July 25, 1997   

This Date's Issues:   1082  •1083  1084  1085

Johnson's Russia List [list two]
#1085 
25 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. Rossiiskaya Gazeta: Prime Minister Chernomyrdin's July 24 report,
"On the Course of the Implementation of the Russian Federation's President's
Address to the Federal Assembly 'Order in Power Means Order in
the Country (On the Situation in the Country and the Main
Directions of the Russian Federation's Policy)' and of the
Programme of the Government of the Russian Federation
'Restructuring and Economic Growth in 1997-2000'."
2. TEXT: PICKERING OPENS CONFERENCE ON NATO PRIORITIES AFTER MADRID. 
3. Trud: US Senate Russian Conscience Law Debate Viewed.
4. Reuter: Dmitry Solovyov, New Kazakh capital leaves would-be 
settlers cold.]

*********

#1
>From RIA Novosti
Rossiiskaya Gazeta
July 25, 1997
VIKTOR CHERNOMYRDIN: "THINGS GOT OFF THE GROUND. THIS MUST BE UNDERSTOOD
BY EVERYONE"

On July 24, at an extended session of the government, the
Prime Minister of Russia came up with a report "On the Course
of the Implementation of the Russian Federation's President's
Address to the Federal Assembly 'Order in Power Means Order in
the Country (On the Situation in the Country and the Main
Directions of the Russian Federation's Policy)' and of the
Programme of the Government of the Russian Federation
'Restructuring and Economic Growth in 1997-2000'."

Esteemed Participants in the Session,
I have deliberately dwelled in detail on the results of
the first six months of the year and questions associated with
the drafting of the budget for 1998, for it is precisely on
this basis that the priorities of the Government's economic and
social policy are formed.
In this connection I would like to single out a number of
problems progress in the settlement of which makes up what I
would describe as a mandatory technical minimum in the
government's economic policy in the second half of the year.
First of all, these are the fulfilment of the budget and
the settlement of most of the federal debts to the budget
sphere. The situation is developing in such a way that we have
good opportunities for fulfilling all our obligations before
the end of the year even with the sequestration of government
spending. Moreover, by mobilizing additional funds and using
for the last time all sorts of mutual offset schemes, we shall
try and will reduce the size of the sequester by about 30
trillion roubles, and even more, if we really try hard.
We are faced with the task of attracting additional
sources for offsetting wage debts to the workers of
budget-financed sectors and servicemen to a total of 20
trillion roubles.
From this sum we must repay 5.4 trillion roubles in July
and August through the Defence Ministry. Another 2.1 trillion
roubles will be used before the end of December to repay
delayed wages and salaries to the workers and employees of the
federal level. 12.5 trillion roubles will be used to repay wage
debts to the workers and employees in the budget-financed
sphere in the regions. At the same time, we will provide
current dedicated transfers to the territories, while 7.5
trillion roubles will be paid out in the form of budget loans.
Let me remind you that the repayment of wage debts will
also enable us to secure additional payments to the Pension
Fund which, with the continued dynamics of collection of
insurance premiums, will make it possible to prevent new debts
in the pension insurance sphere. Calculations show that if we
secure growth in the volume of insurance allocations and reduce
the debts of the enterprises and organizations to the Fund
itself, we will not only eliminate the budget deficit of the
Pension Fund, but will also build a reliable reserve for the
winter months of 1998. I think that everything here is clear.
We must achieve this goal and we will. Personal responsibility
for this lies on the top executives of the Ministry of Finance
(A. Chubais and A. Kudrin) and of the State Tax Service (A.
Pochinok).
Budget execution also means the delivery of essential
commodities to the northern territories, the harvesting
campaign and the preparations for winter. In the North we have
already gave out about one and a half trillion roubles, of
which 600 billion were provided in July, and another 1 trillion
roubles will be paid out in August. There is not much time
left: not more than a month and a half, but we will remedy the
situation. This question is under special government control
now.
I don't remember a single year when Russia did not have 
problems with crop harvesting. There are problems now, too. On
the other hand, the harvesting prospects are particularly good
this year. In the grain harvesting areas the average cropping
capacity is 2.5 to 2.6 tons per hectare. It will be very
regrettable and criminal if we waste away this potential and if
all this wealth gets covered by snow.
It has been recently decided to supply to the countryside
for the harvesting campaign about 3,000 grain harvesters, 4.7
million tons of diesel fuel and 2.2 million tons of gasoline.
Altogether, 3.4 trillion roubles will be provided for the
harvesting campaign, including 1 trillion in July. The Finance
Ministry must strictly comply with the harvesting financing
schedule, for there is no time to be wasted.
As you remember this year a special cut-rate credit fund
for the countryside has been set up. Its formation, though, is
not going easy. Many are delaying their debts for commodity
credit in the hope for help from the federal budget. They do
not understand that this makes it harder for themselves. If
there is no fund, it means there is no money for fuel and
lubricants, farm machines and for harvesting in general. The
situation is anecdotal: they started filling up the fund when
we said: no debt repayments - no transfers. By now about 2
trillion roubles have already been remitted and about 50
billion roubles are arriving every week from the sale of
promissory notes. Things got off the ground and we will make
sure it stays so.
Virtually yesterday the government signed a resolution on
the preparations for winter. Our common task is to make sure
that everything built into this programme is done properly and
in time. There is a question of rescheduling the debts of and
to the fuel and energy complex. We are completing the
development of a comprehensive scheme of the settlement of this
problem.
The fulfilment of the budget is directly linked with the
work with taxes. I will add to what has already been said that
we must very substantially improve the collectability of taxes
from the top-income groups. The real sum of the underpaid
income tax amounts of tens of trillions of roubles.
Very serious attention must be given to urgent structural
reforms which require high responsibility and thoroughly
weighed-up steps. I would single out several directions here:
First, radical restructuring of the entire social sphere.
Second, development of high managerial skills in all
sectors of the economy and reduction of costs and wastes.
Third, protection of property rights, both private in all
its forms, and government.
Fourth, government support for the promotion of goods and
services of Russian manufacturers to the world markets and
integration of the Russian economy into the modern economic
environment.
And, finally, fifth, a radical reform of those elements of
the state structure where even simple continuance by the old
methods threatens the country's economic security. I am
primarily referring here to defence and to the law enforcement
system.
I will start with the branches of the social sector.
We badly need today essentially new, effective mechanisms
of implementation of social policy, which would ensure a more
rational and, I would say, wiser use of the available
resources. The essence of the Government proposals is that
social benefits and allowances must only be provided to those
who really need them. Let me remind you once again that today
the number of people who can contend for various kinds of
privileges and benefits is close to 100 million. This means two
thirds of Russia's population! As a result, for some these
extra payments and benefits practically do not have any
economic or general life significance, whereas for others they
are obviously insufficient and do not guarantee the required
social protection.
I hope that together with our legislators we will manage
to find the required solutions. After all, they are needed not
to discriminate or deprive anyone of bare essentials, but to
secure the most meaningful possible social guarantees and to
implement the principles of social justice.
One of the most important elements of reforms in the
social sphere is the reform of the pension insurance system,
which affects the interests of 38 million pensioners, and in
the long run - of each and everyone.
The essence of the pension reform is gradual transition to
insurance principles and to a savings-based system with
personal pension insurance accounts so that everyone know how
much has accumulated for his or her decent life after
retirement.
This will primarily concern those generations that are
approaching the employment age and have a reserve of time and
energy to earn themselves for decent life at old age. That is
why the transition to the new principles of accumulation and
payment of pensions will take several decades, too. We will not
permit any cuts or other discriminatory measures against those
who are receiving pensions now.
The reform of the public health care and public education
system, too, calls for a well-considered strategy. Oleg
Sysuyev, who heads this work, will tell you in detail about
it. 

Esteemed participants in the session,
We all know very well that the market system is based on
competition. Virtually all documents on the economic policy
seal the correct words about the regulation of natural
monopolies. But we attacked these issues seriously only this
year.
The essence of our actions is to develop competition in
monopoly industries, reduce spending in industry, and
eventually raise competitiveness of the entire economy. 
We have scored certain results. RAO EES Rossii and Gazprom
are being restructured, the rate of growth of their prices and
railway transportation charges went down, and we passed several
decisions to reinforce this trend. Now we must fulfil our
decisions. Much will depend on the activity and persistence of
Boris Nemtsov and heads of industries, companies and
enterprises.
A week ago the Government discussed a package of measures
for the second half of the year designed to reduce cross-
subsidising of consumers, review tariffs and cancel many
privileges. 
The implementation of these measures will reduce
electricity tariffs by 22.5% this year, increase the revenues
of the Railways Ministry by 1.5 trillion roubles owing to a
review of privileges, and create a bridgehead for a more
balanced railway transportation tariff policy. As a result, we
expect the industries' spending on transportation to go down by
2 trillion roubles, and communications charges will be reduced
by 1 trillion roubles. 
In addition, we will continue working to create a federal
wholesale market of electricity, and to streamline tariffs in
the delivery of oil via pipelines. We are finishing work on a
package of measures concerning gas and gas transportation
tariffs. Now we must keep up the speed we have accumulated and
fight back potential procrastination. 
Besides, we have grown used to think that our main
monopolists are the electricity and gas producers and railways.
This is only a half of the problem. What about water and heat
supply, ports and airports? Aren't they monopolists? And the 
charges for navigation along the Northern Sea Route, which have
put on its knees the timber export industry of Siberia? Isn't
this monopolism, too?
The Anti-Trust Committee is acquiring special significance
now. It should direct and coordinate our efforts, and be the
main "agitator." Today the Committee clearly does not live up
to its name. We will change this, strengthen the committee
organisationally and materially. In the next few days we must
appoint a head of the Committee. Are we choosing a bride? What
takes us so long?
We have made considerable progress in preparations for the
reform of the housing and communal services. In principle, we
understand the necessity for this reform. It is apparent that
this reform will have a positive, liberatory effect on the
budgets of all levels and hence on the economy in general.
There are general framework conditions, federal standards of
spending on housing and communal services, and yearly
proportions in the distribution of allocations to the
improvement of these services between the government and the
population. In other words, we have the outlines of the 
reform. 
I want to explain once again that there will be no false
egalitarianism; we will not impose decisions and deadlines on
anyone. It is the task for the regions. They will determine
what, when and how they will do. The centre only demands that
they stop idling, and carry through the reform. To do this,
they should elaborate regional programmes. 
We will encourage this, including by linking transfers,
targeted assistance from the federal budget and other things to
the progress of the reform. We promised to help
organisationally and in term of methods. Today we have
distributed a package of methods tips on the practical aspects
of the reform of housing and communal services. The materials
have been forwarded to the regions. 
The same concerns the reform of enterprises. We have been
speaking about it for a year now.
Today we have the first package of draft methods
recommendations which can be applied in practice. I want to
remind you that we regard the reform of enterprises as a key
instrument of raising the competitiveness of the economy, as
the forerunner of a Russian "revolution of managers." The
Ministry of the Economy (Yakov Urinson) should redouble efforts
in this sphere.
The competitiveness of the economy is always based on the
scientific-technical potential. For many long decades we took
pride in this potential as we did in the vast Russian expanses.
This is correct, of course, but too impersonal. 
However, we seemingly have the potential, but the returns
from it are not sufficient. The bulk of responsibility for this
lies with the government: we do not provide enough funds, and
then with major interruptions. Money means much, of course, but
I will risk saying that it is not an end in itself.
This year federal spending will be two times larger than
last year, even despite the reduction of budgetary expenses.
But this will not make life easier for us. Consequently, we
should change the organisation of the scientific-technical
sphere proper, gear it to market conditions. This will be the
responsibility of Deputy Prime Minister Vladimir Bulgak and
Minister Vladimir Fortov. 
We keep wondering at the successes of industrialised
countries, but their governments spend 1.5-2 times less on
research and development than we do. This means that the point
at issue is effectiveness and proper management. I think we
should prepare for a major reform in this sphere.
Assistance to small businesses is a major task. We should
grant assistance above all to small enterprises working in the
production and innovation spheres, construction and agro-
industry. Today, small businesses have a special role to play
in the reform of the housing and communal services and in
changing the countryside. In addition, they should become a
shoulder on which many servicemen retiring during the military
reform would lean, and should play a vital role in creating
jobs in general.
Economic growth will be impossible without the progress of
small businesses. It is in small businesses that the middle
class is largely developing; it is small businesses that feed
the roots of political stability. 
Regrettably, the State Committee on the Development of and
Assistance to Small Businesses (Vyacheslav Prokhorov), set up
in 1995, did not live up to our hopes, and failed to fulfil the
targeted federal programme of assistance to small businesses,
which it elaborated in the first place. The same concerns the
Fund of Assistance to Enterprise. 
It is especially intolerable that we cannot say that the
Committee and the Fund have no money. They do. They get the
money from the budget, revenues from privatisation and foreign
credits. But this money either idles in agent banks, or is used
ineffectively. Anyway, we don't see any movement in the sphere
of small businesses, owing to the lack of activity on the part
of the Committee and the Fund.
I think that the time has come to analyse the entire range
of issues of government assistance to small businesses at a
Government session. At the same time, we should discuss their
leaders. 
Now that market economy is growing mature in Russia, we
should raise the prestige of the institute of property and of
owners. Spendthrifty, ineffective and incompetent management
does great economic damage. For example, we have long seen that
one of the reasons for non-payments is that property is owned
by incompetent people and sometimes outright crooks. But we
still mark time with regard to the procedure of bankruptcies. I
have been told that several thousand bankruptcy cases had been
initiated. But where is the result? We should resolve this
problem by the end of this year.
I expect the federal department for insolvency cases (P.P.
Mostovoy) to operate more energetically.
The same applies to the state property management
committee. It is far too early to rest on the laurels, Alfred
Reingoldovich (Koch)! There is a lot of work in store in the
sphere of privatisation by individual projects. The thing to be
done first of all is to streamline the legal basis, and devise
dependable rules of the game. Otherwise, each tender, each
mortgage auction is accompanied by a scandal.
Meanwhile, the budgetary task should not be simply
executed, it should be exceeded. We have every right to count
on this in the case of Svyazinvest, where the announced
starting price is US$ 1.2 billion, and in the case of Norilsk
Nickel, and in the case of other major projects.
Admittedly, we have not been paying due attention to
strengthening the right of ownership in the sphere of
protecting the rights of investors in the market of finance and
securities. The special state commission set up by decree of
the President is called upon to improve the state of things and
set things in order. It has powers extensive enough to put an
end to arbitrariness which is rampant in these spheres. 
We will start with analysing proposals for control over
audits and investigation of cases of violated obligations to
investors and bringing to responsibility the heads of
structures who have violated them. Special attention should be
paid to the search for and arrest of the property of companies
and banks that have been or are being liquidated, and returning
the funds thus recovered to the investors and stockholders who
have thus suffered.
We are building conditions for the development of a market
of real estate. The major issue here is vision of land not
simply as a natural resource, but rather a piece of real
estate. Land relations should be viewed as a component part of
relations in the sphere of real estate. If we do not find a
convincing, "technological" and socially acceptable solution
here, we will have to forget about mortgaging, about the
privatisation of land plots, a land market, and the land reform
itself in the cities and the countryside. 
This is one of the natural props of economic growth in the
conditions of a market economy. The ministry of agriculture and
foodstuffs and the Russian land committee should work more
actively here.
I am confident that we would not elevate the notion of
ownership if we do not start reforming the loss-generating
agricultural setups, if we do not teach them to return the
money they borrow. 
With this aim in view, we should replace budgetary
financing with normal bank loans. We launched this wholesome
trend in the beginning of the year, and we will continue going
along this road.
We have a bad need of more competition in the agrarian
sphere - both in production and infrastructure. With this aim
in view, incidentally, we might want to scrap the federal food
corporation. 
A few words about our foreign economic policy. We are
facing three main tasks there: to stimulate industrial export,
including its financial, organisational and technical support;
to create beneficial conditions for the access of Russian-made
commodities to foreign markets; and to upgrade the tariff
policy with the aim of protecting the domestic market and
enhancing the competitiveness of the domestic producer.
To implement these tasks, we have to complete in the
latter half of the year the formation of mechanisms of
supporting exporters, to specify the volumes and deadlines of
allocating the needed financial resources. 
The state is keeping in focus the talks with our leading
foreign trade partners (primarily the US and the European
Union) with a view to precluding undue discriminatory measures
against this country or minimising the harm done. 
To remind: the refusal to recognise Russia a "market
economy" costs us several billion dollars a year. In Denver and
in the course of the subsequent talks the matter got off the
ground somewhat. But it would take a lot of work to attain the
desired result. 
Not infrequently, we are making irrational steps in the
sphere of taxation to hamstring our exports. This is especially
true of the VAT. There are matters to be urgently pondered
here. Therefore, I will be waiting a month for the finance
ministry, the ministry of the economy and the ministry of
foreign economic ties to make suggestions for the improvement
of the VAT levied on the advance payments by foreign consumers
of Russian-made commodities and services, and the reimbursement
of the VAT paid on Russian commodity exports.
I can add that in relations with the CIS states we will
launch a stage effort to levy VAT at the place of destination.
This will help increase mutual turnover. 
I am availing myself of the opportunity to put it
straight: a more indepth trade, economic and integration
cooperation with the CIS states will continue to be a major
priority for Russia. Since the start of the year, we have
signed most serious accords with Belarus and Ukraine. They have
to be observed to the dot. Another task for the latter half of
the year in this sphere is making a realistic advance in the
formation of the customs union of Russia, Belarus, Kazakhstan
and Kirghizia. 
By developing integration processes in the Community, we
will continue to observe the Russian interests, economic
interests in particular. 
There is no room for sentiments which simply stand in the
way of normal agreements. Last week's complicated talks on the
payment for the Russian gas supplies to Ukraine and Belarus
have proven that the approach is the only sensible one. 
One of the priorities for the latter half of the year and
the next three years is the military reform which has a direct
bearing on the economy. It is a complex matter; it embraces
rationalising the structure of the armed forces, raising their
combat capacity and socially protecting the military. 
There is only one principle here - efficiency. Decisions
have been made; Presidential decrees have been signed. Now is
the time to act. 
We will reduce the redundant military, reduce expenditures
that do not serve the effort to strengthen the country's
defenses, and discard the ballast that has accumulated in the
armed forces in the past decades. This is necessary if only
because the effort to provide social guarantees to the retired
military would consume over 4.2 trillion roubles next year. 
Today, 70% of the huge allocations for defense are spend
to routinely maintain weaponry and to pay wages and salaries. 
One of the most important objectives of the military
reform is to re-distribute the resources, primarily in order to
improve combat training and to arm the armed forces with new,
modern weapons. 
We have launched a practical effort to optimise the
structure of the defense complex. We are reducing in a planned
way the number of enterprises involved in the defense order. 
In so doing, we are preserving the critical technologies
needed for the production of modern arms and hardware. 
The situation in the economy, in society as a whole
directly depends on how successfully we are fighting crime,
criminal trends in the economy and corruption. 
Russia has introduced a new Penal Code this year. It has
enhanced the coordinating role of the prosecutor general's
office. The work of the power structures is undergoing a
restructuring. All these steps promote a concerted effort to
fight crime. We will be assessing the work of the heads of the
law-enforcement agencies according to results.
The justice ministry is facing new, scaled tasks. These
are: to streamline the single system of state registration of
legal entities and individual entrepreneurs, the right to real
estate and deals with it, which would help build a system of
more efficient government control in the economy. This is also
to transfer the penitentiary system under the justice
ministry's jurisdiction - a truly revolutionary move.
Of course, the problem of corruption and crime is most
acute and complicated. The main task is to uproot it
economically and financially. This is probably the most urgent
of all priority tasks. 
Esteemed participants in the session,
A few words in conclusion. There is no reason for euphoria
or exaltation. 
But there is also no reason for neurotic exclamations of
the type: "everything is wrong" and "everything is bad in
Russia." There are always too many "wrong" things in Russia. 
There is only one objective for us today - to work, to
ponder and learn mistakes and work again. 
We are at a threshold. We can rise and make the Russian
economy competitive and respected internationally. But we can
slide back into the pit, too. Everything will be decided in the
latter half of this year and the beginning of 1998. Everything
will be decided by our joint, hard work, by our mutual
understanding and trust. 
I am especially addressing the Duma members and our
senators, heads of the executive and legislative authorities in
the regions. The current divergence of positions and opinions
on the key matters notwithstanding, today we must be at one,
our work must be fuelled by our common will to ensure economic
growth. 
Russia's economy is ready. This is something that our
people, Russians, are expecting. I am confident that we will
live up to their expectations and hopes.
(An abridged version)

**********

#2
>From United States Information Agency
23 July 1997 
TEXT: PICKERING OPENS CONFERENCE ON NATO PRIORITIES AFTER MADRID 

OPENING REMARKS
Under Secretary of State Thomas Pickering
The Atlantic Council Conference on NATO Priorities after Madrid
Department of State
Washington, DC
July 23, 1997

Let me begin by thanking David Acheson and the Atlantic Council for
inviting me to open this conference. It is a pleasure and an honor to
be here today. The Atlantic Council has played an important role in
promoting NATO and the transatlantic relationship, and in East-West
relations, arms control, and strategic thinking and planning.

The Madrid Summit was a watershed in the history of European security.
There Alliance leaders announced the birth of a "New NATO" for a new
Europe, a Europe without divisions, a Europe composed of open and
democratic societies sharing common values and common purposes. That
has been our goal since NATO began its adaptation at the 1990 Summit
in London. Fifty years ago, Dean Acheson was "Present at the
creation." Madrid witnessed the creation of a new NATO to serve in the
new era in European and world history. A creation which I am sure Dean
Acheson would be proud of because it builds on the strong foundation
of the Alliance that he helped to conceive, build and support firmly.

Allow me briefly to outline what NATO has accomplished. By inviting
Poland, Hungary and the Czech Republic to begin accession talks, the
Alliance has eradicated the dividing line imposed on Europe by
Stalin's armies and the Cold War. Alliance leaders also pledged to
continue this process through future rounds of enlargement. This
commitment is expressed in clear, unambiguous language. The door to
NATO remains open. And NATO has announced that it will continue its
dialogue with those who still seek to join the Alliance in an effort
to help them prepare for membership. NATO remains open to those
democratic states which can meet the standards.

NATO has put in place the mechanisms to develop deeper, more
cooperative political and military relationships with countries
outside the Alliance -- an enhanced Partnership for Peace and the new
Euro-Atlantic Partnership Council. The EAPC provides a place where
Partners can help shape future missions that we undertake together. It
will be a place not just for those who aspire to NATO membership, but
also for those who do not. The aim is nothing less than the true
security integration of Europe.

Similarly, NATO leaders signed at Madrid a NATO-Ukraine Charter which
provides a framework for an enduring, robust relationship between the
Alliance and Ukraine. The NATO-Ukraine Charter recognizes an
indisputable strategic reality: that an independent, sovereign Ukraine
has an important role to play in European security.

This success follows the May 27 signing of the NATO-Russia Founding
Act. That instrument which creates a fundamentally new, cooperative
relationship between two former Cold War adversaries is an extremely
important forward step. By signing the Founding Act, Russia has
rejected self-isolation and chosen to participate in and to benefit
from European security cooperation. The Founding Act makes clear that
the quest for European security is a not a zero-sum game, where NATO's
gain is Russia's loss. The May 27 agreement marked a major milestone
on Russia's continued integration with Europe and more broadly the
world community of nations.

Finally, NATO has adapted its internal structures to provide for a
more visible, capable European role within the Alliance; to provide
for more flexible, mobile forces capable of responding to today's
security challenges; and to streamline its command structure.
Importantly, the CJTF (Combined Joint Task Force) concept provides a
new flexible way to meet NATO's new, more demanding and more
international role and responsibilities.

That's quite a record of accomplishment. Now, however, the real work
begins, which brings me to theme of today's conference: "NATO's
Priorities After Madrid." I would like to suggest that NATO has three
"top" priorities in the immediate aftermath of Madrid.

First, NATO must complete the accession talks and secure ratification
of the accession protocols in Allied capitals. How this process
unfolds will affect the prospects for future rounds of enlargement. It
is important that the Alliance get it right. That means ensuring that
the issue of enlargement's costs are forthrightly addressed. This
means also that both new and old Allies demonstrate their commitment
to making resources available to maintain NATO's credibility. The
success of this effort will be critical for the future of our Alliance
and hopes of building a more stable and durable security structure for
the century ahead.

In addition, before December, NATO will have to complete a
comprehensive analysis of enlargement's costs as well as refine the
country-specific analyses on the military requirements relating to
enlargement. NATO will also have to assess the military capabilities
that each invitee brings to the Alliance and how best to integrate
those capabilities into NATO's military structure. As NATO takes these
practical steps, we intend to redouble our efforts here to explain
NATO enlargement both to the American public and the Senate in order
to ensure a smooth ratification process.

Second, NATO must bring life to the new institutional arrangements it
has created to bridge dividing lines in Europe and develop more
cooperative relationship with countries outside the Alliance. This
includes the EAPC, the NATO-Russia Permanent Joint Council, and
initiatives outlined in the NATO-Ukraine Charter. If the promise of a
secure, democratic and prosperous Europe is to become a reality, then
these new institutions must offer a practical avenue for cooperation
and consultation. They must be more than mere "talk shops."

The EAPC met in June at the Ambassadorial level, and Allied Heads of
State and Government met at Madrid with counterparts from Partner
countries under the aegis of the EAPC. These discussions represent
only the first step in the EAPC's development. NATO must now develop
an EAPC work plan. This would encompass consultation on European
security problems, such as Bosnia and Albania, in a manner that allows
Partners to shape, as well as participate in, NATO operations.

The inaugural meeting of the NATO-Russia Permanent Joint Council took
place last Friday. Rules of procedure are in place. We must now work
with Russia to develop a working agenda -- an agenda that encompasses
both discussions of broader security issues and practical initiatives
to deepen the NATO-Russia relationship. At Madrid, the Alliance made
clear its commitment to work with Russia to create a strong, stable
and enduring partnership.

Similarly, NATO must now build on the momentum created by the signing
of the NATO-Ukraine Charter at Madrid in order further to deepen its
relationship with Ukraine. The Charter lays out a number of practical
initiatives to accomplish this goal. NATO and Ukraine should seek to
make the possibilities of the Charter a reality by the time of the
inaugural meeting of the NATO-Ukraine Commission in December.

Third, the Alliance must finalize its internal adaptation work. This
includes completing arrangements which would permit a European-only
military operation, under the auspices of the Western European Union,
to make use of NATO assets. NATO must also finalize by its December
Ministerial command structure reform. The "New NATO" we are
constructing must be built in the spirit of cooperation with our
Allies, where both leadership and the burdens of leadership are more
fully shared. NATO must also work to implement initiatives already
approved, including the Combined Joint Task Force concept. The CJTF
trials later this fall and early next year are an important milestone
in this effort.

The framework for the "New NATO" is in place. It is impressive. It is
now time to make it work. That is at one and the same time an exciting
and imaginative prospect and happily the Alliance's top priority.

Thank you.

************

#3
US Senate Russian Conscience Law Debate Viewed 

Trud 
July 23, 1997
[translation for personal use only]
Report by Vissarion Sisnev: "From American Bell Tower"

Washington -- At first glance everything here seems clear and
comprehensible: The U.S. Senate, having decided 16 July to halt aid to
Russia if the law "On Freedom of Conscience and Religious Associations"
approved by the Federation Council is signed by the president, is
undoubtedly interfering in the prerogatives of a sovereign state. 
Especially as during the discussion of this decision various opinions were
heard like that voiced, for instance, by Mitchell McConnell, the Republican
senator from Kentucky: "We must use American aid to promote American
values and American interests."
Moreover, some participants in the discussion warned that this is a
two-edged weapon which could also strike the United States' long- standing
allies and thus national interests. Robert Byrd, the Democrat from
Virginia and a veteran of the Senate, reminded his colleagues that the
State Department's recent report on religious freedoms in the world notes
discrimination against Christians in several countries which are U.S.
allies, including Israel. And that consequently these countries do not
comply with the criteria which the Senate wishes to apply to Russia. And
so to be consistent they should be prepared "for having to halt aid to
Israel one fine day." Byrd's argument did not work, and people objected
that in Israel this is not state policy based on legislation but
"individual manifestations of intolerance."
The Senate, which has 100 members, adopted the document by 95 votes to
four. And in general nothing different should have been expected. There
are two reasons for that. One is what we may call the immediate reason,
the other is a historical reason. In recent years there have been frequent
written and televised portrayals of the successes which are being made in
recruiting supporters in Russia by the evangelical preachers, especially
the most famous of them, the personal friend of many U.S. presidents, Billy
Graham. An AP survey stated that "the newfound popularity of Western
evangelical groups in post-Soviet Russia has generated a seemingly unlikely
coalition between the Communists and the Russian Orthodox Church." That is
how legislators here view what is happening: With the assistance of the
authorities the Russian patriarch is getting rid of rivals.
The evangelists are a component of the Protestant religion, to which
the majority of Americans belong in one form or another. That is why the
senators take so personally the possible restriction on the activity of the
highly popular Billy Graham's comrades in arms on Russian territory. But
that is one side of the matter. The other is that America itself emerged
as a refuge for persecuted religions and sects. The entire state of
Pennsylvania was founded by Quaker refugees from England. Our Molokans
emigrated here in masses in czarist times. The Mormons found refuge here
and turned into a powerful force. There are now over 50 major religious
groups alone in the United States and their subdivisions are innumerable.
As has already been stated Protestantism, that is the multitudinous
congolmeration of independent churches and sects supporting the basic
principles of the 16th century Reformation, are numerically dominant in the
United States. But only numerically. The very first amendment to the
constitution from the ten which taken together received the name "bill of
rights" begins by banning the creation of any "chief" religion, they must
all remain equal. Since children of the representatives of many races
professing to Buddhism, Taoism, Islam, and Judaism are studying in American
schools, on 17 June 1963 the Supreme Court ruled that the practice of daily
general Christian prayers in them was unconstitutional. And religion was
thus definitively separated from the state. The question arises: But what
about those sects which were founded by some crooks for one sole purpose -
- duping gullible people out of their savings or, even worse, turning them
and their children into obedient executors of their will? There are plenty
of these sects in the United States, and they cause considerable harm. You
only have to recall the instances of mass suicide to which mentally
unstable people have been pushed by their "pastors." But Americans do not
approach this phenomenon from prohibitive positions, they view it in the
light of overall legislation: If the sect members violate criminal or
civil enactments then they are punished under the general civilian
procedure. Although this is not without excesses like, for instance, the
military siege on the farm belonging to members of the "Branch Davidians"
sect in Texas ending in the deaths of dozens of people, including children,
whom the law enforces had in this case intended to protect.
Speaking specifically of the American aid which we might lose, it is
not that great. The decision on Russia was taken in the form of an
amendment to the law on aid to foreign states which in the next fiscal year
will be $13.2 billion. Of that sum according to the calculation of the
state administration $195 million is intended for us. But the crux of the
matter lies not in the figure but in the fact that the Russians could lose
something more than a certain number of bucks. There can be no doubt that
this Senate decision, like it or not, will be supported by the majority of
American citizens because it reflects the spirit in which they were raised.
Perhaps the trouble is merely that, in reflecting the features of the
mentality of the majority of Americans and their approach toward such a
delicate matter, this Senate decision fails to consider specific Russian
features, particularly the mentality of Russians including, specifically,
the dramatic fate of religion in our country.

*********

#4
New Kazakh capital leaves would-be settlers cold
By Dmitry Solovyov 

AKMOLA, Kazakhstan, July 25 (Reuter) - Strangers coming to this windswept,
conspicuously Soviet-era town built on marshes amid seemingly endless steppe,
find it hard to believe it will become Kazakhstan's new capital in a matter
of months. 

Yet the move is already reality for the former Soviet republic's political
elite. Some ministries have moved from the current capital, Almaty. President
Nursultan Nazarbayev and parliament could be in Akmola by October. 

The town is blown from all sides by winds that make life unbearable for many
residents in winter when temperatures often fall to minus 40 degrees Celsius
(-40 Fahrenheit). 

In midsummer, the baking heat seldom dips below 30 degrees (86 degrees
Fahrenheit) and clouds of mosquitos from the surrounding marshes gnaw any
living creature incessantly from spring to autumn. 

Bustling business activity in Almaty is in striking contrast to Akmola, which
is more sleepy provincial town than a seat of power and government. 

Yet Vladimir Boiko, aide to the mayor of Akmola, told Reuters: ``In June,
Nazarbayev said he would move to the new capital by October 10.'' 

The ministries of agriculture, transport and justice have already moved to
this city with its population of 300,000, lying some 1,200 km (750 miles)
northwest of Almaty, once Alma-Ata. 

``We always felt Akmola would become a capital...I think that before the
president moves to Akmola all vitally important state structures will have
settled here,'' said Boiko, an enthuasiastic proponent of the move, echoing
the official optimism. 

GEOPOLITICS -- MAIN OFFICIAL REASON FOR THE MOVE 

``The main reason for the move is a geopolitical one. The country's
sovereignty demands that the capital should be in central Kazakhstan,'' said
Boiko. 

Like other top officials in the vast Central Asian state, he is aware of how
close Almaty is to the Chinese border. 

Yet he avoids mentioning China, whose huge population, economic growth and
spreading political influence is a concern for sparsely populated Kazakhstan,
where 16.7 million people inhabit an area five times the size of France. 

``No matter how good our relations with our neighbours, the capital must be
in the centre of the country,'' Boiko said. 

Another reason for the move is that Almaty -- already tagged by the official
press as ``the southern capital'' -- lies in the shadow of the geologically
young Tien Shan mountains. Scientists say the city of 1.5 million is
earthquake-prone. 

Almaty's heavy industrial pollution may also have weighed in the decision by
Nazarbayev, who has run the republic since Soviet days, to move to Akmola. 

NEW KAZAKH CAPITAL -- A HUGE POTEMKIN VILLAGE? 

In view of the planned move, central Akmola is witnessing a whirlwind of
activity among construction firms that can baffle both strangers and
long-standing residents. 

``A new image for the new capital!'' screams a poster on Akmola's main
thoroughfare. 

The dilapidated Soviet-era Hotel Moscow is being rebuilt -- and will become
Kazakhstan's foreign ministry. The current local council building will house
the government and a former reserch institute the Kazakh parliament. 

A Turkish firm is building a five-star hotel -- to be known as the Hotel
Astana or Capital. 

Yet otherwise little seems to have changed. 

``You want to go to central Akmola? Ah yes, that's where the all the showing
off starts,'' said taxi driver Alexander. 

On the main street, dull five-storey apartment buildings hastily put up in
the 1960s are having their facades covered in gleaming plastic. But their
backyards remain as drab as before. 

``This is a real Potemkin village. Everybody knows that Nazarbayev won't look
at the backs of houses,'' one local journalist said. Grigory Potemkin,
favourite of Catherine the Great, erected splendid false facades to impress
the 18th century empress as she toured poverty-stricken new territories. 

Sergei, another Akmola journalist, said locals reacted with glee when
official notices went up declaring that an avenue of fir branches planted
along the central thoroughfare before a visit by Nazarbayev in June comprised
``genuine fir trees.'' 

OFFICIALS, FOREIGNERS NOT RUSHING TO NEW CAPITAL 

Despite the official arguments for the move, Kazakh officials, as well as
foreign diplomats and business people are reluctant to move from Almaty to
sleepy Akmola. 

In the most recent case, senator Daulet Sembayev -- co-author of Kazakhstan's
much-praised pension reform plans -- resigned after parliamentary leaders
decided the legislature would move to Akmola in October. 

Foreign diplomats are also reluctant to move. 

``We will probably have one person sitting in a flat in Akmola on a rotation
basis,'' one Western diplomat told Reuters. 

Boiko conceded the process of resettling diplomatic missions to ``the
northern capital'' would be ``a very long process.'' 

``We have already carved out lots of land for embassies and foreign
companies,'' said Boiko, but only five embassies, including Russia and
Kyrgyzstan, have claimed their areas. 

Offices of large Western companies, feeling in their element amid Almaty's
hustle and bustle, are also scared by the move. 

``There's no way I'm going there. Hopefully, this will be a problem for my
successor,'' said an executive at a large Western company involved in
developing Kazakhstan's rich oil reserves. 

Even many Akmola locals are critical of their home town. 

``Are those bigwigs from the government and foreigners really stupid enough
to move to this hole?'' said Gulnara, a waitress. 

Above all, the word ``akmola'' -- translated from Kazakh as ``white grave''
-- sounds like an omen for many, although some Kazakh linguists translate it
as a more pleasing ``white plenty.'' 

********