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

Johnson's Russia List
#2092
4 March 1998
davidjohnson@erols.com

[Note from David Johnson:
I want to thank those recipients who have provided support to
JRL recently. Due to my efforts to try to reduce the amount of
time I spend on this enterprise I have been negligent in providing
individual responses.
At the Center for Defense Information I am currently working
on an upcoming episode of our television series "America's Defense
Monitor" that will examine the U.S. impact on Russia (primarily
since 1991) and evolving Russian perceptions of the U.S.. We will
be doing a number of interviews in the Washington area. If anyone
has advice or suggestions about this program please contact me.
Happy to see anyone else who wants to say hello.
1. Interfax: New Russian Security Chief: Long Term Security Policy 
Needed.
2. Jamestown Foundation Monitor: WHO ARE THE MIDDLE CLASS? 
3. Val Samonis: On Hanke on Ruble.
4. Jonathan Mueller: Re JRL 2087 -- Stephen Hanke -- Is the Ruble Next?
5. Moscow Times: Valeria Korchagina, Report Warns of Drugs Threat to Russia.
6. Moscow Times: David McHugh, Feminist Slams Male Stereotypes. 
7. USIA: PICKERING ON CENTRAL ASIA, CAUCASUS, CASPIAN REGION.
8. Interfax: Soros To Invest Over $100 Mln In Charitable Programs For
Russia.
9. Interfax: Yeltsin Aide Favors Changes to Electoral System.
10. NTV: Yeltsin, Chernomyrdin, Others Accused of Lavish Living.
11. MSNBC: Alexei Arbatov, Bad for Russia, bad for the world. When it 
comes to U.S.-Russia relations, the risks of NATO expansion far outweigh
the rewards.
12. WP: Alton Frye, Precursor to NATO Enlargement.
13. Reuters: U.S. Surprised by Removal of Russian Atomic Chief.
14. RFE/RL: YELTSIN APPOINTS NEW ATOMIC ENERGY MINISTER.]

******

#1
New Russian Security Chief: Long Term Security Policy Needed 

MOSCOW, March 4 (Interfax) - One of his priority goals is to develop a
long-term national security policy, Andrei Kokoshin, the new Russian
Security Council secretary, told NTV television Tuesday. 
"The state or national security is becoming an increasingly clear and
compact notion," he said. 
In this spirit, the Security Council, Defense Council and State Military
Inspectorate are merging, Kokoshin said. 
"There is more to the merger than the closure of old institutions, for
this will be a synthesis of their functions," he said. 
He is currently trying to define more precisely the list of the most
urgent matters to deal with so as not to interrupt the activities set in
motion by the Defense Council and the State Military Inspectorate. 
"The previous goals remain. Military reform will continue. It received
an impetus last year thanks to the Defense Council, above all the military
development commission headed by Russian Prime Minister *Viktor
Chernomyrdin*," Kokoshin said. 
The Security Council will continue to strive for a Chechen settlement, a
long-term problem painful to the entire society, he said. 
"It would be erroneous to think that former Security Council Secretary
Ivan Rybkin worked only on the Chechen settlement. ... This work was simply
more noticeable, more newsworthy than the others," Kokoshin explained. 
Rybkin was appointed deputy prime minister in charge of CIS affairs
because "it was necessary to appoint an experienced man, well-versed in
negotiations to a position where these qualities are required," he said. 

*******

#2
Jamestown Foundation Monitor
4 March 1998

WHO ARE THE MIDDLE CLASS? Last Friday in his weekly radio address, President
Boris Yeltsin lauded the emergence of a middle class in Russia, noting that
16 million people had traveled abroad in 1997 and that Russia's 850,000
small businesses employ about 10 percent of the work force. (Russian and
Western agencies, February 27)

However, examination of reported income data suggests that the notion of a
Russian middle class is more a psychological than an economic reality. A
poll conducted by Validata for the US Information Agency asked respondents
to define what they understood by a middle class income. Responses ranged
from $200 to $10,000 a month, yet average reported per capita income in
January was a mere 916 rubles ($160). Only 19 percent of the population have
a family income of $170 to $300 a month, and a mere 1 percent of families
take in more than $700 a month. With consumer durables priced at or above
world market levels, it seems clear that a middle class lifestyle in Russia
is enjoyed only by a privileged minority. (Segodnya, February 28, Russky
telegraf, February 27)

*******

#3
Date: Tue, 3 Mar 1998
From: Val Samonis <vsamonis@chass.utoronto.ca>
Subject: Samonis on Hanke on Ruble 

Dear David:
Here are my (VS) comments on Prof. Hanke's article in FORBES.

Forbes
March 9, 1998
IS THE RUBLE NEXT?
By Steve H. Hanke
Steve H. Hanke is a professor of Applied Economics at The Johns Hopkins
University in Baltimore
WHICH WILL BE THE NEXT country whose currency blows up? Russia, with its=
system of pegged exchange rates, is a prime candidate.
Russian roulette. To protect the ruble and itstreasury bonds, Russia
would have to implement dramatic fiscal and microeconomic structural
reforms. Since July 1993 the ruble has been operating within a crawling
peg system. Bear with me a moment while I explain. In a pegged system
the currency is pegged to a foreign currency like the dollar or the
deutsche mark but is permitted to fluctuate in a narrow band around the
parity. (For a definition of the different kinds of exchange rates, see
my column of Oct. 20, 1997.)
Using pegged rates, Russia's monetary authorities have allowed the
nominal value of the ruble to depreciate slowly and in an orderly manner
against the greenback (see chart, below, top). On Nov. 10, 1997 the
Russian central bank set the central parity at 6,200 rubles to the
dollar and widened the fluctuation band to plus/minus 15%.

VS: So far Prof. Hanke might be right. However, plus/minus 15% IS NOT a
narrow band; at least not any more compared to other transition economies
where that band is 7% (as in Poland) or similar. Actually, the ruble's
exchange rate regime is now closer to floating ("restricted", "dirty",
"managed", whatever). Contrary to what Prof. Hanke seems to imply, that
is a good thing under the current circumstances of instability in the
Asian emerging markets. If anything, fixed exchange rates as part of
currency board arrangements, had they been introduced in Russia, might
have invited the run on the Russian ruble much sooner. In the unflexible
situation of a fix, it is easier to "make a killing" with one concerted
attack on the currency. That is what actually happened in Asia, with
possible exception of Hong Kong, where extraordinary large foreign
reserves (amounting to 40% of GDP) enabled that province to maintain
relative stability regardless of the nature of its monetary arrangement
(currency board or central bank). Unfortunately, Russia's foreign reserves
are much smaller.

Hanke:
On Jan. 1, 1998 the ruble was redenominated, so that the new central parity
is now
6.2 rubles to the dollar. But the basic ratio remains unchanged.
Until October of last year, the interest rate necessary to attract and
keep foreign money in ruble-denominated debt had been rather stable at
about 20%. But with the troubles in Asia, the repricing of risk in
emerging markets and capital flight from Russia, the rates have shot up
to over 30% (see chart, left, bottom). This nominal rate translates into
about a 20% real rate since Russian inflation is running about 10% 
year. That's not just high. It is punishingly high.

VS: Well, it may have been so but those rates are declining.

Hanke:
These high real interest rates have helped attract enough foreign money
to keep the ruble stable, but even so, the Russian central bank's
reserves declined from $23.1 billion at the beginning of the fourth
quarter of 1997 to $19.3 billion at the end of the quarter. Given that
$4.5 billion of these reserves are encumbered as collateral, the net
foreign exchange reserves declined from $18.6 billion to $14.8 billion
in the fourth quarter.
Either interest rates will have to go to the moon to keep foreign money
from quitting Russian treasury bills or Russia will have to abandon its
pegged exchange rate.
Can the ruble continue to hold? I don't see how. As the troubles in Asia
continue to wreak havoc on the international markets, the rickety ruble
will come under increasing pressure. Either its interest rates will have
to go to the moon to keep foreign money from quitting Russian treasury
bills (called GKOs) or Russia will have to abandon its pegged exchange
rate.
My conclusion: By midyear, if not before, Russia's foreign reserves will
reach alarmingly low levels. To avoid collapse of the ruble as reserves
dwindle, Russia would have to implement dramatic fiscal and
microeconomic structural reforms to restore investor confidence. Given
the political situation, the chances for this are nonexistent.

VS: Russia has undertaken a daring privatization program and introduced
other measures (like improved bankruptcy laws) aimed at speeding
enterprise restructuring and other structural reforms. These efforts
should pay in the longer term, even if there is an intervening period of
uncertainty to bridge over. But Russia seems to enjoy a more than average
attention of the IMF, so this bridging finance may not be as unattainable
as some might think. Large countries, especially nuclear powers, do seem
to get a break in many such circumstances. Regards. Val Samonis.

*******

#4
From: "Mueller, Jonathan D" <MuellerJD@bakuwpoa.us-state.gov>
Subject: JRL 2087 -- Stephen Hanke -- Is the Ruble Next?
Date: Wed, 4 Mar 1998 13:00:00 -0500

It is interesting to see Stephen Hanke concerned about Russian
vulnerability to capital outflows, since Hanke is a single-minded
proponent of curreency borads, a monetary institution which list among
its weaknesses, first and foremost, vulnerability to flows to/from world
capital markets. In fact, from where I sit, Hanke is too late --
interest rates are falling in Russia now, and FX reserves and the stock
market rising (at least they were the last time I looked!) Russia
appears to have survived the worst of the shock from Asia, and maybe
never deserved it, anyway, since its external accounts are in a very
different condition from the Asian tigers.
Where I see an external shock to Russia possibly coming from is
entirely different. One of the strengths of Russia's balance o payments
is export revenues from natural resource exports. But, because of
weakened demand in Asia, oil prices are now 20-25% below last year's
averages. I have not yet seen any comment on the impact of low oil
prices on Russia, but if present price levels pesist they will have an
effect on Russian exprt earnings. 

*******

#5
For more articles from The Moscow Times, check out their website at
www.moscowtimes.ru

Moscow Times
March 4, 1998 
Report Warns of Drugs Threat to Russia 
By Valeria Korchagina
STAFF WRITER

A major new report on Russia's drug problem, unveiled to the public 
Tuesday, said that drug use and the narcotics trade are growing so fast 
they pose a threat to the future of the nation. 
The report was commissioned by Vladimir Gusinsky, a media magnate and 
owner of the NTV television station, and prepared by the nongovernmental 
Council on External and Defense Policy in conjunction with the Interior 
Ministry. 
The 14-page report covered all aspects of drug abuse from provincial 
drug addicts to international mafia cartels which run drug pedaling 
operations in Russia. 
It said that over the past five years the number of people in Russia 
using illegal drugs had risen by 3 1/2 times. The report went on to 
predict that within a year the number of drug addicts would exceed 3 
million. 
The report's authors stressed that drug abuse has become a nation-wide 
problem. Illegal substances were viewed as fashionable by many young 
people, the report said, and it called on the government, together with 
the mass media, to work to dispel this belief. 
Gusinsky said that by commissioning the report he wanted to attract 
attention to the problem which is already blighting many Russian 
families. 
"I asked my son ... how difficult it is to get drugs in Moscow and he 
said that it is easier than buying a pack of cigarettes in the evening," 
Gusinsky said. However, law and order officials and narcotics experts 
attending the presentation of the report could not reach a consensus 
about how best to tackle the problem. 
According to Sergei Karaganov, deputy director of the Russian Academy of 
Science's Institute of Europe, because Russia is relatively new to 
wide-scale drug abuse, there is little experience of dealing with the 
problem. 
"While in the East drugs have been known for thousands of years and in 
the West there are some quite effective methods created by now to fight 
the problem, Russia remains in neither, in some kind of a black hole," 
he said. 
Igor Malashenko, general director of NTV and a member of the council 
that drafted the report, was even more pessimistic and outspoken. "We 
simply don't know what to do," Malashenko said. 
Government officials responsible for tackling the tide of illegal 
narcotics said their work was hampered by political obstacles, outdated 
methodology, poor coordination between government departments, and -- 
inevitably -- lack of funds. 
"I spoke to my colleagues from the FBI and they told me that the U.S.A. 
could not get to grips with the problem until all 52 relevant State 
Departments were united in the same program," said General-Lieutenant 
Anatoly Safonov of the Federal Security Service, or FSB. "Mind you, it 
took them 15 years to do that," he added. 
Mikhail Vanin, the head of the State Customs Committee's anti-drug 
department, said that his force's attempts to prevent the smuggling of 
narcotics into Russia was complicated by the customs union between 
Russia, Belarus, Kazakhstan and Kyrgyzstan. 
"We are on the verge of a situation when the unified customs zone can 
turn into a unified drug zone," Vanin said. 
NTV came under a storm of criticism last year from the Russian Orthodox 
Church for broadcasting the controversial Martin Scorsese movie "The 
Last Temptation of Christ" and is badly in need of some positive public 
exposure. 
The station started its own anti-drugs campaign earlier this year 
consisting of a series of hard-hitting anti-drugs commercials and the 
show "Sumerki," or Dusk. Malashenko also said that NTV and the 
Media-Most holding company are planning to run a contest for the best 
concept for an anti-drug media campaign. 

******

#6
Moscow Times
March 4, 1998 
Feminist Slams Male Stereotypes 
By David McHugh
STAFF WRITER

The fast-approaching International Women's Day holiday usually provides 
an occasion for men to buy flowers and Russia's beleaguered feminists to 
complain about discrimination against women. 
On Tuesday, this old theme took a different twist, with State Duma 
Deputy Irina Lakhova, a prominent promoter of women's issues, pointing 
out what she called Russia's massive discrimination against men at a 
news conference and discussion at the Central House of Journalists. 
Lakhova pointed to health and longevity statistics to bolster her point 
that Russian society's sex stereotypes are as hard on men as they are on 
women. Russian men can expect to live to be only 59 years old on average 
while women have a life expectancy of 73, the largest such gap in the 
world. 
She said rates of suicide, on-the-job accidents, alcoholism, drug abuse, 
and infectious diseases are several times greater for men than for 
women. 
"These statistics are terrifying," she said. 
Stereotypes about men are behind much of it, Lakhova said. The notion of 
the man as the primary earner in the home subjects many men to serious 
stress in an era of economic turmoil, when many people are not getting 
paid and few families can get by on just one salary. 
The argument made by Lakhova, who is coordinator of the political 
movement "Women of Russia," is that sex stereotypes hurt everyone. And 
so while men are busy thinking what sort of flowers to buy their wives, 
girlfriends or mothers, Lakhova urged them to think about how equality 
would benefit both men and women. 
Andrei Sinelnikov, project director for Male Solidarity, which offers 
telephone consultation for men who abuse their families, agreed and said 
society doesn't offer good models of male behavior. 
"They say, I want to act differently, but I don't know how. I don't have 
any skill for different behavior; I can't build my relations to my 
family on any other basis -- I've always done as I've seen others do 
around me," Sinelnikov said. 

*******

#7
USIA
03 March 1998 
TEXT: PICKERING ON CENTRAL ASIA, CAUCASUS, CASPIAN REGION 

Washington -- Ambassador Thomas Pickering, under secretary of state
for political affairs, outlined U.S. policy on Central Asia, the
Caucasus and the Caspian Sea basin region at a March 3 roundtable
discussion sponsored by the Senate Foreign Relations Committee.

"Our policy in this region has three main elements: to promote
sovereign, democratic and prosperous states at peace with their
neighbors; to foster conflict resolution; and to support the
development of an East-West transportation corridor that would bring
Caspian energy resources to market," Pickering said.

He discussed the region as a potential source of one of the world's
largest new oil and gas reserves, and its promise as a trade and
transport corridor linking Europe with Asia.

"The most significant threat to the stability and security of these
states remains the unresolved conflicts in the region," Pickering
said. "The U.S., working with the international community, is
committed to playing an active role in the search for balanced and
lasting settlements of the tragic conflicts affecting Tajikistan and
the Caucasus."

Following is the text of Pickering's opening statement to the
Roundtable:

(Note: In the following text, "trillion" equals 1,000,000 million,
"billion" equals 1,000 million.)

-----

DEPARTMENT OF STATE
Office of the Under Secretary for Political Affairs
SENATE FOREIGN RELATIONS COMMITTEE ROUNDTABLE
CENTRAL ASIA, CAUCASUS AND CASPIAN REGION
Thomas R. Pickering
Under Secretary of State for Political Affairs
March 3, 1998

OPENING STATEMENT

I welcome the opportunity to meet with you today to discuss U.S.
interests in the Caucasus and Central Asia, an area of growing
importance to the United States. Our policy in this region has three
main elements: to promote sovereign, democratic and prosperous states
at peace with their neighbors; to foster conflict resolution; and to
support the development of an East-West transportation corridor that
would bring Caspian energy resources to market.

The U.S. actively promotes political and economic reform, integration
into the international community, and commercial and trade
development. One of the most tangible ways in which the U.S. has
implemented its policy objectives is through assistance. Since 1992,
the U.S. has provided nearly a billion dollars in assistance to the
Central Asian states and well over a billion dollars in aid to the
states of the Caucasus. In recent years, our assistance has started to
shift from humanitarian relief assistance to development assistance.
We have supported programs designed to promote political and economic
reform -- from helping governments establish commercial codes and
legal and regulatory reform to working with non-governmental
organizations to support democratic development and human rights in
these countries.

We have also supported these countries' integration into the
international community through our support for their membership in
the United Nations, the Organization for Security and Cooperation in
Europe (OSCE), and NATO's Partnership for Peace. In addition, we have
promoted close ties with the World Bank, International Monetary Fund,
Council of Europe, and other international financial and political
institutions.

The Caspian Sea basin region, including portions of Central Asia and
the Caucasus, contains potentially one of the world's largest new oil
and gas reserves, perhaps worth trillions of dollars. Development of
these resources will benefit suppliers, consumers, and transit states
and help increase diversification of world energy supplies. Foreign
investment is crucial to this development and American companies have
been at the forefront of commercial activities in the region. We
continue vigorously to support their efforts.

As energy development offers benefits and opportunities to the broader
region, we support Russian and Turkish participation in Caspian Sea
energy production. Our position on Iranian participation is negative
because Iran continues to support actions which are not in keeping
with international standards. These include the development of WMD
[weapons of mass destruction] and missile delivery capability, the use
of terror as an instrument of state policy, and the support of
violence in opposition to the Middle East Peace Process.

We also support the development of multiple pipeline routes, including
an East-West Eurasian energy transportation corridor to carry Caspian
energy resources to world markets. This corridor would include
Baku-Ceyhan and trans-Caspian pipelines.

The Caucasus/Central Asian region also has great promise as a trade
and transport corridor linking Europe with Asia. This includes
East-West trade with China and other states. We have welcomed steps to
promote regional cooperation as a means of facilitating these
countries' growth as well as addressing problems that cut across their
national boundaries. The Trade and Development Agency's "Crossroads of
the World" Conference in May is just one example of our efforts to
support U.S. business and development and cooperation among the
countries in the region -- including Russia and Turkey.

The most significant threat to the stability and security of these
states remains the unresolved conflicts in the region. The U.S.,
working with the international community, is committed to playing an
active role in the search for balanced and lasting settlements of the
tragic conflicts affecting Tajikistan and the Caucasus. As a co-chair
of the Minsk Group, we have worked as an honest broker in trying to
resolve the Nagorno-Karabakh conflict. In Abkhazia, we have played a
key role as a Friend of the UN Secretary General. We continue to work
through the OSCE to support the peace process in South Ossetia.

In Tajikistan, we continue to monitor implementation of the peace
process and support UN efforts. With regard to Nagorno-Karabakh, I
might note that Congress can help us in our role as an honest broker
in the Nagorno-Karabakh peace process by repealing Section 907 of the
Freedom Support Act, which restricts aid to Azerbaijan. We have long
sought repeal to facilitate and support our efforts in the search for
peace in Nagorno-Karabakh. We are very interested in the
Brownback-Smith legislation, which takes note of our concerns
regarding Section 907.

We will continue to promote the development of this region, which is
important to our and their long-term interests. Thank you for this
opportunity to explain our policy in the Caucasus and Central Asia.

*******

#8
Soros To Invest Over $100 Mln In Charitable Programs For Russia 

MOSCOW, March 4 (Interfax-FIA) - The Soros Foundation in 1998 is planning
to invest more than $100 million in charitable programs for Russia,
well-known American businessman and philanthropist George Soros said at a
press conference at the Interfax news agency's main office Wednesday. 
Of this sum, $20 million will go to the Pushkin project which provides
for publishing 1,000 book titles annually and sending them to 3,500 Russian
libraries. 
Another $6.5 million will go to a medical project to combat
tuberculosis. In 1999 the sum invested in this project will probably be cut
down because there are plans to involve additional sources in financing it,
Soros said. 
He announced that from $4 million to $5 million will be contributed in
1998 to the implementation of another charitable and educational medical
project, Mother and Child, aimed at providing the population with medical
information. 
The Soros Foundation next year will make large investments in the
establishment of Internet centers at Russian universities. The investment
will amount to $20 million, Soros said. 
Another $5 million will be put into cultural projects, first of all in
supporting an art school which is restoring Kizhi (Karelia), a masterpiece
of Russian wooden architecture, and Leo Tolstoy's museum estate in Yasnaya
Polyana. 
He said regarding the Yasnaya Polyana museum-estate that there are plans
to set up a national trust organization, similar to trust organizations in
Britain and the United States, that might help preserve the Tolstoy museum
and other Russian historical and cultural monuments. 

******

#9
Yeltsin Aide Favors Changes to Electoral System 
Interfax
25 February 1998

Presidential representative to the State Duma Aleksandr Kotenkov has
said the parliament's lower chamber is unlikely to accept President Boris
Yeltsin's proposal that Duma elections on party lists be cancelled. This
proposal has caused heated debates, Kotenkov said at a roundtable in the
Central Election Commission Wednesday. Changes to election legislation are
possible because the Constitution does not set the election system, he
said.
The composition of the State Duma may be considered by the
Constitutional Court, because 50% of deputies were elected on party tickets
and "it is unclear whom they represent, especially those whose names were
not given on ballot papers," he said. On the whole, the Duma should become
less politicized and more effective, Kotenkov said. Introduction of
elections on party tickets was aimed at political structuring of society,
he said. However, the problem has not been resolved. Instead, many small
parties have emerged and the makeup of the present Duma does not reflect
the political composition of the society, Kotenkov said.
As a possible compromise, he proposed that elections on party tickets
be preserved but that all candidates nominated by parties be fielded in
specified constituencies. Votes cast in favor of these candidates will be
tallied and parliamentary seats will be distributed in proportion to the
total number of these votes, Kotenkov said. He said he was unaware of
alleged preparation of a referendum in support of Yeltsin's proposal to
scrap elections on party tickets. The President cannot hold a referendum
at his own discretion, Kotenkov said. The president can appoint a
referendum only at the initiative of 2 million citizens. Kotenkov said he
did not know whether action committees had been created or if signature-
collecting had begun.
The Central Election Commission is the main initiator of changes to
election legislation, even though the Constitution does not give the
commission the right to a legislative initiative, he said. This is natural
because members of the commission work with these standards on a day-to-day
basis and know them better than anybody else, Kotenkov said.

*******

#10
Yeltsin, Chernomyrdin, Others Accused of Lavish Living 

NTV 
25 February 1998
[translation for personal use only]

>From "Segodnya" newscast presented by Marianna Maksimovskaya

In Moscow today the chairman of the Duma Committee on Security, the
Communist Viktor Ilyukhin, asked the lower house to apply to the Prosecutor
General for the prosecution of top Russian leaders. Ilyukhin had Prime
Minister [Viktor] Chernomyrdin and First Deputy Prime Minister [Anatoliy]
Chubays in mind, first and foremost.
[Begin Ilyukhin recording] We are proposing that our evidence be
forwarded to the Prosecutor General of the Russian Federation, so that the
question of instituting criminal proceedings against Russian Prime Minister
Chernomyrdin and First Deputy Prime Minister and former Finance Minister
Chubays, as well as a number of other officials, can be considered. The
Audit Chamber considers that, as a result of patent abuses by high-ranking
government officials and officials of lower rank and their irresponsibility
in executing the law on the budget, the state has sustained losses of
65,800 billion rubles. [end recording]
Ilyukhin also spoke today about the president. Ilyukhin has
complaints about Yeltsin too.
[Begin Ilyukhin recording] I declare that the country is being ruled
by a collection of bribe-takers and unscrupulous people. The upkeep of the
president of the Russian Federation and members of his family is also
costing the taxpayer a great deal. This is what one of the Audit Chamber's
findings says, for example. Almost 1,000 billion rubles, earmarked for
support of the gold-mining industry, was spent on reconstruction of the
presidential residences at Gorki- 9 one and Gorki-9 two, on his aircraft,
the purchase of imported china, overhaul of presidential suites and so on. 
I think it is time for the president, who at the end of the 1980s and the
start of the 1990s declared a war on privilege, to sort out his own
privileges, in particular his residences at Barvikha, Zavidovo, Gorki,
Karelia, Sochi and so on. Isn't this too many for a single person and his
family? [end recording] [Video shows Ilyukhin addressing a news
conference]

******

#11
>From MSNBC
http://www.msnbc.com
Bad for Russia, bad for the world
Alexei Arbatov: When it comes to U.S.-Russia relations,
the risks of NATO expansion far outweigh the rewards
By Alexei Arbatov
SPECIAL TO MSNBC
Alexei Arbatov is deputy chair of the Defense Committee of the Russian
Parliament.

MOSCOW, March 3 — NATO expansion will plant a permanent seed of mistrust
between the United States and Russia. It will worsen existing differences
on everything from nuclear-arms control to policies in Iraq and Iran. It
will push Moscow into alliances with China, India and rogue regimes. And it
will move America towards unilateral actions, disregarding the interests
and positions of other states.
THE RECENT CRISIS over Iraq and rising U.S.-Russia tensions over the
use of force to ensure Baghdad's compliance with United Nations weapons
inspections speak to more than just differing responses to problems in the
Gulf region. The reasons for the widening U.S.-Russia gap are of a broader
nature and deal with the architecture of the whole post-Cold War security
system and the relative roles of major powers in its operation. 
The first serious crack in this architecture was created with a
decision at the 1997 NATO Madrid summit to extend the alliance to the East
by inviting Poland, the Czech Republic and Hungary to join NATO. There is
no doubt that the Iraq crisis was just the first big issue, affected by the
growing mistrust between Russia and the West. Others will follow, if the
issue of NATO enlargement is not quickly and efficiently resolved by a
mutually acceptable compromise. 
There is a broad political consensus in Russia that NATO expansion is
not just against Russian security interests, but also violates some
commonly accepted rules on which the Cold War was ended.
Moscow had agreed to the reunification of Germany and its staying in
NATO; to disbanding the Warsaw Pact and then the very Soviet Union; to
deeper reductions on nuclear and conventional forces than reductions in the
West; and on hasty withdrawal of 500,000 troops from comfortable barracks
in Central Europe to tent camps in Russian fields. But nobody took the
trouble to warn Russians that as a result of all these concessions and
sacrifices, NATO — the most powerful military alliance in the world — would
start moving towards Russian borders. 
To the contrary, Moscow was repeatedly told by the West that it
would be accepted as an equal and genuine partner, and that no major
decision on international security would be made without it. Well, the NATO
summit in Madrid came as a clear manifestation that such decisions may and
will be made and that Russia's opinion really matters only so long as it is
in line with Western position. 
It's not that Russians are against NATO as it is, but they would
prefer this great military alliance to find other functions, rather then to
extend to their borders without any plausible explanation for doing so. In
the aftermath of Paris and Madrid, the fundamental question in Russian
minds remains unresolved: if NATO expands as a superior military alliance,
what is the threat to the new member-states that would warrant such an
expansion — apart from "historic grievances", of which there is no shortage
in Russia? 
If, on the other hand, NATO extends in a new role — as a foundation of
a new European security system for peace-keeping — why the haste? Why is
Moscow's objection dismissed? If there is a reason to hurry, why is Russia
not seriously regarded as a member of such a system in the foreseeable
future? Why, instead, is it offered only a role in the "Partnership for
Peace" and yet another consultative committee? And why are those roles,
while good enough for Russia, considered insufficient for new members and
aspiring states? 
At best, NATO expansion to the east is regarded in Russia as a
mistaken policy, prone to complications and new controversies. At worst it
is regarded as the consummation of a "grand design" to encircle and isolate
Russia, establishing strategic superiority and finally destroying Russia,
ending once and for all Russia's role as a European power.
That reaction in Russia to the Madrid decision was mute should not
be a reason for complacency. Summer is a dead season for Moscow politics.
The issue of NATO expansion would soon surface in politics with a triple
force, around the defense budget; ratification of arms control treaties;
military reform and the management of regional crises like Iraq. In all
these cases, the expansion of NATO has been a major stumbling block.
One notion accepted in the United States is that the "man in the
street" in Russia doesn't care about NATO expansion. But ask a person who
is at all interested in foreign affairs and you discover a great deal of
concern. There are millions of pensioners, who remember horrors of the
World War II. There are millions of soldiers, workers in defense
industries, intellectuals, mass media professionals, federal and regional
government workers and political elites. These kinds of people — who show
up in large numbers to vote or directly conduct election campaigns, form
public opinion and elaborate practical policy decisions — they care very
deeply about the proposed expansion of NATO.
Another risk involves arms control. Chances for ratification of the
next phase of the START II treaty were quite high just a few months ago.
However, the political tensions over NATO enlargement may be used by
opponents of the treaty in Russian Parliament to block it once again. 
Personally, I'm fully committed to the ratification, but it's
worthwhile to keep in mind that the treaty envisions much larger cuts, at
much higher costs to Russian forces, than to U.S. nuclear forces. And it
should be remembered that when President Boris Yeltsin agreed to that in
1992, he could not have imagined that NATO would start moving towards
Russian borders. Still less could he have imagined that this would happen
against his clear objections to his "friend" Bill Clinton, his "friend"
Helmut Kohl and other pals in the West. 
It's surprising, even now, as the entire Moscow political kitchen is
open to mass media, that some people in the West fail to recognize, that
Russia, like the United States, is not a politically homogeneous entity.
Most Russian political actions are results of tough domestic infighting,
while foreign and domestic events shift internal balances of forces and
thus affect the resulting policy decisions.
Those who are against START II and any cooperation with the United
States will use NATO expansion to justify their case. Many of those, who
have been trying to persuade the West not to expand NATO and who were
striving for some compromise on START II, are the people who have staked
their careers (and probably more than that) on Russia's close and fair
cooperation with the United States. 
I would never claim that Russia has been faultless in its relations
with other nations and in addressing its domestic issues. However, the
Madrid summit and the ensuing NATO movement to the east would make
improving those policies much harder, and in some cases impossible at all.

NATO expansion will not topple Russian democracy, but it certainly
will make the goals of Russian democrats much harder to achieve. Madrid is
universally perceived in Russia (by some with grief, by others with
malevolence) as a major defeat of Moscow's policy of broad partnership with
the West. It is considered a great setback for Russian democrats, whose
domestic political positions, commitments and reform plans are largely
predicated on such cooperation. 
NATO expansion will remain a permanent seed of mistrust, controversy
and deadlocks on a broad range of international issues, from START II to
Iraq; and from transfers of nuclear and missile technology to the Caspian
Sea pipelines. Madrid's policy course will greatly strengthen the hand of
opponents of cooperative relations between Russia and the West on both
sides. It will push Moscow into various endeavors with China, India, with
anti-Western agendas and rogue regimes. And it will move the United States
towards unilateral actions, disregarding interests and positions of other
states and towards arbitrary use of force in the world. 

*******

#12
Washington Post
4 March 1998
[for personal use only]
Precursor to NATO Enlargement
By Alton Frye
The writer is senior fellow of the Council on Foreign Relations. 

The Post's Feb. 11 editorial "Opening NATO's Door" arrays important
considerations supporting NATO expansion, but it ignores serious questions
and constructive options that deserve attention in the coming Senate debate.
Given the "doubts" and "misgivings" mentioned by The Post, the task of
shaping a durable consensus among Americans must begin with points on which
advocates and skeptics of NATO expansion agree. The first such point is
clear: Strengthening the economies and democracies of Poland, Hungary and
the Czech Republic is an overarching priority.
There has been a crucial development in the months since the three
countries applied for NATO membership: They have been invited to negotiate
accession to the European Union. With such talks now imminent, the question
arises of how best to relate the prospect to their proposed NATO
membership. There are powerful arguments for synchronizing the two processes:
There is no near-term threat to the three candidates' security.
Modernizing their economies will do far more to shore up their
democratic institutions than symbolic association with NATO.
Meeting the military requirements of NATO membership will divert
resources from the urgent economic transformations needed for admission to
the European Union.
Phasing them into NATO after they join the European Union will greatly
strengthen their economic capacity to meet the substantial procurement,
training and operational costs alliance membership imposes.
Their active participation in NATO's Partnership for Peace already
affords them the full range of effective military cooperation for which
they are prepared.
More than three years ago a confidential document of the European Union
Council laid plans to integrate Central and Eastern European countries into
the European security architecture. It concluded that those states should
eventually become members of the European Union and its defense arm, the
Western European Union, and of NATO.
Setting aside the presumption that future members of the European Union
should be admitted automatically to NATO (thereby committing the United
States to help defend their territory), the logic of that analysis is
relevant to Senate action on NATO expansion. The European Union Council
already contemplates linkage between European Union membership and NATO
membership. It is entirely appropriate for the Senate to reach its own
judgment about how that linkage should evolve. 
Without rejecting the three pending candidates, the Senate can stipulate
that final admission to NATO should await entry into the European Union.
Indeed, by linking the two processes, the Senate would be applying useful
leverage to encourage the European Union to expedite accession negotiations
with the three countries. That would, in fact, serve Poland, Hungary and
the Czech Republic better than premature admission to NATO.
None of this addresses the fundamental differences over the
administration's open-ended approach to NATO membership. (Nor does it
assess the costs already incurred in slowing cooperation with Russia to
control and reduce the massive nuclear arsenals that are still our nation's
and the planet's gravest security threat.) NATO's integrated military
command and decision-making structure are vital, whether functioning as an
alliance in crises such as Bosnia or as the infrastructure for coalitions
to meet common dangers in the Persian Gulf or elsewhere. 
By insisting that NATO should remain open to many additional members
beyond the three current candidates, the administration would burden the
alliance with added responsibilities to risk blood and treasure, while
weakening its military cohesiveness and capacity for decisive action.
Moreover, grave problems lie ahead if the Partnership for Peace is seen not
as a suitable alternative to NATO membership but primarily as a pathway to
it. If NATO membership is the only way to avoid leaving former Soviet-bloc
states "marooned in strategic ambiguity," in The Post's words, the alliance
is bound to be debilitated. 
With 27 active partners, from Albania to Uzbekistan, it will not be easy
to open that pathway to some while excluding others. By encouraging the
ambitions of the Baltic states, the Bulgarians and other aspirants for NATO
membership, President Clinton is headed toward a juncture of divisive and
discriminatory choices. The fault line is already visible between us and
our European allies, who are wary of admitting the Baltics and adamantly
opposed to eventual Russian membership. The Senate needs to grapple with
these long-term implications.
The Post rightly says that there is "a moral heart to the case for
enlargement." In great issues of policy, however, moral claims are embedded
in political and strategic realities of immense complexity. Balancing those
claims and realities will test the Senate's conscience -- and measure its
statecraft.

********

#13
U.S. Surprised by Removal of Russian Atomic Chief 
Reuters
3 March 1998

WASHINGTON -- U.S. officials and independent experts said on Tuesday they
were surprised by the abrupt removal of Russia's powerful nuclear energy
minister, and they were divided about what it meant. 
Some analysts viewed it as a signal of Moscow's intention to cooperate
more closely with Washington on nuclear policy. But others dismissed that
view as overly optimistic. 
Victor Mikhailov, since 1992 head of the Russian nuclear energy
ministry, was removed on Monday by President Boris Yeltsin. 
Mikhailov, 64, spent much of his career developing nuclear weapons for
the Soviet Union. More recently, he brokered the deal to sell a nuclear
reactor to Iran, a move vigorously opposed by Washington on the grounds
that it would assist Tehran in developing nuclear weapons. 
"We did not have any indication that he intended to resign in our recent
contacts with him," State Department spokesman James Rubin told reporters. 
He said the administration had expected Mikhailov to participate in the
commission chaired by Vice President Al Gore and Russian Prime Minister
Victor Chernomyrdin which meets next week in Washington. But that
apparently will not be the case. 
U.S. officials are looking to the meeting to make progress on resolving
U.S.-Russian differences over Iran, which include Moscow's sale of
ballistic missile technology to Tehran. 
As far as whether Mikhailov's removal would affect U.S.-Russian
cooperation on nuclear issues, Rubin said: "Given the strong (U.S.)
presidential and vice presidential interest in this area ... we expect our
dialogue and cooperative work on nuclear matters to continue without
interruption." 
Privately, however, U.S. sources said there was rejoicing in some parts
of the U.S. government when Mikhailov's removal was disclosed. 
Several officials said they do not know for certain what lies behind
Yeltsin's action but some said it suggested that the relentless U.S.
campaign to persuade Moscow to halt nuclear cooperation with Tehran was
having an effect. 
The United States has accused Iran of trying to acquire a nuclear
arsenal, sponsoring state terrorism and undermining the Middle East peace
process. 
Washington and Tehran have been bitter enemies for two decades, although
there has been some improvement since last year's election of moderate
President Mohammad Khatami. 
U.S. officials said Mikhailov's removal may also be linked to suspicions
that he might be involved in corruption in connection with a lucrative deal
to sell uranium to the United States. 
Mikhailov has been one of the most influential figures in Russia's
nuclear establishment, aggressively seeking to market Russian technology
abroad in an effort to earn badly needed hard currency and to expand the
country's nuclear program. 
During a visit to Tehran last week, he reaffirmed Russia's intention to
continue investing in the offshore South Pars gas field, over which the
United States has threatened sanctions. 
Mikhailov also endorsed speeding up construction of a nuclear power
reactor in Bushehr, Iran, despite pressure from the United States for
Russia to end the project altogether. 
Mikhailov "is considered a difficult person to deal with from our point
of view," said Jack Mendelsohn, deputy director of the non-profit Arms
Control Association. 
"He had an agenda abroad that gave us a lot of problems with Iran but he
also had a very conservative agenda at home where he jealously guarded his
prerogatives and his institution's sanctity," Mendelsohn said. 
"We don't know who's coming next but assuming a neutral person is
appointed, it's probably an advantage to have Mikhailov out," he said. 
Mikhailov's removal may "suggest something bigger is going on here" and
that Yeltsin's government may even be ready to move ahead on approving the
landmark START 2 strategic nuclear arms reduction treaty, Mendelsohn added. 
But Leon Aron of the American Enterprise Institute disagreed, saying
Russia probably believes it has more to gain in money and prestige from
cooperating with Iran than not. 
"There's little left to Russia from superpowerdom ... While it's
possible Mikhailov's successor might be more civil and more flexible, I
think he'll probably continue the policy of exporting nuclear-related
technology," Aron said.

*******

#14
RFE/RL NEWSLINE Vol 2, No. 43, Part I, 4 March 1998

YELTSIN APPOINTS NEW ATOMIC ENERGY MINISTER. President Boris Yeltsin on 4
March appointed nuclear researcher Yevgenii Adamov to head the Atomic
Energy Ministry, Russian news agencies reported. Adamov was involved in the
Chornobyl cleanup and since then has been director of Russia's Power
Technologies Research Institute. He replaces Viktor Mikhailov, an
unexpected casualty of the recent cabinet reshuffle (see "RFE/RL Newsline,"
3 March 1998). After meeting with Yeltsin, Adamov told journalists that the
president has instructed him to preserve "parity" in nuclear weapons while
making it possible to reduce funds spent on Russia's nuclear arsenals.
Adamov also said Yeltsin told him to work on improving nuclear safety and
spoke "warmly" of Mikhailov. ITAR-TASS speculated that Mikhailov had
recommended Adamov as his successor. LB

********