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2 January 1998
[Note from David Johnson:
This message is being sent from my parents home in Petersham,
Massachusetts. Let me add to the personal message of December 31
the reassurance that the Russia List has NOT played a negative
role in my personal life or in that of my family. Quite the opposite.
So please don't worry that you have been enjoying a guilty pleasure.
1. Reuters: Yeltsin says Russia still undergoing growing pains.
2. Alan Fogelquist: Eurasia Research Center Web Site.
3. Izvestia: ARE WE LIVING BETTER NOW?
4. ARGUMENTY I FAKTY NEW YEAR POLL.
5. Christian Science Monitor: Peter Ford, A Russian Debunks The
6. RIA-NOVOSTI REVIEWS THE MAIN EVENTS OF 1997.
7. The Age (Melbourne, Australia): James Meek, Sir Humphrey shows
that mandarin is understood in Russia. (British TV in Russia).
8. Paul Goble (RFE/RL): Analysis from Washington: One Country, Two
9. Boston Globe: David Filipov, Anxiety is the bottom line. Weary
Russians face ruble redenomination.
10. Reuters: Russia will ring in New Year with old problems.
11. Interfax-Argumenty i Fakty: RUSSIAN POLITICIANS SUMMARISE 1997,
MAKE FORECASTS FOR 1998.]
Yeltsin says Russia still undergoing growing pains
MOSCOW, Dec 31 (Reuters) - Russia is still overcoming ``growing pains'' in
adopting to the market economy but the government will achieve its main goals
by the end of 1998, Russian President Boris Yeltsin said on Wednesday.
Russia ``is learning, almost on its feet, overcoming growing pains and the
fear of change,'' Yeltsin said in televised New Year's greetings broadcast
initially in the Russian Far East, whose main cities rang in 1998 eight hours
ahead of Moscow.
``Our state has a thousand-year history. But the new, democratic Russia in
1998 will be only seven years old,'' the president said. ``For a person this
is a time of schooling and study. It's the same for a country. It is now
acquiring new experience to regain its deserved place in the world.
``But let us remember: from all difficulties and troubles, Russia has
emerged even stronger, believing as before in itself and its mission.''
Yeltsin acknowledged that the Russian government, which a year ago had said
1997 would bring renewed growth to a country still suffering from economic
depression, fell short of its goals.
``I want also to note that we have not managed to carry out everything we
planned,'' he said. ``But I am sure it will turn out all right next year.''
Government officials now say that Russia should experience economic
1998 for the first time since the Soviet Union collapsed just days before the
end of 1991.
Yeltsin's New Year's greetings are broadcast just minutes before
each of the country's 11 time zones.
Date: Wed, 31 Dec 1997 07:30:46 -0800
From: Eurasia Research Center <email@example.com>
Subject: Eurasia Research Center Web Site
I want to send New Years Greetings to readers of Johnson's List. I also
want to thank David Johnson for providing us with an essential resource for
detailed information on recent developments in Russia. The articles
containing different viewpoints and interpretations of Russian trends and
events are especially useful.
This note is to let readers of Johnson's list know about the Eurasia
Research Center web sites, which have been designed to give visitors quick
links to incoming news and information on Russia and neighboring countries.
The links are frequently updated so that scholars, researchers, or
journalists interested in these countries can easily find some of the most
information rich web resources on the regions or topics of their interest.
There are also links to news on special topics such as Eurasian
geopolitics, economic reform, privatization, crime and corruption, and the
environment. The site is organized by country and region so that it is easy
to find information on Belarus, Russia, Ukraine, or Azerbaijan.
The URL for the Eurasia Research Center Web Site is:
The ERC also has a special web site dedicated to today's Iran.
I hope that you will find the site useful for locating information that
will help you in your research and analysis of problems in Russia and
Best Wishes to You All
Alan Fogelquist, PH. D.
Eurasia Research Center
>From RIA Novosti
December 27, 1997
ARE WE LIVING BETTER NOW?
The "Public Opinion" service headed by G. Pashkov, carried
out a telephone public opinion poll of 1,020 respondents on
December 19, 20 and 21.
The question asked was whether the outgoing year was good
or bad for you and your family.
Year 1991 1992 1993 1994 1995 1996 1997
Good 34.1 25.1 35.5 36.4 39.7 34.4 46.7
Bad 39.8 53.6 43.2 43.4 34.3 41.5 28.5
sure 26.1 21.3 21.3 20.2 26.0 24.1 24.8
>From RIA Novosti
ARGUMENTY I FAKTY NEW YEAR POLL
Argumenty i Fakty, No. 52
The year 1997 is coming to a close. We have bought all the
presents and are now anticipating the moment when, with a glass
of invariable champagne in our hands, we shall wait for the
Kremlin chimes to strike midnight. This will happen soon
enough, but now is the time for summing up the results of the
On the order from the AiF, the All-Russian Public Opinion
Study Centre (VTsIOM) asked people to give their opinion of the
outgoing year and tell about their hopes for the future.
The events which gladdened you
(no more than three)
Payment of arrears of pensions 29%
Stabilisation of the rouble,
a fall in inflation growth rates,
calm international situation,
a great diversity of interesting
newspapers and magazines, films
and TV programmes 15% (each item)
The emergence of a hope that
Russia will get out of the
Growing trust to Russia
in the international arena 9%
Growth of people's social
Signs of revival of the
national industry 5%
The number of those who are inspired by the "accelerated
pace of democratic reforms" in this country has remained
unchanged for several years running now (1%).
The number of people who find at least some joy in this
life has increased by 13 percent.
THE EVENT OF THE YEAR
(not more than three)
The final withdrawal of troops from Chechnya 44%
The air crash of the "Ruslan"
aircraft in Irkutsk 43%
The mine blast in the Kemerovo Region 35%
The announcement of the re-denomination
of the rouble in 1998 24%
The death of Svyatoslav Richter, Bulat
Okudzhava, Yury Nikulin 23%
Payment of arrears of pensions 21%
The scandal around A. Chubais'
authorship fee 19%
In 1993, the overwhelming majority of people in Russia
saw the liberalisation of prices as the event Number One of the
outgoing year; in 1994, the entry of troops into Chechnya and
the "Black Tuesday" (a financial crisis caused by a sudden
sharp rise in the dollar rate of exchange); in 1995 - the
capture of Grozny, the murder of Vladislav Listiev and a number
of air crashes in December, in 1996 - the crisis with the
payment of wages and allowances.
THE NEWSPAPER OF THE YEAR
Below, is the breakdown of the polled people's
1. AiF (Argumenty i Fakty) 15%
2. Komsomolskaya Pravda 9%
3. SPEED-INFO 8%
4. Moskovsky Komsomolets 5%
5. Trud 3%
WHAT WILL THE YEAR 1998 BE LIKE?
Very good 1%
Very bad 4%
I can't say
for sure 21%
Which means that the pessimists are in a minority in this
Christian Science Monitor
December 31, 1997
[for personal use only]
A Russian Debunks The Bard
By Peter Ford
MOSCOW -- It is difficult to imagine a landscape farther removed from
the bucolic, half-timbered English towns of Warwickshire than the grimy,
shoddily built district of Moscow where Ilya Gililov lives.
But here, in the cramped apartment he shares with his wife, cat, and a
great many books, Mr. Gililov has thrown himself into the world of
After more than 20 years of teaching himself to read English, poring
over Shakespearean texts, sending out envoys to examine original
manuscripts in foreign libraries, and combing through scholarly work, he
believes he has solved the ancient riddle of who really wrote the plays
and poems signed "Shakspere."
That question has puzzled literary figures - including Mark Twain and
Walt Whitman - for more than 100 years, and theories have abounded
naming Francis Bacon, Philip Marlowe, even Queen Elizabeth I, as the
personality behind the pen.
In his new book, "The Game of Shakespeare," Gililov, who is secretary of
the Academy of Sciences' Shakespeare committee, sets out in intricate
detective-novel detail why he believes the fifth Earl of Rutland and his
wife actually wrote Shakespeare's work.
The book, now in its second edition, has landed on the nonfiction
bestseller lists in Russia, and Gililov hopes it will soon be translated
and published in English.
"My book and my articles challenge British and American scholars to a
debate," he says defiantly. "Now the question has been posed, it has to
As far as mainstream academics are concerned, there is no question.
Theories that someone other than William Shakespeare of Stratford on
Avon wrote "Hamlet," the sonnets, and everything else in the
Shakespearean canon "are less respectable than ever," says Richard
Wilson, a Shakespeare scholar at the University of Lancaster in England.
Speculation abounds nonetheless. Just this year, American literary
critic Joseph Sobran wrote "Alias Shakespeare: Solving the Greatest
Literary Mystery of All Time" (Free Press), which makes a forceful case
for Edward de Vere, 17th Earl of Oxford.
Analysis and watermarks
Gililov, who lives on a modest pension and wrote his book on an ancient
typewriter, bases his theory on careful textual analysis, detective work
on ancient manuscripts, and some striking pieces of circumstantial
He discovered, by examining watermarks, that the only three extant
copies of a book containing one of Shakespeare's poems were published at
the same time, despite being dated differently on their frontispieces.
Revealing that mysterious discrepancy earned him a fellowship at the
Folger Library in Washington, the mecca for Shakespeare scholars, and
propelled him into the world of mirrors that he believes concealed
Shakespeare's real identity.
On his journey, he has uncovered some strange coincidences: For example,
the Earl of Rutland attended Padua University, and among his classmates
were two students named ... Rosenkrantz and Guildenstern. The Rutland
family's archives at Beauvoir Castle reveal that the fifth Earl's
steward paid Shakespeare 44 shillings in 1612, the year of Rutland's
death, after which the man from Stratford disappeared.
And while we do not know who paid for Shakespeare's memorial in a church
in Stratford, it was built by the same two brothers who made Rutland's
tomb, to a very similar design.
Gililov believes that Rutland and his wife hid behind the actor-manager
William Shakespeare, arranging a historic hoax by paying him to pretend
to be the author of their poetry. "This is the most grandiose piece of
all of Shakespeare's theater," he says. "This is a play for the ages
that we are still acting in today."
Gililov stands in a long and distinguished tradition of Russian
fascination with Shakespeare that persists to this day. Three different
productions of "Hamlet" are being staged in Moscow this season, and a
literary review is currently running a competition to find new
translations of Shakespeare's sonnets.
Competitors do not lack for examples to follow: Most of the great
Russian poets - most recently Boris Pasternak - turned their hands to
translating Shakespeare, and even Empress Catherine the Great produced a
Russian version of "The Merry Wives of Windsor."
The Bard's Soviet parables
Popularized here by the Romantics in the early 19th century,
Shakespeare's plays lived on through the Soviet era as parables. "During
Stalin's time it was impossible to stage plays about the tragedies
unfolding in front of peoples' eyes, so they went back to the classics
and gave them hidden meanings," Gililov recalls.
Gililov also fits right into a Russian tradition of conspiracy
theorizing in a country sadly accustomed to not being told the truth
about anything by its leaders. In Russia, reality lies behind the
official account, and this atmosphere feeds the search for somebody else
behind Shakespeare's name.
Indeed, the Rutland theory has a Russian pedigree. One of the first to
propose it was an émigré professor named Porokhovshchikov, and one of
its early adherents was Anatoly Lunacharsky, the first Soviet commissar
for culture. When the great Russian poet Anna Akhmatova visited England,
she refused to visit Shakespeare's memorial in Stratford, on the grounds
that he had had nothing to do with "Shakespeare."
Lunacharsky's political downfall, however, brought his ideas about
almost everything - including Shakespeare - into disrepute, and the
question became taboo. Soviet ideologists were delighted to promote the
image of an untutored genius emerging from the people to become one of
history's most brilliant figures.
Now, in the new atmosphere of freedom in post-Soviet Russia, Gililov is
spoiling for a fight. "Some of the things in my book are fully accepted,
and some are only partly proved. I am opening the discussion," he says.
Although he certainly won't find much acceptance among Western
Shakespeare scholars, some academics grant that William Shakespeare was
probably not solely responsible for the plays bearing his name.
"Most people now work on the assumption that all late 16th-century plays
were collaborations - more like what we would call a theater workshop
today," says Jonathan Sawday, an expert in Renaissance literature and
culture at the University of Southampton in England. "You should think
of Shakespeare as the character who put the whole process into motion."
But attributing all of Shakespeare's writings to someone else is reading
too much into ambiguous evidence, says Professor Wilson, quoting Antony
in "Antony and Cleopatra": "Sometimes we see a cloud that's dragonish."
RIA-NOVOSTI REVIEWS THE MAIN EVENTS OF 1997
31 December 1997
-- The Big Four met late in 1997 that was proclaimed the
year of reconciliation and accord by President Boris Yeltsin of
the Russian Federation. A round-table discussion was also held
several days ago. A new machinery of constructive interaction
between executive-power and legislative-power branches, as well
as leading socio-political associations for the sake of
elaborating agreed-upon approaches toward the solution of
pressing national problems was activated.
-- A team of young reformists headed by First Deputy Prime
Ministers Anatoli Chubais and Boris Nemtsov joined the Russian
-- Boris Yeltsin and Aslan Maskhadov signed a treaty on
peace and principles of relations between the Russian Federation
and the Chechnya-Ichkeria Republic in Moscow.
-- It was decided to issue new civilian passports to the
Russian Federation's citizens in place of former Soviet
THE ECONOMY AND FINANCES
-- The Russian Government decided to re-denominate the
rouble, which will "lose" three zeros after January 1, 1998,
thus replacing those "paper" millions and symbolizing the
stabilization of the Russian financial system and an economic
-- Voucher privatization was replaced with bids envisaging
the sale of leading Russian corporate stocks, e.g. those of
Norilsk Nickel, Svyaz-Invest and the Tyumen Oil Company. Such
bids have channelled substantial monies into the federal budget,
thereby making it possible to tackle acute socio-economic
problems. Contradictions between leading financial-industrial
groups were aggravated at the same time, with President Boris
Yeltsin stepping in and demanding that the so-called "banking
war" be stopped.
-- The Russian stock market was hit really hard by the
global crisis at Asian and other foreign stock exchanges. Russia
had to pay dearly for its integration into the global financial
system. However, the consequences of that crisis turned out to
be less serious than the pessimists predicted. The Russian
Cabinet has managed to stop the rouble from plunging, restoring
the confidence of international financial institutions and
obtaining IMF and World-Bank credits in full volume by late
CULTURE, SCIENCE AND PUBLIC LIFE
-- Moscow marked its 850-th anniversary, which became an
outstanding international event, highlighting the Russian
capital's tremendous potential as one of the world's biggest
-- The Culture state-run and non-profit TV channel was
opened, thus making it possible to once again revive and expand
those rich traditions of Russian culture and the arts within its
-- Russia's problem-ridden Mir orbital station continued
its spectacular space odyssey that was more thrilling to watch
than any science-fiction movie. The unlimited potential of
international space exploration was displayed during the Mir
DISASTERS, NATURAL CALAMITIES
-- This country was shocked by terrible disasters, such as
an explosion at Zyryanovskaya mine near Novokuznetsk (Kemerovo
region), air crashes in Irkutsk, near Sochi and Naryan-Mar and
calamities in southern Russia. All of them claimed dozens of
lives, inflicting tremendous material damage.
-- Presidents Boris Yeltsin and Alexander Lukashenko signed
a treaty dealing with the Russian-Belarussian union.
-- President Boris Yeltsin of Russia and his Ukrainian
counterpart Leonid Kuchma signed a treaty on friendship,
cooperation and partnership, completely settling the problem of
the Black Sea Fleet's division.
-- Russia played an important constructive role in settling
various conflicts on post-Soviet territory, including those in
Tajikistan, the Dniester area and Trans-Caucasia.
RUSSIA AND THE WORLD
-- The founding act on mutual relations, cooperation and
security between Russia and NATO was signed in Paris.
-- President Boris Yeltsin attended the G-7 summit in
Denver, Colorado. That summit heralded Russia's admission as a
full-fledged member into that elite club of the world's leading
-- Russia was also admitted as a full-time member into the
Paris Club of creditor nations and into the Asia-Pacific
Cooperation Council, signing a package of debt-rescheduling
agreements (as regards former Soviet debts being owed to the
biggest foreign commercial debts) with the London Club.
-- Russian President Boris Yeltsin and Japan's Prime
Minister Ryutaro Hashimoto met for their "no-neckties" summit
near Krasnoyarsk, reaching an historic agreement to the effect
that a bilateral peace treaty should be concluded by the year
-- Russia made an important contribution to settling the
crisis around Iraq. Moscow's energetic diplomatic moves made it
possible to prevent yet another sharp aggravation of the
-- An international consortium for producing and exporting
Caspian oil was created with Russia's participation.
The Age (Melbourne, Australia)
31 December 1997
[for personal use only]
Sir Humphrey shows that mandarin is understood in Russia
By JAMES MEEK,
A tale of skulduggery, hypocrisy and broken promises at the highest
level, set to unfold on Russian television on New Year's Day, would
hardly raise an eyebrow among a public used to lurid exposes of Kremlin
scandals, except for one detail: the minister and civil servant involved
Russian bureaucrats are expected to send their Mercedes drivers home,
switch off their mobile phones and sit glued to the box on Thursday
night as the first episode of Da, Gospodin Ministr - better known as the
BBC's Yes, Minister - offers a course in mandarin-speak and realpolitik
The backhanders are seats on government agencies, not brown envelopes;
the secret deals are stitched up in gentlemen's clubs, not saunas; and
the pedigrees are Oxbridge rather than Soviet Communist Party. But
Russian television chiefs find something oddly familiar about it all.
"The BBC were doubtful whether it would suit our audience in Russia. But
I'm absolutely convinced it's going to work," said Mr Alexander Akopov,
head of programming at Russian TV, which will beam the sitcom to most of
Russia's 147 million viewers.
"We do have something in common, after all, and I don't think the
bureaucratic machine's been shown in action better anywhere." Russian TV
hired a team of translators, comedy writers and half a dozen actors to
dub the sparring between the civil servant Sir Humphrey Appleby (Nigel
Hawthorne) and the minister Jim Hacker (Paul Eddington).
"I've no doubt that the main audience for the program will be among the
civil servants themselves," Mr Akopov said. "They'll recognise
themselves, they'll recognise their classic apparatchik tactics, and
they'll laugh louder than anyone."
Despite the popularity of Benny Hill and Mr Bean, dialogue-rich British
situation comedies, from Fawlty Towers to Absolutely Fabulous, have not
been hits in Russia, because of cultural incomprehension and poor
But Russian TV believes it has the right ingredients this time. It has
even persuaded the British ambassador to Moscow, Sir Andrew Wood, to
record an introduction.
The chief script editor, Mr Konstantin Naumochkin, said aspects of
British government that would have made no sense to Soviet viewers had
now become part of Russian life.
"Five years ago the words `tax inspector' wouldn't have meant anything
to a Russian. Now they do." - Guardian
Analysis from Washington: One Country, Two Foreign Policies
By Paul Goble
Washington, 29 December 1997 (RFE/RL) -- Conflicting statements by
Russian President Boris Yeltsin and his foreign minister, Yevgeniy
Primakov, concerning the state of relations between Moscow and the West
raise some questions about Russian foreign policy intentions in 1998.
In his New Year's messages to foreign leaders, Yeltsin said that
Russia's inclusion in the G-7 group of major economic powers -- which
now becomes effectively the G-8 -- and progress on disarmament were
evidence of "effective Russian-American cooperation."
But in his year-end assessment, Primakov adopted a very different tone.
Speaking to a press conference last Tuesday, the Russian foreign
minister suggested that Moscow's effort to form a strategic partnership
with the West had failed.
He even suggested that the idea of such cooperation has "lost its luster
with time" and that "such ties had started turning into those between
patron and client," a relationship Russia could never find acceptable.
And Primakov said that Russia not only remained opposed to any eastward
expansion of NATO but was actively considering the extension of Russian
security guarantees to those countries in Central and Eastern Europe not
offered membership in the Western alliance.
Despite coexisting in the same government, the two men have often been
at odds in the past on a wide variety of foreign policy issues. But
seldom has the distance between the two been so great on an issue of
fundamental importance. And that raises three interrelated questions:
First, does this difference between Yeltsin and Primakov presage a break
between the two? Second, is this split simply a tactic designed to
compensate for Russia's current weakness? And third, what does this
difference portend for Russian foreign policy, especially if Yeltsin is
incapacitated for significant periods of time during the next year?
In virtually any other country, a public division this deep between the
president and his top foreign policy aide would presage the rapid
departure of the latter from office. No president with executive
responsibility for foreign affairs could be expected to tolerate what
must appear to other leaders as open insubordination.
One explanation for Primakov's continued survival is that he reflects a
part of the Russian political spectrum that Yeltsin cannot or will not
challenge even if he personally disagrees with it. Yeltsin appointed
Primakov to placate the nationalists in the Russian parliament and the
Russian population; he may not be able to fire him even if he wants to.
If that interpretation is correct, Primakov may be able to continue in
office for some time. A second interpretation is that he is in trouble
and that he is speaking out now precisely to drum up support for himself
among his traditional allies. If that is the case, Russia may have a new
foreign minister sooner rather than later.
But yet a third interpretation, increasingly heard both in Moscow and
the West is that this public disagreement is simply a clever tactic,
with Yeltsin playing the part of the sympathetic good cop while Primakov
plays the bad cop.
According to that scenario, the two men have agreed to their assigned
roles with each gaining as a result. Yeltsin can approach the West as a
friend with the not so implicit warning -- the voice of Primakov -- that
another and less sympathetic Russia is possible if the West does not
give him what he wants.
If that is the case, the two men have more in common than a superficial
reading of their speeches might suggest. And no one should expect a
fundamental change in the direction of Russian foreign policy anytime
But even if the two men are playing these roles -- and that is far from
certain -- they do have very different ideas at least on the basis of
their public remarks. And that in turn raises the issue of just where
Primakov might take Russian foreign policy if Yeltsin is incapacitated
for an extended period as has often been the case in the last year.
If Yeltsin were to pass from the scene, a new Russian government might
decided to replace Primakov or alternatively to back him fully. But if
Yeltsin is simply not in full control of the situation, Primakov may be
in a position to act ever more independently.
That could have the effect of making Primakov statement this week a
self-fulfilling prophecy -- and also of undermining any chance for
Yeltsin's more hopeful one.
31 December 1997
Anxiety is the bottom line
Weary Russians face ruble redenomination
By David Filipov
MOSCOW - Olga Nikolayeva just got her telephone bill and she is ready to
The unemployed aerospace worker does not make a lot of long-distance
calls - her bill is for 10,500 rubles, which is about $1.80 according to
today's exchange rate. What she is frightened about is tomorrow, when
the government issues new rubles with three zeros chopped off. This
means that one US dollar equals about six new rubles instead of 6,000
''Does that mean my bill is worth $1,800? How am I going to pay that? Am
I going to be ruined, again?'' Nikolayeva asked. To find out, she went
to her local bank, where Russians pay their phone bills. No luck there -
the bank is closed until Jan. 5.
Nikolayeva need not worry, at least about the telephone bill. The
government has promised that new and old currencies, which look the same
except for the zeros, will circulate together for one year. All she has
to do is pay her phone bill using 10,500 in old banknotes.
But her confusion about the change in the ruble epitomizes the mood here
as reform-weary Russians brace for what they fear will be another
painful episode in their six-year post-Soviet odyssey.
Confidence in the local currency, never high in the best of times, has
plunged again. Uncertainty about what will happen next is a constant in
a country whose prime minister, Viktor S. Chernomyrdin, likes to say,
''We wanted things to turn out well, but they turned out as they always
Long lines at banks and currency exchanges indicate that people are
withdrawing their money in dollars and stashing them under mattresses.
Since the 1991 Soviet breakup, Russians have protected their assets by
keeping them in dollars. One newspaper recommended that people make big
purchases before the new year because money next year will be in short
Other analysts have warned of a new round of inflation. They predict the
money supply will double when the new bills arrive. This, in turn, will
force down the value of the ruble and push Russia's fragile financial
system to collapse.
Still others, including a number of people interviewed for this story,
are convinced that the redenomination was merely a ploy by the
government to raise prices.
''Mark my words, adventurists and slimeballs will make money on this,''
Nikolayeva said. ''This is the story of our country. It's easy to trick
us because everyone is walking around confused.''
No one anticipated this gloom when President Boris N. Yeltsin announced
the currency redenomination last August. At the time, Russia appeared to
have reached the bottom of its economic fall. Inflation that once topped
2,600 percent was down to 12 percent and the ruble, which had plummeted
for years, was holding firm.
The plan to lop off zeros appeared to be a vote of confidence in the new
stability of the currency. It also loomed as a potential political coup
for Yeltsin, who could claim to have restored prices to pre-reform
But the global financial upheaval that erupted after the plan was
adopted has shaved 30 percent from the value of Russia's stock market.
Foreign investors, reminded once again of Russia's volatility, have
pulled out, putting added pressure on the ruble.
To avoid a collapse similar to South Korea's, the Russian Central Bank
has raised interest rates on its treasury bills to attract back foreign
investors. The plan has stemmed the ruble's slide, but it could put even
more pressure on the financially strapped government.
In the eyes of ordinary people, says Julia Shvets of the
Russian-European Center for Economic Policy, redenomination has ''added
to the general confusion and uncertaininy about what is going on in the
economy. Right now, to throw a currency reform into this mess looks like
very bad timing.''
Russian Central Bank officials have tried to calm the public by noting
that similar redenominations have occurred in Poland and Ukraine without
any tangible negative effect on those economies. And the officials
remind people that the introduction of new US $100 bills in Russia last
year went smoothly, despite widespread fears of disaster.
But many Russians are not buying the argument that what works for the
dollar and the zloty can work for the ruble. This skepticism stems
largely from the country's stormy recent history of confiscatory
currency reforms. In 1991, people were given only a few hours to
exchange their old money for new notes. That rush caused panic and
erased the savings of those who kept their money in cash.
Russians also remember the early years of market reforms, after the
Yeltsin government lifted Communist-era price controls in 1992. In the
resulting hyperinflation, lifetime savings in bank accounts shrunk
overnight. Nikolayeva's family had 9,000 rubles in an account, which in
1,990 rubles was enough to buy a car. Today, 9,000 rubles buys a
''Russians are tired of sudden upheavals and most of all want stability,
and therefore react badly to any changes in their daily life,'' said
Boris Zhukov, a commentator on social issues for the news magazine
Itogi. ''Any actions by the state toward the national currency makes
average people think, in the best-case scenario, of lines and hassles,
and in the worst, of huge new losses in their personal wealth.''
To fight skepticism, the government has blanketed the airwaves with
advertisements in which celebrities describe the change as a harmless
step that will simplify daily life. ''It's the same money, just without
all those zeros that we're all tired of anyway,'' says actor Anatoly
Kuznetsov in one ad.
The campaign has had some effect. Weekly surveys from the Public Opinion
Foundation, a respected Moscow-based pollster, have shown a slight drop
in Russians worried about the upcoming changes.
Still, about one in four Russians thinks that the reform will trigger
new financial disasters. And many of those who claim not be be worried
may still privately harbor concerns. Another question in the weekly
surveys asks participants about the attitudes of people they know who
support redenomination. The most common answer is, ''I haven't met
''Those polls miss the point,'' says Valeria Avdeyeva, who sells baked
goods from a table in a Moscow outdoor market. ''If people aren't
worried about the redenomination it's because nobody has any money. How
can you be worried about what will happen to something you don't have?''
Asked whether she intends to accept old rubles after Jan. 1, Avdeyeva
said, ''I'll see after the new year. Who can say what will happen?''
Russia will ring in New Year with old problems
By Peter Henderson
MOSCOW, Dec 31 (Reuters) - Russia scraped up enough money to settle accounts
with millions of workers at the end of 1997 but a bright new year will offer
grand new opportunities to pile up new debts, economists said on Wednesday.
``The fiscal hole is still there,'' said Dan Lubash, emerging markets,
director at Merrill Lynch.
Despite clear indications the economy is finally growing after years of
decline and stagnation, Russia's dysfunctional tax collection system, bringing
in about half the targeted receipts for the year, has not been fixed,
Prime Minister Viktor Chernomyrdin and his reform-minded lieutenant Boris
Nemtsov boasted the government had sent public sector workers 14.5 trillion
roubles ($2.4 billion) by year-end, meeting President Boris Yeltsin's promise
to pay wage arrears.
``The most important result of 1997, concerning all Russians, is that we
finishing the year without any wage arrears,'' Chernomyrdin was quoted by
Interfax news agency as saying.
Many economists took a longer term view.
"My suspicion is this is a one-time payment,'' Lubash said. ``This is going
to be an ongoing problem.''
Russia is now much better off than what it has been over the last eight
It feels confident enough about inflation to redenominate the rouble from
January 1, lopping off three zeroes to establish a rough rate of six to the
``The Russian economy is fundamentally healthy,'' said Tuomas Komulainen,
chief economist at Moscow brokerage CentreInvest Securities. ``There are no
fears of currency crisis, inflation is low, current and trade accounts have
Russian domestic debt prices which plummeted in November have
To some Russia's world-leading equities market, which lost more than 40
percent of its value in October and November but still finished the year up
almost double on 1996, looks cheap.
``Russia looks attractive compared to other emerging markets,'' said
Bond, who heads Deutsche Morgan Grenfell's Russian research.
The 1998 draft budget working its way through parliament is much more
realistic than the 1997 plan, Bond said, though he added revenue targets for
the new year were still optimistic.
But the broadly positive outlook is not enough to protect Russian
the turmoil shaking the rest of the globe.
``Russia is not sufficiently independent to ignore what is happening in the
rest of world,'' Bond said, pointing to turmoil in Japan, which had heavy
emerging market investment.
Russia has performed best when United States markets have been steady, he
``Investors should keep their focus on the way developments in Japan affect
Lubash said Russia faced at least two years of fiscal troubles as it
straightened out tax collection problems and hopefully implemented a new tax
code in parliament.
Yeltsin said on Tuesday he had expected a better year and called for
``considerable improvement'' in 1998.
Lubash said foreign investors who this year poured money into cheap Russian
company shares would take harder looks before handing out the cash that will
spur further growth.
Like Yeltsin, investors will look for results, he said.
``People are going to look for performance.''
($ - 5,980 roubles)
>From RIA Novosti
Interfax-Argumenty i Fakty, No. 1
RUSSIAN POLITICIANS SUMMARISE 1997, MAKE FORECASTS FOR 1998
Ivan RYBKIN, Security Council secretary:
The coming year should mark a turning point in many
respects. Hopefully, this country will see the end of the
economic slump and the beginning of growth in the economy,
which means that those who work, who create real values will
find life easier. More people will realistically live a worthy
life and hopefully see the fruit of the reform in their
But there will be no further progress of our reforms
without a decisive transformation of land relations in this
I am very much concerned over the fates of the military,
officers and privates alike. A decisive military reform has
finally been launched on the basis of the national security
concept and the military development programme endorsed by the
President. The common task for all is to make sure that not a
single retired officer should find himself outside the flow of
life, to prevent a repetition of the 1959 mistakes.
I would like to see a very important political objective
become a reality in 1998. I mean concord between the various
political forces and in the ruling elite, I want to see all
co-thinkers rally behind the President, I want to see the
socialists and the liberals to come to agreement.
In the years, which now seem so distant, when I was
teaching in Volgograd, my colleagues and me, who were so very
different and had both Centrist and Rightist convictions, we
were united primarily by the national interests of this
country. The correctly understood interests, the love of the
country - free of nationalism, chauvinism and gung-ho spirit
which can only spoil everything - can help consolidate
Today, Russia is doomed to attaining concord. I want this
to happen as soon as possible, preferably in the new year.
I sincerely wish all the best to every home. Let us
remember that we are repairing our common home and that all the
reforms are expected to work for the good of every tenant.
Vladimir RYZHKOV, deputy State Duma speaker from the Our
Home Is Russia faction:
In a nutshell, the main result of the year is economic and
political stability. In the economy, the GDP has grown, for the
first time in the past few years, if only by a half percent.
The volume of industrial production has grown, too - 1.5
In politics, there have been no bad cataclysms: the Duma
has not been dissolved, the government has not resigned, there
have been no mass protests, etc. Importantly, the fall saw the
trend of rapprochement between the executive and the
I am confident that the trend will continue in the new
year. We will see a growth, if only slight, of the economy. I
am confident that we will be able to collect more taxes thanks
to a number of projected measures. One step is to establish
closer control over the sale of alcoholic beverages, to combat
moon-shining, and to collect alcohol excise payments in full.
Another move is to control the natural monopolies, to improve
the approaches of the tax police and shift their attention onto
individuals, markets and the so-called grey economy which
operates huge funds and pays no taxes.
The year 1998 will be stable from the viewpoint of the
political situation. I do not foresee any political tremors in
Russia. There will be no serious reasons for confrontation and
tougher struggle. Some elections are past, others are still far
away. It will be a quiet year.
But it will be decisive for the executive authorities.
The rule of the game is: the victor in the elections has
six months to form a team and get it going, then he has two
years to make radical changes and live up to his election
pledges. In the middle of the third year, he cannot change
anything because he is bracing up for new elections. The first
of the two quiet years is past. There have been no tremors, but
no breakthroughs either. This means 1998 is the last chance for
the executive authority. For the President and the government,
it should be a year to show initiative. Initiative and drive.
If there is no breakthrough in 1998, they will have no time to
deal with economic matters in 1999.
Alexander SHOKHIN, leader of the Our Home Is Russia
faction in the State Duma:
To borrow maths terms, this year is ending positively. The
slump in the economy is nearing an end. There is economic
growth, even if small.
Switching from the economy onto politics, let me note the
main thing: the executive and the legislative authorities have
displayed restraint and wisdom - the Duma did not pass the vote
of no-confidence in the government and was not dissolved.
I hope the positive democratic trends will continue in
1998, too. The Duma will adopt the 1998 budget at the beginning
of the year, the nation will be confidently working to overcome
I think that the infamous end of the Weimar Republic,
meaning a weak democracy and the coming dictatorship, is
impossible in our case. Our collective intelligence will
prevent the rise of monstrous dictators.
The latest elections on all legislative levels prove that
democracy in the country is growing and becoming stronger. I am
optimistic about the future, although our problems would not be
automatically resolved, of course, and it would take time and
perseverance to attain accord and understanding in society.
Grigory YAVLINSKY, leader of the Yabloko faction in the
This year has been wasted. There have been declarations:
combating corruption, starting a housing reform, and
competitive army procurement, which is good per se. But nothing
has been done. The year has not been marked by a breakthrough.
Hopefully, in the coming year the President will get sick
and tired of the impotent and corrupt government which the
people do not trust, which is incapable of collecting taxes,
providing jobs, and dependably paying wages and pensions. He
will sack the government and will find people who understand
the problems and can resolve them.
The good thing to happen is, first, spring. Secondly,
there will be summer which may be warm. Thirdly, one can
confidently predict a harvest in the fall, including cabbage,
so that the people would have sauerkraut as the President
And there will be the Women's Day on 8 March, the Victory
Day on 9 May and, finally, the New Year's Day again.
Nikolai RYZHKOV, chairman of the Narodovlastie (Power to
the People) group of State Duma members:
From the point of view of the economy and economic
activities, the year 1997 has not been one of the best, I
regret to say. Moreover, it has been even worse, as evidenced
by the analysis of the situation and my personal contacts and
meetings with the electorate.
Judging by everything, the chosen course is faulty and
leads into a dead end.
I think that the activities of the parliamentarians in the
past year have been more productive compared to the previous
years. The factions have identified their positions, all MPs
have been working so much better. Importantly, we now know
Our supreme authorities have been smeared with dirt, in
particular in connection with the book scandal. Understandably,
the things that have recently come to light are rooted in the
past of two or three years ago. Regrettably, we are
increasingly becoming an appendix of the international
financial structures. The activities of the Popular Patriotic
Union of Russia, whose executive committee I chair, have become
more fruitful in the past year, its structures have grown and
are better coordinating their interaction.
I am quite satisfied with my personal life, my
grandchildren are students. One grandson, who is 15, is a
military school cadet, of which I am proud.
I would want the President and the premier to finally
realize, in 1998, that the situation is the country is grave
enough and to make steps, in particular, to get a new
government. Its name does not matter: a government of popular
trust, a coalition government, a government of professionals...
Importantly, all major political forces should be represented
on it, the forces that would chart serious measures to lead
Russia out of the crisis.
We need new forces and new people whom the nation may
trust. There is no other way. I think it is important for the
President and his team to tell the people all the truth about
the mistakes that have been made in the past years, to repent
and identify ways to lead the country out of the crisis.
Lev ROKHLIN, chairman of the State Duma Defense Committee:
This year is one of the six grey years, it has brought
nothing but ruin, nor could it bring anything else. There is no
hope of changes to come.
First of all, this is because the President is the leader,
the helmsman who steers the country's course. He is
systematically forming teams. Any team is formed to fit an
idea, political will, and have a programme for more than one
day, but rather for several years at least. A short-term
programme, a long-term programme, etc.
Since none of the teams can exist for more than six months
or a year, can any programme be implemented? Since each time
after these people leave the President's team they come to be
exposed as criminals, mafiosi, con men and thieves for whom
their personal gain is supreme, can one hope that the
President's team can achieve any success for the nation?
Therefore, this past year is yet another year of Russia's
disintegration and movement into the precipice.
Transcript by Alexander BELONOVSKY
and Lyudmila SHCHERBINA.