March 25, 1998  
This Date's Issues:    2117  • 2118   

Johnson's Russia List
#2118
25 March 1998
davidjohnson@erols.com

[Note from David Johnson:
1. AP: No Major Shifts for Russian Economy.
2. Reuters: Communists Want Coalition Government.
3. Reuters: ''Soviet man'' becomes new-style Russian PM.
4. Moscow Times: Dmitry Zaks, Yeltsin Warns of Tougher Kremlin Rule.
5. Jamestown Foundation Monitor: LESS THAN MEETS THE EYE IN RUSSIAN 
GOVERNMENT OVERHAUL? 
6. Russky Telegraf: Yuri Golotyuk, PRESIDENT RETAINS CONTROL OF NUCLEAR
BUTTON.
7. Nezavisimaya Gazeta: Vitaly Tretyakov, THE LAST TEMPTATION BY YELTSIN.
8. Vladimir Shlapentokh: Korzhakov.
9. Stephen Blank: Yeltsin firing.
10. Ellendea Proffer: eXile.
11. Garfield Reynolds: Garbage about the eXile.
12. Journal of Commerce: John Helmer, US, British investors face off in
Russia.
13. Ronald Pope: Business Success in the former Soviet Union.
14. Journal of Commerce editorial: Russia's turmoil.
15. Sean Becker: Conference--The Caspian Labyrinth: Negotiating Security and
Prosperity.]
I
********

#1
No Major Shifts for Russian Economy 
By Vladimir Isachenkov
March 25, 1998

MOSCOW (AP) -- Russia's government shakeup will bring new faces to the
Cabinet but no major shifts in economic policy, a top presidential adviser
said today. 
Any personnel and policy changes ``will be positive, but not too big,''
Yevgeny Yasin, one of several dozen Cabinet members fired Monday by
President Boris Yeltsin in a massive government purge, told the Interfax
news agency. 
The biggest change in the economic sphere has already taken place: the
dismissal of First Deputy Prime Minister Anatoly Chubais, the mastermind of
Russia's unpopular economic reforms, said Yasin, a former economics
minister and longtime Yeltsin adviser. 
Meanwhile, Yeltsin's new acting prime minister, Sergei Kiriyenko,
prepared to pay his respects today to heads of Parliament's major factions,
including Communist leader Gennady Zyuganov. 
In an interview published in the daily Izvestia, the 35-year-old former
oil minister, with just seven months of government experience in Moscow,
admitted he faces a daunting challenge. 
``I feel frightened, very frightened,'' he said. ``It's impossible to be
a professional in every field. The essential thing is to clearly understand
where your competence ends and rely on members of your team for the rest.'' 
Yeltsin has made it clear that not all members of his former Cabinet
need clear out their desks, indicating that key advisers, like Foreign
Minister Yevgeny Primakov and Defense Minister Igor Sergeyev, are expected
to stay on. 
Yeltsin spokesman Sergei Yastrzhembsky has indicated that Kiriyenko has
a strong chance of gaining the president's nod for prime minister. But
Moscow pundits were still working overtime handicapping other possible
nominees. 
Among those named: First Deputy Prime Minister Boris Nemtsov; Moscow
Mayor Yuri Luzhkov; various provincial governors, including Dmitry Ayatskov
of Saratov and Konstantin Titov of Samara; Ivan Rybkin, the minister for
Commonwealth affairs; and Grigory Yavlinsky, head of the liberal Yabloko
Party. 
Most of those are far more prominent figures than Kiriyenko, a seemingly
mild-mannered man who more easily fits the profile of mid-level technocrat
than world statesman. Since November, he had been serving as minister of
fuel and energy. 

``Many of us don't know Kiriyenko well. For us, he's a mysterious
figure,'' said Gennady Seleznyov, the speaker of the State Duma, the lower
house of Parliament. 
Yeltsin has two weeks to submit a nominee to the opposition-dominated
Duma, where almost any choice acceptable to the president is likely to face
a difficult fight for confirmation. 
Yeltsin has ordered Kiriyenko to assemble a new Cabinet, but the acting
premier said he first had to develop an action plan for the government.
``Within a week, I'll present my proposals to the president,'' he said in a
wide-ranging interview on NTV television. 
Yeltsin has said that Russia needs a more dynamic leadership team to
revive the economy and protect democratic reforms. 
Foreign investors have watched the political shakeup with concern, but
there were no immediate signs of a panic or a pullout from Russian markets. 
Chernomyrdin, meanwhile, held an emotional farewell meeting with his
staff, in which he said he had no intention of retiring. 
``I feel that I can do a great deal, and I will do this,'' he said,
according to Interfax. 
His political party, Our Home is Russia, opens a congress in Moscow
tonight, and there has been speculation he may announce his candidacy for
president in 2000. 
Deputy chief of Our Home is Russia, Vladimir Ryzhkov, noted that ``the
entire political situation in Russia will change'' if Yeltsin decides to
run for a third term. 
There has been speculation that he might do so if the Constitutional
Court rules that his first term, which began under the old Soviet
constitution, does not count toward Russia's two-term limit. 

*******

#2
Communists Want Coalition Government 
Reuters
March 25, 1998

MOSCOW -- Russian Communist leader Gennady Zyuganov said on Wednesday that
his party, which dominates the Duma, will insist on forming a coalition
government. 
"We have offered to form a government of popular trust," Zyuganov told
reporters. "We will hold consultations today with the acting prime minister
(Sergei Kiriyenko) to discuss his vision of how such a government may be
formed." 
"We believe that they (the government) should be powerful, professional
people who have the backing of the majority in the Duma and the Federation
Council upper house," he added. 
President Boris Yeltsin sacked Prime Minister Victor Chernomyrdin and
the entire government on Monday, saying he wanted more dynamic economic
reforms. 
He gave outgoing Fuel and Energy Minister Kiriyenko, 35, a week and what
he described as a free hand to form a new Cabinet. 
The communists have long insisted that the government lineup should be
based on the balance of forces in the Duma. 
But the Kremlin has rejected any such demands, saying the Cabinet should
be a team of professionals rather than a coalition of political parties. 
The first deputy Duma speaker, Vladimir Ryzhkov, who belongs to
Chernomyrdin's faction Our Home Is Russia, said after meeting Kiriyenko on
Monday that the acting prime minister was unlikely to agree to the
coalition government either. 
Kiriyenko met the leaders of the Duma and Federation Council on Tuesday
and he is expected to meet ultra-nationalist Vladimir Zhirinovsky and
possibly leader of liberal Yabloko party, Grigory Yavlinsky, later on
Wednesday. 

"We are ready to offer a whole package of candidates for ministers,"
Zyuganov said. 
It was not clear whether Yeltsin would ask the Duma to approve Kiriyenko
as the full-time prime minister, but several top Kremlin officials have
indicated that he is the strongest candidate. 
Zyuganov, who earlier said he was doubtful about Kiriyenko's chances of
approval, skirted questions by reporters on whether his party would back
Kiriyenko if Yeltsin asked the Duma to approve him. 
"I think that in the current circumstances a powerful and professional
team is needed," Zyuganov said. "One person can hardly do anything --
besides he (Kiriyenko) lacks experience." 
Under the constitution, the president dissolves the Duma and calls a
fresh election if the chamber rejects three times in a row his candidate
for prime minister.
*******

#3
FOCUS-''Soviet man'' becomes new-style Russian PM
By Adam Tanner 

MOSCOW, March 24 (Reuters) - Sergei Kiriyenko had a good excuse for missing
his daughter's eighth birthday party -- he had just been named Russia's acting
prime minister. 
``I came home and she was already asleep, unfortunately,'' he said
ruefully in
a television interview on Tuesday. 
The 35-year-old fuel and energy minister, bespectacled and with thinning
dark
hair, appeared as surprised as anyone by his meteoric rise after President
Boris Yeltsin dismissed the previous government on Monday. 
An unknown quantity to Russians and the outside world alike, he described
himself jokingly as a ``Soviet man'' -- born in Georgia, with a Russian
mother, Jewish father and a Ukrainian surname. 
Friends and associates told Reuters on Tuesday that, apart from a shared
love
of hunting, Kiriyenko presents a complete contrast in background and style
with his dour veteran predecessor Viktor Chernomyrdin. 
``Sergei has three main characteristics: his energy, his intelligence
and his
ability to talk to people,'' said Alexei Likhachev, an old friend in Nizhny
Novogorod who heads the Aval insurance company. 
Like many older Russian government leaders, Kiriyenko got his first
taste of
leadership in a Communist Party organisation -- in his case, the Komsomol
youth league. 
But by the time he made it his full time job in 1987, the ``perestroika''
reforms of Soviet leader Mikhail Gorbachev had largely removed the ideological
shackles of the past. 
He said in his television interview that he had never formally left the
Communist Party and his membership card was still lying around at home. ``I'm
not ashamed of that portion of my life,'' he said. 
It is not yet clear whether Yeltsin will name another prime minister or ask
Kiriyenko to fill the spot permanently, but two senior Kremlin figures have
endorsed him as a strong candidate. 
His ability to manage the vast Russian bureaucracy and survive Kremlin
political battles remains to be seen, but as an outsider he has the advantage
of having few enemies -- yet. 
In interviews with Russian newspapers, Kiriyenko admitted his new
responsibility was frightening but said he did not see himself as a
``kamikaze'' -- a reference to previous reformers who have survived only

limited spells in government. 
His approach is typically soft-spoken, but he has been known to give
associates a dressing-down. 
``He seems like such a nice calm guy, but at the same time he is a very
tough
leader,'' Likhachev said. ``Of course he curses people when they fail to
perform.'' 
Kiriyenko also has strong intellectual credentials. 
``He always studied wonderfully and has a good, deep understanding of the
problems of the market economy,'' said professor Oleg Protsenko, who headed
the Moscow business school management programme Kiriyenko attended from 1991
to 1992. 
``He differentiated himself from other students with his ability to discern
the main point, but also to study further and go deeply into other areas he
didn't understand as well.'' 
Ignoring Protsenko's invitation to study for a doctorate, Kiriyenko went
on to
help found the Garantiya bank in Nizhny Novgorod in 1994. Interfax news agency
reported Yeltsin first met and was impressed by him when he visited the city
that year. 
His next job was to briefly head the Norsi oil company, Russia's third
biggest
refinery, from November 1996. 
``After his arrival things changed very quickly,'' said Maxim Krokhin,
assistant to the president. ``A decision had been taken that something had to
be done or the enterprise would face bankruptcy. A new team headed by
Kiriyenko was appointed, and he quickly worked out a crisis programme.'' 
Ally Boris Nemtsov, Russia's first deputy prime minister, brought him to
Moscow to serve as deputy fuel and energy minister in May 1996. By November he
was heading the ministry, and was seen as a fighter for reform. 
If the burly Chernomyrdin embodies the old-style Russian bureaucrat,
solid but
grey, Kiriyenko represents a newer model with free-market business experience.
In his spare time, he loves scuba diving and Japanese martial arts. 
``He's an athletic guy who lives a healthy life style. He does not smoke
and
rarely drinks,'' said Likhachev. 
Kiriyenko met his wife, a paediatrician by training, when they were both
students in Nizhny Novgorod. They have an eight-year-old daughter Lyuba, and a
boy, Volodya, in his teens.

*******

#4
Moscow Times
March 25, 1998 
Yeltsin Warns of Tougher Kremlin Rule 
By Dmitry Zaks
STAFF WRITER

One day after firing his faithful prime minister and dissolving the 
Cabinet, President Boris Yeltsin warned Tuesday that he will keep people 
in the new government on a much tighter leash. 
"We must create an environment in which everyone knows and feels that 
noncompliance with decrees is death," Yeltsin said sternly in televised 
portions of a Kremlin meeting. 
"Otherwise, you can either write your resignations or simply walk away," 
Yeltsin said to the stony silence of his most senior aides. Some nodded 
their heads and took notes. 
And as dust on the biggest political shake-up to rock the Kremlin in 
years seemed to be slowly settling, Yeltsin hinted that he was not done 
just yet. 
"Of course, some personnel changes will have to be made in the 
presidential structure. Not everything in your work is to my liking." 
After a week out sick, Yeltsin stormed back into the Kremlin on Monday 


to fire his entire government. He said the Cabinet needed new blood to 
take overdue steps to ease ordinary people's hardships, but analysts say 
Yeltsin is really more interested in showing he is in charge and not a 
lame-duck president, while also orchestrating his own succession. 
Despite Yeltsin's continued bluster Tuesday, several ministers' jobs 
seem quite safe. He had kind words for Defense Minister Igor Sergeyev -- 
in charge of the thankless army-reform effort -- and Foreign Minister 
Yevgeny Primakov, who has recently taken credit for helping avert U.S. 
military strikes on Iraq. 
Senior members of Yeltsin's administration hinted that other officials 
likely to make it back into the government include Privatization 
Minister Farit Gazizullin and First Deputy Prime Minister Boris Nemtsov 
-- either as prime minister or in some other senior capacity. 
"People like Farit Gazizullin must stay on," Yeltsin's deputy chief of 
staff, Alexander Livshits, said in a live interview with Ekho Moskvy 
radio. 
It is also clear that the Kremlin careers of fired Prime Minister Viktor 
Chernomyrdin, First Deputy Prime Minister Anatoly Chubais and Interior 
Minister Anatoly Kulikov are over, at least for now. All three showed up 
to work Tuesday to clear out their offices. 
Chubais ceded his room in the White House, the main government building, 
to boyish Sergei Kiriyenko, the new acting prime minister. 
The 35-year-old was unexpectedly plucked by Yeltsin from his Fuel and 
Energy Ministry post. Yeltsin gave the Nizhny Novgorod native who came 
to Moscow only last year seven days to propose a new government for 
Russia.But it is not at all clear if Yeltsin will ask Kiriyenko to stay 
on the job permanently. 
The president has two weeks to present his nomination to parliament for 
confirmation. Neither he nor Kiriyenko is saying who that person might 
be. 
Making sure not to irritate Yeltsin, who came back from his illness in 
rare fighting form, Kiriyenko refused even to hint who might be included 
in the new Cabinet. 
He redirected all such questions to the president. 
"Let's just say that personnel questions are not that important," 
Kiriyenko told reporters. "It is more important to solve a set of 
problems" that have been outlined by Yeltsin. 
"I have not spoken with anyone about appointments over the past two 
days," he later said on NTV television's "Hero of the Day" program. 
Kiriyenko said he was not concerned about whether Yeltsin would give him 
the prime minister's job permanently, adding that he would be happy to 
return to the Fuel and Energy Ministry to attend to "unfinished 
business." 
The Kremlin is saying nothing official, but the list of potential 
candidates seemed to dwindle by at least one -- Gregory Yavlinsky, the 
democratic opposition leader of the Yabloko faction, who cut short his 
trip to Germany on news of Monday's bloodletting in the Kremlin. White 
House spokesman Igor Shabdurasulov, who had been Chernomyrdin's personal 
press secretary, said at a news briefing that Yavlinsky's candidacy was 
not being considered. 


Another potential candidate, Moscow Mayor Yury Luzhkov, said nothing of 
wanting the job Tuesday. He said he knew very little about Kiriyenko but 
would fight his policies if they turn out to be similar to Chubais'. 
Meanwhile, Chernomyrdin, who was loyal to Yeltsin for five years and was 
one of Russia's longest-serving officials until getting the ax Monday, 
put the best spin possible on his fate. 
"I feel that everything is still in the future, or at least that a lot 
more can be done," he told colleagues in the White House, who greeted 
him with warm applause and thick bouquets of roses. 
Chernomyrdin repeated that he will concentrate his efforts on preparing 
the "party of power" -- a loose affiliation of Kremlin insiders and 
their business and parliament friends-- for the 1999 parliamentary and 
2000 presidential elections. 
After firing Chernomyrdin on Monday, Yeltsin put him charge of preparing 
for the elections, but it was unclear whose presidential campaign the 
former prime minister would be running. Yeltsin has left his choice of a 
successor wide open, and also has not ruled out running for a third term 
himself. 
A senior member of Our Home is Russia, Vladimir Ryzhkov, said 
Chernomyrdin is the most likely candidate to receive the faction's 
nomination for president. 
But while pundits are not at all sure of Chernomyrdin's presidential 
chances now that he is out of office, his spokesman said Chernomyrdin 
has no plans to follow Chubais into the private sector. 
"He does not plan to look into offers from any commercial structures," 
Shabdurasulov said. "The president instructed him to work in politics, 
not business." 

********

#5
Jamestown Foundation Monitor
25 March 1998

LESS THAN MEETS THE EYE IN RUSSIAN GOVERNMENT OVERHAUL? Russia's acting
prime minister Sergei Kirienko is proceeding with assembling a government
for President Boris Yeltsin's approval. He has two weeks in which to do so.
It is becoming increasingly clear that, though Yeltsin sacked the government
as a whole, many if not most of the outgoing ministers can expect to retain
their jobs. This certainly applies to Foreign Minister Yevgeny Primakov and
Defense Minister Igor Sergeev, both of whom were warmly praised by Yeltsin
yesterday (see following story). It also seems true of Boris Nemtsov.
Nemtsov is much in evidence as Kirienko's right-hand man in the every day
running of the government. The only ministers who seem definitely to have
lost their jobs are those whom Yeltsin dismissed personally by decree:
former Prime Minister Viktor Chernomyrdin, First Deputy Premier Anatoly
Chubais (whose office Kirienko has taken over) and Interior Minister Anatoly
Kulikov, who evacuated his office without a word. It appears, in other
words, as if Yeltsin may have used the dramatic dismissal of the government
both as a way of showing that he was still in charge and as a smokescreen
behind which to get rid of Chernomyrdin (Europe's longest-serving head of
government save Germany's Chancellor Helmut Kohl). 

Conspiracy theories abound. Media tycoon Boris Berezovsky added to them
yesterday by giving a series of rambling interviews in which he claimed to


have been the guiding spirit behind the replacements. (Financial Times,
March 25) Berezovsky is indeed close to the Yeltsin family, especially
Yeltsin's daughter, Tatyana Dyachenko. He may well have played some role,
though the rationale for Chernomyrdin's replacement that Berezovsky put
forward yesterday is one that others have also voiced in recent months.
Berezovsky said he had advised Yeltsin that, with only two years before the
presidential election, the pro-capitalist camp had no candidate capable of
winning a popular election. Berezovsky described Chernomyrdin, Nemtsov and
reform economist Grigory Yavlinsky as unelectable. This meant that the
election would be won by a candidate--Communist leader Gennady Zyuganov,
Moscow Mayor Yuri Luzhkov or maverick General Aleksandr Lebed--incapable, in
Berezovsky's view, of managing the economy. It was, in other words, vital
for Yeltsin to clear the decks and to begin grooming a successor able not
only to run the capitalist economy but also to win a popular election.

Strong rumors are afloat that Kirienko, who moved to Moscow from Nizhny
Novgorod only a year ago, will bring some provincial governors into the new
cabinet. Yegor Stroev from Orel, Mikhail Prusak from Novgorod, Konstantin
Titov from Samara and his rival Dmitry Ayatskov from Saratov are all names
to watch.

*******

#6
>From RIA Novosti
Russky Telegraf
March 24, 1998
PRESIDENT RETAINS CONTROL OF NUCLEAR BUTTON
By Yuri GOLOTYUK

Reshuffles in the Russian government invariably worry the
rest of the world. This is understandable in the case of a
nuclear superpower. Yesterday's changes in the government
reminded the world about the nuclear button, since these
changes concern people who have a direct relation to the
button. 
In Russia's recent history, the nuclear button often
turned from an ordinary device ensuring the defence ability of
the country into a symbol of stability of the authorities. It
was not by chance that we thought about it in the frightening
days in 1991 and 1993, when tanks thundered through Moscow
streets, or in 1996, when nobody ventured to predict the
outcome of Yeltsin's heart surgery. 
Our sources in the Defence Ministry say that yesterday's
changes did not affect the control system of the national
strategic nuclear forces and tactical nuclear weapons. "The
technical means of control did not change hands," our sources
say. Meaning the hands of President Yeltsin and Defence
Minister Sergeyev. 
We know that the current control system provides for the
existence of the so-called nuclear cases (officially called the
mobile Cheget displays of the special Kazbek conference
communication system), held by at least two leaders - the
President and the Defence Minister. 
Initially, the conference communication system, designed
at the end of the cold war in the early 1980s, when the Soviet
leadership feared a surprise US nuclear strike, provided for
the existence of three cases, with the third Cheget display
held by the Chief of the General Staff. 
It appears that in January 1995, when the president's
nuclear case signalled alarm over the launching of the Black


Brant Norwegian-US weather rocket, Mikhail Kolesnikov, then the
Chief of the General Staff, held one of the nuclear cases. 
But there are not grounds to believe that the current
chief, Anatoly Kvashnin, inherited the case from his
predecessor. He may get it only if Defence Minister Sergeyev
resigns. The Minister has two first deputies, who will step
into his shoes - General of the Army Kvashnin and the
ministry's Secretary of State Nikolai Mikhailov. 
Our sources say that the number of Cheget displays may be
reduced yet again, and in this case only one man will hold the
nuclear case, which will turn into the symbol of autocratic
presidential power. Moreover, experts believe that the Cheget
displays cannot be used to directly order the firing of
missiles. They are used by the political-military leadership of
the country to deblock the nuclear arsenals, while the
subsequent control of the strategic nuclear forces belongs to
the General Staff.

********

#7
>From RIA Novosti
Nezavisimaya Gazeta
March 24, 1998
THE LAST TEMPTATION BY YELTSIN
Three Candidates for the 2000 Election: Yeltsin,
Chernomyrdin and a New Premier
By Vitaly TRETYAKOV

The current political crisis is one of the major crises in
Russia's recent history and it may be compared for its
significance to three events only: Gaidar's resignation in
1992, the political standoff in the autumn of 1993 and the 1996
presidential election.
What caused the crisis? The absence of tangible and real
economic progress: no President would dismiss the government
that lays the golden eggs of reform. However, this is not the
main reason, because it was possible to change the economic
team without so much fuss.
The second reason is more significant: Boris Yeltsin has
finally ended the conflict of interests that tore the
Government apart and made it incapable, ousting from the
Cabinet both main participants in this conflict.
The third reason is the most important one. With this 
pre-emptive strike Boris Yeltsin tried to seize political
initiative from all who had any plans to participate in the
2000 presidential election campaign. This applies to the
Chernomyrdin camp as well as the Chubais camp and the Luzhkov
camp.
In the latter case it is the most sensational dismissal,
the sacking of Interior Minister Anatoly Kulikov, that matters.
I think Mr. Kulikov was punished, first, for his latest 
electoral alliance with the Moscow Mayor and, second, because
owing to his position, he could not but be enlisted to the
implementation of the scenario of an early transfer of power to
the adversaries of Anatoly Chubais (there is no doubt that such
an operation, designed to prevent Chubais' supporters from
coming to power, was prepared).
Chernomyrdin has lost tactically but not yet
strategically. His more than honourable resignation,
accompanied by Yeltsin's instruction to prepare the
presidential elections, means that Yeltsin has given
Chernomyrdin a chance, but to win the latter must now compete
with the man who will head the new government. Chernomyrdin may
win or he may lose, one possibility is just as good as the

other. 

*******

#8
Date: Tue, 24 Mar 1998 
To: ludmila@erols.com, davidjohnson@erols.com
From: Vladimir Shlapentokh <shlapent@pilot.msu.edu>
Subject: Korzhakov

Dear Ms.Foster:
You probably omitted in your reading of the book not only several
innuendos,indeed indirect,but also one direct nice comment,quite genuine
and spontaneous: Korzhakov suggested people with Jewish features not to
appear on TV during the Presidential campaign in 1996 in order not "push
away potential votes for president"(p.329). Of course,anything can be
interpreted differently and even in Zavtra or whatismore in Duel the authors
do not declare themselves deeply rooted antisemites however how this remark
sounds by American rigorous standards?
many thanks for your attention to my piece
Greetings Vladimir 

*******

#9
Date: Wed, 25 Mar 1998 08:44:01 -0500
From: blanks@carlisle-emh2.army.mil (Stephen Blank)
Subject: Yeltsin firing

I have some thoughts to offer as to the firing of the cabinet, based 
upon my conversations with Jake Kipp and the readings. Hopefully they 
shed at least a partial light on some of Yeltsin's motives. This 
argument cannot explain the whole story, but there is an important 
military element to this story.

We contend that one reason Yeltsin fired his cabinet was that this 
was the only way he could get rid of Kulikov without provoking an 
immense crisis in the Duma given Kulikov's great popularity among the 
opposition. The reasons for firing Kulikov are as follows:

1. In February he publicly came out against the military reform, 
arguing for a greater emphasis on conscription and readiness for all 
kinds of contingencies including large-scale conventional theater war, 
not just local wars like Chechnya or peace operations as in 
Tajikistan. This public opposition to the MOD and to Yeltsin came 
quite close or could have come close to the loud and public opposition 
movements in the Duma among the opposition and more dangerously, that 
are led by Lev Rokhlin. Rokhlin is organizing in the provinces and 
there is no doubt that there is sizable military opposition to the 
new reforms which, in any case, are being implemented with great 
difficulty, if at all. The danger Yeltsin undoubtedly saw is a linkup 
between the Parliamentary and military oppositions with Kulikov playing 
a prominent role and having the power to be a kingmaker or a coupmaker 
as he has done in the past. Hence he had to go. But the only way 
Yeltsin could dismiss him without provoking a major Parliamentary 
crisis that could trigger his worst fears about a military opposition 
is to dump the entire cabinet with Kulikov and bring those people whom 
he needs or values, or trusts, back. Moreover, had he let 
Chernomyrdin, who was politically aligned with Kulikov, do the deed, 
it would have signified Chernomyrdin's authority over the power 
ministries and not Yeltsin's.



While this probably does not account for the whole story, it makes 
sense that this is one reason for the firing of the cabinet and that 
Yeltsin is not the doddering fool he is portrayed as being. He may be 
sick but it is unlikely that he is a fool or that he has lost his 
wits. As for the reports about Berezovsky or other would-be boyars at 
Yeltsin's court, they may or may not be part of this intrigue. But we 
should not overlook the very important military and power element of 
these events and more generally in Russian politics. 

*********

#10
Date: Tue, 24 Mar 1998 22:06:04 +0000
From: Ellendea Proffer <eproffer@worldnet.att.net>
Organization: Ardis Publishers
Subject: eXile
After a million years of watching the press in Russia, I have the
following to say about the EXILE stuff: it's so easy to criticize, so
hard to do. EXILE breaks no real stories most of the time, it's a nice
little carping organization, and such things are always useful as a
corrective. But it is also true that a reporter on the ground gets the
story as well and as quickly as he can--and those are extremely narrow
parameters. To know who's lying and who's not is pretty hard, and
covering your ass with vague comments is entirely understandable. Of
course Stanley and Specter are far from the best journalists the NYT has
sent to Russia, for exampleÑbut they are also not the worst. 
As for the muckraking needs of the new Russia: a context is needed, not
just to justify horrors, but to put them in perspective. When a nation
is feeling its way toward democratic freedom, a little realism is
required. Who among us could really have thought that the new Russia
would be acceptably law-abiding overnight (in this case overnight equals
ten years)? Just like the old black market reflected the "real" prices
of everything, this new Russia is reflecting the "real" evolution of the
country. It's no good to demand from Russia what it took us 100 years to
obtain in the areas of law and citizenship. Criticism is legitimate, but
not when it ignores the context of a country which was deprived of its
natural evolution. 

E. Proffer
Ardis Publishers
24721 El Camino Capistrano
Dana Point CA 92629
phone: (714)-248-4910
fax: (714)-248-5381
email: publisher@ardisbooks.com
If you are interested in Russian literature, please access our
website: 


http://www.ardisbooks.com

********

#11
Date: Wed, 25 Mar 1998 13:48:08 +0300
From: Garfield Reynolds <garfield@times.spb.ru>
Organization: St. Petersburg Times
Subject: Garbage about the eXile

Dear David,

I can be silent no longer about my admiration for the eXile and the job
it does. Doctor Kollmann's astonishing lack of awareness has forced me
to weigh in.

As Rik (spelled with a silent P) of the British TV show the Young Ones
once said: "It's a joke silly .... And you fell for it like the FASCIST
you are!"

I personally find Mark Ames stuff overdone and sophomoric, but I would
never for one moment take his drivelly attempts at satire any more
seriously than Ames does.
I will say that when I visit Moscow one of the first things I look for


is the eXile. Apart from anything else it gives by far the best, most
accurate and most amusing coverage of the Moscow night and restaurant
scene. This is often (though not always) the case with its investigative
stuff. 

I am hoping that Taibbi's estimable and essential press review will
continue and that it is having or will have some effect. I notice that
Reuters is a bit less shy about mentioning Chubais stock market earnings
when out of government and his book deal -- though they still get
forgetful about calling it the bribe that it so obviously was. 

AP has also improved, and in their coverage of the sackings prominently
mentioned that Chubais received the money for a book that has never been
published from a bank that benefitted from privatizations. And that
critics called it a defacto bribe. 
I do not know if the above matters mean that Taibbi's work is having an
effect on anything other than the Johnson list. I hope it is and that he
and David J keep up the good work.

Garfield Reynolds, 
Business Editor, The St. Petersburg Times.

*********

#12
Journal of Commerce
March 25, 1998
[for personal use only]
US, British investors face off in Russia
Accountability again in focus at steelmaker
American investors are blocking attempts by British shareholders to make 
management more accountable. 
BY JOHN HELMER
JOURNAL OF COMMERCE SPECIAL

MOSCOW -- Novolipetsk Metal Combine, Russia's leading steelmaker, is 
locked in a stalemate of rival U.S. and British shareholders that shows 
no sign of a breakthrough.
Adopting the same stonewalling tactics that they once accused the 
London-based Trans-World Group of using, the Reform Group of American 
shareholders blocked several challenges to the management at an 
emergency meeting of Novolipetsk shareholders on March 14.
The Reform Group includes the George Soros vehicle, Cambridge Capital 
Management, and Boris Jordan's Renaissance Capital, which has merged 
with Uneximbank of Moscow. 

Switching sides

Vladimir Lisin, who was previously allied with Trans-World through a 
trading company called Intertrade, switched sides late last year to join 
the Reform alliance. Together, they hold more than 60% of Novolipetsk's 
shares.
The latest meeting was called by the Trans-World Group, whose Russian 
companies, titled Kasmet and Argistal, control about a third of 
Novolipetsk's shares. The Trans-World Group called for a vote on the 
proposed charter of the company, which the Reform Group had blocked for 
months last year. 

Contracts at issue

Also on the agenda were challenges by Trans-World Group to the current 
board of directors, and to trading contracts between the big steelmaker 
and Worslade, an Irish offshore trading group associated with Mr. Lisin.
In an interview, Mr. Lisin refused to confirm or deny his ties to 
Worslade. Trans-World sought to have the board of directors disclose the 
arrangements they have made with this company. 
The move was blocked by Mr. Jordan's representative, Dimitri Bakatin. He 
told the shareholders' meeting that Trans-World had failed to present 
proof of the Worslade contracts it sought to challenge.


Mr. Lisin admitted earlier this year that the contracts exist. Asked to 
clarify what the relationship is with Worslade, he said, "Novolipetsk 
works with several traders, including Worslade."
Mr. Lisin also was asked to clarify reports that Novolipetsk is 
considering a new trading arrangement with Paragale, a Cyprus-registered 
offshore vehicle believed to have been created by Trans-World to escape 
the legal tangles in which Worslade is embroiled. Mr. Lisin refused to 
comment.
Novolipetsk's trading policy, he added, allows for "cooperation with 
everybody, especially those who don't try to damage the plant."
A year ago, when Mr. Lisin was voting with Trans-World to block the 
Reform Group's demand for seats on the Novolipetsk board, he claimed 
that Cambridge Capital and Uneximbank would damage the company's 
prospects if they were elected to the board.
On March 14, Mr. Lisin and his allies managed to deflect Trans-World's 
shareholder challenge to the new board, arguing that it lacked an 
alternative slate of candidates. Trans-World's move was voted down. 

Charter adopted

The Trans-World bloc was able to muster enough votes to block adoption 
once more of the Novolipetsk company charter. A year ago, when Cambridge 
Capital managed to do the same thing, it claimed the company was 
operating "illegally."
Pressure from American steelmakers is restricting sales of rolled steel 
products from Novolipetsk in the U.S. market this year. This is forcing 
the Novolipetsk management to shift toward producing cheaper billet, a 
move Trans-World accuses the American investors of shortchanging the 
company. 

*******

#13
Date: Wed, 25 Mar 1998 08:22:57 -0500
From: Ronald Pope <73123.3543@compuserve.com>
Subject: BUSINESS SUCCESS IN THE FORMER SOVIET UNION

Dear Mr. Johnson:

I just learned about your Russia List through a contact at RFE/RL. 
Following are two brief essays [DJ: One here] I have recently written which
might be
suitable for posting on your List. If so, please feel free to use them. 
For additional information on our activities in Vladimir, please see our
new website: http://www.serendipity-russia.com/default.html. (I will
appreciate it if you will include a link to this website with the
essays--if you use either of them.)

BUSINESS SUCCESS IN THE FORMER SOVIET UNION
The Essential Role of Public Relations

Dr. Ronald R. Pope, President & Senior Consultant
Serendipity: Russian Consulting & Development, Ltd.
Associate Professor of Russian Politics
Illinois State University

The former Soviet Union is a veritable gold mine of business
opportunities--set in a landscape loaded with land mines. Assets include
pent up consumer demand for quality products, an abundance of natural
resources, a workforce willing to accept wages well below Western standards
(especially if paid on time), and, in general, considerable under-utilized
human talent. Among the problems and threats to business success are crime
and corruption, an illogical tax system that if fully applied would
confiscate all profits, 
often arbitrary rules and regulations (which aid and abet the corruption),


and after decades of Communist propaganda on the evils of capitalism, a
population very wary of foreign investors. For instance, in a recent
opinion poll, Belorusians indicated by a two to one margin that they did
not want foreign investors to be able to purchase controlling interests in
local companies. (U.S. Information Agency report, July 18, 1997.)

Westerners appreciate businesses with social responsibility. This can be
even more important for foreign businesses operating in the former Soviet
Union. Successful investment in this region requires, among other things,
overcoming the population's "greedy capitalist syndrome." That is, to earn
the respect 
of their labor force and the acceptance of the local population, investors
must effectively present themselves as "good neighbors," rather than
exploitative capitalists who have come to town only to take advantage of
cheap labor and bribe-taking officials. This requires a well thought out
public relations campaign which takes into account the idiosyncrasies of
Post-Soviet culture and the specific needs of the local community.. 

Initially, investors who provide jobs with above average wages--which are
in fact paid each month--will be welcomed by the local community. However,
when it becomes clear that only a small percentage of the town's unemployed
and under employed will actually be hired, the envy of those on the
"outside" can 
quickly become a problem. For example, an investor's factory or offices
can become the target of costly vandalism--with no one in the community
helping the authorities find the guilty parties, and with the authorities
themselves quite possibly not making a serious effort to solve the crime. 

The key to long term success is for investors to identify needs and
formulate an approach whereby the community as a whole will benefit from
their presence, not just those lucky enough to be hired by their firm. In
this way, the community will have a vested interest in the success of
foreign investors--and it will be much easier for the investor to obtain
needed assistance when problems inevitably arise. An added, and
potentially very valuable benefit of a positive public image is that local
officials will find it more difficult to 
ignore an investor's legitimate interests or to pursue bribes.

An effective public relations campaign must involve substance, not just
favorable mention in the local media. In other words, there must be actual
benefit to the community. However, it is not necessary to invest in
expensive projects, such as building a new hospital or a new school. 
Helping to upgrade existing institutions and services will be well
received. 

For example, linking local doctors and nurses with their Western
counterparts can result in improvements in medical care in the host
community, in part through a significant boost in morale. A direct
contribution can be made by including donated medical equipment with any
shipments made. Providing used computers to the local schools, where
generally there are no computers, also can be quite helpful.


Since building a model American home in Vladimir, Russia in 1992,
Serendipity has acquired substantial experience with not-for-profit
projects. These include a very successful American English and culture
program, assistance with law enforcement training, and help with art
exchanges. As a result, when assistance has been needed, we have had a
variety of contacts to turn to, and we have been given a fair hearing and
have been treated with respect, whether by the city gas company or by the
judicial system.

********

#14
Journal of Commerce
March 25, 1998
[for personal use only]
Editorial
Russia's turmoil

Is Russian President Boris Yeltsin out of his mind? Just as his country 
finally shows a hint of stability and economic growth, the ailing Mr. 
Yeltsin sends Russians -- and Westerners -- reeling by sacking his prime 
minister and his entire Cabinet. 
Mr. Yeltsin is almost certainly sane, even if his health is poor. 
Indeed, his actions this week look more like clever Kremlin politicking 
than anything else. And in a testament to the country's nascent 
stability, and Mr. Yeltsin's commitment to reform, Russia's economy is 
likely to suffer only slightly from this shake-up. The real test for 
Russia is not what happens this week, or whom Mr. Yeltsin chooses as the 
new prime minister, but the eventual choice of a leader to succeed Mr. 
Yeltsin himself.
Mr. Yeltsin purged his government, he said, to spur lagging economic 
reforms and to introduce fresh ideas. Yet, Russia has recently started 
to show its first economic signs of life. After six years of free fall, 
the economy actually grew in 1997, though at a barely perceptible 0.4%. 
Still, growth of around 1% is expected this year, and other evidence has 
been positive as well. Inflation is at its lowest point since reforms 
began, interest rates have fallen nicely and Russia seems to have 
weathered the Asian flu fairly well.
So why did Mr. Yeltsin fire his workmanlike prime minister, Victor 
Chernomyrdin, who was reasonably well-regarded by most of Russia's 
factions and by Western investors? No one but Mr. Yeltsin knows for 
sure, but politics -- and the Russian presidential election in 2000 -- 
seem to be the best bet. 
Mr. Chernomyrdin, after nearly six years as prime minister, had become 
an increasingly assertive figure in Russia's government. He clearly saw 
himself succeeding Mr Yeltsin, who cannot run for another term. By 
firing Mr. Chernomyrdin and appointing a new prime minister -- subject 
to Parliament's approval -- Mr. Yeltsin can give someone a leg up in the 
next election.
This election, more than anything, will determine Russia's future. Mr. 
Yeltsin, for all of his faults, delays and digressions, has generally 
backed economic reforms from the day he took power. This has led to a 
saying among frustrated reformers: "Boris Yeltsin -- the worst possible 
president for Russia, except for the alternatives."
But unless Mr. Yeltsin finds some way to change Russia's Constitution 
and run again -- which he may be considering -- one of those 
alternatives will become president in two years. Some of the younger 

reformers might, in fact, do a good job, but they may not have the 
popular support to get elected. The other choices include ex-generals 
with anti-foreign agendas, barely reformed communists and crony 
capitalists. If someone from that crowd is elected, Russia may be in 
serious trouble. Thus Mr. Yeltsin could turn this week's purge into good 
news if he builds support for a bona-fide economic reformer.
Most foreign investors, meanwhile, are taking the shake-up in stride. 
Mr. Yeltsin made it clear Russia's economic policies would not change, 
and the markets seem to believe him. Russia's stock market fell 4% in 
the hours after Mr. Yeltsin's Monday announcement, then roared back and 
opened higher Tuesday. Russia also went ahead with a 1 billion Deutsche 
mark Eurobond offering -- which it later raised by 250 million marks -- 
evidence that investors were unconcerned with Monday's crisis.
Russia now faces three tasks. Most immediately, Mr. Yeltsin must select 
a new prime minister committed to economic reforms. Next, that prime 
minister must push through the Parliament tax code revisions and other 
changes that will increase investment and give businesses greater 
certainty. Finally, and most important, Russia's reformers must develop 
a political and economic strategy that keeps them in power after 2000. 
That, not this week's shake-up, will decide Russia's future. 

********

#15
Date: Tue, 24 Mar 1998 22:31:55 -0500 (EST)
From: Sean Becker <sbecker@emerald.tufts.edu>
Subject: The Caspian Labyrinth: Negotiating Security and Prosperity
I
Dear David, 
I was hoping that you would include the following on yet another
Caspian conference. It is this Saturday, March 28, 1998 in Medford,
Massachussetts( near Boston). Thanks.

Sean Michael Becker
The Fletcher School
(781) 391-4320

The Fletcher School of Law and Diplomacy announces the conference 

"The Caspian Labyrinth: Negotiating Security & Prosperity",

to be held on Saturday, March 28, 1998 in Medford, Massachusetts at The
Fletcher School at Tufts University. The conference will consist of four
panel discussions and will run from 8:30 am to 5:00 pm. The four panel
discussions will be:

Ethnic Conflicts in the Trans-Caucasus: Territorial Integrity versus
National Self-Determination?
Law of the Caspian
Negotiating Business Deals in the Caspian Region
The Pipeline Game: Russia, Turkey, Iran and the West

"The Caspian Labyrinth" is organized and sponsored by student
groups at The Fletcher School, including the International Negotiation and
Conflict Resolution (INCR) group, the South West Asia Program (SWAP), and
the Eurasia Club. The Fletcher School invites all members of the local
professional and academic communities who are interested in Central Asia,
Negotiation and Conflict Resolution, and the developments relating to oil
and gas exploration in Central Asia. 

The Caspian Sea region is an area of major importance in world
politics and business. Located in the historic Silk Road, the Caspian
basin represents a meeting point for the major civilizations of Persia,
Russia and the Central Asian nations of Azerbaijan and Turkmenistan. The

Caspian Sea is estimated to hold reserves of petroleum and gas comparable
to those in the North Sea. Oil exploration and development is
handicapped by ethnic fighting and international legal challenges
concerning national sovereignty and control of the oil resources of the
Sea. Questions about how to deliver oil and gas from the landlocked
Caspian Sea basin to markets in Europe and Asia are complex and face
challenges that include geographical and political factors. The Central
Asian and Trans-Caucasian region is struggling with economic reform and
development, and with issues of independent state building after the
collapse of the Soviet Union. 

Presenters include members of the diplomatic corps of
Turkmenistan, Iran, and Azerbaijan; U.S. government officials,
multinational oil company representatives and Boston area specialists on
the Middle East and Oil Development issues. 
The conference will run all day on Saturday, March 28th, and
admission is free. Pre-registration via e-mail is requested for a
participants directory. Submit name, institutional affiliation, address,
e-mail and phone/fax numbers to sbecker@emerald.tufts.edu.

For additional information about the conference or about The
Fletcher School, please contact Professor Eileen Babbitt, Director of the
Program on International Negotiation and Conflict Resolution (INCR) at The
Fletcher Law School of Law & Diplomacy, Tufts University, Medford, MA
02155
E-mail: Ebabbitt@infonet.tufts.edu/Tel. (617) 627-3796/FAX (617)
627-3005, or e-mail inquiries can be sent to Mr. Sean Becker at
sbecker@emerald.tufts.edu. 

********