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Johnson's Russia List


March 4, 1998  
This Date's Issues:    2091   2092

Johnson's Russia List
4 March 1998

[Note from David Johnson:
1. Reuters: Let economics decide Caspian pipe route-Russia Min.
2. AP: Senate Committee OKs NATO Expansion.
3. Robert Lyle (RFE/RL): Russia: IMF Denies Demanding Break Up 
Of National Railways.

4. Moscow Times EDITORIAL: Delay Tactics Let President Save Cabinet.
5. Moscow Times: Asar Eppel, ESSAY: Soviet Mantra Kept Russia 
Obedient, in Order.

6. Interfax: Fewer Russians Say Government Can Improve Overall 

7. Interfax: Polls Shows 52% of Russians 'Ignored' Yeltsin Annual 

8. Interfax: Russian Academician: US Needs Saddam For Economic 

9. Moskovskiy Komsomolets: Yevgeniya Albats, "Why Should the Kid 
Feel Sorry for Iraq? Friendship With Saddam Is Going To Cost Us a 
Pretty Penny."

10. Reuters: Russia 1997/98 grain exports seen way below target.
11. Financial Times (UK): John Thornhill, Moscow tightens grip on 

12. Itar-Tass: Official Comments on Investment in Russia at US 

13. Reuters: Russia miffed at exclusion from Caspian oil talks.]


Let economics decide Caspian pipe route-Russia Min

TOKYO, March 3 (Reuters) - Russian Fuel and Energy Minister Sergei Kiriyenko
said on Tuesday that economics should be the factor to decide the route of a
new pipeline carrying output from Caspian oilfields.
Kiriyenko was responding to a question on whether Russia would continue to
support the idea of a possible route connecting the Azeri capital of Baku to
Novorossiisk, Russia's main export outlet on the northern coast of the Black
"Economics should be purely the (primary) factor in deciding the oil pipeline
route," Kiriyenko said through an interpreter at a news conference. 
Last week, Azeri President Haydar Aliyev said in Tokyo that the Caspian oil
pipeline would run from Baku to Turkey's Mediterranean port of Ceyhan.
Kiriyenko said that political factors were overshadowing the talks but
reiterated that economic factors should be the factor deciding the route the
pipeline should take. 
The Baku-Ceyhan route, supported by the United States, is the source of a
developing row between Washington and Russia, which wants the pipeline to pass
north across its territory. 
Turkey supports the Azeri-U.S. choice on environmental grounds and because it
stands to gain from transit fees if oil goes to Ceyhan. 
The Azerbaijan International Operating Co (AIOC), an $8 billion international
oil consortium tapping the fields, says the decision on the pipeline route
would not be made until October. 
The Russian minister came to Tokyo to meet Japanese government officials to
discuss broad regional energy security issues. He has also met Japanese
company officials involved in Russian oil development projects. 


Senate Committee OKs NATO Expansion
3 March 1998

WASHINGTON (AP) - The Senate Foreign Relations Committee endorsed a measure
Tuesday that would grant NATO membership to Poland, Hungary and the Czech
The resolution, passed by a margin of 16-2, is expected to come before the
full Senate later this month, and an ``overwhelmingly positive'' vote was
predicted by Sen. Jesse Helms, R-N.C., the committee chairman. 
That would clear the way for the three former Soviet-bloc nations to join the
North Atlantic Treaty Organization later this year. Other countries have also
asked to join. 
President Clinton welcomed what he called the committee's ``strong
endorsement'' of his administration's push to expand NATO by three countries.
``By adding these countries as newest allies, we will make NATO stronger,
Europe more stable and American more secure,'' he said. 
Although the resolution approved by the committee does not put limits on
future NATO expansion, several senators were expected to propose amendments
for a hiatus during final debate on the matter. One is a proposal by Sen. John
Warner, R-Va., to bar any further NATO additions for three years. 
NATO has agreed to consider the issue of inviting additional members to join
the alliance in 1999. 
The Clinton administration has pushed hard to modify the 49-year-old
organization to let in Poland, Hungary and the Czech Republic. That expansion
was supported by Helms. 
``It appears that Senate approval of this resolution will occur on an
overwhelmingly positive vote, which will be an obvious vote of confidence in
the democracies of Eastern Europe,'' the chairman said. 
Critics of the resolution contend an expanded NATO could entangle the United
States in a series of Bosnia-style peacekeeping missions. 
Voting against the measure were Sens. John Ashcroft, R-Mo., and Sen. Paul
Wellstone, D-Minn. 
Ashcroft, a possible 2000 presidential contender, said he did not oppose the
expansion in itself but thought now was a good time to re-examine the overall
mission of NATO in a post-Cold War world. 
``I believe there should be some clarification of what the long-term mission
is,'' he said. NATO ``keeps redefining itself,'' Ashcroft said, moving from an
alliance committed to the defense of territory to one defending far-flung
Wellstone said he feared an expanded NATO would result in the redivision of
Europe and poison future relations with Russia, which fears a creep of the
alliance toward its borders. Wellstone said he couldn't completely put voice
to his concerns, but had ``pricklies in my fingertips'' that were forboding. 
NATO was formed after World War II to confront the former Soviet Union in
Europe. It currently has 16 members. The last time it was expanded was in
1980, when Spain was admitted. 
Secretary of State Madeleine Albright told the Foreign Relations Committee
last month that the administration had not extended any future invitations to
other counties to join NATO, but opposed any efforts to formally apply a
moratorium such as the one supported by Warner. 
She said it would be seen ``as a vote of no confidence in the reform-minded
governments'' of countries that were once considered Soviet satellites. 
Among the nations also seeking entry are Romania, Slovenia and the three
Baltic republics of Estonia, Latvia and Lithuania. 
Senate Majority Leader Trent Lott, R-Miss., said he plans to bring up the
expansion in a week or two. He suggested the measure would draw considerable
Like a treaty, the resolution requires a two-thirds vote of the Senate. 
``There are some senators that have legitimate concerns,'' Lott said. ``I
personally am for NATO enlargement. I think we should pass it and do it in
reasonable time. But you've got to allow senators a chance to be heard on


Russia: IMF Denies Demanding Break Up Of National Railways
By Robert Lyle

Washington, 3 March 1998 (RFE/RL) -- The International Monetary Fund (IMF)
has taken the unusual step of publicly denying news reports out of Moscow
that it has demanded that Russia break up its national railway system.
An official spokesperson at IMF headquarters in Washington (unnamed,
female) said the reform program for 1998 recently agreed between Russia and
the fund "does not envision breaking up or privatizing the railways of Russia."
The reports, based on unidentified sources, claimed that the rail break
up was one of several undisclosed conditions the IMF placed on the
continuation of the long-term $10.1 billion loan it is currently drawing in
quarterly payments.
They also quoted the IMF's deputy representative in Moscow, Tom
Richardson, as confirming the report.
The IMF spokesperson disputed that, quoting Richardson as saying he had
declined to make any comment on any reports.
An IMF team was in Moscow since early February working out the 1998
program targets for the three-year loan. IMF Managing Director Michel
Camdessus traveled to the Russian capital last week to wrap-up the
discussions on the 1998 program and for a general review of the country's
progress. He met with a number of senior officials, including President
Boris Yeltsin.
The news reports quoted unidentified Moscow rail sources as saying that
Camdessus had tried to take Yeltsin by surprise by raising the rail
privatization demand at their Kremlin meeting, but officials close to
Camdessus deny that. The entire subject was "not (even) discussed" by the
IMF chief and Yeltsin, say IMF officials.
The official IMF spokesperson says that the 1998 program does envisage
increasing the transparency of railroad operations, enhancing their
efficiency and improving their revenue collections.
The program involves "a number of measures aimed at reforming Russia's
public utilities and transport monopolies, including the railroads," says
the spokesperson. 
Transparency of operations would be achieved by publicly publishing the
railroads financial accounts to meet international accounting standards by
the end of 1999, says the spokesperson.
Revenue collections, as part of a strategy to resolve nonpayment
problems, would be improved by establishing targets for collections in cash.
This would entail reducing the railway's dependence on in-kind transfers and
liability trade, two forms of non-cash payment used by other state entities.
Thirdly, says the spokesperson, the national railroad would be subject to
the same long-term general government reform program of divesting social
assets, such as schools and clinics, to local governments, and of
privatizing or selling-off ancillary enterprises and services which are not
directly related to rail transport.
Russia's First Deputy Minister of Railways, Ivan Besedin, told reporters
he has drafted a conceptual outline of railway reform to be discussed at a
meeting of railway officials with Minister Nikolai Aksenenko later this
month. But he did not outline what shape that reform would take.
Yeltsin and others have said they want to keep the railroad under a
government ministry. IMF officials dealing with Russia say that rail
privatization is not included in any of the programs they've worked out with
Moscow over the past year or more. 
They suggest that some Russian officials who are opposed to reforms may
be spreading the story in an effort to stop all movement towards reforming
and modernizing national railway operations. 


For more articles from The Moscow Times, check out their website at

Moscow Times
March 4, 1998 
EDITORIAL: Delay Tactics Let President Save Cabinet 

There was not much of real significance in the Cabinet reshuffle that 
President Boris Yeltsin has just completed. 
A few minor ministers lost their jobs. A clearly incompetent minister 
for CIS affairs was replaced by Ivan Rybkin, perhaps as a stepping stone 
to the foreign minister job that he has always coveted. Viktor 
Mikhailov, the long-serving nuclear power minister, resigned, perhaps 
over something important, perhaps because he was just tired of the job. 
And as an incidental side-benefit to the reshuffle, Yeltsin took the 
opportunity to amalgamate the Defense Council and the National Security 
Council, two bodies whose functions were almost impossible to 
distinguish anyway. 
But do not be fooled by all the smoke and mirrors. Yeltsin has used all 
this bustle as an elaborate decoy to distract attention from the much 
more fundamental decision not to make major changes in the Cabinet. 
The Communists wanted the heads of deputy prime minister Anatoly Chubais 
and Boris Nemtsov, but Yeltsin has refused to sack either of them. 
Financier Boris Berezovsky also wanted to destroy the "young reformers," 
exploiting their rivalries with Prime Minister Viktor Chernomyrdin. But 
Yeltsin has now averted the major risk of split between them. 
While the whole logic of the Cabinet reshuffle and the government 
performance report was to do absolutely nothing, Yeltsin covered his 
tracks with plenty of dust. 
When attacks on Chubais and Nemtsov came to a head last year, with calls 
for their dismissal coming both from Communists and from Russia's 
biggest banks, Yeltsin made a great show of ordering the government to 
give an account of its performance. 
While threatening major dismissals, Yeltsin very cleverly insisted that 
the changes could only take place after the government's presentation. 
Now three months later, the report has taken place but the key players 
are still in the Cabinet and the opposition has run out of steam. While 
tension still lurks, Chernomyrdin has been convinced that his deputy 
prime ministers are still politically useful. 
The Communists, who were certainly not fooled by Yeltsin's decoy 
tactics, understandably feel a little short-changed. But the Communists 
have lost the initiative they had in the fall when Berezovsky, aggrieved 
at his sacking from the government, was briefly on their side. 
Thanks to Yeltsin's brilliant delaying tactics, the challenge to his top 
ministers has been headed off. Yeltsin may often be accused of changing 
course too often but he should also be credited with some clever 
political instincts. 


Moscow Times
March 4, 1998 
ESSAY: Soviet Mantra Kept Russia Obedient, in Order 
By Asar Eppel 
Asar Eppel is a writer whose most recent work is "The Mushroom of My 
Life." He contributed this essay to The Moscow Times. 

Everyone is familiar with the problems in the country, but not everyone 
understands them. Foreigners, for example, even those who know the 
secret mainsprings and reasons for our failures, do not always sense 
their metaphysical potential, their specific workings, for they have 
been raised in a tradition of more or less regulated moral discipline 
that has gone uninterrupted. Here is an incident with which I am 
familiar that is a paradoxical illustration of this. 
A certain young English woman married a Soviet dissident -- a remarkable 
and intelligent person who suffered several years in prison for his 
convictions. Her mother is a very nice woman. She approved of her 
daughter's choice and was pleased with her son-in-law, but, to the very 
end, could not accept that he had been a prisoner. 
"I know he spoke out against injustice in this wretched country," she 
told her daughter. "He was irreconcilable and principled. We can and 
should be proud of this. But why should he have ended up in prison? How 
could a decent man be imprisoned for wanting his country to be better 
off? He didn't set off a bomb or take hostages. So it's very odd that he 
spent 10 years in confinement. I certainly don't want to say he's a 
criminal, but I just don't know what to think." 
Problems in this country exist on all levels. From top to bottom. And 
everyone looks for someone to blame. The general opinion is that the 
government is at fault. Or the president. The government and the 
president, however, say the State Duma is engaged in sabotage. They 
point to an ideological opposition that is trying to destabilize normal 
life for their own pro-communist or national-patriotic aims. 
Embezzlement of state property is also to blame. Simple theft is to 
blame. So is irresponsibility. Anarchy. Indifference. Insouciance. Open 
the dictionary, and all the words with negative connotations beginning 
with the prefix "un-" could very well serve as a cause of the country's 
present disorder. 
The 19th-century classic Russian poet Alexei Tolstoy invented a refrain 
for one of his amusing satirical poems, which is known to every educated 
person in Russia: "This land of ours is rich. All it lacks is order." 
As it turns out, there is no order because an evil fate hangs over the 
nation -- laws don't work within society and the 10 commandments have no 
power over the individual. Thus, the rulers have attained relative 
success by exploiting the quiet and compliant people's customary absence 
of personal opinion and inner sense of obedience. 
Under Stalin there was order, many people recall. Even before 
perestroika there was order, they say. Meanwhile, the needle on their 
life's compass shows them not the right direction, but spins 
I should say here that I personally know the formula that has kept this 
country obedient and provided it with order. This is not even a formula, 
but an incantation. A mantra. Rather, a super-mantra, for unlike other 
mantras, it needs to be pronounced only once: "Hand in your party card!" 
The point is that all bosses, right on down to the pettiest of them, 
were part of the Communist Party. This by no means meant that everyone 
fervently shared the doctrine of Marxism-Leninism. It is just that if a 
person was not a party member, pursuing a career was impossible. There 
are, of course, examples of non-party members becoming famous 
scientists, artists and writers, but that was only the other side of the 
coin. The right not to belong to the party was also sanctioned by the 
Everything that was linked to party membership was of an almost sacred 
nature. The party card, for instance, was more than a sacred cow. To 
have it stolen or carelessly lose it entailed running up against much 
unpleasantness. A verbal reprimand was the least one could expect. There 
were more severe reprimands with warnings. There were reprimands that 
were marked on the party card. They all meant a semi-ruined life, and 
expulsion from the party meant that your life was completely ruined. 
One of my acquaintances once danced with a foreign woman in a cafe when 
he was abroad and received a reprimand from the party. He managed to get 
it revoked after two years of fighting. Nonetheless, his records 
indicated that there had been a reprimand, although it was repealed. The 
records showed that my acquaintance stood out and was persistent, and 
that, although he was able to defend himself, even this ran counter to 
the will of the collective, however mistaken it was. 
Let's return, though, to the cultural accessory in the form of the 
inoffensive little book in a red cardboard binding. It was to this that 
the frightening words "Hand in your party card" referred. These words 
assured labor activity and strict order. 
A court sentence, prison or hospital stay, or loss of work were peanuts 
by comparison. Expulsion from the party was for everyone an immediate 
prison without bars. It was a sentence against which you could not 
appeal. It meant the swift loss of work. I for one can testify that 
being excluded from the party almost always ended in a heart attack, for 
the world collapsed. 
"Hand in your party card." With these words, Soviet leaders, who were 
clearly ungifted and clearly worse than the current leaders, were able 
to establish some kind of order. Let's say Brezhnev is being driven to 
his dacha from the Kremlin. It is snowing a great deal. It is even 
snowing around the clock. So much so that even trolleys have not run for 
hours. Brezhnev phones someone from the car and says: "If the roads 
aren't cleared by evening, hand in your party card." The person whom 
Leonid Ilyich called knows that there are not enough snow plows, but he 
calls his subordinate who is in charge of plowing the streets and says: 
"If all the snow isn't removed within three hours, then hand in your 
party card!" This person calls the appropriate subordinate and yells: 
"If the snow isn't cleared in two hours, then hand in your party card!" 
This functionary calls the lowest-ranking boss who is told he must clear 
all the snow in only one hour, and, by the way, it is Sunday, when all 
the groundskeepers and drivers have long since been drunk, and half the 
trucks have broken down. But faced with the prospect of "handing in the 
party card," he will somehow find a way of clearing away the snow, or, 
in any case, the path along which Brezhnev will be traveling. 
This is how things were. And they worked without a hitch. For an entire 
73 years. Now there are no longer any party cards. The phrase "hand in 
your party card" will soon be accompaniedby scholarly commentaries and 
explanations. This land of ours is still rich. But, as the poet wrote, 
it still lacks order. 
It should be noted that in various criminal societies, where a strict 
hierarchy is observed, the least misdemeanor is punished with the 
severest of punishments. Everything runs like clockwork. Orders are 
carried out. There is total obedience. There is no laziness, lack of 
discipline or insubordination. 


Fewer Russians Say Government Can Improve Overall Situation 

MOSCOW, Feb 26 (Interfax) -- Just 13% of Russians feel the government
is capable of attaining an improvement in the overall situation in Russia,
down from 22% in September 1997.
The All-Russian Center for Studying Public Opinion (VTsIOM) conducted
the latest survey among 1,600 people throughout Russia on February 21 to
24, prior to the government's report to Russian President Boris Yeltsin.
Currently, 56% of respondents do not believe the government is capable
of changing the situation for the better, against 46% last September. And
22% of those polled said the situation could go either way, down from 24%
in September 1997.
Last September, 8% of the respondents refrained from answering,
compared to 10% in February.
Fewer than one third (31%) of Russians said they approved the activity
of Russian Prime Minister Viktor Chernomyrdin in February, down from 33% of
the respondents who said so last September.
Public approval for the work of First Deputy Prime Minister Anatoliy
Chubays also declined from 22% to 13% over the past five months.
Approximately the same number of those polled, 52% in February against
51% last September, positively assessed the activity of First Deputy Prime
Minister Boris Nemtsov.


Polls Shows 52% of Russians 'Ignored' Yeltsin Annual Speech 

MOSCOW, Feb 26 (Interfax) -- As many as 52% of Russians have not read
or listened to President Boris Yeltsin's annual message to the parliament
February 17, shows a poll conducted by the All Russian Center for Political
Studies, also known by its Russian acronym VTsIOM, on February 21-24.
The poll involved 1,600 Russian citizens.
Last year, 40% of Russians ignored Yeltsin's address to the Federal
This year, 11% of respondents said they liked the message (compared to
22% in 1997) while 15% had a negative impression (17% in 1997).
Besides, 16% of respondents said Yeltsin's message to the parliament
failed to cause any reaction on their part. The figure last year was 15%.
Another 6% of respondents, the same as last year, were undecided.


Russian Academician: US Needs Saddam For Economic Reasons 

MOSCOW, Feb 25 (Interfax) -- The United States needs Iraqi President
Saddam Husayn to keep the American military-industrial complex fit, Deputy
Director of the Russian Academy of Sciences' Institute of Oriental Studies
Vladimir Isayev told Interfax Wednesday. Noting that the transfer of
aircraft- carriers and other military equipment to the Persian Gulf
involves great spending, he said that there is one more economic reason
which is making the United States "counter the Iraqi leader."
"Saudi Arabia has long become a depot of American weapons. It is
spending enormous sums on buying them. The current crisis is yet another
pretext for selling as many weapons as possible to the oil- producing
countries. To do so, the United States needs such irritants as Iraq or
Iran," Isayev said. He said in this connection that "the United States
will hardly ever drop bombs on Iraq because the work of the U.N. experts
who know where to look for weapons of mass destruction and how, helps find
and eliminate much more weapons than the bombs dropped during the Desert
Storm operation in 1991."
In his opinion, the next aggravation of the Iraqi crisis should be
expected in a couple of years, because the recent increase in the Iraqi oil
quota will no longer suffice. Given this, he said, "any Iraqi leader,
Husayn or anyone else, will have to advance new demands to the world
community in order to ease the sanctions." The best way of preventing a new
crisis, he said, would be "to show that country some light at the end of
the tunnel." However, if Iraq is immediately allowed to export as much oil
as it did before the war with Iran, the world market will receive more than
100 million tonnes of oil which will cause a drop in oil prices. "If this
happens, the development of oil in the Caspian Sea and in the Northern Sea
will have to be terminated, because if the world price drops below $10 a
barrel, the transportation of Russian oil to distant places will become
inexpedient. The world oil market will have to be divided again and new
quotas will have to be established," Isayev said. He said the gradual
restoration of the Iraqi oil industry would be a way out that would make it
possible to come to terms even within the framework of OPEC by lowering oil
production quotas in some of its member-states.


Support for Iraq Seen as 'Costly' for Russia 

Moskovskiy Komsomolets
23 February 1998
[translation for personal use only]
Article by Yevgeniya Albats: "Why Should the Kid Feel Sorry for
Iraq? Friendship With Saddam Is Going To Cost Us a Pretty Penny"

Sixty-two years ago the then U.S. Secretary of State Cordell Hull
tried to persuade the then U.S. President Theodore Roosevelt: "Mr.
President, one should not trust journalists' reports from Germany: There
is much exaggeration in them...." In Germany, they were already burning
stores and books and people being were murdered on the street and herded
into camps by the hundred; the steel, electrical engineering, and chemical
monopolies' plants were mushrooming, the military sector of the economy was
gaining momentum, there was practically no unemployment -- the Third Reich
was rapidly preparing for war. But Roosevelt believed him: The
correspondents were exaggerating....
Sixty years ago the prime ministers of Great Britain and France
concluded a treaty with Hitler and Mussolini in Munich: Having surrendered
Czechoslovakia to the conceited fascists, they hoped the latter would be
satisfied with that and Nazi expansion would bypass their countries. It
did not....
Seven years ago, barely having ended the war with Iran, Iraq occupied
neighboring Kuwait -- plundering, killing, and burning oil refineries. The
coalition of democratic countries, led by the United States, kicked Saddam
Husayn out of Kuwait. The United Nations imposed sanctions: a ban on the
production of mass destruction weapons. (After World War II the losing
side -- Germany and Japan, first and foremost -- faced far stricter
sanctions, imposed with the USSR's participation: Not only no weapons, but
no army, and, to make sure, there had to be occupation authorities to keep
tabs on the local authorities.)
Iraq promised to produce no weapons. It promised to admit
international inspectors -- who would take its word? It lied. It admitted
the commission of international experts (the so-called UNSCOM) to 300 of
its facilities, but would not let them into another eight -- [Saddam]
Husayn's personal residences. In April 1995 the inspectors collected
evidence that Iraq was continuing to produce and increase stockpiles of VX
nerve gas and that it also had missile warheads capable of delivering
biological and chemical weapons over distances of up to 1,000 km. In July
1995 the Iraqi Government admitted that tonnes of toxins necessary for the
production of biological mass destruction weapons had been produced in the
little place of al-Hakam. In 1996 the Iraqi Government admitted -- not
without pressure, and great pressure at that -- to having produced 3.6
tonnes of nerve-gas weapons. Not much, but plenty to smother a country or
two -- including the Caspian, and even our Caucasus. They told Saddam
Husayn: "Hey, you've lied again, and we've caught you out. We must check
out everything, including the places you call your residences, but we
suspect there are underground plants there." Saddam said: "No." In
January 1998 Iraq's vice premier (and Yevgeniy Primakov's great friend)
Tariq 'Aziz told the international commission that it could check and see
for itself that there were neither VX gas nor warheads in Iraq any longer
-- it had discarded them. However, the inspectors do not believe this --
with reason -- and continue to insist: They are not going to believe it
until they have checked out the top secret facilities to which admission
was denied in the past.
The United States and Great Britain, backed by a number of other
countries, including Arab ones, proceeded to prepare for Desert Thunder --
for war. Supported by France, Russia came out sharply against it.
What motivates the United States and Great Britain? The old feeling
of guilt for what happened 60 years ago when they "would not believe" and
quietly watched Hitler destroy Europe, while others hoped to be spared by
permitting their neighbors to be gobbled up? This does motivate them. 
Those in both these countries who remember history and have learned its
lessons do not forget and would not accept even a hint of a repetition. 
But all these are emotions, albeit not useless.
Pragmatism is more useful. World War II cost the United States -- in
aid to rebuild Europe -- tens, if not thousands, of billions of dollars at
1940's-1950's prices. Smothering Hitler and his Reich in 1936-1938 would
have cost it many times less. True, it feared Stalin's USSR.
Iraqi warheads are no threat to the United States: They cannot get
that far. The Persian Gulf, however, is a sphere of U.S. national
interests (including oil-related interests). It is costly -- very -- to
have an unbalanced and unpredictable dictator there who cares little for
his own people and even less for other peoples and is ready at any moment
to spill blood (or release gas, or let pathogenic microorganisms flow into
water supplies). To wait every day to see what will be his next trick,
which pipeline he will blow up, where he will release infected mice or fire
a rocket, means creating unpredictability on our own market and continuing
the production of means of protection and arms worth many billions -- this,
in short, is costly too.
What motivates Russia? A suddenly materialized belief in the right of
every nation (remember Chechnya) to [determine] its own destiny? The
illusion that the Iraqi people will overthrow the dictator on their own? 
But Saddam is no Gorbachev, and it was as recently as 1996 that he killed
200 members of the opposition (threw them into vats containing a chemical
solution, they say) and jailed 2,000, while a further 7,000 dissidents fled
the country. Is it a sincere intention (a good intention, of course) to
stave off war and avoid civilian losses? An awakened sense of guilt, so to
speak, for the bombing in Groznyy and the shooting in Samashki? God grant
there is still something to be awakened....
Can it be, then, that our government and Foreign Ministry are
motivated by sober calculations? What does Russia stand to gain by siding
with Iraq and opposing the United States? Let us work it out. Some
Russian diplomats hint unofficially that Iraq owes us $7 billion for the
arms supplied to Husayn before 1991 -- they say that the lifting of the
sanctions on Iraq will make it possible to recover this money. Is that so?
How is a hungry and poverty- stricken Iraq going to repay the money? I
know: In the same way we are going to repay the czar's debts.
What else? The Lukoil company has signed a $3.8 billion agreement
with Iraq for developing an oil field, and the agreement will come into
force only if the UN sanctions imposed on Iraq are lifted. The Volgograd
Tractor Plant recently announced that it has signed a $5 million contract
to sell 250 tractors to Iraq (this in not prohibited under the sanctions). 
And? Is Iraq going to help our military-industrial complex start to
breathe? Unlikely. Our Scuds -- short-range missiles -- were received by
Iraq via Libya (which, incidentally, is not going to pay its debts to us
just yet, either), but it was German specialists who increased the range of
these missiles. France is mainly responsible for equipping Iraq
militarily. In order to go over fully to our shipments, that is to say, to
become a realistic market for Russian arms, Husayn would have to burn up
all that he already has. We can, of course, sell some small things for
chemical and biological weapons via nongovernmental commercial
organizations, but we are not going to earn anything for the state coffers.
So can it be strategic interests that motivate Russia? In the Caspian,
say? By defending Iraq, are we trying to cool off Iran (Iraq's
long-standing opponent) in its claims to Caspian oil? However, from the
point of view of military production and state interests, it would pay us
better to side with Iran, which we were actually supplying with weapons --
this is our market. It is Iran, too, that is more advantageous to us as a
counterweight to Turkey, which is growing ever stronger.
What do we stand to lose? A commentator in a Sunday [22 February]
political [television] program said the United States and Russia have been
and remain on different sides of the barricade, and Russia should look for
allies against the United States. That sounds proud. But naive.
First, because, according to all modern political and economic
studies, integration into the world economy is a necessity without which no
country, especially one with a transition economy, can extricate itself
from poverty. The United States, whether we like it or not, is one of the
principal players on the international economic field. Do we want to be
shut out from the field completely? Second, it is naive because for the
time being -- as long as production is growing by some invisible tenths of
a percentage point -- we cannot survive without Western injections. Russia
has already received billions of dollars of these. Whether this money
comes from the U.S. government, the World Bank, or the IMF does not make
much difference. Those who know the mechanics of this money realize that
we are not going to get much without the OK from the United States.
We have a remarkable government: It wants, as the saying goes, to eat
the fish and swim in the lake. That is to say, to get "cheap" money from
the United States and to remind itself of its own great-power status. 
Unfortunately, it has to choose: either eat the fish, or do things in the


Russia 1997/98 grain exports seen way below target
By Mike Collett-White 

MOSCOW, March 3 (Reuters) - Markets reacted with deep scepticism when
Agriculture Minister Viktor Khlystun forecast last year that Russian 1997/98
grain exports could be as high as 10 million tonnes after a big harvest. 
And as the trade year (July-June) enters its ninth month, it looks
increasingly likely that the forecasts were indeed wildly optimistic, and that
total deliveries abroad may be around a quarter of the target. 
``Khlystun's targets were just not realistic,'' Andrei Sizov, grains analyst
at the independent SovEcon consultancy in Moscow, said on Tuesday. ``Total
grain exports are likely to be around 3.0 million tonnes.'' 
A Moscow-based grain trader with a western company said the total might be as
little as 2.0 million tonnes as demand and prices were capped by high global
supplies, particularly of feed grain. 
``Russia has milling wheat, feed wheat, feed barley, rye and millet. The
problem is, who is going to buy it?'' he said. 
Russia's troubled farming sector was highly optimistic late last year after
official figures confirmed a 1997 net grain harvest of 88.5 million tonnes, or
28 percent higher than 1996's 69.3 million. 
For a sector still largely dogged by Soviet-era inefficency, ageing
fuel and fertiliser shortages and low quality seeds, the sharp rise in
production was no small feat, although the weather had a big part to play. 
But hopes of a significant rise in hard currency export earnings were dashed
by the low quality of much of the crop and by plentiful supplies of feed
grains globally. Russian silos are full of lower quality material available
for export. 
``Feed stocks in Russia are high, although food wheat stocks are not so
the Western trader said. 
While the overall export outlook is unspectacular, January trade data show
some marked shifts in supply patterns, which could provide pockets of
opportunity for trading companies active in the former Soviet Union. 
Russian wheat exports in July-January totalled around 384,000 tonnes, with a
sharp pick up in volumes in January to 127,000 from 82,000 in December, Sizov
``The rise was because of high deliveries to Uzbekistan, which in January
reached 47,000 tonnes from practically nothing in December,'' he said. 
Traders said Uzbekistan might continue to source more of its food wheat from
Russia rather than its traditional supplier and Central Asian neighbour
Kazakhstan in the coming months. 
``We have heard that Uzbekistan may be wanting to tender for Russian wheat
rather than Kazakh wheat because of questions over Kazakh wheat quality,'' a
Western trader said. 
January was the first month this trade year that Russian wheat exports
exceeded imports, which were 117,000 tonnes. 
Sizov pegged total Russian wheat exports at 600-700,000 tonnes in 1997/98
about 600,000 tonnes the previous season. 
Barley shipments are already well ahead of year-ago levels. In July-January
they totalled 1.4 million tonnes, and were forecast to reach 2.0 million by
But barley deliveries slowed sharply to 130,000 tonnes in January, from
December's 203,000. Traders had expected exports as low as 50,000 tonnes in
January due to low world prices, but Saudi Arabia came in and bought 40,000
Traders said it was too early to give accurate forecasts for Russia's 1998
grain campaign. 
Severe floods in the key southern grain region of Krasnodar are bound to have
spoiled some crops, but local officials have yet to say what damage has been
``So far we don't have much data,'' said a crop official based in Krasnodar,
the regional centre. ``But the water is receding and the situation is
But one trader estimated up to 40 percent of the 1.9 million hectares that
could eventually be sown to grains in the region would have to be planted or
replanted this spring. 


Financial Times (UK)
4 March 1998
[for personal use only]
Russia: Moscow tightens grip on military
By John Thornhill in Moscow

Boris Yeltsin, Russia's president, yesterday shook up the country's 
defence establishment and gave additional impetus to military reform 
when he appointed a civilian as secretary of the country's influential 
security council.
The council not only supervises the defence ministry but also oversees 
the security services.
Military observers said the elevation of Andrei Kokoshin, an academic, 
was likely to strengthen civilian control over the military, which has 
been a law unto itself during much of Mr Yeltsin's administration.
At present, the Soviet-minded Red Army is experiencing an acute crisis 
of management and morale.
In his previous post as secretary of the Kremlin's advisory defence 
council, Mr Kokoshin was a leading architect of Russia's military 
reforms, designed to turn the country's cumbersome, conscript army into 
a professional, mobile fighting force.
The defence ministry has already started cutting the size of the armed 
forces and introducing stricter budgetary controls.
Mr Yeltsin also announced yesterday that he was beefing up Mr Kokoshin's 
new responsibilities by merging the security council with the defence 
council and the military inspectorate.
Sergei Yastrzhembsky, the presidential press spokesman, said the move 
was "directed at more closely co-ordinating the efforts in reforming the 
whole defence and security system".
According to the military analyst, Mr Kokoshin will now become the 
"referee" between Russia's competing power ministries.
Mr Kokoshin, 52, worked for 18 years as an analyst at the prestigious 
USA and Canada Institute.
He replaces Ivan Rybkin, the mild-mannered former parliamentary speaker, 
who has been appointed deputy prime minister in charge of relations with 
other Commonwealth of Independent States countries.


Official Comments on Investment in Russia at US Conference 

NEW YORK, February 25 (Itar-Tass) -- The March meeting of the
Russian-American inter-governmental economic cooperation commission will
lead to a boost to contacts between Russian regions and U.S. states, said
Arkadiy Volskiy, president of the Russian Union of Industrialists and
The commission is co-chaired by Russian Prime Minister Viktor
Chernomyrdin and U.S. Vice President Albert Gore.
Volskiy attends a conference in San Francisco, at which 19 regional
economic projects of Russia are presented.
Businessmen of Russia and the U.S. are discussing the cooperation in
banking, telecommunications, energy and other fields and obstacles to
Volskiy said the American investment in Russia is negligible. He
cited as an example the investment of California, making only 0.3 per cent
of its total overseas investment.
"In my view, we very badly know the western coast of the U.S.
Nevertheless, in progress of initial meetings within the framework of the
Chernomyrdin-Gore commission, a policy of pooling the efforts of the
American West and Eastern Siberia, and generally of the (Russian) Far East
has been outlined," Volskiy said.
Asked about specific fields of cooperation, Volskiy said the Americans
showed much interest in a project of an "energy bridge" between Russia and
China which was presented to the conference.
"We can sell to China with a big profit the surplus energy which
already now reaches 40 billion kilowatt-hours a year," he said.
"And with the launching of the Boguchanskaya hydroelectric power plant
the figure is estimated to grow to 90 billion kilowatt-hours. Presentation
of the energy bridge idea made a huge impression on conference
participants, who expressed interest in financing the project," Volskiy


Russia miffed at exclusion from Caspian oil talks

MOSCOW, March 3 (Reuters) - Russia expressed surprise on Tuesday at having
been excluded from weekend talks in Istanbul between Turkey and four ex-Soviet
republics on the export of oil from the Caspian Sea to the West. 
``We expressed to the organisers of the meeting our legitimate surprise (at
not being invited) which was conveyed by official channels to the Turkish
side,'' Foreign Ministry spokesman Gennady Tarasov told a news briefing. 
``Regardless of the configuration of such meetings nobody is in a position to
alter the indisputable fact that Russia is a state adjacent to the Caspian
Sea,'' he said. 
Turkey said on Monday it had won the backing of Azerbaijan, Georgia,
Kazakhstan and Turkmenistan for a proposal to pump the major output from
Caspian oilfields to the West via a pipeline. 
But it said approval of the project, which envisages carrying the bulk of
output from an $8-billion international project from Baku to Turkey's
Mediterranean oil outlet of Ceyhan, also depended on economic factors. 
Tarasov said Russia believed all states in the Caspian region should take
in discussions on the export of its oil wealth. 
The Baku-Ceyhan route, supported by the United States, is the source of a
developing row between Washington and Russia, which wants the pipeline to pass
north across its territory. 
The Ceyhan pipeline would cost about $2.5 billion excluding finance costs and
carry 45 million tonnes of crude annually. 
The other options include routes through Russia and Georgia but both would
need the Black Sea and Turkish straits to ship oil via tankers to
international buyers. 
Kazakhstan is looking to get its oil to markets other than through Russia's
existing pipeline network and is planning a pipeline from its onshore Tengiz
field to Novorossiisk, Russia's main export outlet on the northern coast of
the Black Sea. 
Estimates of the Caspian's hydrocarbon resources vary wildly, with offshore
reserves of oil starting at 35 billion barrels, and total onshore and offshore
reserves pegged anywhere up to 200 billion barrels. 


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