August 21, 1997  
This Date's Issues: 1134 •1135  •1136 

Johnson's Russia List
#1136 
21 August 1997
djohnson@cdi.org

[Note from David Johnson:
I appreciate the expressions of concern about my son Keir.
The skateboard accident damaged his spleen but it looks like
he will come through it with no permanent disability.
1. Gunnar Holmsteinn: Yeltsin in August 1991.
2. Wallace Kaufman: Kazakh/Kazakhstani.
3. Albert Weeks: Exchange rates.
4. Floriana Fossato (RFE/RL): Conflict Increases Among Berezovsky, 
Nemtsov And Chubais.
5. Toronto Sun: Matthew Fisher, In the woods with Russia's 
nouveau riche.
6. Jamestown Foundation Monitor: RUSSIAN MILITARY GETS MONEY 
FOR BACK WAGES.
7. Reuter: Draft Russian budget tight but ambitious--analysts.
8. RIA Novosti: OVER 40 PERCENT OF ENTERPRISES IN 74 REGIONS 
OF RUSSIA OPERATING AT A LOSS.
9. RIA Novosti: SALARY PAYMENTS TO BUDGET-FUNDED WORKERS 
EASE SOCIAL TENSION -- TRADE UNIONS.
10. RIA Novosti: RUSSIA'S FOREIGN DEBT TO REACH USD 
141 BILLION BY 1999.
11. RIA Novosti: PRIVATIZATION REVENUES IN 1998 WILL 
AMOUNT TO ABOUT 10.4 BILLION ROUBLES, SAID VLADIMIR PETROV.
12. Reuter: Yeltsin Orders Arms Trade Shakeup, Removes 
Boss.
13. Izvestia: Vycheslav Kostikov: Chechnya Has Lost the 
Sympathy of Russian Democrats.
14. Segodnya: The Glorious Revolution.
15. Komsomolskaya Pravda: August 1991: Yeltsin Went to War in 
Slippers and the GKChP -- with a Bottle of Vodka.
16. Pravda 5: Yakov Jugashvili from Glasgow.
17. Smena (St. Petersburg): Anatoly Chubais and Alfred Kokh Are 
Expected to Come to the Funeral.
18. AP: Russian Comic Yuri Nikulin Dies.
19. UPI: Russia opens case against U.S. diplomat.
20. Paul Goble (RFE/RL): Looking Beyond The CIS.
21. The Financial Post (Canada): The quiet revolution in Russian 
banking.] 

********

#1
Date: Thu, 21 Aug 1997 18:58:44 +0200
From: "Maria.Gunnbjornsdottir@LungMed.uu.se" <lmedmg@strix.its.uu.se>

Dear Mr. Johnson and thanks for a very good list.

>From AP:
>Yeltsin, president of the Russian republic, made his
>historic stand on a tank, rallying tens of thousands of people outside the>
parliament building, or White House, to oppose them. 

- I was wondering if this statement is really true? I have heard that there
really were not so many people around Yeltsin at this moment of the coup. I
have also heard that a certain cameraman from CNN had the angle of his
camera pointed upwards towards Yeltsin, and therefore no one really saw the
few people that were near Yeltsin. Please correct me if I'm wrong.

Gunnar Holmsteinn 
pol.scientist
Uppsala, Sweden

*******

#2
Date: Thu, 21 Aug 1997 11:51:34 +0600
From: Wallace Kaufman <wkaufman@arcticmail.com>
Subject: Kazakh/Kazakhstani

David,
I notice a common error in the Ria Novosti post about Luzhkov in
Kazakhstan. He writes, "the Kazakh president." 

It is true that Nazarbayev is an ethnic Kazakh. But he is the president of
a very diverse country which includes Russians, Ukrainians, Poles, Germans,
Koreans, Uihgers, and Iranians. We do not refer to Yeltsin as the Slavic
President, Clinton as the Caucasian president, or Fujimoro as the Japanese
president (of Peru). 

There is a lot to be said about ethnic relations in Kazakhstan, good and
bad, arguments for considering it a Kazakh country, etc. But it Kazakhs
are a minority and President Nazarbayev says he is dedicated to treating
all ethnic groups fairly and equally. (Not always carried out in practice,
however.) 

The proper word for a president or citizen of Kazakhstan is "Kazakhstani."
The international press should no more slight the non-Kazakh citizens of
the country than should the national press. 

******

#3
Date: Thu, 21 Aug 1997 12:44:04 -0400
From: Albert Weeks <AWeeks1@compuserve.com>
Subject: Exchange rates

Those astronomical dollar/ruble exchange rates!
I don't know how others cope with them but I use an old
Russian slide-rule, lining up the far end of the slide with the rubles
(above), dollar equivalent below. In this case as of this week: R5813 to
the dollar. Or on the slide-rule "58" above, "100" below, then sliding the
window hairline to whatever R or $ amounts above and below.
Post-modernists will prefer setting ratios on their
battery-operated calculators. But I recommend viewing the whole picture.

*******

#4
Russia: Conflict Increases Among Berezovsky, Nemtsov And Chubais
By Floriana Fossato

Moscow, 21 August 1997 (RFE/RL) -- The war of words between some members of
the Russian government and the country's financial and media tycoons has
taken a new turn with President Boris Yeltsin's criticism yesterday of
Security Council Deputy secretary Boris Berezovsky and the president of NTV
commercial television station Igor Malashenko for having offended Chechen
politicians. 
The two men have publicly alleged that top Chechen officials might have
been involved in the recent wave of kidnapping of Russian journalists.
Yeltsin was apparently upset that these allegations were made only one day
after he had met Chechen President Aslan Mashkhadov for talks about future
relations between Moscow and Grozny. Yeltsin's remarks fueled speculation
that Berezovsky may be politically sidelined and could even be ousted. 
Yeltsin's outburst came soon after First Deputy Prime Minister Boris
Nemtsov told RFE/RL that Berezovsky "is not a person in the right job" in
the Security Council and hinted that the government might soon act to
restrict the influence of that businessman-turned-politician. 
But the presidential office said no such move was in the offing. And
Berezovsky himself told the press immediately after Yeltsin's
pronouncements that he did "not think the president aimed at criticizing"
him. Berezovsky then added that he "would comply with any decision made by
the President." 
Asked to comment on Nemtsov's criticism, Berezovsky responded by
complaining about Nemtsov and Anatoly Chubais, both First Deputy Prime
Ministers, for "making a strategic mistake" in ignoring opinions of
Russia's business community. 
Berezovsky went on to say that "businessmen are the backbone of the
economy and the foundation of reforms," and the government "should
certainly listen to their voice." 
He said that Chubais and Nemtsov, "after they have risen to positions of
power, decided to snub the opinion of the business community." He added
that he and other businessmen have been unsuccessfully trying to convince
Chubais and Nemtsov that they were wrong. 
Berezovsky said that Chubais and Nemtsov and the financial community
have "different understandings of what kind of relations the authorities
and businessmen should have." 
Berezovsky belongs to a group of financial and media tycoons who last
year combined forces in support of Yeltsin's reelection and successfully
bankrolled him into a second term in office. 
They have received handsome business dividends for their support.
Yeltsin brought Berezovsky, who has vast business interests and holds a
minority share (49 percent) in the partially state-owned ORT television
network, to the Security Council last October . 
Chubais has said recently that members of the financial community tried
to influence the government's policies on such issues as the conduct of
privatization. He added that the state would "carry out its functions with
increasing toughness, whether certain people like it or not." 
Nemtsov told RFE/RL that the government might have "lost in recent years
its ability and possibility to control its own assets...but is starting to
regain control." He went on to say that he put aside his business interests
when he joined the government. But he also charged that, although formally
Berezovsky is not involved in business activities, "de facto this is all he
does." 
Prime Minister Viktor Chernomyrdin may not share Nemtsov's views,
however. Chernomyrdin appears often opposed to his first deputies over the
pace of reform, and has reportedly become recently closer to Berezovsky.
The Prime Minister has not taken any public stance in the controversy so
far, but his position is considered crucial for a decision on whether
Berezovsky will maintain his post. 
Both Chernomyrdin and Nemtsov are seen as contenders for the future
presidential race, scheduled for the year 2000. And support of the wealthy
financial community is expected again to be crucially important. 
Observers say the sale of a substantial stake of shares in the
telecommunications monopoly Svyazinvest set off a financial and media war
last month, dividing Russia's previously allied financial elite. 
Nikolay Petrov, a political analyst at the Carnegie Endowment for
International Peace in Moscow, says relations between Berezovsky and the
two ministers soured as "it became evident that reformists in the
government were feeling strong enough to make clear their intention to stop
acting under rules set by the financial community." 
Petrov said that the public row "could not be avoided," as "the
government gave a clear sign to the media tycoons that it would not allow
them to start creating their own communication monopoly." He also said that
control over Svyazinvest "does not simply mean control over telephone
lines. It means control over the future of communications in Russia." 
Nemtsov and financial analysts alike have hailed the Svyazinvest deal as
Russia's most fair and transparent auctions ever. But Russia's biggest
media magnate, Vladimir Gusinsky, who led the consortium that lost the bid,
charged that the government officials had rigged the auction. 
Gusinsky and Berezovsky, who was also involved in the losing group,
launched a campaign of criticism of the auction through their media holdings. 

********

#5
Toronto Sun
21 August 1997
[for personal use only]
August 21, 1997 
In the woods with Russia's nouveau riche
By MATTHEW FISHER (74511.357@CompuServe.com)
Sun's Columnist at Large

MOSCOW -- The first raw hints of fall have already been in the air for a
few weeks now. 
But that has not diminished traffic to the innumerable holiday communities
which surround the Russian capital. 
Russians suddenly allowed to taste the easier and more exotic living on
offer in Spain, Cyprus or Turkey, may now turn up their noses at
Soviet-style resorts or
sanitariums in the Crimea or the Caucasus. But nothing, apparently, can
stop the Russian
love affair with the dacha. 
As during Leonid Brezhnev's Golden Age of Stagnation, Muscovites who long
ago gave
up rural life still feel the mystical pull of the countryside. All roads
out of the city are
jammed every Friday evening between May and September. 
At times it seems as if half of the 10 million inhabitants are off
merrily turning this year's
bumper crop of cucumbers and fruits into pickles and jam for consumption
during the long
winter that's about to set in. 
Canadians would call dachas "cottages." But there are important
differences between
Canadian and Russian summer homes. Cottages are invariably built along or
near some
relatively pristine waterfront. Dachas tend to be built in the middle of
forests or on the
outskirts of ancient farming villages. 
Cottages have evolved to the point where they often have every comfort
of urban living.
Dachas are more rustic. Many have no plumbing or electricity. Virtually all
have fruit and
vegetable gardens. 
As contemporary Russian society becomes rigidly stratified along
economic lines, two
classes of dacha owners are developing. The poor continue to make the best
of often
tumbledown wooden shanties. The greedy few who have quickly acquired vast
fortunes by
often devious means are constructing 10- and 15-room palaces of brick and
steel which
represent the very best in the bad taste for which New Russians have become
infamous. 
Most of my Russian friends are of modest means. So, perforce, are their
dachas. But a
short time ago I got a glimpse of the emerging dacha culture. 
A friend of mine invited me to spend the weekend with a distant cousin
who had hit the
jackpot by landing a job with Moscow Mayor Yuri Luzhkov's regime. Although
only a
mid-level paper pusher, the relative was provided with a car and a driver
and a lot of other
perqs which did not seem to accord with her modest duties. The woman's
equally friendly
husband described himself to visitors as a "biznezzman," but refused to
provide even a
small hint about what that business might be. 
Their new dacha wasn't vulgar. In fact, it was a tastefully appointed,
two-building
pinewood affair. 
Without much prodding, our hosts, who like most successful new Russians
had been
well-connected, card-carrying Communists until 1991, confided they had
wanted to erect
a brick monstrosity but decided to spend only about $150,000 on a wooden
dacha. They
reasoned that if the Yeltsin administration actually makes good on the
president's promise
to begin collecting taxes, they would have great difficulty explaining how
they were able to
afford even this. 
The deputy minister next door did not seem to have such qualms. He had
managed to
spend about $300,000 on his dacha from a salary of a couple of hundred
dollars a month.
Another neighbor, a military doctor, had used his meagre pay to acquire a
half-million-dollar summer home. 
The reigning local champion was an army general. His three-storey
holiday fortress, which
came equipped with an indoor swimming pool, sunken living room, bodyguards,
attack
dogs and, of course, a fruit and vegetable garden, must have cost more than
$1 million. 
Just before dusk our hostess suggested that like all dacha-loving
Russians, we should help
her hunt for wild mushrooms. For "our protection" she tucked a Makarov
pistol under her
track suit before leading us into the forest. 

********

#6
>From Jamestown Foundation Monitor
21 August 1997

RUSSIAN MILITARY GETS MONEY FOR BACK WAGES. The Finance Ministry has
provided Russia's Defense Ministry with the full 5.9 trillion rubles needed
to cover the back pay owed to the members of the armed forces, but it
remains to be seen how soon and how much will trickle down to the individual
officers and enlisted personnel. First Deputy Prime Minister Anatoly Chubais
-- who is also the finance minister -- announced yesterday that the money
had been turned over to the Defense Ministry three days earlier, thus
fulfilling President Boris Yeltsin's July order to pay the military its back
wages by September 1. (Russian agencies, August 20)

The money must now be distributed through the chain of command, where there
are innumerable opportunities for it to get sidetracked. Last week a senior
Finance Ministry official, Aleksandr Smirnov, complained that the wage debt
was a moving target, that the military had raised the amount from 4.5
trillion rubles to 5.9 trillion and then to more than 8 trillion. He charged
that local commanders were often using this money "as they see fit" rather
than turning it over to their troops. (Russian agencies, August 14) 

The top military leadership realizes that this is a serious problem. Last
month Defense Minister Igor Sergeev warned his commanders that such
diversions would be treated as sabotage. The ministry even placed a special
telephone hot-line in operation to be used by troops who had not received
their pay. (Itar-Tass, July 28) Yet the temptation to use the wage funds to
buy fuel, to repair crumbling facilities, or to meet the hundred-and-one
other financial crises facing military commanders is a powerful one. Some
might try to skirt Sergeev's orders by placing the wage funds in a bank for
a few months, counting on the interest thus earned to meet other needs. 

********

#7
Draft Russian budget tight but ambitious--analysts
By Ben Hirschler 

LONDON, Aug 20 (Reuter) - Russia has set itself a tough target with a tight
1998 draft budget which will be submitted to cabinet on Thursday,
London-based analysts said. 
But the proposals to cut the deficit by raising revenue and curbing
expenditure, against a backdrop of falling inflation and interest rates, show
a welcome determination to further stabilise the economy. 
``For those who were sceptical on Russia this should serve as a positive
fillip,'' said Eric Fine, Russia analyst at Morgan Stanley Dean Witter. 
Fine said the thrust of the budget and the economic assumptions on which it
was based showed the strides which had been made by the reformist government.
A senior government source said on Tuesday the budget planned a decline in
the fiscal deficit to 4.8 percent of gross domestic product (GDP) from 5.35
this year, giving a deficit excluding debt servicing of 0.42 percent. 
Real GDP growth is forecast at two percent, the first positive growth this
decade, while inflation is forecast to fall to five percent from over 12
percent this year. 
That should allow Treasury bill rates to fall to 12-14 percent from 18-19
percent at present. 
``It's a very tight budget,'' said Susanne Gahler of J.P. Morgan. 
``It's ambitious but it is consistent with what the new team of (First
Deputy
Prime Minister Anatoly) Chubais and (fellow deputy premier Boris) Nemtsov is
trying to do.'' 
In contrast to previous years, Moscow had adopted a more realistic approach
in calculating likely revenue, she said. 
``They will have to adjust expenditure accordingly, with continued cuts and
efficiencies in federal spending -- that is the key portion of this budget.''
That was likely to lead to clashes between the government and the Duma
(parliament), although Gahler said she expected a compromise rather than a
showdown. 
David Boren, head of emerging markets at Salomon Brothers in London, also
predicted a difficult time getting the budget through the Duma, adding this
was only one area of potential conflict in the coming months. 
The Duma is also due to consider a proposed new tax code designed to
overhaul
revenue collection, the Achilles heel of the reformist government. 
Even if it is passed, the new tax code may only yield its full benefits
from
1999. 
Daniel McGovern of Merrill Lynch predicted another difficult year ahead as
the government struggles with tax collection. He calculates that the 1998
budget will need tax revenues equivalent to 12.4 percent of GDP, against 11.5
percent this year. 
``It is clearly a significant step in the right direction because they are
committed to bringing the fiscal deficit down,'' he said. 
``The difficulty is they need to do a lot more to increase tax
collection.'' 
Recent budget problems have resulted in delayed wage payments to
millions of
state employees. 
Both Russian debt and equity have undergone a major rerating this year,
with
dollar-denominated loans soaring recently on expectations of a restructuring
deal with the London Club of commercial banks. 
Russian stocks, meanwhile, have proved the top-performing emerging
market in
the world with the Russian Trading System 21-share index around 530 from
under 200 last year. 
In the last week profit-takers have stepped in but most analysts remained
upbeat on the country, hoping for positive growth in 1998 and an improved
fiscal position. 
Stocks also stand to benefit from the country's inclusion in the
International Finance Corp's global invisible index from November 3 which is
used by fund managers as a guide to stock weightings. 

*******

#8
OVER 40 PERCENT OF ENTERPRISES IN 74 REGIONS OF RUSSIA
OPERATING AT A LOSS
MOSCOW, AUGUST 21. /RIA Novosti/ -- According to the data
of the State Statistical Committee of the Russian Federation, at
present there is not a single region in Russia with the number
of loss-generating enterprises below 30 percent. In 74 regions
of the Russian Federation the share of unprofitable enterprises
is over forty percent, while in Karelia, Komi, Kalmykia,
Buryatia, Ivanovo, Chita, Magadan, Amur, Kamchatka, Irkutsk
oblasts, in the Jewish Autonomous Oblast, and the Chukchee
Autonomous Area the figure is as high as 60 percent.
Compared with 1996, the current share of ailing enterprises
in Russia has increased. By June 1997, in industry this share
had reached 45.7 percent, with a total sum of the accumulated
losses equal to 20,500 billion roubles. In the construction
sector, the share of the companies running at a loss constituted
44.4 percent, and the sector's overall losses were equal to
2,000 billion roubles. However, the leader on the list of the
loss-generating sectors was Russia's transportation sector,
where the share of losing enterprises was equal to 64.7 percent
and the sum total of the losses of the sector was standing at
6,600 billion roubles. 

********

#9
SALARY PAYMENTS TO BUDGET-FUNDED WORKERS EASE SOCIAL
TENSION -- TRADE UNIONS 
MOSCOW, AUGUST 21 /RIA NOVOSTI'S CORRESPONDENT ANDREI
MALOSOLOV/ -- The government's efforts to pay salaries to
workers in the public sector have sizeably eased social tensions
in society, Andrei Isaev, secretary of the Russian Independent
Trade Union Federation /FNPR/, told RIA Novosti. 
Liquidation of arrears in state orders "remains a big
problem". For example, workers in the military industrial
complex still cannot receive 10 trillion roubles, especially in
the Maritime Territory /Zvezda factory/ and the Far East
/Khabarovsk Ship-Building Factory/. 
If the government copes with this problem, the autumn
attack promised by trade unions will, if at all, be of a "local
economic character". In case the government fails, the FNPR will
come up with political demands, Isaev warned. 

*******

#10
RUSSIA'S FOREIGN DEBT TO REACH USD 141 BILLION BY 1999
MOSCOW, AUGUST 21. /FROM RIA NOVOSTI CORRESPONDENT REGINA
LUKASHINA/. As of January 1, 1999, Russia's foreign debt will be
well about USD 141 billion, and as of January 1, 1998, it will
make up USD 127 billion, experts say. These figures are cited in
a report of the Russian finance ministry, which has been
submitted today to the Russian Cabinet at its regular session
which was due to discuss a draft 1998 federal budget.
The major part of Russia's foreign debt is money taken by
the former Soviet Union and succeeded by the Russian Federation.
The Russian foreign debt, itself, makes up just USD 25 billion.
The draft 1998 federal budget provides for increasing
payments to service Russia's foreign debt. 

********

#11
PRIVATIZATION REVENUES IN 1998 WILL AMOUNT TO ABOUT 
10.4 BILLION ROUBLES, SAID VLADIMIR PETROV
MOSCOW,AUGUST 21 - RIA NOVOSTI CORREPSONDENT REGINA
LUKASHINA. According to the draft 1998 federal budget, the
privatization revenues will amount to about 10.4 billion roubles
(in terms of denominated roubles), the RIA Novosti correspondent
learned today from Vladimir Petrov, First Deputy Finance
Minister. Petrov specified that 6.1 billion roubles will come
from the sale of state property and 4.3 billion roubles will be
the revenues from the management of share holdings that are in
federal ownership, including 2 billion - the Central Bank's
profit. 
We will recall the statement by First Vice-Premier Anatoly
Chubais who said that "the value of private and state property
is growing with every year at an accelerated rate." The number
of facilities that are left to be sold, said Chubais, "is small,
but their price will enable the government to gain with every
passing year. This figure will increase several-fold." Thus, he
stressed, "the privatization revenues have by far not been
exhausted. That is why, in forming the 1998 budget, the
government has included in it the privatization revenues, which
make up considerable figures." 

********

#12
Yeltsin Orders Arms Trade Shakeup, Removes Boss 
Reuters
21 August 1997
MOSCOW -- President Boris Yeltsin ordered an extensive shakeup in Russia's
arms trade on Thursday and removed the head of the state arms trading
organization Rosvooruzheniye. 
A presidential decree issued by the Kremlin said Rosvooruzheniye would
be replaced by a new organization with the same name, to be headed by
Yevgeny Ananyev. Alexander Kotelkin was removed as head of the existing
firm, the decree said. 
A spokesman for Rosvooruzheniye said he had not heard about the decree
and was not immediately able to comment. 
On Wednesday, Kotelkin gave a news conference at Russia's annual airshow
at which he boasted of strong support from the president amid tough
criticism and efforts to unseat him from domestic rivals jealous of
Rosvooruzheniye's position. 
The president's aide for arms trading, Boris Kuzyk, told the same news
conference Yeltsin had praised Rosvooruzheniye's work at a meeting with
Kotelkin on Tuesday. 
Kuzyk said that thanks to Rosvooruzheniye, which controls more than 90
percent of Russia's arms trade, the country was well on the way to
overtaking the United States in terms of arms exports. 

********

#13
>From Russia Today press summaries
http://www.russiatoday.com
Izvestia
August 21, 1997
Vycheslav Kostikov: Chechnya Has Lost the Sympathy of Russian Democrats 
Summary
Former presidential press secretary Vycheslav Kostikov wrote about the
shift in Russian public opinion towards Chechnya and its influence on
policies. 
When Russian troops were introduced in Chechnya, the democratic society
assessed it as a tragic error. The sympathies of the democrats belonged
with the Chechen people. 
The military and propaganda victories of the Chechens resulted not from
the talents of Chechen leaders, but from the split in Russian society.
Russian soldiers were demoralized by the lack of support at home. 
Now the situation has changed dramatically. Chechen leaders should blame
themselves for this. They have not understood that a policy of bluffing
cannot last forever. 
The whole population of Russia now perceives the actions of the Chechen
politicians in talks with Moscow as mere extortion, and the tactics of
taking hostages as political cannibalism. 
Chechen pretensions to the role of intermediary between Russia and the
Muslim world look naive. Russia has its own long and stable relations with
the East, and it does not need intermediaries, said the daily. 
Public opinion in Russia has consolidated around the question of
Russia's integrity. Its position on the issue will only get tougher. The
ultimate compromise that can be achieved is a status for Chechnya similar
to that of Tatarstan. If Chechen leaders continue their policies of
blackmail and threats, said the daily, economic aid from Moscow will be
delayed even further. 
RUSSIA TODAY Notes:
Russian President Boris Yeltsin and Chechen leader Aslan Maskhadov met for
talks in Moscow earlier this week, after which both sides pledged to work
out a comprehensive treaty on future relations. Prior to the meeting,
Chechen officials had been noisily asserting the republic's independence.
However, Yeltsin has said the rebel republic will remain within the
federation, but most likely with a wide degree of autonomy, such as that
enjoyed by Tatarstan. Also this week, two groups of Russian journalists
that had been held hostage in Chechnya were released. Some in Moscow have
said Chechen officials are aware of or even supporting the hostage-taking.
Chechen leaders deny the allegations, and Yeltsin angrily rejected such
talk on Wednesday. See also Segodnya. 

********

#14
Russia Today press summary
Segodnya
21 August 1997
The Glorious Revolution 
Summary
The daily wrote about the revolution which took place in Russia six
years ago. 
The "democratic" revolution, which followed the putsch of old Communist
proponents, resulted in one of most stable regimes in Russia. President
Boris Yeltsin's regime has gone through the collapse of the USSR, the
liquidation of all the people's savings and defeat in the Chechen war. 
Still freedom of speech remains unchanged -- and this freedom has become
not a threat but the main support of the regime. 
Leonid Radzihovsky defined the events of 1991 as a bourgeois
establishment revolution, conducted under anti-establishment slogans. The
members of State Emergency Committee (GKChP) really have no reasons to cry.
Even though the USSR and the Communist Party collapsed, the old
establishment has won, having transformed its power into money. 
All the elite are gaining wealth. The authorities and the opposition
both belong to the oligarchy. The financial oligarchy has now set
completely, and it is even more closed than the old Communist one. 

*******

#15
Russia Today press summary 
Komsomolskaya Pravda
21 August 1997
August 1991: Yeltsin Went to War in Slippers and the GKChP -- with a Bottle
of Vodka 
Summary
Komsomolka wrote about some unknown details of the events of 1991, when
a group of top state officials in the USSR staged a putsch against
reformist President Mikhail Gorbachev, who was then vacationing in Foros
(Crimea). 
Then Russian President Boris Yeltsin, Vice President Aleksander Rutskoi
and parliamentary Speaker Ruslan Khasbulatov were viewed as heroes, who rid
Russia of the Communist danger forever. 
The author wrote that it was Moscow government Premier Yury Luzhkov (now
Moscow mayor) who persuaded Yeltsin to go to Moscow on Aug. 19, 1991, the
beginning of the Communist coup attempt. Yeltsin was in his country
residence Arkhangelskoe. The Moscow "head" told Yeltsin that he could
secure the president's safety in the Moscow streets, so that Yeltsin did
not have to disguise himself or hide from the coup leaders, whom Luzhkov
did not take seriously. 

*******

#16
Russia Today press summary
Pravda 5 
21 August 1997
Yakov Jugashvili from Glasgow 
Summary
The daily wrote that Josef Stalin's great grandson, who now lives in
Great Britain, is a graduate of an art school in Glasgow and a talented
artist, according to the daily. 
Recently Yacob Jugashvili, 25, was interviewed by Time Magazine. He
talked about the culture shock that he experienced in Great Britain. He
said that national diversity in the former Soviet Union was much greater
than in the West. The daily commented that Soviet powers invested much into
the Georgian culture, literature, cinema and even into the Georgian
lifestyle, despite the threat of a future collapse of the empire. 
A talented artist, Stalin's descendant went to study in the West thanks
to the support of Georgian sculptor Zurab Tsereteli, Moscow Mayor Yury
Luzhkov's favorite. 

*******

#17
Russia Today press summary
Smena (St. Petersburg)
21 August 1997
Anatoly Chubais and Alfred Kokh Are Expected to Come to the Funeral 
Summary
Vyacheslav Shcherbakov, the chief deputy governor, has been designated
to head the funeral commission for the burial of deputy governor Mikhail
Manevich who was assassinated on Monday. 
In an interview for the daily, he said security for the funeral will be
tight. In fact, security has been tightened for government officials since
the murder took place on Monday. 
Shcherbakov also hinted that Manevich was probably destined to end up in
the State Property Committee in Moscow. He explained that the scandal over
the Svyazinvest deal had proven that the federal government's system of
privatization has many problems, and some thought that a talented official
like Manevich might be able to help smooth out operations. 
Shcherbakov said he was almost certain First Deputy Prime Minister
Anatoly Chubais and former privatization minister Alfred Kokh would come to
the funeral, since they are old friends of Manevich. 
Manevich will be buried in the city's prestigious Volkhov cemetery, in a
section where many other famous economists are buried. Such an honor is in
recognition of Manevich's great work for the city. 
RUSSIA TODAY Notes:
The 36-year-old Manevich had headed the city State Property Committee since
1994, while Anatoly Sobchak was still mayor, and headed privatization in
the city. There were no scandals during his time as head of the committee.
He was proud of the city's reputation for conducting the fastest
privatization process in Russia, and with few violations of the law. The
police have a composite drawing of the killer and believe the assassination
involved four men. As for motive, Ponidelko could only speculate. While
political motives will be investigated, he felt that the crime was
connected to the Tambov mafia group which has a reputation as the city's
most powerful criminal structure. There are rumors that Manevich had
information against one of the leaders of this mafia group. 

********

#18
Russian Comic Yuri Nikulin Dies 
By Mitchell Landsberg 
Associated Press Writer 
August 21, 1997 
MOSCOW (AP) -- Yuri Nikulin, Russia's most-beloved comic actor and director
of the Moscow Circus, died today at a Moscow clinic where he had undergone
heart surgery, doctors said. He was 75. 
The comic, known to children as ``Uncle Yuri,'' had been in intensive
care since his operation Aug. 5. 
Nikulin, born in 1921 in Smolensk, was a World War II veteran who became
a Moscow Circus clown in 1950. He was appointed director of the circus in
1984, a post he still held. 
Nikulin ``personified a wonderful type of Russian man, and all the
nation felt it,'' Culture Minister Yevgeny Sidorov said. ``That is why his
death is painful for the entire nation, is a drama of the people. 
``Such people are rarely born, and by them mankind gets an idea of what
is best in this or that nation,'' Sidorov said. 
While Nikulin was closely associated with the circus, a cherished
Russian institution, he owed much of his nationwide popularity to his movie
roles, well known to generations of Russians. His typical role was that of
a slightly silly, average guy, witty but never mean-spirited. 
He starred in Soviet comedy classics that included the 1967 ``Caucasian
Prisoner,'' in which he played the leader of an incompetent trio of crooks,
and the 1968 ``Diamond Arm,'' in which he played a mild-mannered man who
gets caught up in a diamond-smuggling scheme. 
He also starred in the gloomy and acclaimed 1977 film, ``Twenty Days
Without War.'' 
Many of his most famous lines became part of the national culture, as
did his song, ``Ah, it's all the same to us.'' 
The actor was awarded the People's Actor of the USSR title in 1973 and
in 1990 was given the former Soviet Union's top peacetime award, the Hero
of Socialist Labor. 
In recent years, Nikulin, wearing his trademark sailor cap, starred in
many television shows, and newspapers frequently printed jokes from his
vast repertoire. 
In December, the circus held a grand celebration in honor of Nikulin's
75th birthday. Moscow Mayor Yuri Luzhkov was to perform a trapeze act in
homage to Nikulin, but sprained his ankle while practicing. 
President Boris Yeltsin called Nikulin's widow to express his
condolences, and Russia's ORT television led its newscast with taped
fragments of Nikulin's last interview and clips from his films. 
``It is hard to find a Russian who did not admire this unique artist,''
the ITAR-Tass news agency said. ``Everybody knew that Nikulin brought
with him smiles and laughter and joy. ... Russia became an orphan after
losing its beloved and unique actor.'' 
Besides his wife, Nikulin is survived by a son and three grandchildren.
Funeral arrangements were not immediately announced. 

*******

#19
Russia opens case against U.S. diplomat
MOSCOW, Aug. 21 (UPI) _ The Russian Foreign Ministry says criminal
proceedings have been initiated against a senior U.S. diplomat involved in
a serious car accident, which injured a Russian woman. 
A foreign ministry spokesman says Matt Bryza, a political officer at the
embassy in Moscow, may face charges. 
The spokesman says the foreign ministry has sent a letter to the embassy
summoning Bryza to a police precinct for questioning on the case. 
The U.S. State Department ordered the diplomat to leave Moscow
(Wednesday) and the foreign ministry is now requesting his return. ``His
departure does not close the case,'' the ministry spokesman says. 
He says a full investigation is under way and, should Bryza be found
guilty, ``measures will be taken''. 
``Of course, there is also the moral and material damage which the
family of the victim can claim,'' the spokesman says. 
The injured woman is currently in critical condition in a coma. 
The State Department says Bryza was brought back to Washington because
publicity surrounding the case made his job too difficult. 
State Department spokesman James P. Rubin says, ``We have taken the
decision to withdraw the diplomat. The attention this kind of an incident
would have on him would make it impossible for him to function. '' 
Bryza and his wife were returning from a workout Aug. 18 when the car he
was driving struck a Russian woman, causing her severe injuries. Bryrza,
who Rubin says was driving at 15 mph and completely sober, was questioned
by Russian police then released. 
The incident was reminiscent of an accident earlier this year in which
an allegedly drunk Georgian diplomat based in Washington lost control of
his car and killed an American teenager. Under heavy pressure from the
United States, Georgia agreed to lift the diplomat's immunity so he could
stand trial in the United States. 

********

#20
The East: Analysis From Washington--Looking Beyond The CIS
By Paul Goble

Washington, 21 August 1997 (RFE/RL) -- Kazakhstan President Nursultan
Nazarbayev and Moscow Mayor Yuri Luzhkov have added their voices to those
who believe that the Commonwealth of Independent States (CIS) is
ineffective and should be replaced. 
Following a meeting in Almaty on Wednesday, Luzhkov called the CIS "a
nostalgic stage prop" while Nazarbayev argued that the organization had
"failed to become a real economic zone or even customs union." 
In its place, the two leaders called for the establishment of a new
Eurasian Union, a body that they said would promote cooperation and
coordination among the 12 former Soviet republics that are currently
grouped within the CIS. 
Nazarbayev has been pushing this idea since 1993, and Luzhkov's support
for it highlights just how dissatisfied many in the region are with the
current arrangements. But despite this latest burst of enthusaism for a
Eurasian Union, there are three reasons why is is unlikely to be realized.
Indeed, instead of leading to a new organization, this proposal seems more
likely to complete the destruction of the existing one. 
* First, most Russian officials from President Boris Yeltsin on down
oppose Nazarbayev's suggestion just as much now as they have in the past. 
Their objections are rooted in the following fact: A Eurasian Union as
outlined by the Kazakhstan president would precisely define the rules of
the game for all the countries of the region and thus tie the hands of the
largest and most powerful CIS country, Russia. 
Indeed, any number of Russian commentators have suggested that
Nazarbayev's intention in making this proposal was to limit Moscow's
freedom of action. 
Whether that is a fair comment is in some sense irrelevant. To the extent
that many in Moscow believe it, few in the Russian capital are likely to
support an idea that they see as working against their interests. 
* Second, one of the chief reasons that the CIS is so ineffective is that
few of its member states now see much benefit in trying to cooperate with
this particular collection of states as a whole. 
They are unlikely to view a proposal for tighter integration as
corresponding to their interests now or even more in the future. 
With each year that has passed since the end of the Soviet Union, each of
the CIS states has increasingly sought to promote its own national
interests, using bilateral and multilateral ties within and across the
borders of the former Soviet space. 
Ever fewer of them participate in CIS-wide agreements and ever fewer of
them fulfill the terms of CIS accords that they signed earlier. 
As a result, these countries see ever less utility in an organization
which Luzhkov so precisely described as "a stage prop" for a play that is
no longer going on. 
* And third, this latest proposal, just like the various sub-groupings
that have surfaced across the territory of the CIS in recent months, is a
sign of the Commonwealth's decay rather than its vitality. 
Not only could Nazarbayev's ideas never hope to attract the support of
all 12 CIS member states, but their acceptance by a smaller grouping within
would only have the effect of driving those staying outside it still
farther apart. 
Moreover, Nazarbayev's proposal represents a direct challenge to
Yeltsin's own efforts to promote integration with Belarus. And as a result,
the proposal for a Eurasian Union may have the effect of blocking that
drive as well. 
Consequently, Luzhkov's backing for this idea is unlikely to represent a
breakthrough to a new and more perfect union as the Moscow mayor appears to
think. 
Instead, it is likely to open the way to a situation in which the CIS
will be discarded as no longer necessary and the Eurasian Union will be
seen by the states of the region as something not corresponding to their
interests as independent countries. 

********

#21
The quiet revolution in Russian banking 
The Financial Post (Canada)
August 21, 1997 
[for personal use only]

Scarcely a day passes in Russia without a scandal erupting around the
country's banks. 
They are accused of buying state assets on the cheap, mishandling budget
funds, manipulating government officials or corrupting the media. 
But amid the noise and fury, a quieter and potentially far more
significant revolution is under way. 
Some of Russia's 1,700 free-wheeling banks are transforming into
recognizable financial intermediaries. 
The growing trend is to raise longer-term capital from international
investors and domestic depositors and pump it into the local economy. 
Sergei Aleksashenko, deputy chairman of the central bank, says the
successful stabilization of the economy signals the end of fast profits for
Russia's banks. Either they must adapt or die. 
``Many Russian banks lived, and live, like financial trading companies,
making money speculating on the currency and government debt markets. But
profits from these markets have sharply fallen away,'' he says. 
``If banks do not find their place in the normal credit business, then
they will have a very sad fate.'' 
Already, Aleksashenko's predictions are coming true. 
Like other post-communist transition economies, Russia is experiencing a
banking crisis. 
Over the past two years, 450 banks have collapsed, including such large
regional banks as Tveruniversalbank, which ranked as the 17th largest. 
Local bankers expect a further wave of failures and mergers as the
sprawling industry consolidates. 
But a small group of powerful banks, including Oneximbank, SBS-Agro, and
Alfa Bank -- which have jointly raised US$650 million from eurobond issues
over the past few weeks with the aim of making long-term industrial loans
-- are pointing the way to the industry's future. 
``The time has come when banks must begin in earnest to do what banks
everywhere are ordained to do, which is to lend money,'' wrote Tanya
Azarchs, an analyst at international credit rating agency Standard & Poor's
Corp., in a recent report on the sector. 
Oneximbank -- which recently attracted publicity for controversially
buying government stakes in the Svyazinvest telecommunications company and
Norilsk Nickel metals company -- is planning to invest long-term capital in
developing its related industrial assets. 
In effect, Oneximbank is emerging as the treasury for the associated
Interros financial industrial group, which controls 24 industrial companies
with combined sales of US$10 billion. 
Vladimir Potanin, head of Oneximbank, says the bank's primary goal will
be to strengthen its capital base and broaden its branch network to service
its diverse industrial assets. 
With access to capital from abroad, Oneximbank will be able to lengthen
the maturity of its loans to up to three years. 
At this stage of Russia's economic development, Potanin argues it is far
safer to lend money to enterprises the bank controls. Poor legal and
accounting standards make unsecured third-party loans a risky business. 
``We want to be sure that the money we invest will be properly
managed,'' he says. 
But other banks are pursuing different strategies, arguing it is
dangerous and economically inefficient to be over-reliant on a captive
client base. 
For example, Alfa Bank, founded to support the Alfa Group of companies,
is busy disentangling itself from most of its related group businesses to
strengthen its credibility as an independent corporate bank. 
Mikhail Fridman, head of Alfa Group, says that being a pocket bank of a
big financial-industrial group leads to excessive concentration of assets
and risks, and leaves enormous opportunities begging elsewhere. 
``We understand that to develop as a nationwide bank, a universal bank,
we need to have more transparency for investors. We are therefore trying to
develop the bank as an independent entity with an independent strategy. Now
the relationship between the bank and the group is absolutely commercial.'' 
Russia appears considerably underbanked, especially outside Moscow. The
average bank has only two branches. As of mid-1996, 81% of all loans
extended by Russian banks were for less than one year. 
Total banking assets at the end of 1995 amounted to only US$132 billion,
or 34% of gross domestic product. In the Czech Republic, for example, the
comparable figure was 155%. 
SBS-Agro, which was formed last year from the merger of Stolichny
Savings Bank and Agroprombank, the state agricultural bank, believes its
future lies in retail banking. 
At the moment, this sector is dominated by Sberbank, the state savings
bank, which boasts 34,000 branches and holds 70% of all retail deposits. 
But Andrei Lykov, first deputy chairman, argues the vast, unwieldy
Sberbank is vulnerable to competition. 
He says SBS-Agro now has 1,400 branches covering 62 of Russia's 89
regions and expects to win 10% of the retail deposit market by the end of
the year. 
The bank is marketing a growing range of consumer products such as
credit cards, savings accounts, and insurance services. 
``Our population may have between US$20 billion to US$40 billion under
their mattresses, and if we can attract even part of that money, we will
have a very stable and independent funding base,'' he says. 
In contrast to Oneximbank and Alfa, SBS-Agro is concentrating on lending
to small and medium-sized businesses, where the competition is less intense
and the demand for efficient banking services is greater. 
``One year in Russia is like 10 years abroad,'' Lykov says. 
``The situation changes very rapidly, but it is very clear that bankers
should now specialize in banking.'' 

********