLIN
MOSCOW, JULY 25 (from RIA Novosti's Marianna Shatikhina) -
14 out of the 89 regional governors and other administration
heads of Russian Federation constituents are four days late to
declare their incomes, reliable sources in the Kremlin said to
RIA, proceeding from this morning's information. Conspicuous
among them are governors Alexander Surikov of the Altai
Territory, Nikolai Maksyuta of the Volgograd Region, Alexander
Rutskoi of the Kursk, Yuri Goryachev of the Ulyanovsk, and
Evgeni Mikhailov of the Pskov Region.
Local executive heads are to declare their incomes before
July 21 in compliance with a federal presidential decree.
Governors are the least disciplined of all in this respect,
remarked Evgeni Savostyanov, second in charge of the federal
presidential staff. All presidential envoys in the regions had
complied with the declaration decree down to the last
man--against a deplorable 37 per cent of governors, he said to a
Moscow news conference yesterday.
Now, the presidential decree merely recommends to elective
regional heads to declare incomes, but it will be an obligatory
practice for all civil servants since January 1, he warned.
Black lists have been drawn of VIPs who failed to declare
their incomes and property before the deadline. Prominent on
these lists are Petr Mostovoi, General Director of the Federal
Board for Insolvency and Bankruptcy; Victor Mikhailov, federal
Minister of Nuclear Power Industry; and presidential assistant
Lev Sukhanov. However, these and some other high functionaries
have given valid reasons for failing to comply with the decree,
and promised very soon to submit their declarations.
The acting legislation does not stipulate criminal
liability for failure to submit income declarations, and it is
up to the federal President to mete out administrative
punishments on the culprits, said Mr. Savostyanov. 

********