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Johnson's Russia List


October 12, 1997 
This Date's Issues: 1279

Johnson's Russia List
12 October 1997

[Note from David Johnson:
1. AP: Russians Protest Homeless Kids.

3. Los Angeles Times: Carol Williams, Russia Reels Out More 
Red Tape to Protect Ruble.

4. The Electronic Telegraph (UK): Robin Lodge, Thousands of 
homeless face death during Russian winter.

5. The Sunday Times (UK): Mark Franchetti, Duma puts perks 
before rebellion.

6. Moskovskiy Komsomolets: Premier, Chubays Pull It Off in Duma.
7. The Straits Times (Singapore): Gennady Chufrin, China and 
Russia: Just ties, no alliance.


9. Mary Connolly: Political or Social Strife.]


Russians Protest Homeless Kids
October 11, 1997

MOSCOW (AP) - Hundreds of angry mothers turned out in front of
Russia's government building on Saturday to protest what they said
was a lack of official interest in Russia's abandoned children.
There are thousands of homeless children in Russia, many of whom
turn to crime to support themselves.
Saturday's demonstrators outside the Russian White House said
they wanted to alert the government of how critical the situation
has become, and to demand more government spending on abandoned
``The government doesn't care about Russian children. They only
care about other things, like power,'' said one of the protesters,
Nina Sukalova.
The demonstrators complained that the cash-strapped government
has given out less than 10 percent of the allocated money for
children's issues.


ALEKSANDR POLOTSKI/. Mayor of Moscow Yuri Luzhkov rejected
indignantly the idea he will run for Russian presidency in 2000.
"Of course, No. Are you crazy? Do write this down this way!",
Luzhkov replied emotionally to a RIA Novosti correspondent who
put this question to the Mayor in Berlin today.
Yuri Luzhkov who arrived to the German capital today to
stay for a one-day visit has met in the Red House with Berlin's
Mayor /Burgomeister/ Eberhard Dipgen. The two mayors discussed
the deepening of cooperation between Moscow and Berlin in
solving various problems of public services and utilities.
The schedule of the Moscow mayor provides for him to get
familiar with the reconstruction of Berlin's new centre near
Potsdamer Platz, to make a speech in the Russian House of
Science and Culture on 'Moscow-97: look from the inside,' to
present his new book 'We are your children, Moscow,' published
here in German, and to give a Moscow's 850th anniversary medal
to burgomeister Dipgen.
Upon completing his visit to Berlin today afternoon, Moscow
mayor will return to Moscow. 


Los Angeles Times
October 11, 1997 
[for personal use only]
Russia Reels Out More Red Tape to Protect Ruble 
Currency: Moscow issues new controls on the dollar. But experts say they 
are unlikely to be effective. 
By CAROL J. WILLIAMS, Times Staff Writer
MOSCOW--They come in a dozen languages, provide job security for 
thousands of customs agents, delay most outgoing flights and end up in 
the trash at the end of each day: Anyone who has ever traveled into or 
out of Russia knows the confusion and frustration of the currency 
declarations demanded at all international airports and border 
     What most do not know is how little relevance the declarations have 
in preventing capital flight or in tracking the circulation here of the 
U.S. dollar, the ostensible reasons for their existence. 
     By all official admissions, the Soviet-era practice of requiring 
those entering or leaving Russia to declare the amount of hard currency 
they are carrying has become an ineffectual instrument for protecting 
the ruble in an economy now flush with cash machines, foreign bank 
branches and tens of thousands of currency-exchange services where no 
questions are asked. 
     So as of this month, the toothless ritual of declarations that long 
stood alone as a shield against the dollar has been joined by a sheaf of 
new currency controls that government officials and economists concede 
are probably likewise unequal to the task. 
     Fresh red tape now entangles most bank withdrawals of dollars, 
requiring the client to detail later how the money was spent outside the 
country. There are also new edicts, effective Friday, prohibiting the 
use of U.S. currency for wages, sales transactions, bank transfers or 
denomination of prices on payment invoices or goods on store shelves. 
     By restricting the dollar's role in everyday transactions and 
demanding detailed accounting of dollars obtained here for spending 
abroad, a "hassle factor" is added that economic strategists hope will 
reduce dependence on the foreign tender. 
     "In our country, we are not talking about invasion by a foreign 
currency but the thorough dollarization of the economy," said Irina 
Yasina, spokeswoman for Russia's Central Bank. "We are financing and 
supporting the U.S. economy and giving the U.S. dollar an unprecedented 
opportunity to grow and expand." 
     Russian citizens have $4 billion in dollar deposits in banks in 
this country, the Central Bank has reported, and U.S. Treasury officials 
estimate that between $20 billion and $50 billion more is stashed in 
Russian homes in mattresses and cookie jars. 
     Pyramid investment schemes, bank failures and clumsy currency 
reforms in the early 1990s robbed millions of their life's savings and 
have made Russians wary of their financial institutions even as the 
economy steadily stabilized over the past two years. 
     "People keep about 90% of their savings in hard currency," most of 
it in homes or offshore bank accounts, said economist Larissa Piyasheva, 
a former chief economic strategist for the city of Moscow. 
     The Russian reluctance to trust banks wreaks havoc with the ruble 
money supply, contributing to the government's myriad financial problems 
that routinely delay state wages and pensions for months at a time, she 
said. Until the unfettered private currency-exchange booths operating 
across the country are closed, there will be no serious impediment to 
dollarization, Piyasheva said. 
     Any person, Russian or foreign, can exchange unlimited sums of 
rubles for dollars. Those with legal work permits can take up to $10,000 
abroad on the strength of the exchange receipt. Amounts exceeding 
$10,000 must be approved by the Central Bank, but the process amounts to 
a rubber stamp on transfers to offshore Russian businesses that have 
been set up by the tens of thousands in places like Cyprus and the 
Cayman Islands. 
     "At some point, the president will have to appeal to the 
population's patriotism and encourage them to help get their motherland 
out of trouble, explaining that, unless this is done, millions of people 
won't be able to get their wages," Piyasheva said. 
     She described the new controls on currency transactions as a good 
psychological move to signal to the population that it is time to 
surrender stashed dollars for rubles if they want the economy to grow. 
     But shutting down the ubiquitous money traders or seeking to block 
capital exports would smack of the heavy-handed measures employed in the 
country during the first years of its transition to a market economy, 
and most analysts fear such moves would do more harm than good to public 
confidence in the ruble. 
     While the new currency controls and continued demand for the 
declarations have little effect on the growth of dollar capital or its 
outflow, they do serve to trip up the naive and unsuspecting. 
     A 25-year-old British graduate student who spent this summer in 
Moscow working as a translator without a Russian work permit had $1,800 
confiscated when he left the country because he could not produce a 
legal paper trail. An American journalist who recently left Moscow was 
threatened with a strip-search when a customs agent discovered twice as 
much cash in her purse as the $300 on her incoming declaration because 
she had since visited an American Express cash machine. 
     Stricter enforcement of the declaration process has been 
implemented by the federal Customs Service to bolster the new 
restrictions. Fines and confiscations have been rising in recent weeks, 
reports Yelena Starozhilova, head of noncommercial currency operations 
for the federal Customs Committee. 
     "We intercept a sum that is not unsubstantial," she said, declining 
to be specific on grounds that such figures are still state secrets. 
     But she acknowledged that cash dollars carried by travelers is 
"small change" in comparison with the sums being transferred abroad 
electronically or through government-authorized export transactions. 
     The declarations are used only to tote up a daily sum of declared 
currency leaving the country and the amount being legally brought in, 
Starozhilova said. No recording of the declarations is made, and they 
are thrown out at the end of each workday. 
     All those entering Russia must fill out a declaration stating the 
amounts of hard currency and travelers checks they have in their 
possession. Amounts exceeding $500 must be inspected and registered by 
customs agents at the infamous "Red Channel," which can take as long as 
six hours to negotiate. 
     All travelers leaving Russia must proceed through the Red Channel 
and present their stamped incoming declaration as well as a fresh one 
denoting how much hard currency they are leaving with. The departing sum 
cannot exceed $500 or the amount brought in and registered upon arrival. 
     The declarations date to the Soviet era, when the only way a 
foreign visitor could obtain cash was to carry it in. Today, however, 
there are thousands of automatic teller machines dispensing both rubles 
and dollars, allowing anyone with a foreign bank account and a 
cash-machine card to legally obtain dollars. 
     "Technology has made it practically impossible to establish the 
origin of capital in today's world," said the Central Bank's Yasina, who 
dismisses the possibility of officially influencing the conduct of money 
abroad or the power of the dollar at home. "No obstacles or punitive or 
repressive measures will be able to stop the flight of capital from this 
country. Until a normal investment climate is created, they can keep 
coming up with severe currency export regulations, but they will just 
keep failing." 
     On the contrary, she said, only full liberalization of capital 
movement will instill confidence in the economy and encourage Russians 
with money to invest to keep it working in rubles in this country rather 
than smuggling it out in dollars to protect it from the whims of 
government control. 
     "You can oblige people to fill out currency declarations down to 
every $10 that enters or leaves the country, but it won't work," Yasina 
said. "Capital is like water--it will always find the holes." 


The Electronic Telegraph (UK)
12 October 1997
[for personal use only]
Thousands of homeless face death during Russian winter
By Robin Lodge in Moscow 

THOUSANDS of Russians will freeze to death this winter. Thousands more 
will die of tuberculosis, diphtheria and a host of other diseases 
spreading out of control among the homeless, impoverished and destitute. 
More surprising is that a huge number of such people will somehow 
survive, only to face the same horror a year from now.
The Russian authorities say the country is booming. Inflation has been 
brought under control, the economy is showing signs of recovery and 
growth is expected for next year. Foreign investment has already tripled 
this year over the whole of 1996. But all this means little to the 31 
million people, almost 22 per cent of the population, who live below the 
official poverty line.
Even in Moscow, Russia's showcase to the outside world, where new steel 
and glass office blocks soar towards the sky, the streets are jammed 
with private cars and the shops abundant with luxury goods, there are 
more than 250,000 homeless people and vagrants, according to police 
estimates. They can be found outside mainline stations, queuing at 
volunteer soup kitchens or huddling in doorways or empty basements. Last 
winter, more than 600 of them froze to death. A further 2,000 were 
treated for frostbite.
Between November and April, temperatures in the capital rarely rise 
above freezing and can dip down to -30C. In many parts of the country it 
is far colder. To be homeless in Russia amounts to a death sentence. 
Those who find refuge from the cold face constant harassment from the 
police, who still regard them in their Soviet-era image as parasites and 
social undesirables.
But it is not just the homeless who struggle to survive. The collapse of 
the Soviet system of guaranteed health care, employment and social 
protection has created a huge underclass, which has been joined by 
millions of state-sector employees who have not been paid for months.
Shipments of subsidised supplies to remote regions have virtually dried 
up, leaving entire towns, villages and rural areas impoverished. 
According to officials in Ivanovo region, only 200 miles east of Moscow, 
the inhabitants of several local villages have been reduced to eating 
animal feed. In the district in Khakassia, in southern Siberia, more 
than 500 children did not go to school throughout last winter because 
they had no shoes.
Tuberculosis, which had declined steadily in Russia until the late 
Eighties, is on the rise again, with more than 110,000 cases reported 
last year, double the number in 1991. It is particularly rife in prisons 
and there are fears that a prison amnesty announced last month by 
President Yeltsin, under which 30,000 convicts are to be set free in the 
coming weeks, will lead to a surge of cases among the general 
population. There have also been rising numbers of cases of cholera, 
diphtheria and typhoid.Anatoly Chubais, the First Deputy Prime Minister, 
last week proudly proclaimed that the gap between Russia's rich and poor 
is narrowing. The statistics do not bear this out. While huge wealth is 
being generated in the country, largely through the exploitation of its 
oil, gas and mineral reserves, there is no sign of this trickling down 
to the worst-off sectors of the population.
For this to happen will require a change in attitude, both on the part 
of the authorities and by those who have benefited from the conditions 
now prevailing in the new Russia.
Last week, the Russian Red Cross and the International Federation of Red 
Cross and Red Crescent Societies, launched their annual Winter Emergency 
Appeal for Russia, with the aim of raising £6 million to help the most 
vulnerable. This year the appeal was aimed first at wealthy Russians, 
urging them to assume some responsibility for the plight of the country.
There are some signs that the change in attitude may come about. Mr 
Yeltsin has designated 1998 as the year of the homeless, but without yet 
spelling out specific measures to help them.
The author Alexander Solzhenitsyn, the self-appointed moral conscience 
of the nation, in a speech to the Russian Academy of Sciences last 
month, denounced what he called "the utilitarian approach" that he said 
had undermined Russian culture since the 1917 revolution and survived 
the latest political transformation.
Respected as he is, Mr Solzhenitsyn is a remote figure, whose words are 
unlikely to have great impact on the up-and-coming generations. But 
other voices have also been raised, including that of Nikita Mikhalkov, 
one of Russia's leading film directors and winner of the 1995 Oscar for 
best foreign film.
In a letter to the Red Cross appeal launch he wrote: "The time has come 
for us to prove to ourselves and the whole world that we have acquired a 
sense of social responsibility, that we have learned to respect and care 
for each other. Only then will we be able to look one another in the eye 
and feel a genuine pride in our country."
It will not happen tomorrow, but with such sentiments now being publicly 
expressed, Russia can perhaps look forward to a better future.


The Sunday Times (UK)
12 October 1997
[for personal use only]
Duma puts perks before rebellion 
by Mark Franchetti 

BACK home, parliament was threatening a vote of no confidence in 
President Boris Yeltsin. But Vladimir Semago, a wealthy communist 
parliamentarian, had no time for fiery speeches in Moscow last week. He 
was swimming and sunbathing in Cyprus. 
On his return to Moscow, his biggest worry was being late for a 
hairdresser's appointment at the Metropol, one of the city's most 
luxurious hotels, where he regularly enjoys a manicure. 
Semago, a maverick millionaire with a penchant for Cadillacs and French 
designer suits, was not the only member of the Russian duma, the lower 
house of parliament, who failed to show much interest in Russia's latest 
political crisis. 
Gennady Zyuganov, leader of the Communist party, which dominates the 
duma, has tabled a no-confidence motion in the government's austere 1998 
budget measures, but the anti-Yeltsin rhetoric is unlikely to get out of 
If the motion is passed and repeated within three months, Yeltsin can 
dissolve the unco-operative duma and call new elections. Semago and his 
colleagues could lose their seats and, with them, the privileges that 
made a duma post one of Russia's most coveted assets. 
"This no-confidence business is just a big game," said Semago, who 
started Russia's first luxury gentleman's club, owns several restaurants 
and is considered one of his party's main financial backers. "Deputies 
aren't so stupid as to risk their own comfortable life. They are not 
going to shoot themselves in the foot." 
Every duma representative costs the taxpayer about $20,000 a month in 
salaries and perks. Each of the 450 deputies is entitled to a Moscow 
flat, a chauffeur-driven car, an office with five paid aides, subsidised 
holidays, diplomatic passports and parliamentary immunity ­ much in 
demand from those with a dubious past. A seat brings valuable business 
and lobbying opportunities. Officially, deputies are barred from running 
companies or receiving a second salary but many register their 
businesses in their spouse's name. 
"We are, quite rightly, forbidden from being paid a business salary, but 
there is nothing against making profits," said Semago. "For instance, it 
is perfectly legal to own and sell shares." 
Vyacheslav Nikonov, a political analyst and a former Yeltsin aide, said: 
"For many the duma is the perfect place to do business. A seat opens 
many doors and it provides a good life." 
Cash advances for foreign trips often go unaccounted for, and expenses 
for petrol and car use are so high that a Russian newspaper calculated 
last week that each deputy would need to drive 20 hours a day if the 
figures were correct. 
"There are quite a lot of criminals here," said Mikhail Yuriev, the duma 
deputy chairman, who made a fortune from oil before becoming a deputy in 
1995. "Unlike others, I lost privileges the day I came here. I had to 
take off my diamond ring and leave my Rolls in the garage because I was 
told that it would make a bad impression." 


Premier, Chubays Pull It Off in Duma 

Moskovskiy Komsomolets 
October 9, 1997
[translation for personal use only]
in Russian 9 Oct 97 p
Commentary by Yana Yurova: "Two C's: In the Arena All Morning.
The Government's Report About its Work Was Delivered to the Sound of
Loud Laughter and Applause"

"Clouds are passing gloomily over the State Duma...." [allusion to
the lyrics of a Soviet-era song with the words "State Duma" replacing the
original word "border"] Only yesterday, on the eve of the government's
report to the deputies, this song had been probably more than relevant. 
The opposition loudly announced that it had collected the necessary number
of signatures to deliver a vote of no confidence in the cabinet. In the
glances of its leaders you could see a clear desire to get Viktor
Chernomyrdin and -- especially! -- Anatoliy Chubays to come to the Duma as
soon as possible in order to make mincemeat of them....
But absolutely nothing of the sort happened. It is not known what it
was that played a bigger role -- Boris Yeltsin's latest radio address, in
which he openly threatened to dissolve the Duma, or something else -- but
yesterday both the premier and the first vice premier were treated to the
most good-natured reception that they could have expected. It is a good
thing that both Chernomyrdin and Chubays had prepared themselves in advance
for the impending show.
The happy clown counterbalanced the sad one....
For starters, Premier Chernomyrdin delivered an optimistic speech. He
traditionally reported to the deputies that for the first time in all the
years of economic reform there had been no reduction in the GDP. Compared
to the same period of last year, it amounted to 100.2 percent. The volume
of industrial production had increased by as much as 1.5 percent. 
Prospects for overcoming the drop in investments could be seen: In only
the first half of the year $6.7 billion in foreign investments made it into
Russia's economy. By the beginning of October, 88.9 million tonnes of
grain had been threshed, which is 31.6 percent more than the figure for
last year. And even the standard of living for Russians has gone up: In
only the last nine months monetary earnings have gone up by 2.7 percent.
And so much still lies ahead! Before the end of the year a Tax Code
must be passed, a pension reform program must be approved, and so on and so
forth. But for this to happen, the deputies and the government must work
closely with one another. "If we get mixed up in a fight, we will blow
everything. And if someone gets an itch somewhere (where exactly? --
Editor) -- scratch something else," the premier summed up.
After that a sad-looking Anatoliy Chubays stepped up to the speaker's
rostrum. And like Mary Magdalene, he publicly repented for the sins of the
members of the government. The message was that they really had not
"hacked it" and are themselves "not satisfied with their own work": In
terms of revenues, they had only fulfilled 65 percent of the planned
volume. The worst failure of the year had to do with tax collection: in
only the recent past] tax arrears had grown from 60 trillion rubles [R] to
R76 trillion. In terms of expenditure, only 71 percent of the planned
volume had been fulfilled....
In short, it was not a speech but rather a kind of masochism session. 
But Chubays immediately pointed out that the deputies should also be
feeling pangs of conscience -- they were the ones who did not approve the
budget sequestration law at the time. If they had come to an accommodation
with the government back then, today they would have a much more attractive
The speech by the repentant sinner turned out to be a strong
psychological move. Mikhail Zadornov, chairman of the Budget, Banks, and
Finances Committee, who spoke later, in principle did not have anything to
say anymore. So he briefly went over the most noteworthy figures. In nine
months expenditure on culture and the arts amounted to only 35 percent of
the planned volume; the figure was the same for industry and 51 percent for
agriculture. At the same time, according to Zadornov, the government had
illegally reached into the pocket of earmarked funds and had, for some
unknown reason, pulled out almost R6 trillion. In closing, Zadornov
proposed that the Duma pass a decree confirming that the government had
simply failed to implement the 1997 budget. It would also oblige the
cabinet to report to the deputies once again in February of 1998.
Nonetheless, the government scenario did not particularly suffer from
this criticism. Chernomyrdin was in good form, expressively parrying all
of the deputies' verbal attacks by saying something to the effect that we
are on the right track and, in spite of everything, life in the country is
getting better from day to day. And from time to time loud laughter would
quickly ease the tension of the exceptionally heated atmosphere in the hall
(the general impression was that the government had seated Quakers
[kvakery; possible misprint for klakery, meaning "claqueurs"] in the front
It looks like it is time for our parliament to think about setting up
a special screenplay and directing department in the Duma. After all,
politics is also an art....


The Straits Times (Singapore)
October 10, 19997
[for personal use only]
China and Russia: Just ties, no alliance 
By Gennady Chufrin 
Professor Gennady Chufrin is Deputy Director of the Institute of Oriental
Studies at the Academy of Science, Moscow. He contributed this article to
Trends, a monthly publication of the Institute of Southeast Asian Studies
distributed with Business Times. 

A REVIVAL of close political and economic ties between Russia and China,
a phenomenon unthinkable only a decade ago, has become one of the most
remarkable events in international relations. 
Indeed, after almost three decades of fierce ideological, political and
even military confrontation, Moscow and Beijing regard each other now, if
not as friends-in-arms as they were in the late 1940s and early 1950s, then
certainly as good partners. 
Numerous and regular exchanges of official delegations, coupled with a
growing number of joint political statements and major business deals, may
be seen as clear proof of such a development. First signs of a thaw in
Sino-Russian (at that time -- Soviet) relations had already appeared in the
second half of the 1980s, while, in 1989 and 1991, Soviet and Chinese
leaders signed two important communiques signifying normalisation of
relations between their countries. 
However, after the collapse of the Soviet Union at the end of 1991, there
was a short period of uncertainty as to the future of a new relationship
between a post-communist Russia and a still-communist China. 
But after President Boris Yeltsin visited China in December 1992 and
reached an agreement there with Chinese leaders on basic principles of
bilateral relations, it became clear that, in the new geopolitical setup,
many important national interests of Moscow and Beijing were not only
parallel or compatible, but in certain areas could also be common and serve
as a basis for coordinated actions. 
Indeed, from the Russian perspective, the development of good relations
with China had to be placed at the top of national foreign policy priorities
and be regarded as important as relations with the United States, and, in
certain aspects, even more important. 
Those priorities were conditioned by a number of objective geopolitical
factors such as, first, the enormous human, economic and military potential
of China, which was growing at a fast rate while Russia was caught in the
middle of a serious economic and political crisis. 
As a result, the power balance between Russia and China was turning
increasingly in favour of the latter. Second, Russia had to ensure stability
along a very long Sino-Russian border, which could become either a zone of
cooperation or, as it was in the not-so-recent past, a line of confrontation
between the two states. 
Third, it was in the basic national interests of Russia to maintain a
maximum degree of mutual understanding with China, not only on bilateral,
but also on major regional and global, issues. As to China, it needed good
relations with Russia to proceed with its own reforms using, for these
purposes, vast Russian natural resources as well as certain
technologies.And, of course, in its quarrels with the US and its allies over
the future of Taiwan, China was particularly interested to have Moscow on
its side. 
That understanding of commonality of basic Sino-Russian national
interests in the present world received new proof during another summit
meeting of Russian and Chinese leaders held in Moscow in April this year,
when President Yeltsin and Mr Jiang Zemin signed a joint declaration on
principles of a new international world order. 
In this declaration, Russia and China categorically rejected any designs
to establish a uni-polar world system and supported the concept of a
multi-polar world order which, in their opinion, would help to preserve
world peace and security in the interests of all countries and not of a
selected few. 
This thinly-disguised criticism of US plans to remain a world hegemony
was supplemented by another unprecedented statement of the two signatories
to the declaration. 
Not only did it describe the current Sino-Russian relationship as one of
equal and trustworthy partnership, but it also stated an intention of both
sides to develop strategic cooperation in the 21st century that would be
mutually advantageous and help to preserve peace and security in the
Asia-Pacific, as well as in the world at large. 
Naturally, this document invited much comment on the nature of such a
"strategic partnership" and raised questions as to what could be its
consequences for other countries. 
Such questions need to be answered in a frank way to help alleviate
suspicions and clear any misperceptions. 
First of all, it must be made very clear that a new Sino-Russian
partnership does not in any way represent a resurrection of the former
Sino-Soviet political and military alliance. 
It is well known that staying out of such alliances is one of the
cornerstones of Chinese foreign policy. Entering into such alliances also
goes against Russian national interests. Therefore, the aim of the
signatories to the Sino-Russian Moscow Declaration was not to create another
bloc or alliance but to express their negative attitude towards continuation
of the "Cold War approach" in the political quarters of some Western
countries. Second, by signing the above declaration, both sides wanted to
minimise contradictions still remaining in their own relations. 
Among such major outstanding issues of a bilateral nature was, of course,
the problem of demarcation and demilitarisation of the Sino-Russian border. 
The first part of this problem had already been resolved after the
signing of the agreements between Moscow and Beijing on the eastern portion
of the border in May 1991 and on its western portion in December 1994. 
These agreements held even when Mr Yevgeni Nazdratenko, governor of the
maritime province, disagreed with the way the Sino-Russian border was
demarcated in some areas and tried to start an ultra-nationalistic
obstructionist campaign on this issue. This unfortunate incident was
resolved, however, in a very amicable fashion by the Russian and the Chinese
governments who, acting in the larger interests of mutual cooperation,
compromised their positions on the disputed border area. 
The second part of the problem (demilitarisation of the border) was
resolved when the Moscow Declaration was supplemented by an agreement
between Russia and China, also signed in April this year. According to this
agreement, Russia assumed an obligation to reduce, within two years, the
size of its armed forces in a 100-km border zone with China by 15 per cent,
while Kazakhstan, Tajikistan and Kirghizia, who joined this agreement,
declared a complete withdrawal of troops from their borders with China. 
As a result, Russia, China and the former Soviet Central Asian republics
had a unique opportunity to divert substantial resources so far spent on
keeping an oversized military potential on their mutual borders for more
productive purposes. 
These border agreements undoubtedly helped to resolve many sensitive and
delicate issues in Sino-Russian relations, including long-standing and
potentially explosive territorial disputes. 
Besides, they also helped to establish a proper climate for resolving
still outstanding border problems, the biggest of which being a large influx
of illegal Chinese immigrants into Russia.Naturally, Russia regards the
establishment of a strict immigration regime as one of its top priorities in
relations with China. 
Third, the Moscow Declaration was also meant to promote economic
cooperation between China and Russia. 
By the middle of the 90s, China had already become the second biggest
trade partner of Russia. 
However, the size of their bilateral trade -- around US$7 billion (S$10.8
billion) -- constitutes less than 4 per cent of the total Chinese foreign
trade turnover. 
Moreover, the bulk of Sino-Russian trade, apart from arms sales, is in
fact an exchange of Russian raw materials for low-quality Chinese consumer
goods while Russian sales of high-tech goods and technologies to China
remain very low. 
In order to improve this situation, Russia and China have taken several
steps, the last one being an official visit of Russian Prime Minister Victor
Chernomyrdin to Beijing in June this year. Meeting his counterpart, Chinese
Premier Li Peng, Mr Chernomyrdin signed a number of agreements and contracts
aimed at expanding the volume of bilateral trade up to US$20 billion (S$30.4
billion) a year by the beginning of the 21st century. 
The most important among them were agreements on massive sales of oil and
natural gas as well as on construction of gas and oil pipelines for these
Russia also expressed its readiness to sell to China nuclear and electric
power equipment, hydrofoil vessels and civil aircraft, as well as some other
machinery and equipment including large trucks and railway equipment. 
These plans, however, will not be easy to realise, as shown by the loss
of tender, only two months after Mr Chernomyrdin's visit to Beijing for the
construction of a giant multi-billion-dollar power project on the Changjiang
(Yangtze river), by a group of Russian companies to a consortium of Western
Though the loss of tender has come as a painful disappointment to Russia,
it only means that the Chinese side is governed in business deals strictly
by business criteria and will continue to act in the same way in the future. 
The same business approach governs arms deals negotiated by the Russian
and Chinese sides, which show a tendency of expanding from selling to China
fighter aircraft to anti-aircraft missile systems, submarines or destroyers. 
One cannot ignore, however, a growing concern in some of the neighbouring
countries in the Asia-Pacific as to how this trade in advanced weaponry may
influence the regional power balance. 
It is therefore in the basic national interests of Russia to have China
participating actively in a dialogue process on regional security while
continuing to assist China in its legitimate plans to modernise its
conventional defence. 


Vol.III No.16 Part 2
10 October 1997

By Aleksandr Tsipko
Dr. A. S. Tsipko is a political philosopher and senior research fellow at
the Institute of International Economic and Political Studies of the Russian
Academy of Sciences in Moscow.

The founding congress of Russia's new "Movement in Support of the
Armed Forces, Defense Industry and Military Science" was held in Moscow on
20 September. It brought together more than forty organizations with
regional branches in almost all the regions of Russia and provided a stark
demonstration of the growing dissatisfaction of servicemen and
defense-industry workers with Boris Yeltsin both as commander-in-chief and
as president. Above all, it provided evidence of the existence of a profound
crisis in the Popular-Patriotic Union, Russia's main opposition movement led
by Communist Party leader Gennady Zyuganov. 
The congress' two keynote speakers -- retired Gen. Lev Rokhlin, and former
defense minister Igor Rodionov -- and military delegates who came to the
congress from their posts on active duty, all painted a harrowing picture of
the decline and collapse of the army. The federal budget is allocating only
one-tenth of the money necessary for defense conversion. Adequate funding is
not being provided for the modernization and security of Russia's nuclear
stockpiles. By 2005, a significant portion of Russia's present nuclear
arsenal will be obsolete. Reforming the army is impossible on the money
which the government has assigned for the purpose (3 percent of the federal
budget). Some 100,000 officers and their families are without housing and
have no prospects for acquiring it in the near future. If the proposed cuts
in military manpower are implemented, the number of those without housing
will double since officers will be discharged into the reserves without
housing. Soldiers are starving. There are humiliating delays in the payment
of wages; frequently, even colonels on active duty scrape a living by
working at night unloading railroad cars. If there were a battle alert in
air force units, only 20 percent of the aircraft would be in a fit state to
take off. And so on.
Strictly speaking, there is nothing extraordinary in Rokhlin's initiatives.
In any normal country, a general would be bound to appear who would speak
plainly and give voice to the pain and suffering of those who still
understand the concept of an officer's honor. In fact, it is strange that
such a man did not emerge several years ago.
Rokhlin's uncompromising approach reflects not so much his own character as
of the mood of the millions of Russian people whose lives are tied up with
the defense sector. Hence his statement that, "As long as Yeltsin is in
power, Russia will be destroyed and perish." The Yeltsin team made a foolish
mistake when, without even trying to enter into dialogue with the general,
it rushed to dub him the next leader of the "irreconcilable opposition."
An analysis of Rokhlin's speech at his movement's founding congress
provides no basis for accusations that the general adopted an irreconcilable
stance toward existing economic and political realities. Rokhlin was
certainly more tolerant than Russian Communist Party leader Gennady
Zyuganov. For example, Rokhlin insisted that the tricolor flag, emblem of
the post-Communist Yeltsin regime, should hang over the congress, and he put
a firm stop to the attempts of activists from Stanislav Terekhov's Union of
Officers to replace the tricolor with the red Soviet flag. Rokhlin's actions
contrasted with the efforts of Zyuganov and the Communist parliamentary
faction he leads to block the adoption of the tricolor as the national flag
on the grounds that, during the Second World War against Germany, the
"Vlasovite traitors" fought under that flag. By his actions, therefore,
Rokhlin distanced himself from the Communist Party's slogans. And it was
certainly not by chance that Rokhlin ended his speech with a call to build a
"democratic Russia." Zyuganov takes care not use such terms: when he speaks
of democracy, it is only in a negative sense. There was no hint of Soviet or
Communist revanche in Rokhlin's speech; he spoke of genuine people's power,
most likely in the social-democratic sense of the word. Contrasting his own
"progressive" patriotism with other, presumably "non-progressive," forms of
patriotism. Rokhlin spoke strongly against the nationalist tint of Russian
patriotism and great-power statism [gosudarstvennichestvo].
Rokhlin often speaks of the need to unite all the patriotic forces, but his
campaign may have precisely the opposite impact. The most likely effect of
Rokhlin's new movement is that it will split the Popular-Patriotic Union
that Zyuganov set up into two warring camps: a "left wing" and a
"progressive patriotic" wing.
In fact, Rokhlin has adopted precisely the positions that Zyuganov should
have adopted a long time ago if he wanted to give the Russian opposition
movement a more constructive character. But it is Zyuganov's tragedy as a
politician that he has been unable, for both objective and subjective
reasons, to shed the red-white patriotism in which his Communist Party is
steeped. Zyuganov is trying instinctively to preserve his own electoral
base, and is doomed to drag behind him the unbearable burden of his red
"train." This is the reason for his Marxist-Leninist rhetoric, the red
flags, the flirting with Stalin and the defense of the ideals and goals of
Lenin's October Revolution.
Zyuganov cannot possibly believe that either the Civil War unleashed by the
Bolsheviks or Stalin's collectivization made the Russian people happy, nor
can he believe that Marxist-Leninist doctrine has all the answers. Were he
to give voice to his skepticism about such things, however, orthodox
Communists in his party would strip him of his post as leader both of the
Communist Party and as leader of the "irreconcilable" opposition.
It is this, in the author's opinion, that explains Rokhlin's success in
creating, in little over two months, a movement that boasts regional
branches in almost all Russia's regions. Rokhlin's feat testifies not only
to the discontent of those in the armed services and defense industry, but
also to the existence of a profound crisis in the ranks of Zyuganov's
Popular-Patriotic Union. The constructive political and spiritual opposition
to Yeltsin's regime is trying to distance itself from red, Communist
revanche. Many people who, for various reasons, remain in opposition to
Yeltsin's regime, fully understand that the fundamentalist Communists are
doomed to extinction and are playing a negative, not a constructive, role.
The revanchist claims put forward by the orthodox Communists are merely
strengthening popular support for the radical reformers and fostering the
illusion that only decisive, accelerated reforms can make the democratic
transformations irreversible.
If Yeltsin's team had had any strategic sense, therefore, it would in the
author's opinion not have pushed Rokhlin and his movement into the embrace
of Zyuganov and the irreconcilable opposition. Rokhlin himself is unlikely
to be elected president in the next elections, due in 2000. But he and his
movement do undermine the position of other figures, such as Aleksandr
Lebed, in the army and the defense industry. At the founding congress of
Rokhlin's movement, speakers who dared to say anything nice about Gen. Lebed
found themselves whistled down. 
And finally, if Rokhlin's movement holds firm to the course of "progressive
patriotism," that is, the course of social and political realism, it will,
by virtue of its very existence, push Zyuganov's Communist Party toward the
center of the political spectrum and facilitate the process of the party's

Translated by Mark Eckert


From: (Mary E. Connolly) 
Date: Sat, 11 Oct 1997 
Subject: Political or Social Strife

Dear Mr. Johnson,

As a student studying the Commonwealth of Russia, I am interested in
furthering my understanding of a theory used by Ted Gurr in the American
Political Science Review which describes the classical study of the causes of
political violence through "relative deprivation". I am curious if Russia
has the ingredients of this sort of political and/or social strife which is
defined as having a gap between "value expectation" and "perceived
capabilites"? If so, could one of your readers/contributors comment on this
theory by outlining briefly what those ingredients may be? What would Russia
look like if this perceived gap continued to widen? And are there measures to
be taken in order to eliminate or lessen political or social strife within
this framework?


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