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Johnson's Russia List
 

 

December 22, 1997   
This Date's Issues: 1447  1448

Johnson's Russia List
#1448
22 December 1997
davidjohnson@erols.com

[Note from David Johnson:
1. Fred Weir in Moscow on currency reform.
2. President Yeltsin's December 19 radio address on
intelligence services.

3. Chicago Tribune: William Rice, NAZDROVIA. RUSSIA'S LAVISH TRADITION 
OF THE ZAKUSKA TABLE TOASTS THE HOLIDAYS. (With recipes).

4. International Herald Tribune: Jim Hoagland, Wishful Thinking Disguised 
as a Russia Policy.

5 Business Week: Patricia Kranz and Carol Matlack, POP GOES RUSSIA'S 
HOT-AIR BALLOON. The crash has refocused attention on the gaping structural 
Russia must address.

6. The Sunday Times (UK): Mark Franchetti, Bury him, says Lenin embalmer.
7. Jamestown Foundation Monitor: CHERNOMYRDIN PROMISES INVESTIGATION INTO 
INFORMATION LEAK. (Re World Bank and IMF).

8. Reuters: Yeltsin to Return to Work Tuesday.] 

********

#1
From: fweir.ncade@rex.iasnet.ru
Date: Mon, 22 Dec 1997 19:13:56 (MSK)
For Hindustan Times
From: Fred Weir in Moscow
Subject: Scene-setter for big currency reform to kick
off in early January. 

MOSCOW (HT) -- Russia will replace its inflated and despised
old currency with new roubles worth a thousand times more,
starting in the New Year. 
But what seemed a simple and sensible reform last summer
looks more like a nightmare in the freezing depths of this
winter, amid growing public suspicion, galloping financial crisis
and fresh worries about the health of President Boris Yeltsin.
"The timing looks awful," says Vilen Perlamutrov, an analyst
at the independent Institute of Market Studies. "A currency
reform should boost confidence when all the economic indicators
are looking up.
"But this is shaping up to be a jolt of mass confusion just
when we're facing all kinds of other troubles."
The plan was approved last August, when Russia's long
economic nosedive appeared to be bottoming out, post-Soviet
hyperinflation had been tamed and a revivified Mr. Yeltsin was
back in the saddle after recovering from hazardous heart by-pass
surgery.
The money to be introduced at the start of January will have
three zeroes knocked-off, so that about six new roubles will
equal one U.S. dollar, instead of the current 6,000.
According to the scheme, new and old currencies will
circulate together for a transition period of one year, and
shopkeepers must post their prices in both. 
"This reform will make the rouble stronger and more
reliable," Mr. Yeltsin said at the time. "I'm sure the time is
coming when Russians will be proud of their rouble and not want
to exchange it for any other currency."
But critics call it a recipe for chaos. They say it's an
open invitation for merchants to jack up prices and warn that
government may seize the chance to pay off its bills with
newly-minted roubles, whose value will plummet as the money
supply increases.
There is fear that Russians, who have little faith in their
national currency at the best of times, will react by changing
their old roubles for dollars instead of the untested new money.
That could drive Russia's fragile financial system into collapse.
"Even in strong and stable economies a reform like this
would be difficult to carry off without the danger of panic,''
says Mr. Perlamutrov. "In Russia we're on the edge of a
precipice, and this could push us over."
There have been three previous full currency reforms in
Russia in this century, none of them a very encouraging
precedent.
"I remember when they changed the money in 1947 and again in
1961," says Serafima Aglayeva, a 71 year old pensioner.
"The first time ruined my father, because they made him
exchange his savings for new roubles at a terrible rate. The
second time, they just used it as an excuse to put all the prices
up."
Partial reforms in 1990 and 1993 are more recent, and
peoples' memories of them seem just as bitter. In those cases
government suddenly sprung the schemes on an unprepared
population, and gave them sharply limited time to
exchange their old bills for new. 
"There is no trust whatsoever among the public," says Mr.
Perlamutrov. "All their experience says that this will just be a
robbery."
The government insists that the reform has been well planned
and thoroughly publicized, and that it will be scrupulously fair.
"Everyone will exchange their old money for new roubles at a
stable rate, and will have plenty of time to do so," Mr. Yeltsin
said.
But a survey conducted by the independent Centre for Public
Opinion Research in November found that the majority remain
deeply sceptical.
Of 1,600 Russians questioned across the country, 40 per cent
said they expected bad consequences, and a further 21 per cent
said the reform was entirely unnecessary.
Just 13 per cent said they supported the measure. No margin
of error was provided.
Meanwhile, economic forecasts for January -- when the reform
will be in full swing -- have turned from sunny to stormy.
Global financial turmoil since the plan was adopted has
shaved 30 per cent from the value of Russia's stock market, led
to an exodus of foreign investors and pushed the rouble to the
brink of Korea-style collapse.
Mr. Yeltsin, whose health is all-important in Russia's
president-centred political system, has spent much of December in
a sanatorium with what the Kremlin called a cold but many fear
might signal something worse.
Nevertheless, the government says the reform will go ahead
as scheduled.
"The rouble denomination will be painless if there is 
no psychological fear," said Arnold Voilukov, first deputy
chairman of Russia's Central Bank.
"There is no way back. Hesitations are inappropriate, 
they may cause a substantial damage to the economy," he said.
"The new money will be in circulation on January 2."

*******

#2
>From RIA Novosti
Rossiiskaya Gazeta
December 20, 1997
PRESIDENT YELTSIN'S RADIO ADDRESS

Dear Russians, tomorrow, December 20, is traditionally
marked as Security Officers' Day, better known as Chekist Day.
On that day 80 years ago the All-Russia Extraordinary
Commission, or VeCheKa, was founded. Ever since it has changed
many names--NKVD, OGPU, MGB and KGB--and it left a deep and at
the same time tragic imprint on the destiny of this country.
Of course, our security service was born more than 80
years ago. Russia's intelligence service and secret police were
first mentioned in Tsar Alexei Mikhailovich's Law Code. 
Without them no state could defend its interests or simply
survive. This is, perhaps, the reason why the profession of
intelligence officer has always attracted interest and
commanded respect.
No wonder our young people were educated by the example of
the exploits of Nikolai Kuznetsov, Dmitri Medvedev, Rudolf Abel
and Konon Molodoi, who was the prototype of the main character
of the popular movie "Dead Season".
But not all chekists were heroes. There were alongside the
intelligence and counter-intelligence officers the punitive
bodies. Millions of Russians, including many security service
officers, fell victim to the cruel state security machine. They
suffered during the years of repression, went through the GULAG
prison camps and lost their families and Motherland. 
It is probably for this reason that there was such an
unforgettable episode in the history of the Russian chekists as
August 1991.
The whole world then saw the newsreels showing thousands
of people giving vent to their just anger with the "punishing
sword of the revolution" and hauling the statue of the first
VeCheKa chief Dzerzhinsky, dubbed the Iron Felix, off its
pedestal. 
But like the state, like its security services.
As I look back, I realise that we nearly overdid it when
we exposed the crimes committed by the security services, for
there were not only dark periods, but also glorious episodes in
their history, of which one may really be proud.
Let us recall some of them.
It is the intelligence service that warned the country's
leadership about the exact date of the Nazi invasion. And may
crucial battles of the Fatherland War were won largely thanks
to detailed and timely information. It is a generally
recognised fact in the world's intelligence community that the
information the Soviet intelligence officers received before
and during the war was something any intelligence service could
only dream about.
Much credit also goes to the special services for helping
this country develop its own nuclear weapons. There is no
denying the fact that by creating an atomic counterweight we
prevented a third world war.
And afterwards the intelligence service often provided the
country's leadership with timely information about crises in
various regions of the world. It helped and still helps it to
respond promptly to the threats of new wars and conflicts.
There are many more successes that make this country's
intelligence service proud. It is the specific nature of the
work of this service that does not allow us to speak out loud
about its victories even now--many years after the event. Nor
can we call by name all the participants in special operations,
even those who died a long time ago.
In 1991 there was a lot of debate about whether the new
Russia should have the State Security Committee. Some suggested
disbanding the entire organisation. However, it was clear that
it was vitally important for this country and that most of its
rank-and-file officers would support democratic reforms. That
is why we opted for the difficult path of reforming the KGB.
To protect the security structures from political
interference and prevent them from interfering in politics I
made the decision to divide this omnipotent service into
several independent structures. It was the only possible
solution then. It was the path by which most democratic states
came.
So now we have several independent services: the Federal
Security Service, the Foreign Intelligence Service, the Federal
Government Communications and Information Agency, the Federal
Guards Service and the Federal Frontier Service.
We have made deep personnel cuts and disbanded the
political police and the structures that fought against
dissidence. 
I can think of no other state structure that has been so
harshly overhauled.
The Russian Constitution today precludes the possibility
of re-emergence of the political police.
Special services will never be the "watchdogs" of party
ideologists or state leaders any more. They will never decide
for the people what they can and cannot should think and speak.
They will never persecute people for their views.
These services have different tasks now:
--protecting Russia's economic and other national
interests;
--defending human rights and civil liberties.
Despite the favourable changes that have taken place after
the end of the Cold War, there is still a hard-fought battle
being waged in the world. The chase for new technologies,
resources and political influence is intensifying.
Foreign intelligence services have not slackened their
activity in Russia. An attempt to pass information about combat
control of our missiles was cut short recently. If this
information had leaked abroad, the combat ability of our
missile forces would have been seriously undermined.
Terrorism poses a formidable threat for society today.
In recent years we have created special anti-terrorist
structures, which have since defused hundreds of explosive
devices and freed dozens of hostages.
The attempts to smuggle gems and precious metals from this
country continue. A short while ago the FSB seized a big
shipment of diamonds worth more than $25 million and 80
kilograms of industrial gold. As you can see, the country's
economic security is now becoming one of the top priorities for
our chekists.
Dear Russians, by tradition Security Officers' Day is not
celebrated with noisy festivities or lavish parties. 
Their activities are not talked much about. Such are the
laws of this service.
Unlike the past years when every child knew the names of
Dzerzhinsky, Yezhov and Beria, few people now know the names of
the present FSB Director, Nikolai Kovalev, and his colleagues
in the other security structures.
I think it's right. People mind their own business and do
not interfere in politics. The principles of democracy and the
work of the security bodies do not clash in this country.
True patriots of their cause are now working in our secret
services. They are not working for glory or awards. It will not
be an exaggeration to say that they are working for a cause.
They are working to ensure security of their country and
safeguard the peace of its citizens.
We must respect the work of the special services, which is
difficult and often heroic.
That is why I want to congratulate all special service
officers on their professional holiday and thank them for their
service, courage and dedication.
I think most Russians will join me in making these
congratulations. 
Thank you.

********

#3
Chicago Tribune
21 December 1997
[for personal use only]
NAZDROVIA
RUSSIA'S LAVISH TRADITION OF THE ZAKUSKA TABLE TOASTS THE HOLIDAYS
By William Rice, Tribune Food and Wine Columnist 

It's fantasy time: You dream a collection of remarkable Russians--real
and fictional--is coming to your home. Tolstoy is bringing Natasha,
Rimsky-Korsakov asks whether there is a piano, Mikhail Gorbachev is hoping
to meet Czar Alexander III. What can you serve that will make visitors from
such different backgrounds and eras feel comfortable?
In a word, zakuska.
What tapas is to the Spanish, what dim sum is to the Cantonese, zakuska
is to the Russians and residents of many of the republics of the former
Soviet Union. It is a ritual form of entertainment that all Russians--real
and fictional--appreciate and enjoy. It's also a form of entertainment that
suits the holiday party season in this country very well because the first
rule is that a group of congenial people in celebratory moods be brought
together and offered a tempting variety of food and drink.
The masterpiece of Russian cuisine, zakuska (defined as hors d'oeuvre or
small bites) offers an array of hot and cold foods, some purchased and
others prepared, of whatever degree of elaboration and quantity the host
can afford. This is no dry party: Between the taste treats vodka is
consumed. ("Don't gulp it down straight off!" warns Chekhov.)
Culinary historians speculate that the zakuska ritual began in the
country homes of wealthy landowners during the 18th Century. In an age
without telephones, fax machines or even paved roads, it was difficult to
predict guests' arrival times. Therefore a snack table was set up to keep
hunger at bay among those already on the scene and to allow the hostess to
gracefully offer new arrivals something to eat as soon as greetings had
been exchanged. Also, for those caught in the less-than-stimulating routine
of country life, gathering around the zakuska table extended the social
part of the day.
Initially, zakuska was merely a warmup for a multicourse dinner. But in
the 19th Century, after the custom had been introduced in Moscow's town
houses, the ostentatious would keep a table stocked day and night for
buffet dining. By the early 20th Century, zakuska--which had been codified
into an elaborate ritual that insisted on strictly symmetrical arrangement
of food, drink and tableware--lost popularity because the gentry who
practiced it found themselves labeled enemies of the state by Lenin's
revolutionaries.
But the Russian traits of hospitality, generosity, love of food, drink
and camaraderie guaranteed the survival of zakuska. Like dim sum, today it
often becomes an entire meal.
Chicagoans George and Valerie Samutin prepare a contemporary zakuska.
George, a mortgage banker, is a native of Moscow who grew up cooking meals
for his mother, a single working parent, and dreamed of becoming a chef.
And he is-executive chef of his home kitchen. His recipes are adaptations
of traditional fare as recorded in English in books such as "The Art of
Russian Cuisine," by Anne Volokh, and "Elena Molokhovets' Classic Russian
Cooking" in the 1992 Indiana University Press translation by Joyce Toomre.
But he is more likely to cook Italian or Chinese dishes than Russian,
except at party time. "It's so time consuming," he says. "I don't have time
for it on work nights."
Valerie is a native Chicagoan who majored in Russian history at the
University of Wisconsin. She and George met in 1987 during a student tour
of the Soviet Union. They were married two years later. Valerie cooks as
well, but leaves the Russian specialties to George and concentrates on the
important aspect of table arrangement.
The rule of Russian entertaining, especially with zakuska, George says,
is "no holds barred. Everything in the larder goes onto the table."
The categories to be filled in an ideal presentation include salted and
smoked fish; roasted fowl and meat; ham, cold cuts and sausages; salads of
vegetables, poultry and fish; poached meat and fish in aspic; pickled and
marinated vegetables and fruit; meat- or fruit-filled dumplings; dark and
light breads of various textures. Eggs and potatoes will be in evidence,
too, along with savory and sweet condiments. Then, one hopes, there will be
caviar in several forms, and a spectrum of plain and flavored vodkas.
Eventually the guests will turn their attention to fresh and preserved
fruits, pastries and tea.
Shopping is as important as cooking to the success of a zakuska party
because many of the foods to be served are prepared. (This allows hosts to
adjust the menu to suit time available for cooking.) Every Russian
considers himself or herself an expert on items such as caviar, smoked
salmon and sturgeon, flavored vodka as well as bread and tea. Inferior
versions of any of these products will be noticed.
In preparation for a party featuring these substantial snacks, the
Samutins first drive to Devon Avenue near Sacramento Street. They always
buy hachapuri, a cheese-filled bread from Georgia, at the Argo bakery, 2812
W. Devon Ave., and consume a fair amount of it on the way home. They also
look for pitted sour cherries, eggplant paste and poppy seed rolls at
Globus, 2909 W. Devon Ave., a rustic period piece of a store. But the
action this day is at Three Sisters Delicatessen & Gift Shop, 2854 W. Devon
Ave. (See shopping story this page.)
Once home, George takes charge of the kitchen (unremarkable with its four
burners, single oven and limited counter space) and quickly turns out a
filleted and reconstructed herring, a beet salad with walnuts, boiled new
potatoes and other treats. On an antique dumplingmaker that looks like a
Chinese checkers board, he uses a rolling pin to force through holes two
layers of dough that encase ground meat. These addictive dumplings, a
Siberian specialty called pelmeni, will be boiled, then dressed with
vinegar, sour cream and dill.
As George works in the kitchen, Valerie prepares the table and a
sideboard. A hand-embroidered cloth from Russia goes on the square table.
Bowls containing salads, marinated mushrooms and condiments are
distributed, the tomatoes and potatoes and breads appear in larger bowls,
and platters emerge covered with sliced smoked fish and poached veal tongue
in aspic. The chilled vodka and the glasses for it are put in place.
On the sideboard, Valerie marks out spaces for sweets. Then she arranges
cups and saucers and spoons of lacquered wood around the vividly painted
samovar, which will hold the hot water for the tea that will be sipped in
quantity toward the end of the evening.
Valerie offers some advice about vodka to novice zakuska partygoers:
"Exhale," she says, "then drink back a short shot-not all of it-and
inhale. Then remember to eat something. But before you drink again, you
must say `nazdrovia' (cheers) and go clink-clink with the glasses of those
close to you."
With that, let the party begin.

SIBERIAN MEAT DUMPLINGS (PELMENI)
Preparation time: 45 minutes
Standing time: 30 minutes
Cooking time: 4-5 minutes
Yield: About 70
Adapted from a recipe by George and Valerie Samutin.
3 cups all-purpose flour
1 teaspoon salt
1 large egg
3/4 cup cold water
3/4 pound ground beef
1/2 pound ground pork
2 medium onions, finely chopped
1 cup crushed ice
Salt, freshly ground black pepper to taste
1 large egg white, lightly beaten
4 tablespoons unsalted butter, cut into pieces
Sour cream mixed with chopped fresh dill and/or white vinegar to taste,
optional
1. Blend flour and salt in food processor fitted with metal blade. With
motor running, add egg though feed tube, pour 3/4 cup cold water in a slow,
steady stream, until dough forms ball around blade (add additional water if
needed). Transfer dough to floured surface and knead until smooth, about 2
minutes. Cover with towel; let stand 30 minutes.
2. Combine ground beef, pork, onions, crushed ice, salt and pepper in
large bowl, stirring until mixed.
3. Divide dough in half; shape into 2 balls. Keep 1 ball covered with
towel. Roll out dough on floured surface with floured rolling pin to about
1/16-inch thick, making sure it does not tear. With a cookie cutter or
glass, cut out 2 1/2-inch circles.
4. Heat 2 cups salted water in small saucepan to boil over high heat.
Place teaspoon of filling toward bottom of one circle. Brush edges of
circle with egg white. Fold empty half of dough over filling to form
semi-circle. Press edges firmly together with tines of fork to seal. Fold
the 2 ends of the semi-circle firmly together over filled portion (like a
tortellini); press against dumpling. Boil 1 dumpling, 4 to 5 minutes, to
taste filling for seasoning. Pelmeni should be well seasoned.
5. Fill and shape remaining rounds, arranging dumplings on lightly floured
baking sheet, about 1 inch apart. (At this point, pelmeni can be frozen.
Cover pelmeni with aluminum foil or plastic wrap; place in freezer until
frozen. Transfer to plastic bag.)
6. To cook pelmeni, heat 6 quarts salted water to boil in large pot. Drop
in half the pelmeni; cook, stirring occasionally, until dumplings rise to
surface and are cooked through, about 4 to 5 minutes. Remove pelmeni to
colander with slotted spoon; drain. Repeat with remaining pelmeni. Transfer
to deep serving bowl; toss with butter. Serve with sour cream, if desired.
Nutrition information per dumpling:
Calories ........ 45 Sodium ....... 40 mg Fat ....... 2 g
Carbohydrates .. 4 g Cholesterol .. 10 mg Protein ... 2 g

TART CHICKEN SALAD (SALAT OLIVER)
Preparation time: 15 minutes
Cooking time: 1 hour
Yield: 4 servings
Adapted from "Elena Molokhovets" Classic Russian Cooking."
2 whole chicken breasts
1 large onion, peeled, quartered
2 teaspoons salt
1/2 cup coarsely chopped sour dill pickle
4 boiled new potatoes, peeled, thinly sliced
3 hard-cooked eggs, peeled, thinly sliced
White pepper to taste
3/4 cup each: mayonnaise, sour cream
Leaf lettuce
2 tablespoons capers, drained, rinsed
1 tablespoon chopped fresh dill
Green olives, tomato wedges, optional
1. Combine chicken, onion and 1 teaspoon of the salt in large pan. Cover
with cold water;heat to boil, uncovered, over high heat. Skim off fat and
scum. Partially cover pan; lower heat to simmer. Poach chicken 10 minutes,
or until cooked through but still moist.
2. Transfer chicken to cutting board; remove skin and bones. Cut meat into
half-inch strips. (This may be done ahead. Cover; refrigerate chicken until
ready to finish salad.)
3. Combine chicken meat, chopped pickle, potato and egg slices, remaining
salt and white pepper in mixing bowl. Combine mayonnaise and sour cream in
small bowl. Add half of this dressing to chicken mixture; toss. Adjust
seasoning to taste.
4. Make bed of lettuce leaves on plate or small platter. Form salad into
pyramid shape in middle of plate. Cover pyramid with remaining dressing or
serve it on the side. Decorate salad with capers and dill. Add olives and
tomato wedges if you like.
Nutrition information per serving (with all dressing):
Calories ........ 615 Sodium ..... 1,920 mg Fat ........ 51 g
Carbohydrates .. 13 g Cholesterol .. 235 mg Protein .... 28 g

CHOPPED HERRING (RUBLENAIA SELIODKA)
George and Valerie Samutin prepare a contemporary zakuska in their Chicago
kitchen.
Preparation time: 25 minutes
Soaking time: 8-12 hours
Yield: 6 servings
Adapted from "The Art of Russian Cuisine," by Anne Volokh.
1 large salt (schmaltz) herring, about 3/4 pound
Milk
4 slices stale white bread, crusts trimmed
1/4 cup vinegar, mixed with 1 cup cool water1 medium onion, finely grated
1 medium tart apple, peeled, grated
1/2 teaspoon sugar
1 tablespoon vegetable oil
Parsley sprigs, chopped chives, olives
Sour cream dressing, recipe follows
1. Soak herring in milk to cover for 8 to 12 hours. Drain, skin and fillet
herring. Cut fillets into chunks. Soak bread in vinegar-water mixture for
10 to 15 minutes. Thoroughly squeeze out excess liquid.
2. Grind together fillets and bread in food processor or meat grinder but
do not puree. Add onion, apple, sugar and oil; mix well.
3. Transfer to serving bowl; garnish with parsley, chives and olives.
Serve with sour cream dressing, if desired.
Nutrition information per serving:
Calories ........ 250 Sodium ..... 605 mg Fat ........ 13 g
Carbohydrates .. 22 g Cholesterol .. 8 mg Protein .... 10 g

SOUR CREAM DRESSING FOR HERRING
Preparation time: 10 minutes
Yield: About 1 1/4 cups
1 hard-cooked egg, peeled, halved
1 teaspoon sugar
1/2 teaspoon mustard
1 cup sour cream
2 tablespoons vinegar
1. Remove egg yolk from white; mash with sugar and mustard until blended.
Add sour cream and vinegar; mix well. Transfer to bowl.
2. Finely chop egg white and sprinkle over herring. Pass dressing.
Nutrition information per 2 tablespoons:
Calories ........ 60 Sodium ....... 20 mg Fat ........ 5 g
Carbohydrates .. 2 g Cholesterol .. 30 mg Protein .... 1 g

BEET SALAD (SALAT IZ KRASNOY SVYOKLY)
Preparation time: 15 minutes
Cooking time: 1-1
1/2 hours
Chilling time: At least 1 hour
Yield: 6 servings
Adapted from a recipe by George and Valerie Samutin.
1 pound beets, stems, leaves cut away
3 large cloves garlic, minced
1/4 cup each, or more to taste, chopped: walnuts, prunes
3 tablespoons mayonnaise
Salt to taste
1. Heat oven to 375 degrees. Wrap each beet in foil; bake until tender, 1
to 1 1/2 hours. Let beets cool. Peel; shred.
2. Combine beets, garlic, walnuts, prunes, mayonnaise and salt in mixing
bowl. Toss until mixed. Chill until 15 minutes before serving.
Nutrition information per serving:
Calories ........ 130 Sodium ...... 95 mg Fat ....... 9 g
Carbohydrates .. 13 g Cholesterol .. 5 mg Protein ... 3 g

INSIDE A RUSSIAN DELI
Three Sisters Delicatessen & Gift Shop, 2854 W. Devon Ave.
(773-973-1919), looks to be just another storefront. But it is a valued
resource for many Russian residents of the Chicago area, including George
and Valerie Samutin, a young couple shopping in preparation for their New
Year's celebration.
True to its name, there are gift items here as well as food: nesting
dolls and plates and glasses and cups for tea from Russia and northern
Europe. There's also a distinctive aroma-a mix of smoke and sugar and
dill-that invades your nostrils at the simplest sniff.
Although the clerks speak English, shopping here is not easy. The
customers on a weekday afternoon, mostly middle-age or older with heavily
lined faces, gather across from the clerks behind the display cases and
steadily push toward the front. There is no formal line, no sequential
numbers, no personal space. It is disquieting, but seemingly inescapable
unless the store is empty.
One large display holds fish, cold- and hot-smoked salmon, smoked
sturgeon and sablefish, herring and mackerel, even cod liver.
Valerie Samutin points out the caviar, in containers of different sizes
and colors at wildly varying prices. The large, fat, cured herring sold
here are less salty than herring sold in jars and cans, she says.
Hanging behind the meat counter is an imposing variety of sausage. In the
glass case are a spicy cured meat called bastruma, a variety of cold cuts,
loins of smoked pork, short ribs of beef.
On shelves, waiting for the Samutins' inspection, stand condiments such
as tekemalli (a plum and herb spread popular with chicken and meat) and
adjika (a red bell pepper sauce for cured meats). There are jars and jars
of jams and a plethora of tea and truly delicious fruit juices. Valerie
picks out a jar of very pretty, small, whole pickled tomatoes and pickled
mushrooms from Poland.
For the famous Russian sweet tooth there are boxes and bars of chocolate
and a giant "napoleon" made with phyllo dough and pastry cream. There's
bread from three local bakers and fancy tortes sent from New York City.
Home bakers have a wide variety of flours to choose from, including
buckwheat and semolina, as well as seeds from poppy to sunflower.
A customer recommends the house-made pierogi. A cheese blintz purchased
and eaten on the spot is very tasty-and appreciated. There's no express
checkout at Three Sisters.

*******

#4
International Herald Tribune
22 December 1997
[for personal use only
Wishful Thinking Disguised as a Russia Policy
By Jim Hoagland The Washington Post

WASHINGTON - The year ends where it began, with the Clinton 
administration hoping against hope that an ailing Boris Yeltsin will 
recover and ride herd over an increasingly troubled U.S.-Russian 
relationship.
Bill Clinton's Russia policy, which began with bold strokes and 
strategic vision of an active partnership, has dwindled into wishful 
thinking about Mr. Yeltsin's hospital charts and what the Russian 
president will do when he recovers from his latest emergency 
hospitalization for a ''cold.''
On Iraq, NATO expansion, the leakage of Russian technology to Iran's 
missile program and other sensitive matters, President Clinton has had 
to appeal directly to Mr. Yeltsin during the past 12 months to sidetrack 
challenges from Moscow to American interests and goals in foreign 
policy.
It has largely worked, although the administration says it is not 
satisfied on the Iran missile problem. When push comes to shove, Mr. 
Yeltsin seems ready to order his ministers to do what Mr. Clinton seeks.
Administration officials say the Russian leader is responsive when he is 
forced to choose between bucking America and keeping the Western 
financial aid that cooperation with the United States unlocks.
A relationship between the world's two greatest nuclear powers that is 
driven by mild diplomatic coercion from Washington is a sorry substitute 
for the ambitious partnership that Mr. Yeltsin's commitment to 
integrating Russia into the West originally inspired.
Worse, it will not work for very long. The coming year is a time when 
the Clinton administration should broaden its approach to Russia, 
whatever the state of President Yeltsin's health. 
The dangers of strategic dependence on a single mortal are obvious and 
much discussed within and outside the administration, which seems to 
have no clear picture of who or what would follow an abrupt departure 
from power by Mr. Yeltsin.
Less discussed but just as important are the illusions about Russia that 
dependence on Mr. Yeltsin creates in Washington. For the White House and 
the State Department, he seems to occupy the position of the czar in the 
old Russian adage: ''If only the czar knew. He would not allow it.''
This has been another Moscow year of false starts and abrupt stops on 
deep fiscal reform, of sudden retreats on fighting corruption and 
correcting the errors of a privatization program that strip-mined 
Russian industry for the benefit of a privileged few. It is now hard to 
believe that this situation is accidental or due largely to Mr. 
Yeltsin's lack of knowledge or interest in economic matters.
He continues to shuffle reformist and status quo governing teams, 
inspiring lurches of change that are stymied when vested interests feel 
threatened. The West, through the International Monetary Fund, responds 
by halting loans for a while to squeeze Moscow on tax collection and 
other fiscal priorities.
But the fund resumes the loans when Mr. Yeltsin's position seems to grow 
shaky. It is about to pony up another $700 million payment to Moscow 
pretty much on that basis.
Who is coercing whom? Mr. Yeltsin needs the aid. But Mr. Clinton needs 
Mr. Yeltsin to have a semblance of a Russia policy. Important originally 
as a detonator of change, Mr. Yeltsin has now become a symbol of an 
illusory stability created at the top. He must be supported. His 
inability to pursue genuine, root-and-branch reform for more than six 
months at a time must be overlooked and even financed from abroad, in 
Washington's view.
There has been a strong argument for this view for much of Mr. Yeltsin's 
reign. But that reign is coming to an end, and so is the utility of that 
argument. If his current illness is far less serious than his quintuple 
bypass surgery and double pneumonia of last winter, it is far more 
serious than a cold, diplomatic sources say.
In any event, Russian politics no longer present a binary choice between 
the Communist Old Guard and Boris Yeltsin. Other faces and forces will 
dominate the next elections. Russian society has moved beyond the model 
of trickle-down stability that Washington assumes still prevails.
The integration of Russia into world organizations requires the 
development of a healthier, less corrupt and less manipulated Russian 
financial and tax system. Politics, too, must change, moving away from 
the autocratic rule that Mr. Yeltsin has refused to alter even though 
the price has been the creation of a void when it comes to succession.
These are the hard choices that Russia has to be encouraged to make. 
Relying on Mr. Yeltsin to deliver diplomatic goodies, while overlooking 
his willful refusal to work seriously for a system that does not depend 
on a czar-like leader, is shortsighted strategy. The goodies are certain 
to disappear when he does.

********

#5
Business Week
December 29, 1997
[for personal use only]
POP GOES RUSSIA'S HOT-AIR BALLOON (int'l edition)
The crash has refocused attention on the gaping structural woes Russia must
address 
By Patricia Kranz and Carol Matlack in Moscow 

Has Russia's long-awaited economic recovery been nipped in the bud? Just
when gross domestic product and industrial production were inching up after
six years of decline, foreign money is leaving amid jitters sparked by the
Asian crisis. Higher interest rates are smothering the expansion plans of
managers in heavy industry and the budding service sector. Inflation, which
Russia had managed to get down to a respectable 11% in 1997 (from 131% two
years ago) is again on the rise. Says Anatoly B. Chubais, Russia's First
Deputy Prime Minister: ''In the best scenario, [economic recovery] has been
set back three to six months.''
Whether they like it or not, Russians are now members of the global
economy. Decisions made by traders in Hong Kong, London, or New York affect
Russians' lives almost as much as decrees issued by President Boris N.
Yeltsin in the Kremlin. When investors fled all emerging markets, including
Russia, after the Oct. 28 global market crash, the Russian stock market
lost more than 40% of its value. Yields on Russian government debt jumped
from 17% to more than 50% during November. As investors took money home,
the ruble came under pressure. Russian banks, which had large portfolios of
stocks and bonds, were hit hard. Many banks had only started investing in
stocks in the spring and bought shares at peak prices. ''We will be more
cautious after this crisis,'' says Vitaly B. Malkin, president of Bank
Rossiyskiy Kredit, Russia's sixth-largest lender.
For most of 1997, foreign investors were infatuated with Russia. They
were impressed with the level of economic stability the government had
achieved and were counting on economic growth in 1998. And on an asset
basis, Russian stocks were among the cheapest in the world. Primarily
because of foreign money, the stock market rose 180% from Jan. 1 to Oct.
23. Russian debt was also hot. Foreigners snapped up $16 billion of
Russia's $50 billion Treasury market and more than $4 billion worth of
Eurobonds. But since investor mood has cooled, as much as $10 billion worth
of new Eurobond deals have suddenly been placed on hold.

SHAKY SCAFFOLDING. The crisis has refocused attention on Russia's
structural problems. Banks are still more interested in speculating than
lending. Almost half of commercial transactions are conducted in barter.
The bankruptcy law has no teeth. Most important, the government is spending
and borrowing too much and not collecting enough in taxes. In this
environment, who wants to take big risks in Russia? Says William F.
Browder, managing director of Hermitage Capital Management: ''Only allocate
an amount of money you can afford to lose.''
In November, Russian regulators got a hard lesson in just how skittish
investors are these days. Reluctant to push up the government's borrowing
costs, regulators intervened in the Treasury-bill market to keep yields
around 28%. But the ruble was under pressure, and 28% was not high enough
to compensate foreign investors for the currency and market risk. Nobody
was buying--and Korean and Brazilian investors, who were preoccupied with
their own money troubles, pulled out some $4 billion.
On Dec. 1, the government decided to stop intervening and made it clear
that it would do whatever was needed to support the ruble. That brought
some foreign investors back in, but T-bill yields remain above 30%. Indeed,
interest rates will be a key factor in the performance of Russia's equity
markets in 1998. If investors can get guaranteed yields of 35% in the
T-bill market, few will buy equities. Banks will put whatever money they
have in Tresury bills rather than loans. And if there's another crisis, all
bets are off. Says Harvey Sawikin, who manages two Russia funds for
Firebird Management LLC in New York: ''Interest rates are the tail of the
dog that wags the stock market.''
Still, barring another global meltdown, Russia stacks up pretty well
against other emerging markets when it comes to major economic indicators.
It still boasts moderate inflation and a balance-of-payments surplus. And
foreign direct investment in Russian companies has doubled this year.
Assets are tantalizingly cheap, too. The market capitalization of Russia's
top oil producers averages less than $1 per barrel of reserves--less than
one-fourth the figure for leading Latin American companies.
But getting reliable information on Russian companies is tough. Russian
accounting practices mask the barter transactions and unpaid debts that are
strangling many companies. Only a handful of companies have been audited
according to international standards. And managers aren't always friendly
to shareholders. Says J. Mark Mobius, president of Templeton Developing
Markets Trust: ''When the Russian market was booming, many investors had to
lower their guard and buy what was available and exciting at the time. Now,
there are many large companies in other emerging markets that are very
attractive and cheap.''
The safest bet in Russia is still the oil-and-gas industry, with its
rich assets and strong export potential. ''You can find outstanding
long-term value, particularly in these natural resources,'' says Jonathan
Garner, director of emerging-market strategy at Robert Fleming Securities
in London. But investors need to shop around more carefully because the
industry is in the throes of consolidation. Small publicly traded companies
are being merged into bigger holding companies under government
privatization rules, and shares in the smaller companies are often diluted
in the process. At the same time, many of these holding companies are now
part of bank-owned conglomerates that have the power to siphon off assets
at will.
Such tangled relationships make it difficult to assess oil companies'
performance. Only Lukoil, created several years before the other holding
companies, now operates as an integrated oil company in the Western sense.
Not surprisingly, it trades at multiples two to three times higher than
those of other Russian oil companies.
Electric utilities, another sector that created a buzz with investors
this year, now looks hazardous. Because utilities are legally barred from
cutting off nonpaying customers, most of them run up huge accounts
receivable or accept payments in barter. Fund managers such as Nancy
Herring of the U.S.-based Lexington Troika Dialog Russia Fund have sharply
reduced their utility holdings.

BARGAINS. Still, the savvy investor can ferret out some good buys. After
the steep drop, companies that were expensive two months ago are once again
bargains. Some regional telephone companies, for example, are trading at
low prices even though they appear to be poised for robust growth, with
local governments approving rate increases and vendors ponying up credits
for capital improvements. And auto maker Gaz has managed to build a
successful light-truck business while other Russian automotive companies
have floundered. It recently announced an $850 million joint venture with
Fiat to produce 150,000 Fiat sedans per year.
Some fund managers are looking closely at consumer-goods companies,
especially food and beverage makers that are holding their own against
imported brands. Danielle Downing, chief Russia equities strategist for
Salomon Brothers Inc. in London, is keeping an eye on startups such as
retailer Seventh Continent and food distributor Soyuzcontract in
expectation of their going public in 1998. ''You're starting to see
consumer-led demand,'' notes Downing.
Others prefer to wait on the sidelines. Firebird's Sawikin cashed out
most of his two funds' holdings shortly before the October crash, and he's
in no hurry to get back in. ''We're still looking for signs of improvement
in the macroeconomic fundamentals,'' he says. Until that occurs, Russia's
raging bull may have to stay in the corral. 

What the Pros Are Watching in Moscow
INTEREST RATES
They're key to Russia's performance in 1998. Treasury bond yields
exceeding 30% are bleeding money from the stock market, slowing the
economy, and swelling the already bloated budget deficit.
TAX RECEIPTS
Now comprising only half of targeted government revenues, they must be
improved. But the International Monetary Fund sees enough progress to let
it release $1 billion in loans.
DICEY STOCKS
Oil and gas is Russia's strong suit, but industry restructuring has
investors on edge. Even giant Lukoil isn't likely to appreciate much.
Barter deals and bad debts are hobbling other favorites, including Unified
Energy System. Phone companies may have better cash flow, and some
stock-pickers like auto maker Gaz for its strong management and foreign
investment.

********

#6
The Sunday Times (UK)
21 December 1997
[for personal use only
Bury him, says Lenin embalmer 
by Mark Franchetti 
Moscow 

ILYA ZBARSKI spent most of his working life ensuring that the legend of 
Lenin lived on in the flesh as well as the mind. Now, the man who 
preserved the corpse of the founder of the Soviet state says it was all 
a waste of time. 
According to Zbarski, Lenin should be taken from his marble mausoleum in 
Red Square and laid to rest with his mother in a cemetery in St 
Petersburg. 
"What was the point of it all?" said Zbarski, 84. "It was a mistake in 
the first place. Keeping him there is barbaric and out of keeping with 
the times. 
"Under Stalin it was too dangerous to think about such matters, but now 
I know I would not do it again." 
Such a devastating conclusion was not easy for Zbarski, who joined 
Lenin's secret team of embalmers in 1934. His father had been the first 
person to work on the body, and Zbarski left a flourishing career as a 
biochemist to spend 18 years keeping it a glowing peachy colour. 
"Seeing and touching the body for the first time was a frightening 
experience. I will never forget it," recalled Zbarski whose memoirs, In 
the Shadow of the Mausoleum, will soon be published in Britain. 
"I was used to working with corpses but this was different. This was 
Lenin I was touching - the father of the revolution. I was terrified. 
The slightest mistake and we would all have ended up in the gulag." 
For millions of Russians, particularly communists, Lenin's body remains 
an important symbol of national heritage. Boris Yeltsin's proposal to 
remove it from public display has prompted vigorous protests. 
Ever since Lenin was hurriedly embalmed after his death in 1924, the 
body has undergone twice-weekly checkups and a full chemical immersion 
for several weeks at a time every 18 months. It is lifted out of its 
sarcophagus and lowered into a tank filled with a special balsam made 
from potassium, glycerine and alcohol. 
In June 1941 Stalin ordered Lenin's body to be removed from Red Square 
and sent on a three-day train journey to the city of Tyumen, in western 
Siberia, to prevent it from falling into the hands of the advancing 
German army. 
Zbarski was commanded to prepare and accompany the body. A carriage was 
specially converted for the trip and he left Moscow at night with a 
platoon of Kremlin guards. 
Zbarski remained in Siberia until the end of the war, caring for the 
body in a temporary mausoleum. In 1952 he lost his job when his father 
was arrested on trumped-up spying charges. "Looking back on my time with 
Lenin, it was pointless work," said Zbarski. "I don't miss Lenin's 
body." 
The team of scientists that took over from him has seen its funding cut 
by 80%, but has developed a lucrative new market: embalming or 
cosmetically reconstructing the mafiosi to make them presentable for 
Russian Orthodox open-casket funerals. 
"We used to embalm our political leaders and now we do the same with our 
'New Russians' and our captains of industry," said Zbarski. "It is one 
of the ironies of Russia's history." 

********

#7
Jamestown Foundation Monitor
22 December 1997

CHERNOMYRDIN PROMISES INVESTIGATION INTO INFORMATION LEAK. Conflict
continues to rage within the Russian government. Prime Minister Viktor
Chernomyrdin has vowed to get to the bottom of last week's leak to the media
of letters sent to the government by IMF managing director Michel Camdessus
and World Bank president James Wolfensohn. (NTV, December 20) The two
letters were published in Nezavisimaya gazeta on December 18 under the
headline, "Why does Russia Need Its Own Government?" They showed the two
international financial organizations setting precise conditions that the
Russian government would be required to fulfill in order to receive
continued financial support. While an outsider might consider that
international lending institutions have a right and even a duty to set
conditions before lending large amounts of other states' money, the incident
has acutely embarrassed the Russian government, laying it open to
accusations by the opposition that it is at the beck and call of
international organizations. The resulting scandal has created an additional
fissure between the prime minister and his first deputy, Anatoly Chubais.
Chernomyrdin has ostentatiously countermanded decisions taken earlier in his
absence by Chubais to seize the property of two major tax laggards -- the
Omsk and Angarsk oil refineries. Instead, Chernomyrdin has given the two oil
companies until December 26 to come up with the large amounts of money they
owe the federal government in tax arrears. (NTV, December 20)

Meanwhile, the World Bank has given the go-ahead for the release of two
loans, totaling $1.6 billion, to Russia. The money is intended for use in
modernizing the Russian coal industry. (Itar-Tass, December 18) The loan
will be released in three tranches, with the first payment of $400 million
dollars expected to reach the Russian government some time this month. The
second and third tranches will be disbursed during 1998, but the exact dates
will be fixed later depending on Russia's progress in reforming its coal
industry and also on whether the Russian government is able to improve its
tax collection performance in line with the demands of the IMF. The money
will be used for mine closures, social programs for redundant miners, mine
renovation, and the opening of new mines.

*******

#8
Yeltsin to Return to Work Tuesday 
Reuters
22 December 1997

MOSCOW -- Russian President Boris Yeltsin has fully recovered from a chest
infection and will return to his Kremlin office on Tuesday, a presidential
spokeswoman said on Monday. 
"Tomorrow I'm going back to the Kremlin and to work. There are no traces
of the illness left," Itar-Tass news agency quoted Yeltsin as saying before
meeting Prime Minister Victor Chernomyrdin. 
The Kremlin spokeswoman confirmed the agency report. 
Yeltsin has been recovering from a cold and viral infection since Dec.
10 at the Barvikha sanatorium outside Moscow. 
The president, who had major heart bypass surgery in November 1996,
underwent routine cardiac checks on Friday. Doctors said his heart was
working normally and had not been affected by the cold and viral infection. 
Last Thursday, Yeltsin said he intended to return to work on Friday but
doctors urged him to stay at the sanatorium for several more days. 
His spokesman, Sergei Yastrzhembsky, said on Sunday the president was
considering starting a holiday shortly or early in 1998 but had not made a
final decision. 
On Monday, Yeltsin said he and Chernomyrdin had a lot of work to do.
"Victor Chernomyrdin and I have many issues to discuss," Russian news
agencies quoted him as saying. They did not elaborate. 

*******

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