August 12, 1997  
This Date's Issues: 1116 • 1117 • 1118

Johnson's Russia List
#1118
12 August 1997
djohnson@cdi.org

[Note from David Johnson:
1. Fred Weir in Moscow on Korzhakov's memoirs.
2. Renfrey Clarke in Moscow: BEHIND PRIVATISATION WARS: 
RUSSIA'S NEW OLIGARCHIC CAPITALISM.
3. Nick Sivulich: Russian religion.
4. Novoye Vremya: Sergey Shelin, "Maestro of Auctions.
Selling out the Country is His Trade." (Re Alfred Kokh).
5. RFE/RL NEWSLINE: CATHOLICISM TO BE ADDED TO LIST OF 
"TRADITIONAL" RUSSIAN RELIGIONS? and HALF OF RUSSIANS AGAINST 
SPECIAL STATUS FOR MEMBERS OF RUSSIAN ORTHODOX CHURCH.
6. Moskovsky Komsomolets: Natalya Timakova, RUSSIAN GOVERNMENT 
DIVIDED.
7. RIA Novosti story on anniversary of August 1991.
8. AP: Russia's 1998 Budget To Be 'Tough.'
9. Interfax: Poll: Russia's Next President Should Be 40-50 Years Old.
10. The Times (UK): Richard Beeston, Typhoid and cholera come 
back to haunt Russia.
11. Panorama: STATISTICS WARNS. A Real Danger Threatens 
Russia in the Year 2010: It May Turn into a "Country of Widows."
12. Argumenty i Fakty: Special Services Reportedly Selling Secrets 
to Media.] 

********

#1
From: fweir.ncade@rex.iasnet.ru
Date: Tue, 12 Aug 1997 17:59:41 (MSK)
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT) -- The man who claims to know more about Russian
President Boris Yeltsin than anyone except, perhaps, Mrs.
Yeltsin, released his explosive tell-all memoir about Kremlin
life Tuesday. The picture he paints isn't pretty.
General Alexander Korzhakov, a former KGB officer who served
as Mr. Yeltsin's personal bodyguard and close confidante for more
than a decade, told journalists at the Moscow book launching that
his tales of bedlam, boozing and betrayal at Russia's pinnacle of
power are just the beginning.
"I know much more than this, and I have documents to prove
everything," Mr. Korzhakov said.
He charged that emissaries from Mr. Yeltsin's daughter and
public relations chief, Tatiana Dyachenko, had offered him $5-
million to cancel publication. The money, according to Mr.
Korzhakov, was to be paid by financier Boris Berezovsky, deputy
chief of the Kremlin's Security Council and one of the book's key
targets.
Booksellers said an initial 150,000 print run of the
420-page shocker, entitled "Boris Yeltsin: From Dawn to Dusk",
would probably be snapped up by Russian readers eager for its
intimate -- if, at times, dubious -- glimpses of inner Kremlin
life and intrigue.
Mr. Korzhakov, 47, was Mr. Yeltsin's loyal shadow --
personal protector, tennis partner, drinking buddy and adviser --
through long years in the political wilderness, while his boss
battled for power against Soviet leader Mikhail Gorbachev and
later as chief of the Kremlin's vast presidential security
service. 
He reputedly amassed great power and a corrupt fortune
through his privileged access to the president, and some accuse
him of talking Mr. Yeltsin into such ill-advised policies as the
war in Chechnya. Liberals cheered when Mr. Korzhakov and others
were ousted in a power struggle last summer and replaced in Mr.
Yeltsin's affections by Anatoly Chubais, currently first deputy
prime minister in charge of economic reforms.
Excerpts from Mr. Korzhakov's book, published in the liberal
Komsomolskaya Pravda last week, portray Mr. Yeltsin as feeble,
lonely and increasingly manipulated by a handful of conniving
courtiers and Russia's power-hungry new financial-industrial
magnates.
"(Yeltsin) is not in charge," Mr. Korzhakov told a recent
interviewer. "Russia is ruled by an oligarchy, not by its
president. He is an isolated man and doesn't know half of 
what is happening around him. His close circle will make sure
that he doesn't get to know about some of the revelations in my
book." 
His purpose in taking up the pen, he said, was to tell
Russians the truth about how, and by whom, they are governed. The
book is prefaced with a quote from Talleyrand, Napoleon's foreign
minister: "The people would be in horror if they knew what small-
minded men rule over them."
Among other things, Mr. Korzhakov reveals that President
Yeltsin underwent repeated bouts of severe depression, and at
least once -- during the Chechnya war -- attempted to commit
suicide. 
He depicts Mr. Yeltsin as almost perpetually lost in a
vodka-drenched stupor, even during his darkest crisis, the bloody
October 1993 storming of Russia's parliament, when 150 people
died.
But he claims the president wasn't drunk in a notorious 1994
episode, when he failed to emerge from his plane at Shannon
airport for a scheduled meeting with the Irish prime minister --
the truth was actually worse. In fact, he writes, the Kremlin
chief had a minor heart attack, or stroke, which incapacitated
him, caused him to wet himself, and left him cursing and whining
in the plane's presidential cabin while a deputy prime minister
went out to meet the Irish leader.
Mr. Korzhakov accuses top Russian financiers, particularly
the sinister Mr. Berezovsky, of plotting to murder one another,
and trying to embroil him in their intrigues. 
On one occasion, Mr. Korzhakov says, the president himself
ordered him to send men to physically intimidate a leading banker
-- an ally of popular Moscow Mayor Yuri Luzhkov -- in a (he says
successful) effort to keep Mr. Luzhkov from running for president
in 1996. 
And he portrays Mr. Yeltsin's daughter and most trusted
adviser, Ms. Dyachenko, as a wide-eyed and empty-headed girl who
is putty in the hands of Mr. Chubais and other tough Kremlin
manipulators. Mr. Berezovsky won Ms. Dyachenko's heart, he
claims, by giving her a car and other expensive gifts.
The president's office has denied all the book's
allegations, although no lawsuits appear to be in the offing. Mr.
Yeltsin's press spokesman, Sergei Yastrzhemsky, says that Mr.
Korzhakov is a "sick man" whose memoirs are a concoction of half-
truths and delusions.
Perhaps the bottom line is that, in today's scandal-ridden
Russia, it doesn't seem to matter much one way or another whether
any of it's true.
"People are exhausted with all the crises, all the
sensations, all the gossip," says Sergei Oznobychev, an analyst
at the independent Institute of Strategic Assessments.
"It's interesting of course, but nobody feels that such
revelations can make any difference. Russians are socially
passive these days, and all this just washes over them." 

********

#2
Date: Tue, 12 Aug 1997 12:55:20 +0400 (WSU DST)
From: austgreen@glas.apc.org (Renfrey Clarke)

#BEHIND PRIVATISATION WARS: RUSSIA'S NEW OLIGARCHIC CAPITALISM
#By Renfrey Clarke
#MOSCOW - There was a time, about 1991, when only slightly drunk
members of Moscow's liberal intelligentsia would exclaim to you
across their kitchen tables that Russia was at last about to
become a normal country. Enterprises would have real owners, who
would manage them in civilised fashion instead of plundering them
for personal gain. Competition would promote efficiency. Economic
stagnation would pass, as the possibility of making honest
profits brought investment and innovation. A free, independent
press would expose and condemn abuses. Laws would become a real
force that even governments had to obey.
#I haven't seen any of those friends recently. But I've thought
of them often in the past few weeks as corporate brawls have
burst repeatedly into the open. Playing on prime-time television,
these battles have provided an illuminating and disturbing
picture of the capitalism being created in today's Russia.
#The first of these wrangles erupted in late July with the
privatisation sale of a 25 per cent stake in the giant
telecommunications holding company Svyazinvest. A sealed auction
for the shares was won by a consortium organised by the
financial-industrial conglomerate Oneximbank. The losing bid, it
transpired, had been made by a rival consortium centred on the
Alfa Bank financial empire and the banking and media-based MOST
Bank group.
#No sooner was Oneximbank's victory announced than media organs
linked to the MOST group began a vitriolic attack on Oneximbank
and on the conduct of the auction. Oneximbank's own media machine
then responded by accusing the MOST group chiefs of past
corruption and political blackmail.
#Behind the ruckus, other sources reported, was the breach by the
Oneximbank bosses of a ``gentleman's agreement'' under which
desirable firms would be privatised in favour of particular
corporate groups, with the prices kept at rock-bottom. ``It was
the turn of MOST Bank to step up to the trough and get its
share,'' independent analyst Nikolai Zyubov was reported as
observing. ``But they were cut out of the deal, and they are
very, very angry.''
#Deputy Prime Minister Boris Nemtsov praised the Svyazinvest
auction as a ``model'' privatisation sale. ``From a bandit-like
amassing of capital, the country is moving to a more or less
civilised regime,'' Nemtsov declared. To outbid its rivals, the
Oneximbank consortium had needed to pay more than 50 per cent
above the government's reserve price.
#However, the successful bidders still received an astonishingly
generous deal. The consortium paid a sum corresponding to $700
per individual phone line, described as exceptionally cheap by
international standards. According to Leonid Rozhetskin, a board
member of the Moscow investment bank Renaissance Capital, the
value of the consortium's investment is likely to triple over the
next two years following organisational changes and some
investment in new lines.
#And if the Svyazinvest sale appeared civilised compared to the
giveaways of the past, that was not the impression that observers
gained a few days later from the sell-off of a controlling 38 per
cent stake in the company Norilsk Nickel. Centred in the Siberian
Arctic, Norilsk is the world's largest nickel producer.
#Once again, the winner at Norilsk was Oneximbank. But this time,
the price paid was suspiciously low - according to the reported
consensus of share dealers, about 25 per cent below the
property's market value. Oneximbank had clearly exploited the
fact that it already exercised control over Norilsk Nickel,
having been awarded the right to manage the firm in November 1995
in exchange for making a loan to the government. The sell-off was
organised, and the terms decided, by an Oneximbank subsidiary.
The London Metals trader Trans-World Group protested publicly to
the Russian government, arguing: ``The conditions to be met for
this auction and the incredibly short timetable make it
impossible for anyone but the current owners to participate.''
#The Norilsk auction went ahead despite well-founded objections
that it was illegal. During July the Accounting Chamber, the
independent state body that audits government finances, sent a
report to the Prosecutor-General's office recommending that the
Norilsk sell-off be blocked on the basis that it violated
presidential decrees, government resolutions, the privatisation
statute and the newly enacted Civil Code. Shortly before the
auction was due to be held, Prime Minister Viktor Chernomyrdin
called for postponement of the auction on the grounds that the
rules violated the law. But after last-minute talks with
government officials and Oneximbank head Vladimir Potanin,
Chernomyrdin dropped his objections.
#Aside from the fact that the privatisation process in Russia is
deeply corrupt - which is scarcely news - there are several other
important lessons in these events. One is that the key role in
the economy is coming rapidly to be played by huge financial-
industrial conglomerates. Another is that the dividing line
between these so-called Financial-Industrial Groups (FIGs) and
the government is quite blurred. Top executives of the largest
FIGs enjoy direct, frequent access to government ministers. For
that matter, these executives often become government ministers,
passing from the FIGs to high state office and back again.
#The Association of Financial-Industrial Groups, headed by former
First Deputy Prime Minister Oleg Soskovets, now has 62 registered
members, uniting over a thousand enterprises and organisations
and more than 90 financial and credit institutions. The rate of
growth of the FIGs has been phenomenal; according to the
government newspaper <I>Rossiyskaya Gazeta,<D> the share of their
products in GDP has increased from 2 to 10 per cent over the past
year. This does not reflect meaningful economic growth - no
important sector of the Russian economy has managed a significant
increase in output during this period - but has occurred
essentially because of takeovers, voluntary acts of association,
and new privatisations.
#The rise of the FIGs has flowed directly from government policy.
A crucial move in their favour was the ``loans for shares''
program initiated in 1995. Under this program, a small number of
Kremlin-favoured banks were given the right to run state
enterprises in return for granting loans to the government. The
enterprises handed over included some of Russia's most lucrative
natural resources firms. When the time came for large
shareholdings in these companies to be sold, the managing banks
were allowed to rig the auctions, awarding themselves hugely
valuable assets at laughable prices. To make these purchases, the
banks often used government money they were holding as
``authorised banks'', entrusted with forwarding state funds
because of the primitive nature of the state's own financial
apparatus.
#Russia's capitalist economy, as its likely long-term shape has
emerged over the past two years, thus has little in common with
the dreams of the liberals of 1991. Instead of the expected
flexible structures, there are huge, relatively centralised
blocs. Hopes that placing industry under the control of bankers
would promote investment do not seem to have been borne out.
<I>Rossiyskaya Gazeta<D> reports that as the FIGs grew in 1996,
the volume of industrial production under their control increased
four-fold. At the same time, capital investment by the 15 largest
FIGs increased much more slowly, by 250 per cent. The habit of
old-time Soviet economic managers, of living well by robbing
increasingly run-down enterprises, evidently lives on.
#As for the dreams of ``vibrant competition'' - if the FIGs could
agree for years that they would divide up the state enterprises
coming onto the privatisation market, they are quite capable of
dividing up other markets as well. A further obstacle to
competition lies in the fact that many of the FIGs are regional
formations, and because of transport costs and links to local
administrations, enjoy effective local monopolies.
#The fact that a capitalist economy is oligarchic in structure -
centred on a small number of giant conglomerates - does not in
itself guarantee stagnation. In its emerging corporate structure,
the new Russian economy has basic features in common with the
economies of Japan and South Korea. But the similarities should
not be exaggerated. The Japanese and South Korean conglomerates
developed with a crucial orientation toward exporting
manufactured goods to international markets where competition was
intense. The exports of the Russian FIGS consist almost entirely
of oil and other primary materials; in these markets, competition
between suppliers is a much less central factor. In the Russian
case, the impulse to invest, innovate and raise efficiency is far
weaker.
#To keep growing in a depressed national business environment,
the Russian FIGs depend heavily on government favours, above all
cheap privatisations. Banding together early in 1996 to fund and
organise President Boris Yeltsin's re-election campaign, the
largest FIGs were able to guarantee that the flow of property
would continue for the time being. But the understanding reached
between the government and the FIGs at that point - that everyone
would continue getting their share, at minimal prices - has now
broken down.
#While the privatisation deals are still generous, the prices are
no longer in the giveaway category. In earlier years, the
government's priority was to place as much property in private
hands as quickly as possible, in order to undercut left-wing
opponents. But the Russian left - and in particular, the
Communist Party of the Russian Federation - is less and less
regarded as a serious opposition. The main threat to the
government is now perceived as coming from an intractable crisis
of state finances. Privatisation, government leaders insist, will
have to play its part in topping up the government coffers.
#Meanwhile, tensions between the FIGs have become explosive. The
supply of enterprises to be handed round is nowhere near
exhausted; some 25 major enterprises are targeted for
privatisation in 1998 and 1999. But especially in the lucrative
resources sector, only a few really enticing titbits remain. The
question of who gets them could decide the relationship of forces
between the major FIGs for years to come.
#The multiple falling-out - between the government and the
oligarchs, and between the FIGs themselves - has sharply altered
Russian political life, introducing new elements of instability.
``The system of power in Russia is in danger of flying out of
control because layers of corruption and dirty-dealing are being
exposed by warring groups,'' Andrei Piontkowski, director of the
independent Centre for Strategic Studies in Moscow warned
recently. ``The handful of financiers who created the power
system in this country are now battling each other for control,
and this could continue to the point of mutual destruction.''
#The conflicts between the FIGs are now being carried into the
government, as the magnates set out to strengthen old friendships
and place their supporters in influential state posts.
Accordingly, the critical question of Russian politics is ceasing
to be the traditional ``Who - whom?'' and is becoming ``Who -
whose?''. Prime Minister Chernomyrdin is considered to be aligned
with Vladimir Gusinsky of MOST Bank and with LogoVAZ chief Boris
Berezovsky, who doubles as deputy head of Yeltsin's Security
Council. First Deputy Premier Anatoly Chubais is regarded as
standing with Oneximbank head Potanin - who until March this year
held the post of first deputy premier himself.
#The swapping of public accusations will no doubt continue, as
will the panicked warnings from capitalist ideologues. So far,
ordinary Russians have watched this spectacle with indifference.
If the country's great and powerful are calling one another
swindlers and thieves, that is merely what everyone else been
calling them for years.
#The patience of the Russian masses is not endless; if the
conflicts
reach the point where administration begins to be paralysed and
the crisis of wage non-payments is worsened, broad protest
movements could erupt. That, however, would be a signal to the
FIGs to hold their tongues and close ranks. The factional
struggles inside the new ruling class have been allowed to come
into the open only because the country lacks a popular, credible
left opposition. If that condition ceased to apply, the leaders
of the FIGs would immediately reflect that they hated and feared
one another much less than they hated and feared the bulk of the
population.

********

#3
Date: Tue, 12 Aug 1997 09:19:47 -0400
From: nick sivulich <nicks@ptd.net>
Subject: Russian religion

Richard Pipes' criticism of Russian Orthodoxy (#1112,
Aug. 10) is instructive. It helps show how utterly
political students of Russian life can be. Pipes describes
a religion that is "xenophobic, nationalist and
anti-democratic." Anybody know many religions NOT fitting
his description? Worse, he certainly infers that Russian
Orthodoxy is beyond redemption. But he ignores the more
bothersome flies in that ointment.
Most of us recall, for example, shameful concordats
out of the past, not to mention modern versions of
self-righteous, politically inspired crusaders among rabbis,
priests, ministers etc. None has yet convinced everybody
that God is in their corners only.
To put it briefly, precisely which religion does Pipes
believe lives without serious, and sometimes even
murderous, historical embarrassments?
Russia's Orthodox religion is the worst, of course,
except, perhaps, for all the rest.

*********

#4
Novoye Vremya in Russian No. 31, 10 Aug (Signed to press 5 Aug 97) pp 10-12
Article by Sergey Shelin: "Maestro of Auctions. Selling out the
Country is His Trade"

Thirty-six-year-old Deputy Premier Alfred Kokh sees nothing special
about his career. According to him, well-nigh everyone who had a job
during the 1990's could have made it to the top as fast as he did. But if
one looks at it from aside, there
Kokh joined the Gaydar-Chubays crowd ten or twelve years ago and he was
one of the youngest of the lot ("They all seemed so intelligent to me --
Nayshul, Gaydar, Vasilyev, Chubays...."). Having spent a brief spell as
men in power, most of the people 
Some time after the free elections of 1990. the young economics department
assistant at Leningrad Polytechnic Institute came to learn that the new
free ray soviet of one of Sestroretsk's suburbs had announced a competition
for the position of executiv
Sestroretsk and its environs was an excellent place complete with elite
dacha settlements, fine beaches and scenic views of the Bay of Finland
marred a little bit by the mass of the unfinished dam. As for Kokh, he
could have been a living illustratio
Kokh won the Sestroretsk competition and came to rule this region of
plenty. There were a great number of such swift rises during the early
1990's. They did not last long as a rule. Kokh held out in Sestroretsk
for one year.
The new executive council chairman quarreled with his deputy benefactors
almost instantly. "I was telling them: 'Guys, you cannot put to the vote
the spherical shape of the Earth. What if the majority should vote for
thinking that it is square?' I
Which management technique was more in tune with the times, was shown by
the experience of further management of the self same Sestroretsk. The
most lasting of Kokh's successors proved to be Vyacheslav Kozyritskiy who
was different than him in at lea
Kokh has finally became a player for the team he had known for a long
time. Some of those who are now being referred to a "the Chubays people"
used to be his fellow students -- for example, Dmitriy Vasilyev who heads
the Federal Commission for Securi
Moving to Moscow to join the Gaydar government, Anatoliy Chubays took
along the greater part of his people. Those who stayed behind, mostly
young people, were supposed to reconquer St. Petersburg. Their main
bastion was the newly organized municipal
Kokh's unique way of doing things was already in evidence at that time.
He was regarded among St. Petersburg reformers, first, one of the
unflinching radicals, second, a practical person. He was less than others
fond of pure politics but his views h
The idea for a sweeping privatization was dear to him back in the late
1980's. He even thought at that time that a special state organ should
have been established which should grab people by the collar and make them
willy-nilly owners of state prope
The scandal which raged this summer between the leadership of
Goskomimushchestvo [State Committee for the Administration of State
Property] and the general director of Nizhnevartovskneftegaz demonstrated
to the public the model which Kokh had opted fo
The Last Redistribution [subhead]
"We were putting on the market more and more enterprises so that the
people could get value for their checks.... We slaved away around the
clock, on pies and tea. This is because otherwise life of the country and
our own would have taken a nasty tur
Kokh does not say anything but good about the voucher privatization -- he
does not think it was either hasty or an empty exercise. Whether he is
right or not, no one would have been equal to perform the great
redistribution for a second time. This w
Gearing up for a change in the privatization policy, Polevanov had an idea
for a personnel shakeout: he summoned his deputy Kokh and said he would
better quit the job. Kokh did write the application but Chernomyrdin
interceded for him -- he somehow 
A new job materialized at this juncture. The budget of the war year of
1995 was a veritable [black] hole and the privatizers were ordered to do
something to cover the deficit. From the legal point of view, it was very
difficult to sell state enterpr
Following that, it only remained for Alfred Kokh to calmly await the
presidential elections knowing all the way that he had performed his duty.
In the expectation of big changes, the "sellout of the country" took a
break earning for the treasure at l
Whether Kokh wanted to raise his status or not in March (he says he did
not, and that he was made to) but he has now joined the category of persons
who make history simply owing to their office.
One of the duties imposed by the new status is to be in the public eye:
to call at parliament, meet with the press and generally make the public
more often glad revealing what he thinks about this or that.
Alfred Kokh is learning his new role with no hurry and selectively. He,
for example, most certainly declining participation in any party
activities: "Should they badger me too much, I would say that I cannot be
in any party save the Party of Beer Lo
It would be however not accurate to say that Alfred Kokh lives a life of a
recluse in Moscow. The circle of people he meets with is perhaps truly not
wide but it is very selective. This is the cream of Moscow's finance and
administrative elite. prim
Should he become bored among this circle, he may appear in public, like
for example, at a concert of Grebenshchikov or Shevchuk. The deputy
premier likes their songs. Besides, he calls himself a fatalist. He says
he has been drifting with the tide 
***
Given all his unstately style and inclination to lyrical digressions,
Alfred Kokh is firmly among the top people of the federal authority today.
His success is part of the success of the entire "Leningrad group." Moscow
reformers, spoiled by a varie
It is either the times have changed or Kokh has changed but he is clearly
keeping up with the times. It is also true that the road is far from
having been completely traveled.

*******

#5
RFE/RL NEWSLINE Vol 1, No. 93, Part I, 12 August 1997

CATHOLICISM TO BE ADDED TO LIST OF "TRADITIONAL" RUSSIAN
RELIGIONS? Speaking in St. Petersburg, Duma Speaker Gennadii
Seleznev predicted that when the law on religious organizations is
amended, Catholicism will be named among Russia's "traditional
religions," ITAR-TASS reported on 11 August. The initial version of
the law, vetoed by Yeltsin in July, listed only the Russian Orthodox
Church, Islam, Judaism, and Buddhism as traditional religions. The
Vatican urged Yeltsin to veto the law. Yeltsin has called on
representatives of the presidential administration, the parliament,
and the Russian Orthodox Church to submit a revised draft of the law
by 1 September. Patriarch of Moscow and All Russia Aleksii II has
argued that Catholicism cannot be considered a traditional religion
for today's Russia, since before 1917, most Catholics in the Russian
empire lived on territory that is no longer part of Russia (see
"RFE/RL Newsline," 5 and 7 August 1997).

HALF OF RUSSIANS AGAINST SPECIAL STATUS FOR MEMBERS OF
RUSSIAN ORTHODOX CHURCH. In a recent nationwide poll of 1600
Russians by the All-Russian Center for the Study of Public Opinion
(VCIOM), 49 percent of respondents said members of the Russian
Orthodox Church should not have a higher legal status than atheists
or representatives of other religious groups, "Izvestiya" reported on
9 August. Some 27 percent of respondents said members of the
Russian Orthodox Church should have a special status under the law,
while 14 percent expressed no opinion. Article 14 of the constitution
declares that all religious groups are equal under the law.

********

#6
>From RIA Novosti
Moskovsky Komsomolets
August 12, 1997
RUSSIAN GOVERNMENT DIVIDED
By Natalya Timakova

It has become crystal clear in the past few days that the
Russian government is again split into groups. The main
confrontation is between the so-called young reformers and
so-called moderate conservatives. What is more, Anatoly
Chubais is trying to set up a complete structure to replace
the isolated groups which are lobbying their own interests.
Chubais, in a way, signifies its brain trust, whereas Boris
Nemtsov, Alfred Kokh, Yakov Urinson and Alexei Kudrin deliver
and UNEXIMBANK headed by Vladimir Potanin is the financial
support.
It is obvious that such a situation is unlikely to suit
the other government members from Viktor Chernomyrdin to Boris
Berezovsky. There is the ground to presume that they will pull
together their efforts to oppose the go-ahead Chubais and Co.
The original agreement was very simple: with the next
presidential election a long time away and Boris Yeltsin being
quite viable, there should be no division of future Kremlin
positions at this stage--all the more so as a perfect
tandem--Chernomyrdin as the next president and Chubais as the
next prime minister--seems to be in the making. All of a
sudden, Nemtsov rushed to the scene, behaving as a generally
recognized heir apparent and upsetting the "water truce". He
introduced the unhealthy spirit of rivalry in what seemed to
be a friendly team of Cabinet members. His continuous hints
that he knows who the next president will be should, in fact,
irritate not only Chernomyrdin who is also preparing to run in
the election campaign in 2000 but also the other members of
the government. Imagine a cranky young fellow keep repeating:
"I am yet to decide whether to put you on my government when I
become the president."
It happens that the reforms have again stumbled over the
issue of how to divide power and are about to start fighting
for influence on the head of state, trying to outpace each
other in a bid to reach Yeltsin's ear: the one who comes the
first in this race will be the winner. The President, judging
by everything, is pleased with such a situation. He, too, is a
great lover of the "system of restraints and counterbalances"
game. It is quite possible that he deliberately uses Nemtsov
in the role of the "irritant."
Small wonder that Yeltsin first tells Chernomyrdin, who
comes to visit him at the Volzhsky Utyos resort, that he
should not worry about his position and several days later
says that he knows the source of "pressure" on Nemtsov and
even reassures his protege that he made the necessary
arrangement so that there should be no more pressure. The
answer who the initiator of such "pressure" with whom Yeltsin
had "to make arrangement" is remains unanswered.
It is a very strange thing, indeed. Previously, we could
always guess who the motor of the reforms was and who tried to
slow them down, who was the democrat and who was the
retrograde. In the Gaidar vs. Soskovets or Filatov vs.
Korzhakov confrontation any normal person automatically took
the "democratic" side. But try and understand today who really
stands on guard of Russia's interests and who upholds the
interests of his own financial-industrial group. We sooner
have a case of machinations for a place in the Sun than that
of dialectical confrontation. Instead of a united and
undivided government of reformers, there is a new round of
disputes between "the young" and "the old", between "radicals"
and "moderates."

"Professionals" in the Government:
Ramazan Abdulatipov, Vice-Premier
Nikolai Tsakh, Transport Minister
Nikolai Akseyenko, Railways Minister
Tatyana Dmitriyeva, Health Minister
Sergei Shoigu, Emergency Situations Minister
Yevgeny Sidorov, Culture Minister

"Young Reformers:
Anatoly Chubais, First Vice-Premier
Boris Nemtsov, First Vice-Premier
Yakov Urinson, Vice-Premier and Economics Minister
Alfred Kokh, Vice-Premier
Oleg Sysuyev, Vice-Premier and Labour Minister

"Moderate Liberals":
Viktor Chernomyrdin, Premier
Vladimir Babichev, chief of the government's staff
Valery Serov, Vice-Premier
Viktor Mikhailov, Atomic Industry Minister
Vyacheslav Mikhailov, Minister for Nationalities Affairs 
Yevgeny Primakov, Foreign Minister
Vladimir Kinelev, Education Minister
Sergei Stepashin, Justice Minister
Yevgeni Yasin, minister without portfolio

"Power Ministers":
Igor Sergeyev, Defense Minister
Anatoly Kulikov, Interior Minister
Nikolai Kovalev, Federal Security Service director
Vyacheslav Trubnikov, Foreign Intelligence Service chief.

********

#7
THE CELEBRATION OF THE SIXTH ANNIVERSARY OF THE AUGUST
EVENTS AND THE DAY OF THE STATE FLAG UNDER THE SLOGAN "VIVAT,
RUSSIA" WILL BEGIN WITH THE MEETING OF THE PARTICIPANTS OF THE
DEFENCE OF THE WHITE HOUSE IN 1991
MOSCOW, AUGUST 12. /FROM RIA NOVOSTI CORRESPONDENT OLGA
KIRILLINA, OLEG LEBEDEV./
The celebrations devoted to the sixth anniversary of the
August events and the Day of the State Flag of the Russian
Federation under the motto "Vivat, Russia" will begin on August
19 with the meeting of the participants of the defence of the
White House in 1991. Konstantin Truyevtsev, chairman of the
organizing committee of "Vivat, Russia", told at a
press-conference in the RIA Novosti that the meeting will take
place on the Free Russia Square. 
On August 20, a procession to the place of death of the
three defenders of the White House at a crossing of the Novy
Arbat Prospect and the Sadovoye Koltso (Garden Ring) will take
place. Here the service for the dead will be held. The next day
wreaths and flowers to their graves will be laid at the
Vagankovo Cemetery.
On August 22, the Day of the State Flag of the Russian
Federation, the white-blue-red flag will be hoisted at the
crossing of the Novy Arbat and the Garden Ring. Meetings of the
public of Moscow and Russia will be held. There will be
theatrical performances at the Novy and Stary Arbat, the
Pushkin, Tverskaya and Free Russia squares. Sports events will
take place at the Vassilyevsky Slope, as well as traditional
musical festival "Vivat, Russia" which will begin at 19:00.
Truyevtsev stressed that the organizers of the holiday "did
not take a kopeck from the budget" for arranging the celebration
events. Commercial companies and public democratic organizations
are sponsors of the holiday, Truyevtsev said. 


*******

#8
Russia's 1998 Budget To Be 'Tough'
August 12, 1997
MOSCOW (AP) - The Russian government is putting the finishing touches on
what will be a ``tough'' budget for 1998, First Deputy Prime Minister
Anatoly Chubais said Tuesday.
The government has pledged a tax cut to help get the economy growing,
but in order to keep the deficit under control, it will have to reduce
spending, Chubais told reporters.
He said the current draft calls for a primary deficit of 0.43 percent of
gross domestic product (GDP), the lowest since the start of market reforms
in 1992. The primary deficit doesn't include the cost of debt service.
``It'll be a tough budget, and I think this may turn out to be a
surprise for some,'' Chubais said.
This year, the government expects a primary deficit of 2 to 3 percent of
GDP, with the overall deficit at 7 to 8 percent.
A Finance Ministry official, insisting on anonymity, said several
versions of the 1998 budget now are being discussed, involving a variety of
cuts and revenue measures.
The official said the deficit reduction will come from increased
revenues, reduced interest expenses and repayment of arrears in 1998.
The ministry is scheduled to approve the final 1998 draft later this
week, bringing the plan to the Cabinet for discussion next week. Under law,
the government is required to present the budget to parliament by Aug. 25.

********

#9
Poll: Russia's Next President Should Be 40-50 Years Old
MOSCOW, Aug 12 (Interfax) - Russia's next president should be aged between
40 and 50, said 52% of 1,600 Russians polled August 1-4 by the National
Public Opinion Center. 
Center experts say that as Russia has a little over 100 million voters,
one percentage point may be rated as one million votes. 
During the poll, 18% said First Deputy Prime Minister *Boris Nemtsov*
would make the best president in 2000 and 11% favored Communist Party
leader Gennady Zyuganov. 
Former Security Council chief Alexander Lebed placed third with 9%,
followed by Moscow Mayor Yuri Luzhkov with 5%. The fifth and sixth places
were shared by the leaders of the Yabloko movement and the Liberal
Democratic Party, Grigory Yavlinsky and Vladimir Zhirinovsky with 4% each. 
Some 36% of those polled said it would be best if the future president
had experience of working on the Cabinet, while 33% wanted him to be a
former local leader. 

*********

#10
The Times (UK)
12 August 1997
[for personal use only]
Typhoid and cholera come back to haunt Russia 
FROM RICHARD BEESTON IN MOSCOW 

RUSSIA'S creaking healthcare system is struggling to fight off lethal
diseases, both old and new, which threaten to raise the nation's staggering
mortality rate. 
In the latest health scare, Sergei Shoigu, the head of the Emergencies
Ministry, has flown to the southern republic of Dagestan to help to combat
an outbreak of typhoid. In the past few weeks the disease has swept through
several villages near the Caspian Sea, leaving 168 victims in hospital,
nearly half of them children. The region is noted for annual epidemics of
other water-borne diseases, such as cholera. 
This year the capital is not taking any chances of a cholera outbreak,
as it prepares for its 850th anniversary celebration. Under an order signed
by the chief medical officer of Moscow, all traders arriving in the city
from Central Asia, the Caucasus and some Russian republics will be obliged
to undergo a compulsory vaccination or face arrest. 
Aside from cholera and typhoid, other diseases practically eradicated in
the West are growing here. Russia has the highest tuberculosis rate in
Europe. It has witnessed an explosion in sexually transmitted diseases such
as syphilis, although Aids is still relatively rare. Between 1991 and 1996
nearly half of the world's diphtheria outbreaks were recorded in Russia. 
A report released earlier this year revealed that life expectancy for
men in Russia is 59 years and 73 years for women. In the world league table
Russia ranks in 135th place for men and 100th for women, behind all of
Europe, America and most of Asia. 
The dramatic drop in life expectancy is largely blamed on the scourge of
alcoholism, which since the collapse of the Soviet Union has reached
epidemic proportions. Russians on average drink more than 13 litres of pure
alcohol annually for every man, woman and child, double the per capita
consumption figure in 1990. 
When Mikhail Gorbachev launched his anti-alcohol campaign in 1986-87,
life expectancy rose to 65, the highest in Russia's history. 

********

#11
>From RIA Novosti
Panorama, No. 32
August 1997
STATISTICS WARNS
A Real Danger Threatens Russia in the Year
2010: It May Turn into a "Country of Widows"
By Yelena Kostina, RIA Novosti

Russia is a country of unprecedented depopulation:
the death-rate is twice as high as the birth-rate.
Yet, no serious attention is paid so far in our 
country to this problem of the nation's survival.

A hundred years ago, in 1897, the first census of the
population in Russia was carried out. According to it, there
were 129 million citizens in our country, with an annual
growth amounting to 1,600,000 people. 
As of January 1, 1997, according to the data of the State
Statistics Committee of the Russian Federation, there were
147,501,000 people in our country. In the course of one year
(1996), the population in Russia decreased by 475,000 (a
record in the past few years), an approximate size of the
population of a rather big regional city. 
This shows that in the 20th century the population of
Russia has grown by only 19 million, while in China it has
increased during this period by 800 million, though it also
lived through wars, revolutions, repressions and reforms.
The average life expectancy of our men is 57-58 years
(the last place in Europe). Russian women live 14 years longer
than men. Such a gap does not exist in any other country. If 
the tendency remains, by the year 2010 Russia will turn into a
"country of widows," according to the apt remark of
Academician Nikolai Gerasimenko, chairman of the State Duma's
committee for health protection. 
What are the causes of death in Russia? Let us cast aside
cardio-vascular and oncologic diseases which are widely spread
also in other countries. The most frequent causes of death in
Russia are accidents, industrial injuries, poisonings, alcohol
and smoking. It is difficult to believe that up to the recent
time privileges in importing alcohol were enjoyed by the
Russian National Sport Foundation. The advertising of
cigarettes and strong drinks is not decreasing as in some
civilised countries. On the contrary, it is becoming more
intensive. 
According to the official data, an annual per capita
consumption of alcohol in Russia amounts to 15 litres (a
quarter of them are substitutes). Sixty percent of men and a 
quarter of women are inveterate smokers.
In the past six years the number of syphilis cases in our
country has grown by twenty-five times, of drug addicts--by
ten times, of alcoholic psychosis--by four times. 
This is what happened in one of the villages in the
Sverdlov Region. A long-bearded drunk man bet that he would be
able to set fire to his beard. And he did so. His drunk friend
decided to extinguish the fire and splashed out vodka on his
face. The alcohol stimulated the fire. The man was saved by
his mother-in-law who poured hot water from a kettle on the
head of the "wit." This is not an anecdote. This really did
happen.
Nobody in the world will respect us till we shall learn
to respect ourselves and to be considerate of ourselves and of
those who live with us or nearby every day and every hour.
Much depends on ourselves. 

*********

#12
Special Services Reportedly Selling Secrets to Media 

Argumenty i Fakty, No. 32
August 1997
[translation for personal use only]
Unattributed report from the "scandal" slot entitled: "Are special
services trading in secrets?"

Not long ago Argumenty I Fakty reported that telephone conversations
of its editorial staff were listened to and that someone outside the
editorial office had access to reports in their computers. However, we had
no idea that this problem is acquiring threatening proportions in our
country. For example, a member of government, Yevgeniy Yasin, was
surprised -- to put it mildly -- when he heard his confidential letter was
read out on Moscow Echo radio. It was about the need to postpone an
auction of Norilsk Nickel shares. The letter was sent personally to Prime
Minister Viktor Chernomyrdin just a few hours before the radio program went
on air.
And here is a fresh example. A Moscow newspaper recently published a
"confidential" conversation between Boris Nemtsov and Sergey Lisovskiy. 
Nemtsov spoke from his office in Government House. This means that
telephone conversations of top government officials are not only listened
to and recorded but also handed over to the press. One recalls that Sergey
Filatov, when he was the head of the presidential administration, once
complained that he had to resort to writing notes in order to exchange
information, for fear of his conversations being listened to.
Such widespread machinations make one seriously think what our special
services -- the Federal Security Service, the Ministry of Internal Affairs,
and the Federal Agency of Government Communications and Information
(attached to the Russian President)
-- are about when their low-paid staff are prepared to sell whatever
and to whoever. Can one trust them? Or can it be that they simply cannot
ensure the security of information?

*********