15, 1997 Return
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Johnson's Russia List
15 October 1997
[Note from David Johnson:
1. Reuter: Never say never to Yeltsin third term.
2. Komsomolskaya Pravda: Media Leaks Suggest Yeltsin May
Still Run for Reelection.
3. Reuters: How Russia's constitution works in confidence
4. Budapest's Nepszava: "Russian Scenarios To Counterbalance
NATO Expansion." (Views of Andrei Kortunov).
5. Interfax: Chubays Says Russian Brain Drain 'Effectively'
'Stopped.' (Meeting with Bill Gates).
6. Reuters: Russian plays new foreign policy game in Europe.
7. Christian Science Monitor: Melissa Akin, "Move Over Cola,
Russia Wants Kvass."
8. Izvestiya: Oleg Sysuyev: Much of What We Propose Is Bad
for the People.
9. Smena: Will Bill Be Angry with Boris over Europe?
10. Reuters: Russia's ailing jails set for change, lack
11. Trud: SERGEI KALASHNIKOV: PRIVILEGES UGLY SIDE OF
SOCIALISM. State Duma Committee For Labour and Social Policy
Chairman Criticises Reform Drive.]
Never say never to Yeltsin third term
By Martin Nesirky
MOSCOW, Oct 14 (Reuters) - While Russia's government and parliament slug it
out over next year's budget and the course of market reforms, President Boris
Yeltsin is deciding if and when he should step into the ring to land the
Yet the blow he is mulling is not directly related to the immediate
hurly-burly of Moscow politics but to longer-term concerns -- a third
presidential term and potential successors.
Yeltsin has launched several trial balloons in recent weeks. They have
floated, by turns, the notion that he has no intention of standing again and
the teaser that he might just change his mind.
At least two of these balloons purported to be the last word on whether he
could or should stand for a third term as leader of the world's largest
country or make way for someone younger.
Few believe the debate is over, and already some intriguing, typically
Kremlinesque scenarios are emerging.
``Yeltsin never says never,'' the daily newspaper Nezavisimaya Gazeta said in
an editorial. ``Even when he uses the word.''
Boris Yeltsin is a seasoned political fighter, bruised by past humiliations
at the hands of the Soviet Communists he once served and by illness. Now
seemingly back in health at the age of 66, he is displaying vigour and
confidence at home and abroad.
That renewed self-assurance means he is eager and able to keep his rivals --
Communist leader Gennady Zyuganov and nationalist Alexander Lebed -- on the
defensive and potential successors, including Prime Minister Viktor
Chernomyrdin and First Deputy Prime Minister Boris Nemtsov, loyal.
``It's Boris Yeltsin himself who shuffled the cards,'' said the newspaper
Above all, he fears being seen as a lame duck so long before the presidential
election in 2000. In addition there is the possibility, or likelihood,
potential successors will squabble rather than unite to keep the communists
and nationalists out.
There are those who take at face value Yeltsin's most recent and apparently
unequivocal remarks in Strasbourg last week that he has no intention of
seeking a third term and will abide by the 1993 Russian constitution that
seems to rule one out.
``The whole point of the statement is Yeltsin fully frees his hands as far as
government and parliament are concerned,'' Andrei Fyodorov, the head of the
Political Technologies Centre think tank, told an NTV commercial television
``From that day on the man who plans not to run for another term and who
heads a great power can dare to take the toughest and most unpopular steps
without thinking about his ratings.''
But most tend to look one step beyond this.
``I think Yeltsin is in the middle of a mental struggle which focuses on
whether he will have an heir by 2000 who will follow his path, or at least
will not focus on denouncing Yeltsin's many failures,'' Vitaly Tretyakov,
Nezavisimaya Gazeta's editor, told the same programme.
``In a word, he is wavering,'' Tretyakov wrote in his editorial.
Tretyakov and others with an inside track believe Yeltsin may even seek to
have loyalist forces rally to a neo-tsarist flag by backing his daughter
Tatyana Dyachenko for president rather than Nemtsov, Chernomyrdin or Moscow
mayor Yuri Luzhkov.
It sounds far-fetched but few would rule it out altogether -- she already has
a formal image-maker post in the Kremlin and was behind her father's
U.S.-style campaign for re-election last year.
Another possibility mooted is that an economic revival, should it
materialise, would enable First Deputy Prime Minister Anatoly Chubais to
stake his claim on the top job. Hitherto he has been ruled out because
Russians associate him with the shock therapy of privatisation.
Some take a pedantic view, noting Yeltsin carefully chose his words in
Strasbourg, venue for last week's Council of Europe summit and just the place
to stress his democratic credentials.
``Yeltsin said 'I will not run because this would demand constitutional
changes','' said Leonid Radzikhovsky, a political observer at the daily
newspaper Sevodnya. ``If his election in 2000 did not demand changes in the
constitution he may consider running. That is one possible interpretation.''
Several Russian newspapers have reported the Constitutional Court is on
standby to receive a request for a ruling but there is no consensus on which
way it will jump.
Either way, Russia does not have a track record for the smooth transition of
``Yeltsin is facing a challenge unique for this country -- he has to
relinquish powers on his own. It is very possible he will do this to create
the precedent of a really free and democratic system,'' Radzikhovsky told
Itogi. ``But psychologically this would be a hard thing for him to do.''
One Kremlin source put it another way.
``Can you imagine Yeltsin giving up to look after his grandsons and tend his
Media Leaks Suggest Yeltsin May Still Run for Reelection
October 10, 1997
[translation for personal use only]
Article by Aleksandr Gamov: "What Term Is Yeltsin Facing --
Third or Second. Will Boris Nikolayevich Take Part in Presidential
Yastrzhembskiy, deputy chief of the Presidential Staff and press
secretary of the Russian president, has finally put in words an idea that
has been in the air in the Kremlin corridors for about six months now and
is not at all regarded as Sergey Vladimirovich's [Yastrzhembskiy] "personal
opinion," even though he maintains so. In an interview for the Belgian
newspaper Le Soir the "mouthpiece" of the head of state, after citing, just
in case, his legal and not diplomatic credentials, pronounced this: "In
view of the fact that Mr. Yeltsin received his preceding mandate under the
USSR Constitution, his current term as president is his first, not his
second. Therefore, another term would be constitutional."
This seemingly banal statement has generated a storm of passions in
Russia. Because those who are well familiar with the presidential
favorite's principle of not being careless with words unnecessarily or for
trifling reasons have heard from Brussels the voice of Boris Nikolayevich
himself: "Since the preceding mandate was received by me under the USSR
Constitution...." The rest is according to the text.
Then why has the president, even though his friends and associates, as
he himself recently admitted in Nizhniy Novgorod, forbade him to speak on
this topic, spoken out anyway by resorting to such hackneyed "sign
The main reason is obvious. Yeltsin is seriously concerned about the
unusually early, albeit unofficial, "start" of the new political race. We
have not even ushered in the new year of 1998, the country is facing loads
of routine tasks, and politicians, having powdered their noses, have
already started emerging for the election parade. Moreover, among those who
are timidly, for the time being, tiptoeing toward the presidential seat
there are even people who are still claiming that they worship Yeltsin, but
How else can you explain the latest newspaper boom that has swept
Russia and the relentless struggle at the top for the right to influence
the electronic mass media? But Boris Nikolayevich wasn't born yesterday:
He knows from his own experience: Once election fever sets in, real work
ceases. Then let the "potential presidents" keep in mind: Yeltsin lived,
Yeltsin lives, and Yeltsin, you'd better understand, will live!
It is symptomatic that it is in the opposition camp that the
"Yeltsin-Yastrzhembskiy statement" has stirred up the greatest commotion.
It is quite possible that the statement was meant precisely for the
opposition in the first place. That same Duma could "run amok" at any
moment, and there is absolutely no point in dissolving it -- should
anything happen, the same individuals, if not even worse ones, would come
to Okhotnyy Ryad. Perhaps it might somehow be possible to outwit them: So
they would swiftly adopt the budget and run en masse to the Constitutional
Court to clarify what term Yeltsin "is facing" -- a third or, after all, a
Besides, it cannot be ruled out that the president, as he gets back
into good physical and intellectual shape, is himself starting to look
seriously at the calendar for the year 2000. And it will not be long
before, as happened in December 1995, he will appear before the people and,
narrowing his eyes cunningly and with his inherent modesty, start a
conversation straight from the heart: "Citizens of Russia, it has again
been suggested to me that I run for a second term as president. Well, I am
at a loss what to do...."
How Russia's constitution works in confidence vote
MOSCOW, Oct 14 (Reuters) - The State Duma, Russia's lower house of
parliament, is to debate a vote of no confidence in the government on
Wednesday. If it passes it, a showdown will loom with President Boris
Under the 1993 constitution, a no-confidence motion can be passed if it has
the support of a majority of the total number of deputies in the Duma. Thus
the votes of at least 226 of the 450 deputies are required.
The Communists and two parties which form a united front with them say they
have 215 votes. The liberal opposition Yabloko party, which backs a
no-confidence motion, has 46 votes.
If the motion is passed, the president has the choice of dismissing the
government or simply rejecting the no-confidence vote.
If the Duma expresses no confidence in the government a second time within
three months, the president must then either dismiss the government or
dissolve the Duma and call new elections.
The prime minister can also ask the Duma to hold a vote of confidence in the
government. If the vote is negative, then the president has seven days to
sack the government or dissolve the Duma.
The Duma has written into its internal regulations a provision saying that,
once the no-confidence procedure has been launched, a government request for
a confidence vote will not be considered until the no-confidence motion has
been voted on for a second time.
But government lawyers say this provision, aimed at keeping the initiative in
Duma hands, is illegal.
In the event of a no-confidence vote the constitution says the government may
offer to resign. The president can accept or decline the offer.
The other case in which the president can dissolve the Duma is if it rejects
his candidate for prime minister. Under the constitution, the president names
the prime minister but needs the Duma's approval for his candidate.
If the Duma votes three times not to accept his choice, the president names a
prime minister, dissolves the Duma and calls a new parliamentary election.
A newly elected Duma must be convened not later than four months from the
date the previous chamber was dissolved.
The president cannot dissolve the Duma on any grounds in the last six months
of his presidency, nor can the house be dissolved on no-confidence grounds in
the first year after its election.
Expert Outlines Russian NATO Counterstep Scenarios
Budapest Nepszava in Hungarian
October 9, 1997
[translation for personal use only]
Article by Katalin Halmai: "Russian Scenarios To
Counterbalance NATO Expansion"
Both in the East and the West, the prevailing opinion is that Russia
can do nothing to stop the impending NATO expansion to the East. The basic
document regulating relations with NATO is clear proof of acquiescence in
the decision, a document signed by Russian President Boris Yeltsin, NATO
General Secretary Javier Solana, and the heads of the sixteen NATO member
states prior to the Madrid summit. Although Moscow tried to explain the
document according to its own taste, primarily out of domestic policy
consideration, by claiming veto rights in NATO decisions, the document in
question does not contain anything like that. However, it does state that
Russia has the right to intervene in European security issues, and rational
political forces can regard this stipulation as a success nevertheless.
Just like the test of the pudding lies in its eating, the viability of
the treaty lies in what will be implemented, and how. The bilateral
Permanent Consultative Council, which meets on occasion, must actually work
out the concrete forms of cooperation and determine the issues in which
both sides have equal intervention rights. The aforementioned body held
its first meeting in New York on Friday last week, and both foreign
ministers called the meeting a success. Although [Russian Foreign
Minister] Yevgeniy Primakov failed to get the exact same rights for Russia
in carrying out joint peace-keeping actions, he succeeded in getting Russia
a greater role in the big power treatment of crisis areas.
Because it is unable to block NATO's expansion, Moscow is striving to
counteract this expansion and its effects, and is trying to hinder the
further expansion of NATO by making threatening statements or proposing
regional cooperation forms.
In a recent international conference held in Budapest, Andrey
Kortunov, a well-known Russian foreign policy expert, analyzed possible
Russian countersteps to the Madrid decision. The expert regarded most of
the emerging or ready ideas as utopistic and impossible to implement, and
he pointed out that Russia should strive to minimize the damage incurred by
NATO's expansion and make maximum use of the advantages in its treaty with
According to Kortunov, certain Russian political forces honestly
believe that they can shake the Western European and U.S. decisionmakers in
their resolution by means of a consistent propaganda campaign and
spectacular foreign policy actions, and thus influence the ratification
debate on NATO expansion, a debate due next year. In their endeavor to
achieve this, the aforementioned Russian political forces might try to
approach Turkey, a NATO country that occasionally blackmails the
integration organizations. However, according to moderate opinions, this
seems to be a rather impossible endeavor.
Kortunov regarded as slightly more realistic the efforts aimed at
deterring the states awaiting acceptance, primarily by referring to the
considerable expenses involved in NATO membership and the expected
difficulties in the decisionmaking process. According to Kortunov, however,
this scenario would not end happily for Moscow: These ill-willed political
intentions would easily turn the countries in question against Russia, and
this would lead to a long-term deterioration in bilateral relations.
But the Russian propaganda machine can target not only Eastern and
Central Europe; it can also target the NATO members themselves. Certain
political forces think that they can drive a wedge between the NATO members
by means of bilateral diplomacy, drawing their attention, for example, to
the extent the organization would weaken if it extended with weaker members
both economically and militarily. Even the possibilities inherent in the
NATO-Russian treaty, a treaty abundant in hazy formulations, could also be
used with good chances toward this purpose.
It is an old Moscow intention to make certain international
institutions and organizations confront NATO. The Kremlin has repeatedly
come up with the plan to make the OSCE the main guarantor of security and
stability in Europe, albeit without success so far. Although many of its
members think that it has a great future, this pan-European organization
cannot be compared with NATO, because of its limited military and political
However, the club of most developed countries, the G-7, to which Boris
Yeltsin was invited to its latest summit in Denver, is only a consultative
forum, and not a decisionmaking one and, thus, its competence cannot be
compared with NATO's competence. No matter how strongly they determine the
direction of global development, the decisions made at the G-7 summit are
not decisions that must be implemented.
Moscow has the biggest hopes from the CIS, the development of CIS
cooperation. However, the CIS members, and especially Ukraine, do not want
any military-defense alliance with Russia as a member. But deepening
cooperation with Belarus elicits opposition in Russia itself.
At a recent conference of Eastern and Central European states held in
Vilnius, Russian Prime Minister Viktor Chernomyrdin outlined a new security
model for the area stretching from the Baltics to the Black Sea. The
proposal aims at creating a "grey zone" that would stretch between NATO and
Russia. The proposal remained without any response, probably not
unexpectedly for Moscow.
According to Kortunov, many people think that the Kremlin should seek
allies and counterbalance against NATO expansion in the radical Islamic
world or in the dictatorial regimes. But getting closer to Iran, Iraq,
Syria, Libya, or North Korea involves serious danger for Russia itself, and
it would lead to complete international isolation. The Kremlin is clearly
entertaining great hopes toward deepening relations with China, but Beijing
is striving for balanced relations with both big powers, and it does not
accept the conflict deriving from upsetting this balance, at least not for
the moment. According to Kortunov, Russia's security is threatened from
the south and the east, and not from the west, but no moderate political
force will speak openly about that.
Andrey Kortunov, who regards every possible Russian countermeasure as
unrealistic, thinks that Moscow must now strive to achieve a uniform
interpretation of the bilateral treaty, to complete it with the concrete
program of NATO-Russian cooperation, and to ratify the Russian-U.S. Start
II treaty aimed at disarming the strategic nuclear missiles.
Chubays Says Russian Brain Drain 'Effectively' 'Stopped'
MOSCOW, Oct 9 (Interfax) -- As economic growth starts in Russia, an
explosion of information technologies in all spheres of life must be
expected, Russian First Deputy Prime Minister and Finance Minister Anatoliy
Chubays told Microsoft President Bill Gates in Moscow Friday.
Chubays said that the brain drain, a painful problem in Russia as
recently as two years ago, had effectively been stopped.
Russia's intellectual potential makes it possible to use information
technologies at every level, from the federal government to a firm
consisting of two people, he said.
A new generation speaking the language of computers is moving to the
fore in the country's political and economic life, Chubays said. "They are
Russia's hope and future," he said.
There are as many as 800,000 Internet users in Russia, Chubays said.
The two men discussed the protection of intellectual property. The
Russian government intends to attend to this problem, Chubays said. Until
recently the government had to concentrate on stabilizing the economy, he
said. But with stabilization under way, inflation curbed, reliable signs
of growth visible in the whole of the national economy as well as in
certain sectors and there is no going back on economic reforms, work can
start on protecting intellectual property and developing information
technologies, he said.
Gates said he thought that few jobs in the world were more complicated
than his, but Chubays' job was one of them.
Significant changes have occurred in Russia since his last visit to
Russia in 1990, he said.
At the start of the meeting Gates gave Chubays a copy of the latest
edition of his book on the impact computer technologies have made on
economics and society. Chubays said he had read the earlier edition and
would be happy to read the latest one.
The two men discussed interaction via the Internet. Gates
demonstrated a new version of a program that Microsoft has developed for
Chubays said he was an Internet user and believed that access to the
net provided a new degree of freedom in both accessing wide- ranging
databases and other sources of information and in terms of communication
with people, in particular those thousands of kilometers away, which is
especially important for Russia with its vast spaces.
In Soviet times this was unthinkable, he said. The computer network
makes one free by creating a true global information space, he said.
Chubays said he never missed the opportunity to work on the Internet
and did so almost continuously when he was vacationing.
In the last decade the computer has ceased to be just an applied tool
to become a source of new knowledge and an instrument of communication
which overcomes geographical, economic and political barriers, Gates said.
The two men found they used the same make of portable computer and
preferred a classic mouse over one built into the keyboard.
They talked in English.
Russian plays new foreign policy game in Europe
By Oleg Shchedrov
MOSCOW, Oct 14 (Reuters) - President Boris Yeltsin is shifting the focus of
Russia's foreign policy towards Europe in order to counter-balance uneasy
relations with the United States, political analysts and Russian media say.
But some of them warn the Kremlin leader against trying to undermine U.S.
influence on the continent as he tries to link bold political and market
reforms at home with establishing Russia as a new-look European power.
``We do not need an uncle from elsewhere,'' Yeltsin, in a clear reference to
Washington, said in an interview before last week's summit of the Council of
``We in Europe are capable of uniting ourselves to live normally.''
At the summit in the French city of Strasbourg, Yeltsin agreed to hold
regular three-way meetings with French President Jacques Chirac and German
Chancellor Helmut Kohl.
He also said he would back an international ban on landmines which is
favoured by European countries but rejected by the United States.
Such moves suggest Moscow is wary of Washington's wide influence in Europe,
and may be designed to drive a wedge between the United States and some
``There is an impression that the European factor is starting to dominate
Russian foreign policy,'' NTV commercial television's weekly analytical
programme, Itogi, said. ``In fact, all Yeltsin's initiatives had a strong
Since World War Two, Moscow's foreign policy has been largely focused on the
United States, the obvious leader of the Western world and its main rival in
the arms race.
Post-Soviet Russia initially stuck firmly to tradition, partly because it
sought U.S. backing to enter or cooperate with international financial
institutions, and partly because it wanted to be the heir to the Soviet
Union's superpower status.
But the honeymoon did not last, and new rifts opened between Moscow and
Washington in both politics and trade. A major source of tension was NATO's
decision this year to grant membership to some of Moscow's former communist
allies in eastern and central Europe.
Foreign Minister Yevgeny Primakov, who took office nearly two years ago, has
accused his liberal predecessor Andrei Kozyrev of putting all Russia's eggs
in one basket.
Primakov is careful to maintain ties with Washington, and it is not clear how
far Russia would go to risk upsetting them. But he argues Russia needs
stronger links with Europe and Third World countries, as well as the Far and
Middle East, to make its foreign policy more balanced.
``We are not talking with the West (as a whole), which is non-existent. We
are talking with separate countries and groupings, each of whom has its own
interests,'' a foreign ministry official said. ``This gives us additional
space for manouevre.''
But many Russian analysts have said Moscow's new affair with Europe is
fraught with political risks.
Alexander Bovin, until recently Russia's ambassador to Israel, warned the
Kremlin in an article published by the respected newspaper Izvestia that
there should be no illusions that European states would sacrifice their
relations with the United States for the sake of new friendship with Russia.
``In the foreseeable future, the U.S. military and political presence (in
Europe) is unavoidable,'' Bovin said.
He added that Moscow's attempts to build up strong ties with Europe at the
United States' expense could result in more political problems for the
``Europe is not the best place to try and teach 'friend' Bill. Irritation is
a bad adviser in politics,'' he said, referring to the habit of Yeltsin and
U.S. President Bill Clinton of calling each other by first names.
But Russian foreign ministry officials said media fears that Moscow's
rapprochement with Europe would upset relations with the United States and
even lead to a new Cold War were largely exaggerated.
``The biggest development of recent years is that we are now on the same side
of the street as the United States and Europe,'' said the foreign ministry
official, who declined to be named.
``There will be fresh tensions in future and Russia will use all means to
ensure its interests as other countries do, but that is something quite
different from a Cold War.''
Christian Science Monitor
October 15, 1997
[for personal use only]
Move Over Cola, Russia Wants Kvass
Melissa Akin, Special to The Christian Science Monitor
MOSCOW -- Vladimir Dovgan is on the front line of an intensifying fight
between Russia and the outside world. The battlefield: highway
billboards and commercial clips on TV.
"It's not a war of products that's going on in the world," says the
Moscow entrepreneur, the impresario of a growing movement to fight
foreign competition and boost Russian goods. "It's a war of
"People all over the world drink Coca-Cola," he says, citing a symbol of
foreign goods that were powerfully seductive to Russians in 1991, the
year the country was released from the consumer confines of the Soviet
Union. "But I think they're really drinking advertising."
Coke is seen as the quintessential American beverage, and "Drink Coke"
was more than a jingle to Russians: It was an invitation to taste
But today the flood of Coca-Cola and other imports has threatened to
drown native industries. And many Russians feel nostalgic for familiar
brands and resentment toward imports squeezing them out of the market.
"Buy American" is out in Russia. "Buy Russian" is in.
Advertising, which was nonexistent in Soviet Russia, is now a big
business here, and ad campaigns are playing on rising patriotism to sell
Russians on everything from stereos to chocolates.
Ad executives note that the main beneficiaries of the trend are members
of the food industry. For example, "Many of [the ads] are for sour-milk
products, like prostokvasha [a fermented milk drink], with those dear,
warm, familiar Russian names. Even I buy products because of that," says
Galina Savina, general director of the Moscow office of the Friedman and
Rose advertising agency.
Ivan the cartoon
A favorite example of patriotic advertising, cartoon character Ivan
Poddubny, has popped up on billboards all across the city to do for the
milk produced by Moscow's Cherkizovsky Dairy what Popeye did for spinach
by flexing his generous biceps and saying he owes it all to
Poddubny has a nostalgic appeal to Russians: He wears a telnyashka, the
striped T-shirt issued to all Russian soldiers, and twirls the thick,
curling whiskers that are the pride of Russian manhood.
His creators have said he is meant to represent a boyar, a member of the
ancient Russian nobility whose traditional accouterments are often used
to represent the glory of old Russia. It isn't just good milk, Poddubny
implies, it's the bounty of this ancient land.
Poddubny's popularity is a reflection of growing pride in things Russian
as well as the hope of "young people and some professional people for
stability in the economy," Ms. Savina says.
The trend has strengthened as the national economy itself begins to show
signs of revival, such as last week's assertion by Prime Minister Viktor
Chernomyrdin that for the first nine months of the year, industrial
output is up 1.5 percent, compared with a 4.5 percent decline for the
same period last year.
The "buy Russian" hook is so powerful that even some foreign firms have
taken it up: Sanyo electronics are now being marketed as "designed for
Russia," and Savina admits to buying Yeliseevsky-brand butter, a
namesake of Moscow's elegant, beloved Yeliseevsky grocery store, even
though the butter itself was made in Finland.
But recently, unlike Poddubny's biceps, this land has not been so
bountiful. Russia's declining industrial and agricultural output has
hurt the pride of many consumers, who boast that the country was
self-sufficient under the Soviet command economy and decry the
appearance of imports. For these Russians, the Coca-Cola and Snickers
bars for sale in every shop are a symbol of national economic malaise.
Dovgan's company purpose
"We understand that lots of enterprises are closing, and people are left
without work," Mr. Dovgan says. "They have no money to buy decent food
or educate their children. These people don't buy other products. If a
butter or candy factory closes, [its employees] don't have money to buy
furniture, clothes, and shoes, and those factories close. On a
subconscious level people have started to understand that they need to
buy Russian products because it means the future of the country."
Dovgan's eponymous company, which uses "Buy Russian" as an official
slogan, is designed to defend Russian enterprises against their wealthy
foreign foes by turning those competitors' own weapon - marketing -
"We put the question to ourselves: Could our beggarly little
enterprises, which are now barely alive, compete with big, powerful
corporations like Nabisco, Nestle, Procter & Gamble, Cadbury, the
biggest world corporations?" Dovgan says. "We saw that we needed to
think up an unusual approach."
That "unusual" approach: Spare the Russian enterprises the expense of
undertaking mass-marketing campaigns and let them produce.
Dovgan takes a 2 to 3 percent licensing fee. His corporation then puts
its trademark on goods produced by struggling Russian enterprises,
guaranteeing their quality and marketing them under the corporation's
umbrella advertising campaign.
He markets only products from firms that conform to his standards of
quality, and offers money back if customers are dissatisfied. He also
puts a hologram on every bottle and bag, like those on ATM cards, to
prove that it is an authentic Dovgan-approved item and not an imposter.
Dovgan's trademark - his face and signature - is one of the best-known
in Russia, and it adorns boxes of oatmeal, bags of rice, cups of coffee
creamer, and bricks of butter, a few examples of a spectrum of 200
Dovgan products made by 200 different producers.
"When we gathered the strength of these 200 companies into a single
fist, we found we could compete," Dovgan says.
'Better than Coke'
Some of Dovgan's products are traditional Russian foods, such as kvass,
a traditional fermented bread drink brewed for centuries by Russian
peasants, which is becoming a popular alternative to Western-style soft
drinks. He claims kvass is "better than Coca-Cola, according to the
But he also markets pâte, unseen in Russia until imports began flowing
in, and concedes that some foods novel to Russia, such as yogurt, have
made an indelible impression. Other new items are frozen vegetables and
dinners, which are growing in popularity, especially among young people,
and French cheeses.
"How on earth could our Russian cheeses possibly compare to French
ones?" asked one Mr. Movsiyants, shopping at Moscow's posh Seventh
Continent grocery store, which carries both Russian and imported goods.
Russian food has been praised by natives from Boris Yeltsin down to
babushki on park benches for containing few chemical additives, an
assertion that finds resonance with Russians who have concerns both
about the quality of imported goods - which can be spotty and is not
regulated by Russian law - and the quantity of preservatives those
imports are alleged to contain.
But, as the natives say, you can't argue with taste. And it may be that
national tastes win the day for many Russian firms, not marketing.
It has been said that patriotism is but the love of the foods one ate as
a child. "There are a lot of things that just don't exist in the West
that we have here," says Irina Muratova, a retiree shopping with her
husband at Seventh Continent, naming kefir, a buttermilk-like drink, and
tvorog, a slightly sour, softer version of cream cheese, both
traditional Russian breakfast and tea-time foods.
Sausages, milk, butter, bread, chocolates, and cookies are all beloved
staples of the Russian diet, and consumers frequently mention these as
items they prefer to buy locally.
"This is all very beautiful," says Mrs. Muratova, gesturing out over row
upon row of coolers containing brightly packaged frozen foods.
"But it doesn't taste very good."
>From Russia Today press summaries
14 October 1997
Oleg Sysuyev: Much of What We Propose Is Bad for the People
Speaking before Russia's business elite, Deputy Premier Oleg Sysuyev
outlined the shape of upcoming reforms in the social sector.
He said the reforms may prove to be hard for ordinary Russians.
In the health-care system, the government intends to change the existing
obligatory medical insurance, so that payments are made to medical
institutions for concrete treatment of a concrete person, instead of the
average number of patients.
In the education sector, expenses will be counted according to the
number of pupils.
Every school will become an independent institution, which may be
established by state or non-commercial organizations. Boards of trustees
will be arranged at each school and given broad powers. This will allow
the shadow money currently in the system to be brought to light, he
Regarding the pension system, the planned reforms will include a
transition to a savings principle, to be introduced gradually. Also, the
pension age in Russia (currently 60 years for men and 55 years for
women) will be increased step by step.
>From Russia Today press summaries
14 October 1997
Will Bill Be Angry with Boris over Europe?
President Boris Yeltsin's recent speech at the Council of Europe summit
last week seems to indicate a shift in friendships.
Yeltsin's friend Bill Clinton, the U.S. leader, seems to have been left
by the wayside, while Boris feels more at home with German Chancellor
Helmut Kohl or French President Jacques Chirac, said the daily.
Yeltsin wants to build a common European home, much like that suggested
by former French leader Charles De Gaulle or Mikhail Gorbachev. And this
European home leaves no room for the U.S., the daily said. Bill is
probably unhappy about this.
Yeltsin's latest initiative seems to be a way to respond to America's
European initiatives ostensibly aimed at Russia, such as NATO expansion,
said the daily.
Yeltsin is especially warming up to Chirac, knowing that there is a
traditional enmity between France and the U.S. Chirac might become a
wedge to keep the U.S. at bay in Europe.
Still, when push comes to shove, the daily concluded, the European
allies have always sided with Washington. They understand that they have
more in common with America than Russia.
Russia's ailing jails set for change, lack funds
By Peter Henderson
MOSCOW, Oct 14 (Reuters) - Russia's chief jailer promised on Tuesday that his
ministry would give up control of the nation's creaking, disease-ridden
prisons to meet European human rights standards -- but said that what was
really needed was hard cash.
The Justice Ministry, set to get control of the nation's criminals, said the
transfer would finish by the end of 1998.
The Interior Ministry's penal system chief General Vyacheslav Ovchinnikov
said tuberculosis and HIV infection were spreading rapidly in the prisons,
mostly built in the 17th-19th centuries, and that the system, overseeing more
than a million convicts, was a victim of Russia's economic trauma.
``We are at the barricades and we need help,'' he told a news conference.
``You may think that a quick transfer will solve the situation -- just the
opposite,'' he said.
Ovchinnikov said only 36 percent of the penal system's estimated financial
needs were being met. The incidence of tuberculosis and of HIV infection,
which causes AIDS, has doubled or tripled since 1993.
``Today the financial situation is difficult, and this transfer may be a bit
early,'' Ovchinnikov said, though he noted the crime rate in prisons had
fallen 2.5 times in five years.
But the Justice Ministry, which will take over the prison system from the
police as part of Russia's efforts to meet human rights standards supported
by the Council of Europe, said the change was simpler.
Justice Minister Sergei Stepashin told a separate news conference the
transfer of the system, which is semi-autonomous with its own budget, could
be done cheaply and completed by the end of 1998.
Stepashin also said he had approved an amnesty also promoted by the interior
ministry, which would free almost 500,000 convicts, mostly those on a type of
probation. That plan must be approved by parliament.
Russia joined the 40-nation Council of Europe, which promotes human rights
and democracy, in February 1996 and has agreed to phase out the death penalty
and to transfer control of its prisons to the justice ministry from the
An inter-ministry commission, which President Boris Yeltsin last week decreed
be set up, must forward a plan for the transfer to the government by December
1 of this year.
Interior ministry officials, however, were wary of European human rights
standards, which Yeltsin is eager to embrace as part of efforts to integrate
with the West.
Colonel Yury Zhdanov, deputy director of the interior ministry's foreign
cooperation department, told the Ovchinnikov news conference Russia was
working closely with the Council and had planned the transfer before Russia
joined the Council.
But he said Russia differed slightly from Western Europe.
``Our Russian mentality is not quite ready to embrace the 1,000-year-old
conception of rights of Europeans.''
Ovchinnikov said: ``We have our own experience and slowly will move to
>From RIA Novosti
October 8, 1997
SERGEI KALASHNIKOV: PRIVILEGES UGLY SIDE OF SOCIALISM
State Duma Committee For Labour and Social Policy
Chairman Criticises Reform Drive
By Trud's political news analyst Vitaly GOLOVACHEV
The committee for labour and social policy is one of the
State Duma's key structures which processes all bills with a
bearing on Russians' material standing - pensions, minimum
wage, allowances, etc.
The committee is chaired by Sergei Kalashnikov, 46, a
theoretician and practical researcher with a wealth of
experience. He is a graduate of Leningrad State University's
psychology department and holds an MPh degree. Head of the
social psychology departments first at the Krasnogorsk Plant
and then in the defense ministry. The president of a major
joint-stock company prior to his election to the State Duma.
VG: Why has the Duma rejected the package of social laws
only to exacerbate its strained relations with both the
government and the Kremlin? Do you think that the numerous
privileges should be preserved?
SK: I have said on more than one occasion and am
repeating: the practice is faulty, it should be discarded as
soon as possible. There are a thousand plus various privileges
in this country. In effect everybody enjoys at least one. There
is not enough money to sustain them all.
Social expenditures have approached a half of the federal
budgetary means, which is one hell of a lot. The majority of
the developed states cannot even imagine this state of things.
So why are the people becoming poorer? The thing is that we are
spreading the funds that we have real thin, in order to give
something to everybody. The result is bad indeed. The system
must be different: the aid should be addressed and delivered to
those who really need it.
VG: The stance of your committee is dubious, indeed: it is
demanding more social allocations and thus posing as a noble
champion of the people, but is not saying whence the money.
There seems to be a bad shortage of funds...
SK: Do you really think so? Yet a billion dollars is
clandestinely exported from this country. This is a lot of
dough. Or look at the wide-spread individual housing
construction. Take the huge shadow economy. The matter is not
that the finance ministry does not have the money, I think, but
rather that the ministry is impotent...
VG: Do you think the social situation in the country is
SK: It is improving in some respects and worsening in
other aspects. One positive process, I think, is the formation
of the middle class. Not because the poor are growing richer
(not in this country, not yet), but rather because people are
being ousted from among the affluent to the middle class.
In effect, there is no middle class as such in this
country. There are 31 million people, every fifth, who are
living below the poverty line, and 6 million rich people with
annual incomes in excess of 550 million. And then there are 110
million people in between the two classes, but their material
standing varies. Some are finding it hard to live until the
next pay day.
Do you think they are the middle class? If the rent and
utility charges were to rise tomorrow, some 20 million Russians
would fall under the poverty line.
This is why it is important to form a middle class
consisting of the more well-off whose incomes are higher than
the average wage. They are finding it hard to live among the
rich, but they can well form the backbone of the middle class.
Wide-spread poverty is a social phenomenon that worries me
the most. True enough, the number of those who have no money to
buy food with, rather than simply live below the poverty line,
has dropped somewhat. But the burden of the poor has become
heavier. Hunger was no problem two or three years ago; it is
today. Of course, this is not the kind of hunger that Ukraine
lived through in the 1930s. But having a meagre dinner every
other day is a realistic prospect for tens of thousands in
Russia - in the Pskov and Chita oblasts, the Maritime
Territory, and other regions. This is the country's worst
In terms of infantile mortality, this country is the third
from the bottom of the list: many African, Asian and Latin
American countries are well ahead of it. In general, the number
of deaths well outstrips the number of births in this country.
In the past four years, Russia's population has decreased by
over three million people (if one were to overlook
immigration). In the first seven months of this year, it has
dropped by 277,000 people. This is a tragedy.
VG: The opposition blames the authorities. But there are
quite a few examples to indicate that a family's plight is
explained by their passive attitudes. Do you think the rampant
mentality of the marginal groups who are finding it hard to
adapt to the market conditions is an explanation?
SK: I agree this is a bad problem. Many people are finding
it impossible to overcome their sponging attitudes, their
meekness and laziness. This circumstance has to be heeded in
the course of reforms. But still, I must say that the people
are slowly, and painfully, adapting to the market conditions...
VG: Would you want to return to socialism, back to the
kind of society that we have had in this country?
SK: Hell no. I don't want the kind of senility, the lies
that we had. We do remember that we used to be saying one
thing, thinking another thing, and doing a third thing...True,
the USSR did provide a degree of social welfare, but the
example of Sweden and other states indicates that there can be
an even better social system in a normal, democratic state.