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Johnson's Russia List
30 July 1997
[Note from David Johnson:
ADVANCE WARNING: JRL will be on vacation next week.
1. Vladivostok News: Heidi Brown, "Hunger, booze, Mafia:
Rural life a struggle." (DJ: Visit the newly redesigned
Vlad News web page at http:/vn.vladnews.ru)
2. Voice of America: RUSSIAN OFFICIALS SOLICIT U-S INVESTORS.
3. Reuter: Prosecutor: Russian crime getting more professional.
4. Reuter: Russia focuses on mobile missile launch-pads.
5. Dow Jones: Russia's Chubais Reportedly Stresses Svyazinvest
Sale Is Final.
6. Mayak Radio Network: Russia's Kokoshin on Reviving Military-
7. The Times (UK): Robin Lodge, Chernomyrdin takes control of
8. Interfax: Zyuganov 'Calm' Over Irkutsk Gubernatorial Result.
9. ITAR-TASS: Russia Expects Record Grain Harvest; Problems in
10. Journal of Commerce editorial: Bad call in Moscow.
11. AP: Russians Refuse Vegetable Wages.
12. Christian Science Monitor: Arthur Helton, Displaced by Soviet
Breakup and In Need of Help.
13. Financial Times (UK): John Thornhill, Chechnya: Leaders break
off rebuilding talks with Moscow.
14. Delovoy Mir: Continuing Role of Dollar in Russian Economy Seen.
15. The Times (UK): From Russia...with cyber-love. (DJ: Together
with the export trade in children, the export trade in Russian women
is a featured accomplishment of reform in Russia.)]
July 24, 1997
[for personal use only]
Hunger, booze, Mafia: Rural life a struggle
Despite abundance around Kavalerovo, villagers struggle to make ends
meet in a land of alcohol abuse and dwindling population.
By Heidi Brown
In the lush valleys of Kavalerovo, fat cows stand idly in the road and
neat dachas burst forth with summer fruit. But many locals are
malnourished, and more are dulling the pain of existence with alcohol in
this central Primoryan region.
To the outside observer, it’s confusing. How can people go hungry in a
place with fertile gardens and long, sunny days?
But the answer lies within Kavalerovo’s verdant hills: tin ore, once
prized but now no longer worth mining.
The Russian government has been shutting down unprofitable mines across
Primorye for the last five years. Kavalerovo presents a stark picture of
how people outside Vladivostok are coping with the tumultuous changes in
their lives since the Soviet Union’s fall.
Under communism, the ore extraction sites and processing plants employed
thousands, giving small Primoryan villages an axis around which every
aspect of their lives revolved. Now, in many areas, life is at a
The Soviet Union, trumpeting manual labor and the aristocracy of the
people, gave Kavalerovo miners a good life for 50 years, locals say.
Store shelves were always well-stocked, sometimes even with goods not
available in Vladivostok, 275 km away. Dedicated miners got annual trips
to sanatoriums, and they got generous pensions when they retired.
“When there was a wedding, everyone in the village celebrated,” says
Lyudmilla Ogloblina, who spent summers in Rudny, about 15 km from the
town of Kavalerovo.
Now, Rudny residents worry more about surviving than throwing parties
for 5,000. The loss of the mines and plants has hurt virtually everyone
here, even those not associated with the industry.
“I’ve lost 18 kilograms in the last two years,” says Nadezhda Bobeyko,
44, a cashier in one of the city’s two large grocery stores. But a look
at the shelves makes it all clear. Besides a selection of grain, some
alcohol and canned food, there is little for sale. “They should close
the kiosks,” Bobeyko says angrily. “All anyone buys there is vodka.”
Bobeyko hefts two thick log books to show how many village residents are
in debt to the store. She says children now go from door to door asking
Denis Sotskov, 11, doesn’t knock on doors. He eats one meal per day at
the local kindergarten; his unemployed mother cannot feed him and his
sister. For his birthday in May, he got two rolls, two jars of jam and a
cap. Denis’ ruddy summer tan keeps him from looking like a refugee.
“There are no jobs here,” says the Rudny village administrator, Valery
Rukin. He says seventy percent of the present population is now
receiving a pension, and that at least 1,000 people have left since
Those who are employed wait for their salaries. I spoke to no one who
had been paid in the last six months — including teachers, doctors and
Of course, this is because the only jobs left in the Kavalerovo area are
with the cash-poor government. In Rudny, the movie theater, restaurant,
bar and several grocery stores are gone.
The solution for those with a bit of capital and a lot of energy is
“commerce,” or buying things elsewhere and selling them at a profit
Larisa Belokon began selling shoes she buys in Vladivostok about three
years ago, when her husband was diagnosed with a lung ailment common to
miners here. She says his lungs are so bad that doctors have forbidden
him from working in the mines again.
So Victor, 47, who worked 15 years as a technical engineer after
graduating from the Mining University of Moscow, now does odd jobs at
home. “I run the entire house,” says Larisa. “Everyone obeys me.”
Once a month, Larisa drives eight hours each way to Vladivostok, where
she buys Italian-made shoes to sell in her two stores in Kavalerovo.
She complains that business is bad and that she will have to close a
slow kiosk in Rudny, but her family is doing comparatively well.
They built their own two-story dacha along a stream not far from Rudny.
There’s a banya and separate living quarters for Larisa’s mother Vera,
70. They have a hothouse for tomatoes and a separate area for growing
ginseng, which Larisa hopes to start selling soon. And they pay $4,000 a
year for a private education for Vanya, 17.
Larisa admits that she pays the mafia a protection fee but that “so far,
they haven’t bothered me yet.”
A couple of “traders” in Kavalerovo actually credit the mob with their
Oleg and his brother Alexander make enough money to live comfortably,
but not extravagantly. Oleg, a cheerful 22-year-old who transports
vodka, pays for his and his wife’s college in Vladivostok. He’s a loving
father to his 18-month-old son, but he insists that the Mafia is a
“I’m doing this so that my son can live honestly,” says Oleg.
Alexander, who worked in the mines five years before opening his own
stores in Kavalerovo, says the Mafia is the only group he can count on
for protection from criminals and payment from debtors. He and Oleg say
the police are too corrupt to help them.
The brothers allow that there is widespread poverty in the area; most of
Alexander’s customers are pensioners — the only ones getting paid
regularly here, it seems. But they are enthusiastic supporters of
Governor Yevgeny Nazdratenko, as are most other people interviewed for
Nazdratenko spent most of his career as manager of a factory in
Dalnegorsk, 60 km from Kavalerovo.
“Of course I support Nazdratenko,” says Nikolai Globa, 38, a maintenance
man who says he doesn’t keep track anymore of when he last got paid. “I
think he could help the region, but they just don’t give him the
freedom,” said Globa.
Even a proud, ailing Communist finds kind words for the governor.
“He doesn’t help much — but he’s a good guy, says Mikhail Gorozhabin.
The former ventilation specialist, 68, also suffers from the lung
disease. Although he worked 40 years in Soviet mines, he doesn’t make
enough of a pension, so he spends every day tending his sheep, cows and
garden, raising his own food for the year.
While doctors in Rudny and Kavalerovo deny it, Gorozhabin is convinced
that almost every miner in Rudny dies of the lung disease he has, called
silikos in Russian. He lists gruesome anecdotes about his acquaintances:
A woman who married seven times because her mining husbands kept dying;
the Communist “hero of labor” who dropped dead after getting his reward,
a friend who died at 45 after begging for death.
Boris Pratsenko, Kavalerovo’s chief physician, says he hasn’t noticed
any rise in the disease, but then he also hasn’t seen any rise in
alcoholism. The children of Rudny disagree.
The stories they tell might recall American inner city life.
Ivan Krisko, 10, has an uncle in jail for murdering a man and attacking
a woman. He says his parents, both teachers, are often drunk.
“Most people here are drunk,” Ivan says. He complains about an old
couple next door who keeps him up every night with their drunken
“You have to be careful of going into the dark places,” says Ivan’s
friend, Sasha Khomutov, 9. “Drunks and junkies always hang out there.”
And it isn’t just the alcoholism, but the collapse of the old, quiet
ways that is hard for locals.
When two teenage friends recently reunited, the conversation between the
girls consisted of who was now pregnant, who had had an abortion, who
was getting married.
Lyudmilla Ogloblinas, 19, asked Olga, 17, why she had let herself get
pregnant and then married.
“It doesn’t matter,” said Olga resignedly, looking out the window.
“Besides, he really loves me.” Olga lives with her husband Sergei in
Dalnegorsk. They are both unemployed.
Later, Oleg, the spunky vodka trader, waxes philosophical as we fly over
Kavalerovo’s roads in the truck he uses for work.
“Yes, the simple people are losing out, but I believe in 10 years
maximum we will have a golden age. By the way, do you want to buy a
tiger skin? I know someone who knows someone who shot one and he wants
to sell it for $3,000.”
Back in Rudny, Pasha Kostenko, who is small for his nine years, accepts
a handful of crackers happily. Although he will probably eat only once
today, he offers the crackers to everyone he passes.
The next day, he sits with his listless, frail sister, Natasha, 21, at
the bus stop. They insist they’re going to Kavalerovo. But although
several buses pass, they don’t get on.
Voice of America
TITLE=RUSSIAN OFFICIALS SOLICIT U-S INVESTORS
INTRO: CITY OFFICIALS FROM MOSCOW AND RUSSIAN EMBASSY LEADERS
ARE MEETING POTENTIAL U-S INVESTORS IN LOS ANGELES (MONDAY AND
TUESDAY). AS WE HEAR FROM MIKE O'SULLIVAN, THEY PROMISE A HIGH
RETURN ON INVESTMENTS, BUT ADMIT THE ROAD TO RICHES IN MOSCOW MAY
NOT BE EASY.
TEXT: LED BY MOSCOW MAYOR YURI LUZHKOV, RUSSIAN AND U-S SPEAKERS
DESCRIBED THE PROMISE AND THE PITFALLS OF INVESTMENT IN THE NEW
RUSSIA. ACCORDING TO MR. LUZHKOV, GROWTH AREAS IN MOSCOW
INCLUDE TOURISM, PHARMACEUTICALS AND CONSTRUCTION OF HOUSING. HE
ADDS THAT COMMERCIAL BUILDINGS PRODUCE A VERY-HIGH YIELD FOR
/// LUZHKOV INTERPRETER ACTUALITY ///
THE BUILDING PAYS FOR ITSELF WITHIN TWO YEARS, AFTER
WHICH HE'S JUST GETTING CLEAR PROFITS. WHERE ELSE, I'M
ASKING YOU, CAN ONE FIND CONDITIONS LIKE THESE? MOSCOW
TODAY IS THE TRUE CENTER OF MAXIMUM VOLUME INVESTMENT.
/// END OPTIONAL ACTUALITY ///
THE RUSSIAN MAYOR SAYS POTENTIAL PROBLEMS FOR OUTSIDE INVESTORS
ARE COMING UNDER CONTROL. ANOTHER MOSCOW OFFICIAL NOTES THE RISE
IN ECONOMIC CRIME SLOWED BY FOUR PERCENT THIS YEAR. IVAN SHILOV
(EE-VON' SHEE'-LOV) SERVES AS LIAISON BETWEEN MOSCOW GOVERNMENT
AND LOCAL LAW ENFORCEMENT AGENCIES. HE SPOKE (THROUGH AN
INTERPRETER) OF MOSCOW'S GROWING IMPORTANCE WITHIN THE RUSSIAN
/// SHILOV / INTERPRETER ACTUALITY ///
SINCE RUSSIA STARTED MARKET ECONOMY REFORMS, SOME 60
PERCENT OF FINANCIAL CAPITAL OF RUSSIA BECAME
CONCENTRATED IN MOSCOW. THE CURRENCY MARKET IS 80
PERCENT OF THROUGHOUT RUSSIA. AND, RIGHT NOW THERE ARE
OVER TWO THOUSAND BANKS AND BRANCHES IN MOSCOW.
/// END ACTUALITY ///
IN ADDITION, MR. SHILOV SAYS THERE ARE 900 INSURANCE COMPANIES
AND MORE THAN 400 PRIVATE PENSION FUNDS.
THIS GROWTH BRINGS PROSPERITY AND BREEDS CRIME, AS WELL. THE
OFFICIAL WAS BLUNT IN LISTING THE PROBLEMS MOSCOW POLICE MUST
DEAL WITH: FRAUD, FORGERY, BRIBING OF STATE OFFICIALS AND --
AMONG ORGANIZED CRIMINALS -- KILLINGS. HE ASSURED HIS LISTENERS
POLICE ARE DEVELOPING MEASURES TO PROTECT BANKERS AND BUSINESS
PEOPLE. THEY ARE TARGETING ECONOMIC CRIMES AND COORDINATING LAW
ENFORCEMENT EFFORTS AROUND MOSCOW.
A FORMER U-S AMBASSADOR TO MOSCOW, WHO ALSO SPOKE AT THE MEETING,
IS CAUTIOUSLY OPTIMISTIC WHEN ASKED ABOUT RUSSIA'S FUTURE AND ITS
ROLE AS A VIABLE MARKET FOR OUTSIDE INVESTORS. FORMER AMBASSADOR
RICHARD MATLOCK SAYS THE COUNTRY IS COMPLEX.
/// MATLOCK ACTUALITY ///
THERE ARE STILL PITFALLS AND ONE HAS TO LOOK VERY
CAREFULLY. SO, YOU CAN'T SAY THAT ANYTHING THERE OR
ANYWHERE ELSE IS NECESSARILY GOING TO PAY OFF. BUT I DO
THINK THAT THE COUNTRY IS NOW DYNAMIC. IT IS CONTINUING
TO MOVE IN THE RIGHT DIRECTION. AND, GIVEN THE NEED FOR
INVESTMENT AND THE PAYOFFS, IT HAS TO BE -- IN GENERAL
-- ONE OF THE GREAT OPPORTUNITIES TODAY.
/// END ACTUALITY ///
THE THEME OF THE U-S / RUSSIAN CONFERENCE WAS EXPRESSED BY MOSCOW
MAYOR YURI LUZHKOV WHEN HE URGED AMERICAN BUSINESS LEADERS TO
JOIN HIM AND FELLOW MUSCOVITES -- WORKING WITH THEM AND MAKING
MONEY. THE SPEAKERS HERE AGREE IT CAN BE DONE, ALTHOUGH NOT
Prosecutor: Russian crime getting more professional
By Tim Heritage
PETROPAVLOVSK-KAMCHATSKY, Russia, July 29 (Reuter) -
Russia's chief prosecutor said on Tuesday crime across the vast
country was becoming increasingly professional and the police
were struggling to cope.
Yuri Skuratov, Russia's prosecutor general, said after
meeting local officials in the Far Eastern peninsula of
Kamchatka that better coordination was needed between local and
national crime fighting organs.
"Crime is becoming more professional and more violent,"
Skuratov told a news conference in Petropavlovsk-Kamchatsky, the
region's main city.
"If you think the prosecutor and the police can cope with
crime, I'll tell you that is a deep deception. Only all of
society together can cope with crime."
Crime, especially violent crime involving Mafia-style gangs,
has risen sharply since the collapse of the communist Soviet
Union in 1991.
Skuratov, criticised for failing to solve a string of
high-profile murders in Moscow, said crime fighting had to be
better coordinated at all levels. "The situation is difficult
but not hopeless," he said.
"We have to sort out clearly what to do on this matter --
the federal government, the federal organs on the spot and
what's done on a municipal level. We have a complete mess," he
Skuratov said federal and regional crime-fighting organs
were in some cases "doubling up" -- meaning doing the same job
more than once.
Skuratov was in Kamchatka, nine time zones east of Moscow in
the country's Far East, in his latest trip to check out the
situation on crime in the regions.
He said that on the whole he was satisfied with the work of
tackling crime in Kamchatka, a remote region inhabited by little
more than 400,000 people.
Crime nationwide is one of the factors discouraging foreign
investors as well as the development of local business. Skuratov
said overall crime had dropped in the last three years but
violent crime had increased.
"The number of kidnaps is rising, the number of crimes
committed by gangs is rising, the number of armed crimes is
rising, the number of contract killings, the number of crimes
committed in the drug business is rising," he said.
"Society must be aware of the dangerous level of crime."
Interior Minister Anatoly Kulikov said last month that
Mafia-style gangs were tightening their grip over Russia's
economy and infiltrating the government and forces of law and
Journalists at the news conference asked why there had been
no major crimes uncovered in the fish trade, Kamchatka's main
business, and Skuratov said he would look into the matter.
Russia focuses on mobile missile launch-pads
July 29, 1997
MOSCOW (Reuter) - Rail-mounted launchers and mobile SS-25
missiles will provide the cornerstone of Russia's nuclear shield
after far-reaching military reforms are instituted, a senior
Kremlin official said Tuesday.
Yuri Baturin, secretary of President Boris Yeltsin's Defense
Council, told the Interfax news agency Russia needed moveable
and easily concealed missile complexes, such as the Topol
(Poplar), known under NATO classifications as the SS-25.
Baturin added, however, that Russia would also develop its
traditional silo-based missile complexes, strategic bomber fleet
and nuclear submarines. The latter formed the main nuclear
strike force in Soviet times.
Earlier this month, Yeltsin announced long-planned reforms,
including cutting troop numbers by 500,000 to 1.2 million by the
end of 1998. Last year he promised to create an all-volunteer
army by 2000, though that deadline appears to have been quietly
The reform, putting the stress on combat readiness and new
weapons, will also restructure the strategic command....
Russia's Chubais Reportedly Stresses Svyazinvest Sale Is Final
July 29, 1997
MOSCOW -(Dow Jones)- Amid a rising clamor of controversy around the deal,
Russian First Deputy Prime Minister Anatoly Chubais said Tuesday last week's
sale of a 25% stake in telecommunications monopoly AO Svyazinvest will go
ahead, the Interfax news agency reported.
"The auction for Svyazinvest shares was conducted strictly in accordance with
government orders and, consequently, its results are final and not subject to
review," Chubais said after a meeting with Vladimir Potanin, president of
Oneximbank, which led the group that placed the winning bid.
Since Friday's sale, several Russian media with ties to the losing bidders
have unleashed a wave of criticism against Oneximbank, with the national
television network ORT calling Potanin and the other investors speculators of
Oneximbank hasn't responded publicly to the attacks, but a spokesman said
late Tuesday that the formal signing of the Svyazinvest deal will take place
Oneximbank joined with financier George Soros and investment banks Deutsche
Morgan Grenfell and Morgan Stanley to place the winning bid of $1.9 billion,
the largest sum ever paid in a Russian privatization.
The losing bid came from a consortium including Russia's Alfa Bank and Most
Bank, as well as Spain's Telefonica de Espana SA.
Russia's Kokoshin on Reviving Military-Industrial Complex
Mayak Radio Network
July 25, 1997
[translation for personal use only]
Russian First Deputy Defense Minister Andrey Kokoshin has given an
exclusive interview to our political observer Viktor Levin. Commenting on
the role destined for the military-industrial complex in military reform,
Andrey Afanasyevich [Kokoshin] said:
[Begin recording] [Kokoshin] The reform of the military- industrial
complex is an integral part of the overall military reform. This matter,
as indeed the reform of the armed forces, has been neglected for far too
long and many problems demand urgent attention. We in the Defense Ministry
have tackled many of these problems by adopting the state arms program.
This program defines ways of appointing long-term contractors for state
defense procurement. But the program is not confined to this. It is
essential that we define the policy for the defense industry on a state
level. It is obvious for everyone today that the expansion of arms exports
is not enough to develop and even to save those branches of industry and
research which will be essential for our rearmament in the future, when we
have more money. We have to find other solutions. I mean first of all an
aggressive export policy regarding high-tech industries, such as aircraft,
missile and space industries, and super high-frequency electronics. It is
perfectly possible for us to be competitive in these spheres, and as a
result to accumulate funds to renew our equipment and to get further
investment. This is the only way to rearm our industry and to reform it in
such a way that it enters the 21st century capable of making full use of
the research and technical facilities which I hope we will have accumulated
by then. This is a most difficult task. The state of most segments of the
industry is far from unproblematical.
[Correspondent] What is the main obstacle that should be overcome for
our industry to start working again?
[Kokoshin] Well, it is working. Against the unfavorable background,
many managers have adapted to new conditions. And even more than that.
They have found new avenues for their output and are increasing production
levels and fighting for every little corner of the market, both here and
abroad. They have learned to bare their teeth in the struggle with foreign
competitors, and I am very glad about this. But I believe the most sad
thing is that the spark of inspiration has gone out of our industry and
there is a lack of national will to carry out a massive industrial
expansion. Some time ago, we did carry out a reform of our industry, but
what we got was an industry unwanted by the end user. As a result, the
national spirit may have been broken down. If we do not act now, then all
the massive investments by previous generations will depreciate and we will
get a huge national trauma. That is why I believe that this is not a
matter just for industrialists, but for society as a whole. It should pay
more attention to high-tech industry, civilian mostly, but also to
dual-purpose technologies which will permit us to maintain our defence
[Correspondent] Can you be certain that the military reform programs
which are being designed will get full funding?
[Kokoshin] I think that our nearest programs will be carried out. And
what happens then--it will be up to the state leadership and to the
leadership of the Defense Ministry to see that these programs are carried
out. But at least the mood that I see now is much more serious and
promising than what I used to see before.
[Correspondent] Whose mood do you mean?
[Kokoshin] Everyone's. I can see that the issue of reforming our
armed forces and of strengthening our defense capability occupies a much
higher place in public awareness than was the case two or three years ago.
The Times (UK)
30 July 1997
[for personal use only]
Chernomyrdin takes control of arms sales
FROM ROBIN LODGE IN MOSCOW
THE Russian Prime Minister, Viktor Chernomyrdin, is to take personal
control of sales by the country's main arms export agency,
Rosvooruzheniye, after newspaper reports of illegal sales and the
diversion of proceeds.
Other Russian companies have accused the multi-billion pound state arms
agency of using aggressive tactics to keep domestic competitors out of
the lucrative market. Criticism has also come from America over concerns
about the large volume of Russia's international arms sales.
This month the weekly newspaper Novaya Gazeta accused Rosvooruzheniye of
illegal arms sales last year and diverting the proceeds to support
President Yeltsin's re-election campaign. Aleksandr Kotelkin, the
agency's general director, has denied any wrongdoing and has accused
critics of attempting to discredit Rosvooruzheniye to prevent it signing
"Propaganda campaigns against Rosvooruzheniye ... usually surface on the
eve of signing a major contract," Mr Kotelkin said. He referred in
particular to a deal being negotiated to sell Indonesia MiG 29 and
Sukhoi 30 strike aircraft, along with guided missiles, radar and
helicopters. It follows Indonesia's cancellation in May of a plan to buy
nine American F16 fighter jets.
In another deal, the agency signed a contract with Cyprus in January to
supply it with S 300 ground-to-air missiles, effectively neutralising
the air superiority of Turkey in the region.
Zyuganov 'Calm' Over Irkutsk Gubernatorial Result
MOSCOW, July 28 (Interfax) -- Russian Communist Party leader Gennadiy
Zyuganov said he was "calm" over the victory of a pro-government candidate
as governor of Irkutsk region Sunday.
Former Irkutsk mayor Boris Govorin, backed by the pro-government party
Our Home is Russia, collected over 50% of the votes, according to
preliminary information. Only about 19% of the electorate voted for the
chairman of the local Russian Communist Party organization, Sergey
Zyuganov spent the week prior to the elections in Irkutsk region. I
"have never before seen a dirtier election campaign," Zyuganov told
"For the first time, the party of power concentrated its money, using
every means available, including buying up mass media, public slandering
and a war of compromising materials without any dignity," he said.
Nevertheless, both candidates "treated each other in a sufficiently
The new Irkutsk governor is "an experienced, solid professional
maintaining normal relations with Levchenko," he said.
Losing elections in Nizhniy Novgorod and Irkutsk does not indicate the
communist party's rating in the regions is falling, he said.
"Our organizations in these and several other regions have grown in
numbers and in organizational strength. However, our electorate is being
stolen by other candidates who stop short of nothing," he said.
Russia Expects Record Grain Harvest; Problems in Reaping
by ITAR-TASS correspsondent Aleksey Filatov
Moscow, 28 Jul -- This year Russia may produce a record-breaking
harvest -- about 80 million tonnes of grain. Experts of the Russian Grain
Union said this today to an ITAR-TASS correspondent. They say the country
has not produced so much grain since the time of the former USSR. This
amount of grain will be enough for Russia not only for food and forage, but
also for exporting to the former Soviet countries.
This year's grain harvest is 10-12 million tonnes bigger than last
year. However, experts think it will not be easy to harvest the crop owing
to the extremely difficult situation in the rural areas. Commodity
producers have been without funds for many months. Hence, farmers do not
have money to buy new equipment or maintain old machines and purchase parts
and fuel. According to the Mechanization Department of the Russian
Ministry of Agriculture and Food, Russia currently lacks 136,000 combines
needed to harvest grain crops in good time and without fail. Many
available combines in the pool have not been maintained. In such
conditions one has to make titanic efforts to gather in the harvest
completely. [passage omitted]
To all appearances, farmers will once again not manage without the
help of vehicles seconded from the Russian army's vehicle park. In the past
army drivers have often earned their daily bread by working in the fields.
Journal of Commerce
July 30, 1997
[for personal use only]
Bad call in Moscow
Russia's sale of a 25% stake in the state's telephone giant,
Svyazinvest, is a good move. But the government's intention of spending
most of the $1.9 billion in proceeds on back pay to government workers
is a mistake. The money should have gone straight back into upgrading
Russia's antiquated telecommunications system.
There are plenty of state assets left whose sale could generate enough
cash to pay wage arrears. Russia's steel, nickel and aluminum industries
are a good example. Proceeds from their privatization would be much
better spent on squaring debts than on propping up unprofitable
But the telecom infrastructure is different. It is a main artery of
commerce; improving it would bring many benefits downstream. That's
where the money should go.
Russians Refuse Vegetable Wages
July 29, 1997
MOSCOW (AP) -- Finicky children aren't the only ones to turn up their
noses at unwanted broccoli and spinach. Workers in Volgograd, Russia,
have refused an offer to get paid in vegetables.
About 300 employees at a regional production plant staged a one-hour
warning strike Tuesday in response to an offer by the district
administration to pay back wages in vegetables and cereals from this
year's harvest, the ITAR-Tass news agency reported.
The workers are owed about $175,000.
If the salaries are not paid within a week, the workers will declare a
full-scale strike beginning Aug. 8, worker leader Sergei Romanenko told
The regional administration of Volgograd, 620 miles southeast of Moscow,
has promised to consider the workers' demands, ITAR-Tass said.
Walkouts, hunger strikes and other protests have become commonplace in
Russia over the last couple of years in response to the cash-starved
government's failure to pay state wages and benefits on time.
Christian Science Monitor
30 July 1997
[for personal use only]
Displaced by Soviet Breakup and In Need of Help
By Arthur C. Helton
Arthur C. Helton, a lawyer, is director of the Forced Migration
Projects of the Open Society Institute, with offices in New York and
The haunting images of conflict in Eurasia are fading. The danger now is
that the international community will forget that millions of people are
still displaced and destitute, adrift in the void created by the
implosion of the Soviet Union. The window of opportunity to help these
people is open, but it's closing fast.
A crucial moment to regain the initiative came and went early this
month, when representatives of governments and international and
nongovernmental organizations met in Geneva. They were to follow up on
commitments made last year to address the most pressing
migration-related problems in the Commonwealth of Independent States
(CIS) and neighboring nations. The lack of progress at this meeting
further jeopardizes efforts to alleviate a potentially explosive
More than 9 million people have been displaced since 1989, following the
breakup of the Soviet empire. This massive migration is the largest
since World War II. The 15 countries that have emerged or re-emerged
with the dissolution of the Soviet Union are hardening their borders in
the face of these movements.
The displacements have many causes: people returning to their ethnic
homelands; refugees fleeing persecution and conflict; and migrants
avoiding economic upheavals. Population movements, in turn, have
produced ethnic friction, human rights abuses, economic deprivation, and
threats to peace and security.
The war in Chechnya graphically illustrated the plight of people
displaced within their homelands. But the world community has not
responded adequately to this humanitarian catastrophe. The failure to
assist in rehabilitation and reconstruction leaves intact the seeds for
Security problems are a cause as well as a consequence of forced
migration. Conflicts in the former Soviet Union have displaced well over
1 million people within their countries, including most of the
approximately 500,000 people who escaped after the first wave of
fighting in Chechnya. Conflicts in Central Asia and the Caucasus have
forced millions more across international borders.
Continued upheaval in Afghanistan could wreak havoc in Central Asia,
sparking new refugee emergencies. The Afghan conflict menaces the
tenuous peace process in Tajikistan. Ongoing fighting in northern
Afghanistan could cause refugees to seek safety in bordering states,
including Turkmenistan, Uzbekistan, and Tajikistan. Even Kazakstan's
foreign ministry has expressed concern that the instability in
Afghanistan could spread throughout Central Asia.
In the CIS, those forced to leave their homes have little to lose and
are easily recruited into ongoing fights. These "refugee warriors"
reportedly have been operating in the Georgian regions of Abkhazia and
South Ossetia, as well as in Tajikistan.
Though it's in the best interest of governments to foster stability and
avoid hardship in the region, the international community's response has
been tepid at best. The principal product of last year's migration
conference, attended by representatives of 87 governments, 29
international organizations, and 80 nongovernmental organizations
(NGOs), was a nonbinding "Program of Action." But the document comprised
a rote recitation of principles and goals, rather than concrete projects
or specific legal obligations concerning population displacements.
So far, the only major contribution to this year's appeals for funding
has come from the United States, which allocated $14.1 million for
programs to assist refugees and displaced persons in the former Soviet
Union. Of that total, roughly $4 million will be devoted to funding
general programs under the auspices of the UN High Commissioner for
Refugees. An additional $5.5 million will go to UNHCR's special program
fund, and the International Organization for Migration will receive $4.6
million. The US stipulated that $500,000 be earmarked for a new NGO
development fund to strengthen civil society and the rule of law.
Immediate progress could be made with the adoption of a few concrete
measures, such as simplifying tax and registration laws to enable NGOs
to work more effectively, professionalizing government policy and
enforcement bodies, and introducing programs to promote tolerance. Such
initiatives could prevent some of the causes and consequences of forced
migration. In those instances where prevention fails, these new
independent actors could help assist and protect the displaced. Such
approaches could provide a framework to begin to manage the new world
Financial Times (UK)
30 July 1997
[for personal use only]
Chechnya: Leaders break off rebuilding talks with Moscow
By John Thornhill in Moscow
Chechen leaders have broken off talks with Moscow, alleging that the
Russian authorities are reneging on agreements to reconstruct the
Caucasian region in the wake of its 21-month conflict.
The continuing friction between Chechnya and the Kremlin casts further
doubt on the future of the oil pipeline through the troubled region,
which is expected to carry oil from the vast reserves in the Caspian Sea
to world markets.
The two sides agreed earlier this month to repair and upgrade the
pipeline, which was damaged during the conflict, but it is not yet clear
when it will be implemented.
"President Aslan Maskhadov has banned all ministers' trips to Moscow and
all talks with Russian officials until a plan to rebuild Chechnya is
signed," a Chechen official said yesterday.
Mr Maskhadov, Chechen leader, this week reiterated Chechnya's claims to
full sovereignty. He suggested that both countries should establish
formal diplomatic relations, opening embassies in each other's capitals.
Mr Maskhadov has also lobbied the Organisation for Security and
Co-operation in Europe, which helped secure the peace agreement, to
press Moscow to fulfil its commitments.
Moscow has reacted sharply to the increased pressure from Chechnya, but
says it wants to maintain good relations.
Mr Valentin Matvienko, a senior Russian interior ministry official, said
that Chechnya legally remained a subject of the Russian Federation and
that there could be no discussion about establishing formal diplomatic
Mr Ivan Rybkin, secretary of Russia's security council, said the federal
authorities "had not stopped and would not stop working for one minute"
on measures to rebuild Chechnya. But he conceded that it would take time
for the two sides to work effectively together to repair the region's
The increased tension in Chechnya coincides with intense diplomatic
activity to settle outstanding territorial disputes in the Caucasus as
oil from Azerbaijan comes on stream.
Mr Geidar Aliyev, president of Azerbaijan, is holding talks in
Washington in an attempt to resolve the simmering conflict in the
disputed region of Nagorno-Karabakh. The US administration has also been
trying to secure a lasting peace agreement between Georgia and the
secessionist region of Abkhazia.
Continuing Role of Dollar in Russian Economy Seen
July 23, 1997
[translation for personal use only]
Article "based on materials from RosBiznesKonsalting" under the
"Currency" rubric: "Rumors About Poverty of Russians Exaggerated"
Despite denials from Central Bank leaders, the dollar is strengthening
its position in the pockets of Russians.
Speaking last week at a meeting with the editors-in-chief of Japanese
newspapers, Central Bank Chairman Sergey Dubinin declared: "In Russia, we
are seeing a rise in the demand for the national currency -- the ruble."
Yet, according to experts, the Russian population sympathizes more with
foreign currency, something that is supported by statistics from the
Russian Federation State Statistics Committee.
From January to April 1997
Russians spent about 107.6 trillion rubles [R], or about 21.4 percent of
their money incomes, on buying foreign currency. This is 6.4 percent
higher than for the same period last year. Moreover, in the first half of
1997 10 percent of the country's richest citizens accounted for 32.3
percent of all money income (compared to about 29 percent last year), while
the poorest 10 percent accounted for 2.6 percent (2.2 percent [last year]).
The subsistence wage, or, in other words, the poverty line, in Russia
averaged R410,000 per person per month in the first half of this year. And
21 percent of the country's citizens (31.1 million Russians) had money
incomes below the subsistence level.
At the same time about 6 percent of Russia's adult population
expressed the desire to spend their vacations this summer at foreign
resorts (including the Baltics). Taking into account that the average cost
of such a vacation is $450-$600, this means that some of our fellow
citizens have accumulated a total of at least $3 billion just for the
purpose of visiting foreign countries.
Right now, according to the most modest estimates, Russians have
$20-$30 billion on hand, an amount which is approximately equivalent to the
total amount of cash rubles in the country. Despite the Central Bank's
efforts to de-dollarize the economy and increase the cash money supply,
Russians are in no hurry to part with their U.S. currency, and use it as a
means of saving as well as making payments. Data collected by the Central
Bank show that the average size of foreign currency purchases made at
currency exchange points in commercial banks exceeds $1,000, which is what
led Central Bank First Deputy Chairman Sergey Aleksashenko to believe that
"it is not ordinary citizens who are purchasing dollars." And if this is
so then it is obvious, in Mr. Aleksashenko's opinion, that the main bulk of
the dollars being purchased "are going on servicing unregistered foreign
Be that as it may, it is obvious even to a schoolboy that the dollar
is even more actively strengthening its positions in Russia largely because
it is purchases of currency and not consumer goods that account for the
bulk of cash expenditure in excess of incomes. Even official information
shows that, if foreign currency is included, the population has almost
twice as much cash on hand as it has in bank accounts. Many do not trust
anyone with their savings. Faith in the ruble is waning as more and more
citizens prefer to hold their savings in hard currency. And it is no
coincidence that the biggest excess of expenditure over income is observed
in the richest "cash" cities and regions -- Moscow, St. Petersburg,
Novosibirsk Oblast, and a number of others. As a result, approximately 75
percent of all foreign currency is now purchased in Moscow, St. Petersburg,
Sverdlovsk, and other major Russian cities.
The situation is also not being rectified by the development of the
gold market, which, according to officials from the Central Bank and the
government, should help assist in the de-dollarization of Russia's economy
and in replacing the savings the population holds in dollars with savings
held in precious metals. Although it would seem that the Russian depositor
in theory has a double chance of winning by investing in precious metals --
due to changes in their price and due to the rise of the dollar against the
ruble, since base prices for gold are determined by Western stock
exchanges. However, right now the Central Bank is controlling the dollar
rate tightly and therefore it is impossible to hope for significant
The situation developing around the quoted prices of precious metals
themselves is even worse. Thus, the price of gold has been falling
steadily on all the world's major exchanges since the beginning of the
year, and recently, after tumbling by more than 5 percent, fell below its
1985 level. This situation is due to the massive sale of gold reserves by
the central banks of European countries and Australia (the Australian
Central Bank sold more than two-thirds of its reserves in the last six
months), as well as a fall in demand from investors. Several gold mining
companies were even planning to reduce production in the event that prices
continued to fall. Prices for silver and platinum are also falling.
All of this once again confirms a well-known truth: The ruble can
only be strong if it is backed by a revitalization of production. This is
the main link which should become the government's principal task.
Otherwise another disruption of the economy will become unavoidable.
The Times (UK)
30 July 1997
[for very personal use only]
>From Russia . . with cyber-love
MEN, are you looking for a romantic woman who believes in love and the
pleasures of raising a family? Do you have about $1,000 to spend?
Then take a look at 300 attractive Russian women whose details have been
put on the Web by the Svetlana Introduction and Marriage Agency of St
Normally the agency, run by Svetlana Novikova, charges $10 for the
address of a Russian woman, but a special promotion means the first
1,000 men who send in their photo and personal profile "will soon begin
receiving letters from lovely, marriage-minded Russian ladies" free of
You could, for instance, hear from 20-year-old auburn-haired Anna, a
student looking for a partner aged from 25 to 40.
"Many young girls dream of finding an older husband who understands
them," claims the agency.
Why don't they want a Russian mate? "Our men are too much interested in
business and careers," says Novikova. "In a fast-moving city like St
Petersburg, family life doesn't exist for Russian men. Careers, money,
and friends rule their lives."
Hmm, now where have I heard something like that before?
So where does the $1,000 come in? That's what the agency charges for a
week-long package tour, staying in one of the apartments its sister
agency, Svetlana Estates, just happens to be able to provide.
And, of course, it includes plenty of time to meet all those lovely
"We can arrange as many as ten 30-minute appointments a day," says the
agency. "Two or three days is usually enough to start narrowing it
For men who believe in love at first sight, a short hop to Finland (only
three hours away) lets you get hitched in only a couple of days.