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Johnson's Russia List


August 2, 1997  
This Date's Issues: 1110

Johnson's Russia List
2 August 1997

[Note from David Johnson:
The last JRL message before a week's vacation will
be Sunday AM.
1. Reuter: Yeltsin keeps busy as end of holiday approaches.
2. Robert Lyle (RFE/RL): The East: Corruption Considered 
Worse In Russia, Poland, Czech Republic.

3. AP: World-Renowned Pianist Richter Dies.
4. Philadelphia Inquirer: Trudy Rubin, Oil-rich but unstable 
Caucasus could use the U.S. as a facilitator.


6. Komsomolskaya Pravda: Yeltsin Shuyskaya Chupa Dacha 

7. The Times (UK): John Thornhill, Moscow talks: Yeltsin seeks 
talks on Abkhazia.

8. Komsomolskaya Pravda: Svyazinvest Sale Could Trigger 
Government, Media 'Shake-Up.' 


10. Reuter: Svyazinvest victors to divide spoils in two years.
11. InterPress Service: Andrei Ivanov, and Judith Perera,
Ridding Russia Of The Chemical Weapon Threat.



Yeltsin keeps busy as end of holiday approaches
By Gareth Jones 

MOSCOW, Aug 1 (Reuter) - President Boris Yeltsin, nearing the end of his
month-long summer vacation, held talks on Friday with Prime Minister Viktor
Chernomyrdin and other senior officials and said he would return to Moscow
next Tuesday. 
Yeltsin, holidaying at the Volga River resort of Volzhsky Utyos, also tried
to calm the waters in a dispute with neighbouring Belarus, saying its
president was ``too excitable.'' 
The 66-year-old Yeltsin, who has made a strong recovery from open heart
surgery and pneumonia last winter, has kept up a busy work schedule during
his vacation but has also managed to enjoy his hobbies of fishing, hunting
and tennis. 
Yeltsin's talks with Chernomyrdin focused on army reform and payment of wage
arrears to the military and state sector workers, Interfax news agency said. 
``Everything is going to plan...and is being taken positively by the military
themselves,'' Interfax quoted Yeltsin as saying. 
Earlier this week he urged the military rank-and-file to support far-reaching
reforms aimed at turning the huge, cash-strapped army into a leaner, more
efficient fighting force. 
Yeltsin also held talks on Friday with central bank governor Sergei Dubinin.
Interfax said he would give an account of that conversation on national
television and radio ``in a few days.'' 
Russia's feud with Belarus over its arrest of three Russian journalists
worsened when President Alexander Lukashenko angrily called off a visit to
the Russian enclave of Kaliningrad. 
Kaliningrad's governor had urged him to postpone his trip due to the concern
over Russia's ORT television crew. 
Lukashenko's spokesman Vasily Dolgolev accused Kremlin liberals opposed to
closer integration between the two former Soviet states of being behind the
governor's decision. 
``As a representative of the president I consider that this is an insult to
our state...These actions were hardly the initiative of the governor but were
planned by Russian opponents of integration,'' Dolgolev told reporters in
The Kremlin's press spokesman said the governor had acted unilaterally
without consulting Moscow but said he did not think the spat would seriously
harm ties between the two countries. 
Yeltsin also appeared to take a relaxed view of the affair. 
``Lukashenko is young and over-sensitive to criticism. I, for example, take
criticism well when you sometimes criticise me fairly,'' Yeltsin joked with
reporters in comments broadcast on television. ``He is too excitable.'' 
The Russian leader has threatened to review a treaty of union signed with
Belarus in May if the TV reporters are not released. 
Yeltsin also spoke by telephone on Friday with Patriarch Alexiy, head of the
Russian Orthodox Church, in an effort to improve relations marred by recent
disagreements over a controversial law on religion. 
The presidential press service said in a statement that the two men had had
``a cordial conversation'' that focused on the draft law vetoed by Yeltsin
last week. 
Yeltsin rejected the bill, passed by parliament and strongly backed by the
patriarch, because he said it contravened Russia constitution guaranteeing
equality for all faiths. 
The bill, which drew strong criticism from the United States, the Vatican and
human rights groups, would have imposed tough curbs on ``non-traditional''
religious groups in Russia. 
``The president and the patriarch agreed that the adoption of the law was
necessary once the specific corrections...had been made,'' the Kremlin
statement said. 


The East: Corruption Considered Worse In Russia, Poland, Czech Republic
By Robert Lyle

Washington, 1 August 1997 (RFE/RL) - A private international group fighting
corruption around the world says surveys show that people perceive that
corruption has gotten worse in Russia, Poland, and the Czech Republic since
last year, but has improved in Hungary. 
Transparency International (TI), a non-governmental organization based in
Berlin, released its 1997 index of corruption perceptions yesterday in
The index is based on a survey of seven major polls of business people,
Internet users, and the general public by established major polling
organizations, including Gallup, Gottingen University, and the Institute for
Management Development in Lausanne. 
The index ranks only 52 countries because to be included, a nation must
have been covered by at least four of the major surveys. Dr. Johann Graf
Lambsdorff, an economist at Goettingen University in Germany, who developed
the index for TI, says that since there are almost 200 sovereign states in
the world today, it is "certain that there are many countries that may be
perceived as even more corrupt than those (in) the index, but we do not have
sufficient information to rank them all." 
The surveys used to build the index found that most people perceive
Denmark as the least corrupt nation and Nigeria the most corrupt. 
Russia is only three places above the lowest spot. Corruption there was
perceived to have gotten worse compared to last year. In 1996, Russia had a
score of 2.58 out of a possible 10. This year, Moscow's score dropped to
2.27. No nation got a perfect ten. 
In the middle of the 52 countries ranked are: 
* Czech Republic -- number 27 on the list -- with a score of 5.20, down
from last year's score of 5.37. 
* Hungary, number 28, with this year's score of 5.18 an improvement over
last year's 4.86. 
* Poland, number 29, with a score this year of 5.08, down compared to last
year's 5.57. 
* Romania, ranked 37th with a score of 3.44 out of a possible ten. It is
the first year Romania has been included on the index. 
Transparency International's President Peter Eigen cautions not to assume
these nations are either the very best or the very worst. 
"TI is not saying in this index that one country is more corrupt than
another. We are reporting how business people around the globe perceive
levels of corruption in different countries." He adds: "We must also bear in
mind that many of these business people are a part of the problem." 
Additionally, he says, "cultural settings are likely to differ
considerably over time and between different surveys and differing
perceptions may be due to a change in awareness rather than real corruption." 
Lambsdorff also stresses that many of the business people surveyed are
from western industrial nations and many of the surveys used in compiling
the index are run by western organizations, which may lead to some bias
against developing countries. 
Still, says Eigen, when different surveys and polls find similar
concerns, it is usually an indicator that there is a problem. Further, he
says, the index provides "insights into perceptions, which have an impact on
how private companies, particularly in Japan, North America, and Western
Europe, operate in the rest of the world." 
Transparency says it compiles the index to help in its campaign against
corruption everywhere in the world. The organization, founded in 1993, has
more than 70 national chapters. 


World-Renowned Pianist Richter Dies 
August 1, 1997

MOSCOW (AP) -- Svyatoslav Richter, a world-renowned pianist and one of the
greatest musicians of the Soviet era, died today after suffering a heart
attack, the Russian Culture Ministry said. He was 82. 
Richter had been taken to Moscow's Central Clinical Hospital after
complaining of chest pains Thursday at his country home outside Moscow, the
ITAR-Tass news agency said. 
Richter, who won international praise and the highest honors conferred by
the Soviet government, was hailed by Russia's NTV television network as ``a
symbol of our country, a symbol of European culture and performer No. 1.'' 
Two years ago, on Richter's 80th birthday, President Boris Yeltsin called
his musical interpretations ``a source of inspiration and love of beauty.'' 
He was known for his brilliant technique and a repertoire that included
practically all styles, from Bach to Debussy to Prokofiev and Shostakovich. 
Born March 20, 1915, in Zhitomir, Ukraine, Richter learned music from his
father, a pianist and organ player. 
He began conducting while still a teen-ager, at the Odessa Opera House.
He gave his first solo piano concert in 1934, also in Odessa. 
From 1937-47, Richter studied at the Moscow Conservatory under well-known
pianist Heinrich Naygauz. 
He became the Soviet Union's leading pianist in the 1940s and toured the
world's stages in the 1950s. He rarely toured in recent years. 
Richter was named a People's Artist of the USSR, the highest Soviet honor
for a performing artist, in 1961. He also received the USSR State Prize in
1950, the Lenin Prize in 1961 and the title Hero of Socialist Labor in 1975. 
He had been living in Paris in recent years and underwent heart surgery
eight years ago in Zurich, Switzerland. 
An unidentified family member told Interfax that Richter had returned
from Paris on July 5, ``as if foreseeing his death and wishing to spend his
final days in his native land.'' 
Burial will be Monday at Novodevichy Cemetery in Moscow, where many of
Russia's most famous musicians, writers and other figures are buried. 
There was no immediate information on survivors. 


Philadelphia Inquirer
August 1, 1997
[for personal use only]
Oil-rich but unstable Caucasus could use the U.S. as a facilitator 
There are ethnic disputes and pipeline routes to consider, and Azerbaijan
is in the middle of it all. 
By Trudy Rubin / Worldview 

The hottest new country on America's map of strategic interests is
This small Turkic nation is the gateway to the Caspian Sea region, which
sits on up to 200 billion barrels of oil and is being
touted as the largest source for Western oil-and-gas guzzlers after the
Middle East.
Today, the shrewd Azeri President Heydar Aliyev, a former Soviet politburo
member and KGB general, makes his first visit to
the White House. He will announce three big new contracts with U.S. oil
companies to add to the billions already invested by
U.S. oil giants in his country. This follows an ambitious initiative by
Deputy Secretary of State Strobe Talbott to involve
America more deeply in the fates of the former Soviet republics of the
Caucasus -- Azerbaijan, Armenia and Georgia -- as
well as in Central Asia, aimed at stabilizing the Caspian region so oil can
That won't be easy.
Just as the Mideast involved America with the Israeli-Arab imbroglio and
the Lebanon war, the Caspian oil trade will bring
with it a full set of ethnic and regional problems. Talbott isn't kidding
when he says that ``conflict-resolution must be Job One
for U.S. policy in the region.''
Russia has fueled ethnic fires in the Caucasus to force her former colonies
to beg for her help. Iran, a part of the Caspian basin,
is seething at American efforts to exclude her from the region. The endless
conflict between Armenians and Azeris threatens to
destabilize the territory, through which crucial pipelines must be built.
So Aliyev's visit to Washington takes on special importance. Its outcome
will signal whether America really has the stomach
and the smarts to help convert the Caucasus into a peaceful source of oil.
A prime obstacle to Caucasus stability is the conflict between Armenia and
Azerbaijan. Its roots go back to Armenia's fear of
subjugation by Turks, born of the Ottoman Turks' genocide against Armenians
in 1915. The more immediate cause is a
mountainous region called Nagorno-Karabakh, a predominantly Armenian pocket
within Azeri borders.
After the Soviet breakup, Nagorno-Karabakh tried to join Armenia; in the
ensuing war, Armenia captured that area and much
more of Azerbaijan, turning one million Azeris into refugees. Militant
Armenians from Nagorno-Karabakh have threatened to
prevent Azeri oil from flowing through a key pipeline that passes near
their territory.
The Clinton administration has immersed itself in the international effort
to resolve the Nagorno-Karabakh issue, becoming a
co-chair -- along with France and Russia -- of the negotiating team. But
its impartiality as a mediator is hampered by a
5-year-old congressional ban on aid to Azerbaijan, imposed because that
country blockaded Armenian energy supplies during
their war.
The ban is outdated and counterproductive, and the administration is
rightfully trying to get it lifted. It prohibits humanitarian aid
to Azerbaijan's refugees, as well as limiting democratization aid in trying
to open up Azeri politics.
In an interview on his chartered plane flying from New York City to Andrews
Air Force base, an energetic Aliyev expounded
on why Congress should lift the ban. ``The United States has very strong
economic interests in Azerbaijan,'' he said.
``Azerbaijan is a long-term partner for the United States.''
The Azeri leader also referred to Azerbaijan's role as a buffer against
Iran. ``Iran protests the increased cooperation between
the U.S. and Azerbaijan and tries to exert pressure, but we increase this
cooperation anyway. The U.S. Congress has to
appreciate this.''
In fact, Azerbaijan has paid dearly for helping the United States isolate
Iran. Washington pressed Azerbaijan to exclude Iran
from participation in a major oil consortium, and Iran retaliated by
blocking electrical power to Azerbaijan. The simplest, safest
way to move oil from Azerbaijan to the West, via Turkey, would be to run a
pipeline for a short distance through Iran.
Washington has nixed this idea.
If America starts reconsidering its Iran policy, that pipeline may still be
the best route. But if not, this only increases the need
for an impartial U.S. role as mediator on the issue of Nagorno-Karabakh.
All but one of the 52 member countries of the Organization for Cooperation
and Security in Europe, which is in charge of
peace negotiations, have voted for a formula that would let
Nagorno-Karabakh have full autonomy but return it inside
Azerbaijan's borders. Armenia's was the only ``no'' vote.
But Armenia's fears must be addressed. One way would be for America to
facilitate a reconciliation between Turkey and
Armenia, something the presidents of those two countries tried but failed
to do in 1992-93. If that historical breach could be
healed, as Israel healed its breach with Germany, perhaps the breach with
Azerbaijan could be healed, too.
U.S. mediation also would be vital to stop Russia from meddling in the
matter by shipping arms illicitly to Armenia. Aliyev, who
visited Moscow last month to protest such shipments as well as reputed
Russian efforts to have him assassinated, says, ``We
need time to see whether the Russian attitude has changed.'' He adds
darkly, ``Russia doesn't want to have its hand taken off
of the Caucasus.''
America will have its hands full if it truly wants to promote Caucasus
stability. In the words of Paul Goble, Radio Free Liberty's
top expert on ethnic matters in the ex-Soviet Union, ``This conflict is
like a giant Rubik's cube. Unless all parts are lined up,
nothing works.''
Trudy Rubin's column appears on Wednesdays and Fridays. 


KHABAROVSK, AUGUST 1 (RIA NOVOSTI's correspondent Eduard
Terela) - The share of the shadow economy constitutes up to $50
billion in the national economy; however, there are no exact
figures about its real scope, Vice-Premier of the Russian
Government Vladimir Bulgak has told today's session of the
Council of the Inter-Regional Economic interaction Association
"Far East and Trans-Baikalia" held in Khabarovsk. 
According to him, the Russian Far East is one of the
regions where the ratio of the shadow and state economy is
especially noticeable which may turn out to be decisive in
disfavour of the state while we are busy "creating a tax code."
According to Bulgak, in this situation a need arises to
accelerate the development of the state economy. Otherwise,
stressed the Vice-Premier, "the shadow economy will have to be


Yeltsin Shuyskaya Chupa Dacha Described 

Komsomolskaya Pravda
July 25, 1997
[translation for personal use only]
Article by Komsomolskaya Pravda special correspondents
Roman Popov, Stas Levshin, and Sergey Kulikayev: "The President's
Bedroom Is "Blue," and His Wife's Is "Pink""

Since Yeltsin"s vacation in Shuyskaya Chupa, in Karelia,
they are still saying that bombers had dispersed the clouds in order
to ensure good weather, and that fish had been stocked for Boris
Nikolayevich in the fishing lake.
Petrozavodsk--settlement of Shuyskaya Chupa--The
old ladies at the bus station, upon learning that we were going
to Shuyskaya Chupa, became indignant: "But no one is allowed in
there! Yeltsin has built a castle there! Worse than a tsar!!!..."
Our Karelian correspondent, who has been to the dacha, confirms
that, yes, of course, things are pretty intense there. But local
"new Russians" have dachas that are better. On the whole, the setup
is like a good hotel.
After reconstruction, the two-story building acquired a stylish
roof--double-sloped roofing of Finnish iron. On the first
floor, in the entrance hall, the walls are adorned with light-brown
tapestry. In the sitting room, the heated floor is made of Italian
marble. In the same place is the original fireplace, fire irons
of gold, chandeliers again of a golden color, and a whole set of
air conditioners.
To the left of the sitting room is a kitchen with Italian
equipment, and to the right, a recreation room. A small table, two
armchairs. A billiards table of green fabric. On the walls, paintings
by Karelian artists Boris Pomortsev and Tamara Yufa. In the opinion
of the President"s security guards, "very nice."
Especially impressive is the President"s tennis court.
The vaulted ceiling is in the characteristic style of Finnish buildings.
A spacious hall with special red and green covering. The tinted
windows are enormous, along the entire wall.
A dacha without a bathhouse, as is well known, is throwing
money to the winds. The local masters "hewed" a high, carved chamber
of Karelian spruce at a cost of 250 bucks per cubic meter. The timber
was impregnated with a special solution—dampness has not
affected it for more than one decade. A steam room with transparent
doors of some sort of tinted glass, 2 m by 2 m in size, a pool about
2 m deep, a spacious shampoo section, several recreation rooms,
the air-conditioned air—all this is at the disposal of
the sweating room attendants.
Only one thing is hard to understand: Why does the President,
who calls upon the country to make use of the services of Russian
commodities producers, himself "love" everything imported?
The dacha construction and reconstruction work was performed
by...the Swiss firm Mobitex. The workers were Albanians; the designer,
from Italy. And even the bathhouse, for lack of aspen and linden
(!), was trimmed with foreign Canadian apache wood...
In addition to the main, presidential, building, situated
on the territory of the "dacha" are four more three-room cottages.
They are for the President"s team. These are also fully
supplied--a self-contained kitchen, a sitting room, a recreation
For Yeltsin"s arrival, the wooden fence was replaced
with a concrete and chain-link barrier, the doors were oiled, the
windows fitted, the rugs laid, a lot of wood chopped, and geraniums
planted. From the local library were obtained "two linear meters
of books" (the length of a bookshelf--Authors'note). 
According to personnel of the Petrozavodsk repairs and construction
highway works administration, R250 million was spent in all on the
improvement of the territory around the residence. Meanwhile, the
workers themselves have gone without their wages since September...
In order to check up on the rumors, so disturbing to the population,
of the impossibility of penetrating into the territory close to
the residence, we set out for Shuyskaya Chupa. The editorial office"s
assignment was to go for a swim in the same lake as the President
and to wander in the forests here.
...The first forest path that the dacha dwellers pointed out
to us led to the lake, and we, without a second thought, jumped
into the water. The water was murky but warm, and we swam to our
heart"s content, 500 meters away from Yeltsin"s
dacha. Then, our eyeglasses flashing (so that the snipers would
be able to see...), the Komsomolskaya Pravda correspondents headed
along the shoreline in the direction of the residence. On the way,
we looked for mushrooms and ate unripe bilberries.
Security guard personnel would later tell us that the forest
is "packed" with "special devices" and that they had known about
our peregrinations. We also noticed broken-off young saplings (evidently
their crowns were in the way of the laser beams), but no one ever
came out toward us. And only when barbed wire tore through a
correspondent's trousers did we hear:
"Halt!"--and we saw a man dressed in camouflage.
At his demand, we introduced ourselves, came closer, stepping
over the barbed wire and a length of very fine fishing line (what
if one were to touch it!) and...found ourselves under arrest. When
the guard came running up, a man peered out from the bushes and
flung out, spitefully: "Should have shot them!"
We were handed over to the police, who examined us, took our
things and documents, and then waited for personnel of the President"s
security service.
The chief of the security service came to take a look at the
uninvited guests: "You are reckless fellows. What if you had taken
a bullet?"--and he gave the order to put us through the
whole program.
We were held under arrest for five hours. We were interrogated,
our identities were ascertained. Finally, we were asked to write
up an explanation and taken to Petrozavodsk. The member of the
security service made sure to inspect the hotel room where we had
stayed and to clear up all the rumors that we had heard about the
President. We made sure to ask the security man a heap of
questions--andto deny or confirm these rumors.
And so--no one dispersed the clouds over Petrozavodsk:
That was all the invention of some American reporters. The local
residents had not even tried to penetrate onto the territory of
the residence. No one interfered with their movements in the region.
On the contrary, we had seen the President"s dacha neighbors,
and also boats floating in the area of the dacha.
Boris Nikolayevich"s peace was guarded by no fewer
than 100 people (about 30 passenger cars were allocated to serve
them), and also armored personnel carriers. In the forest, civilians
in mosquito netting were "scattered about," who in the event of
an approach to the border of the dacha itself ask one to leave.
In addition, along the fence, "border guards" stood guard. With
a view to security, the bottom of Lake Ukshozero had been gone over
thoroughly by divers, and the shoreline "checked" by a border-guard
But no one stocked the fish, and no one dispersed the mosquitoes.
The fables of the President"s catches have been greatly
exaggerated. Ukshozero is generally considered to be dead. A few
years ago, military plants poured wastes into the Shaya, a small
neighboring river, and the perch, having fattened up by the middle
of the summer, sank to the bottom with the heat—so the
fishing here is not great.
Aleksandr Trubin, the chief gunner of the Polar Odyssey club,
who accompanied the President fishing, testifies:
"The President preferred the fishing rod. After about five
minutes the float went down. The first perch was about 10 centimeters
long, and it did not get any better from there. The fry we got were
small, and the largest perch did not make 20 centimeters. The rod
brought on board only a few small perch; the rest of the fish we
caught with a net. Then we brought up the crayfish pots. I have
never seen such a quantity of crayfish in one cage before! And it
was the crayfish that gladdened the President...
"Later, after his departure, three snipers came to see us.
Just what weren"t they festooned with: from pistols and
grenades to unparalleled rifles, automatic rifles with silencers,
and grenade launchers. We treated the guys to fish, and they went
back where they had come from."


The Times (UK)
August 2, 1997
[for personal use only[
Moscow talks: Yeltsin seeks talks on Abkhazia
By John Thornhill in Moscow

Mr Boris Yeltsin, Russia's president, intends to invite the leaders of 
Georgia and the secessionist region of Abkhazia for talks in Moscow, as 
the deadline expired this week for withdrawal of 1,500 Russian 
peacekeeping troops stationed in Abkhazia.
The diplomatic initiative is an attempt to ensure that a simmering 
conflict in the Caucasus does not flare up into renewed hostilities. The 
Russian troops, which show no sign of imminent withdrawal, were first 
deployed in the region in 1994 after a ferocious secessionist struggle, 
in which 10,000 people were killed and 150,000 forced to become 
Mr Eduard Shevardnadze, the Georgian president and former Soviet foreign 
minister, has refused to renew the mandate for the Russian peacekeeping 
mission, which operates under the auspices of the Commonwealth of 
Independent States. Georgian nationalists still resent Russian support 
for Abkhazia during the war and doubt whether Moscow can act as an 
honest broker.
The Georgian national security council said it would prefer a 
UN-sanctioned peacekeeping force to move into the region but would not 
force out Russian troops. It added that Georgia was making "moral and 
military" preparations to restore its territorial integrity by force if 
the situation deteriorated. Mr Yeltsin said Russia was prepared to 
withdraw its peacekeeping troops as soon as progress was made towards a 
peaceful settlement.
"We do not intend to keep peace-keepers in Abkhazia for a long time. We 
want that everything there will be solved in a quiet and peaceful way, 
that Georgia will be a single united state but that at the same time 
there will be a large degree of independence for Abkhazia," Mr Yeltsin 
said. Russia also retains three military bases, with an estimated 20,000 
troops, in the rest of Georgia - although Mr Shevardnadze has been 
pressing Moscow to close them.
The Caucasus are rapidly acquiring great strategic significance as 
Azerbaijan begins to exploit the vast oil reserves under the Caspian Sea 
and pipelines are built to transport oil to ports on the Black Sea.
Russia has adopted an increasingly conciliatory role in attempting to 
resolve several outstanding disputes in the region. But Mr Gennady 
Zyuganov, Russia's Communist party leader, denounced Mr Yeltsin for 
allowing Russia to be "squeezed out of the Caucasus". "Western states 
should be made aware that this is a zone of Russia's geopolitical 
interests," he said.


Svyazinvest Sale Could Trigger Government, Media 'Shake-Up' 

Komsomolskaya Pravda
July 31, 1997
[translation for personal use only]
Article by Yevgeniy Anisimov: "Weather Forecast for Upper Echelons.
In Two Weeks' Time Russia Will Have Either a New Television Service or a
New Government"

The row over the auction of shares in the Svyazinvest Open-Type
Joint-Stock Company has exposed serious conflicts within the Russian elite:
On one side are the supporters of "privatization among friends," and on
the other side is the government, which has declared a policy of honest
privatization (that is to say, for big money). As we have discovered, not
long before the auction's outcome was decided, B. Berezovskiy, V.
Gusinskiy, and V. Potanin flew to a meeting with A. Chubays, who was on
vacation at the time. At that meeting Berezovskiy and Gusinskiy tried to
persuade the first vice premier of the need to "put the brakes" on Potanin,
who, in their opinion, had distanced himself too far from the other
contenders. They argued that it was therefore necessary to sell the block
of Svyazinvest shares not to the consortium set up by Uneximbank but to its
rival, and at the price offered by the second contender ($1.2 billion). A.
Chubays rather bluntly rejected the bankers' demands. As is known, the
final price of the block of shares was $1.875 billion. And it was paid by
Immediately after the auction the losers began hostilities, using,
according to B. Nemtsov, the mass media that they control. NTV, as a
private television company, had every right to criticize the government,
but the controlling stake in ORT belongs to the state, and we have been
reliably informed that the First Channel will not be forgiven for such
behavior. In the coming two weeks the battle of giants -- the government
and the biggest financial and media holding companies -- will end either in
a thorough shake-up of the television companies and the appearance of a new
deputy secretary of the Security Council, a thorough shake-up of
the government. The power departments could also be used to remove
inconvenient first vice premiers: Criminal proceedings could be brought
against members of the deputy premiers' closest entourage, a noisy
propaganda campaign will be organized, and it's as good as done.
The government too is obviously preparing for more active operations,
which could seriously damage not only the mass media controlled by its
opponents, but also their financial and industrial structures -- war is
Although the conflict seems at first sight to be the exclusive concern
of the "upper echelons," its roots are in fact deeper. Either the country
will start to live according to civilized rules explicitly laid down by the
government, or all politics will be dictated by a closed group of financial
oligarchs. In the latter case, we shall be unable to avoid the Latin
American scenario, with all its "delights": total corruption, lack of
public control over power, and a weak and dependent government.
This crisis cannot last longer than two-three weeks, the winner must
emerge. At the moment, the better chance of victory lies with the


MAKHACHKALA, AUGUST 1 (from RIA Novosti's Dekabr Beibutov)
- If all ethnic entities in Russia are sure of their tomorrow,
the country will regain its Great Power status, Ramazan
Abdulatipov said in an exclusive RIA interview.
State Duma member, today appointed federal Deputy Prime
Minister for nationalities policy by President Boris Yeltsin, he
met the Novosti correspondent in the capital of his native
Daghestan, venue of an International Mountaineers' Congress,
convened on his initiative to represent Moscow, many Russian
regions and several foreign countries.
"I see my new office as tremendous responsibility, because
I shall have to deal with hard and pressing problems. I shall
have to do very much--first of all, to start dialogues with
regions and peoples in order to reunite Russia practically, not
by sheer appeals and reprimands," he said.
From the very start of his work on the new high post, Mr.
Abdulatipov is determined to see what he can do "to get Russia
out of crises--mainly out of interethnic critical situations--
which we are coming through".
Commenting on the resumed Osset-Ingush tensions, the
Vice-Premier said: "Caucasians are to regain their senses--
better late than never--to get rid of external traits alien to
Caucasian peoples. First of all, they are to establish fraternal
relations with their neighbours, for which they were marked
throughout their history. If one cannot live in peace with his
neighbours, one will never be able to get normal relations going
with any nation in the world." 


Svyazinvest victors to divide spoils in two years
By Maxim Filimonov 
MOSCOW, Aug 1 (Reuter) - Members of the consortium
which won a tender last week for one quarter of Russian holding company
Svyazinvest will divide up the shares after two years, a senior official from
one of the participating banks said on Friday. 
In the meantime, the main task of the consortium is to increase the value of
the stake sharply, said Leonid Rozhetskin, board member of Moscow investment
bank Renaissance Capital. 
"After two years it will be divided up. This is a sensible compromise...It is
necessary to say exactly when the investors can hold securities not of the
Cypriot company Mustcom but the shares that interest them," Rozhetskin told
The Cyprus-registered Mustcom consortium of Russian and foreign financial
institutions was built around Uneximbank, Russia's third biggest bank.
Uneximbank President Vladimir Potanin said on Thursday the consortium would
hold the shares for two years, and Uneximbank would keep its share longer. 
Rozhetskin signed the agreement with the Russian Federal Property Fund, by
which the consortium will pay $1.875 billion for 25 percent plus one share of
Svyazinvest -- Russia's biggest privatisation -- on behalf of Mustcom. 
Consortium members, who include Deutsche Bank investment banking division
Deutsche Morgan Grenfell, Morgan Stanley Asset Management and U.S. financier
George Soros, agreed the shares would be held as a single package as Mustcom
property for two years, and managed by Uneximbank, he said. 
Rozhetskin said measures to be urged by the consortium should triple the
value of Svyazinvest, currently about $8 billion on the basis of the price
paid by the consortium, over two years. 
These measures included unifying Svyazinvest subsidiaries' accounting
systems, introducing flexible tariffs and providing new lines, he said. 
"I see no reason why Svyazinvest should be valued less than the Mexican
operator TelMex, whose market capitalisation is $45 billion. Mexico's
population is the same as ours and is no richer," Rozhetskin said. 
The consortium intends to encourage investments in Russia's antiquated
telecommunications industry by allowing Svyazinvest subsidiaries to issue
shares, he said. Svyazinvest has large stakes in 89 Russian telecoms
"Many regional telecoms companies could attract funds by going to the capital
market and issuing shares. They have not been able to do that until now
because Svyazinvest did not have the money to take part in these issues,"
Rozhetskin said. 
"Our primary task is to draw up a plan to finance Svyazinvest so that it can
channel money into the development of the regional companies. Svyazinvest
would retain its stakes while doing this," he said. 
Under this scheme the regional companies would raise 50 percent of the funds
from the market and 50 percent from Svyazinvest, he said. 
Rozhetskin said Svyazinvest would raise "billions of dollars" of investment
through the consortium, either as loans or equity. 
Some 10-15 regional companies could each raise up to $200 million by the end
of the year through share issues, he said. 
"If you calculate that each of these companies could raise $100-200 million
this year alone, that gives you a rough idea of the scale of the investment
we are talking about," he said. 


>From InterPress Service
DISARMAMENT: Ridding Russia Of The Chemical Weapon Threat
By Andrei Ivanov and Judith Perera

MOSCOW, Jul 29 (IPS) - One of the strongest critics of chemical
weapons in Russia is the soldier charged with protecting the
country from them, Colonel-General Stanislav Petrov, commander
of Russia's nuclear, chemical and biological defence forces.
He envisages no scenario where they could or would be used
by a Russian government and believes their continued existence
makes them a temptation for 'madmen' or 'terrorists'. The sooner
destroyed the better, he argues.
But though he has finally won consent from six Russian regions
to allow him to set up the facilities needed to destroy the
remaining 40,000 tonnes of chemical weapon stocks, Petrov lacks
the funds to start work.
''If we had the funding and were in a position to allocate
appropriate finance to these regions, then a start could be made,''
he said. As it is, barely enough money is being allocated from
federal sources to maintain the stocks in a safe condition.
''In 1996 we got only one percent of the funds asked for and
only 5.5 percent of the funds eventually allocated in the budget,''
he explained in an interview with IPS. This totalled only about
eight billion roubles, about 1.4 million dollars.
''This enables us to maintain the status quo and prevent any
breakdown. But there is no question of us doing any substantive
work. We can update the technology and keep the system
The six sites are at Kambarka in Udmurtia where there are 6,400
tonnes of Lewisite, and Gorny, in the Saratov region where there
are 1,125 tonnes of mustard and Lewisite. The others are at Kizner
in Udmurtia, Shchuchye near Kurgan, Maradykovsky in Kirov
and Leonidovka in Penza, where nerve agents are stored.
In addition, the Bryansk regional authorities have agreed in
principle to the construction of facilities to destroy nerve
agents stored at Pochep, but the location has yet to be decided.
While the United States favours simple incineration of old
chemical weapons stocks, Russia has developed a two-stage
involving initial neutralisation of the toxic substances before
This results in solid wastes composed of salts which are no
more hazardous than ordinary industrial chemical waste, Petrov
said. ''This can be converted into concrete or incinerated to
produce solid waste, after which it can be buried in an underground
The solidified waste can be incinerated later.
Incineration in high-tech furnaces where heat levels approach
that on the surface of the sun is a new science; at such
the nature of chemical reactions is not so well understood. Some
U.S. furnaces set up to dispose of dangerous organic pest
icides in the 1980s ended up leaking new and equally toxic
chemicals into the soil and air.
Petrov says the incineration will take place in a closed system
with all waste gases being purified before discharge. As for
the stored weapons themselves, he says they are carefully monitored
to detect any that may be leaking.
Chemical-filled munitions are fitted with detectors which change
colour from grey to pink in the event of any leak. The detectors
are highly sensitive and will detect what Petrov describes as
''vanishingly small'' amounts.
''It is not a case of dripping or condensation but just a trace
quantity of toxin.'' In this case the weapons is immediately
removed from storage and encased in a hermetically sealed container
to dispatch to a special installation for reprocessing and de
struction. However, this is a rare occurrence, he said. Only
150 tonnes out of the 40,000 tonnes in stock have had to be
destroyed in this way.
After years of storing the deadly weapons -- from World War
I type mustard gases through to the nerve agents of the Cold
War years -- Petrov believes their disposal is long overdue.
He believes Russia would never use chemical weapons. ''Even
in the extreme conditions of 1942 when the Germans were on the
banks of the Volga River and only pushed back 300-400 kilometres
from Moscow, when the front line was there and Leningrad was
under siege, even in those extreme conditions our government did
not resort to the use of chemical weapons,'' he recalls.
And today, with the chemical weapons convention in place, Russia
would certainly never use them. ''So if we do not intend to use
them, why should we retain these stocks which could, in theory,
pose a threat to our own population.?''
At the same time, he does not think the present army reforms
in Russia will result in any reduction in his troops.
''They are protection troops, so there will always be enough
work to do. There will be enough work firstly because not all
countries have abandoned the idea of possessing arsenals of
chemical, biological and nuclear weapons.
''Some of them have declared that they have while they continue
this work. We cannot take the chance of taking them at their
Petrov believes the risk of terrorism is still a matter of
concern. ''If you need to and want to, you can always carry out
an act of terrorism. (U.S. president John F.) Kennedy was shot
despite the most powerful protection system and the complex of
measures to guard him.
''Chemical weapons are well guarded but I cannot give a 100
percent guarantee, in the conditions that prevail in our country
at present, that some madman will not carry out a terrorist
without calculating all the consequences, even though we have 
air defence systems and land-based defence systems and all
sorts of devices for detecting intruders.''
The Chemical Troops will always have a role to play, he says.
''We have done everything we can to ensure 100 percent security.
We cannot, however, guarantee that there will not be an incident
arising from some wild coincidence of circumstances.
''This why we have the troops, so that we will be able to clear
up the consequences of any disaster, whether natural or


MOSCOW, AUGUST 1, RIA NOVOSTI - Federal President Boris
Yeltsin had a long telephone conversation with His Beatitude
Alexis II, Patriarch of Moscow and All Russia, to discuss the
vetoed bill, On Freedom of Conscience and Religious
"It was a long, hearty and mutually well-wishing talk,"
says presidential press secretary Sergei Yastrzhembsky.
The President shares the Patriarch's apprehensions as
sinister sects and cults are mushrooming in Russia to bring
moral and physical damage to people they entice. The President
is sure that they will be neutralised through official efforts,
and their proliferation stopped, the presidential press service
says in a statement circulated today.
The President and the Patriarch agree that Russia needs the
freedom of conscience law after all its premises are amended
into constitutional compliance. They regret that they are both
absent from Moscow--Boris Yeltsin on vacation, and Alexis II on
ecclesiastical affairs--and so cannot confer eye-to-eye about
the disputable bill. If it had taken place in due time, such a
conference would have prevented many misunderstandings and
misrepresentations of the developments by the mass media. 
The President and the Patriarch agreed to join hands for
bill amendment and adoption.


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