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Johnson's Russia List


May 21, 1998  
This Date's Issues: 2187 2188 

Johnson's Russia List
21 May 1998

[Note from David Johnson:
1. AP: Clinton Opposes Sanctions on Russia.
2. RFE/RL: Julie Moffett, East: U.S. Says Securing Nuclear 
Material A Top Priority.

3. George Oswald Re JRL 2186 #4/McIntyre on data fraud.

5. AP: Russian PM Faces Economic Challenge.
6. International Herald Tribune: Jim Hoagland, Celebrity, Status 
and Sirloin in the New Moscow.

7. Moscow Times: Andrei Piontkovsky, SEASON OF DISCONTENT: It's 
Official: Russia Is Not Rich Country.

8. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: You Can't 
Pin Lebed Down.

9. The Independent (UK): Phil Reeves, Protest cripples Siberian

10. Izvestiya: Interview with Yegor Gaidar, "Yeltsin’s Last Chance."


Clinton Opposes Sanctions on Russia
May 20, 1998 

WASHINGTON (AP) - The Clinton administration worked Wednesday at trying to
stop Congress from imposing sanctions against Russia for allowing missile
technology to leak to Iran. 

A top White House official told a Senate Foreign Relations subcommittee that
President Clinton would likely veto the sanctions. The House already has voted
for the sanctions and Senate Majority Leader Trent Lott promised at a pro-
Israeli rally on Tuesday that the Senate would vote on them this week. 

Clinton summoned 12 senators to the White House late Wednesday for what
spokesman Mike McCurry said would be discussion of proliferation matters
involving Russia and Iran. A State Department official said Secretary of State
Madeleine Albright would attend the meeting, which would focus on assurances
Russian President Boris Yeltsin gave Clinton when they met last week in

Yeltsin told Clinton he has taken new steps, with his reshuffled Cabinet, to
clamp down on exports of technologies used for building missiles. The steps
include establishing a new agency to improve control over high-tech exports.
Clinton said he thought the understandings with Yeltsin ``will bear fruit.'' 

Nonetheless, Sen. Joseph Biden of Delaware, the senior Democrat on the Foreign
Relations Committee, predicted the Senate will overwhelming vote in favor of
the sanctions because Russian entities clearly are in violation of existing
laws on proliferation. Biden said, however, he would likely vote against them.

Stephen Sestanovic, Clinton's special adviser on the former Soviet states,
told the Senate subcommittee on Europe that sanctions would be ``profoundly
counterproductive to U.S. national interest with respect to Russia.''
Sanctions, he said, ``risk inadvertently undermining our efforts to stop
Russia's support of Iran's missile programs.'' 

The bill would require sanctions even in cases where a company was not aware
that an item was going to Iran or could be used in missiles, Sestanovic said.
``Such a provision is fundamentally unfair and will undermine U.S. credibility
and the willingness of foreign entities to cooperate with us.'' 

Sestanovic acknowledged that the problem of technology leaking out of Russia
``is not fixed,'' but he said Russia is making concrete progress towards
stopping it. 

``The test is, what kind of results do you think your actions are going to
produce?'' he asked the subcommittee members. 


East: U.S. Says Securing Nuclear Material A Top Priority
Byy Julie Moffett

Washington, 20 May 1998 (RFE/RL) -- A U.S. expert on securing nuclear
materials says the possibility of thieves stealing unprotected matter in
the former Soviet Union remains an issue of serious concern to the American

Kenneth Sheely, Deputy Director of the Russia and NIS (Newly Independent
States) Nuclear Materials Security Task Force at the U.S. Department of
Energy, told RFE/RL that America is doing all that it can to secure as much
nuclear material in the former Soviet Union as possible. 

Sheely works under a program at the Energy Department called Nuclear
Material Protection, Control and Accounting (MPC&A) which focuses on
protecting nuclear matter in the former USSR. He says the program came
about when measures to improve nuclear security in the region were proposed
in 1992, and funding made available by the U.S. Congress. 

Says Sheely: "Our focused goal here is to prevent the spread of nuclear
weapons, to prevent the use of nuclear materials in a terrorist attack by
securing the material at its source. Once the material is stolen, it is a
very difficult process to track it down and retrieve it." 

Sheely said the program is involved with 53 facilities in Russia, Ukraine,
Kazakhstan, Latvia, Lithuania, Uzbekistan, Georgia and Belarus. 

Sheely explains: "During the Soviet period these facilities relied on more
of a human-based security system and that system was very effective in
controlling the material. But as the Soviet Union was breaking up in the
early 90's, some of those infrastructural security activities started to
break down because of political change and economic conditions." 

He said that in the U.S. and other countries, "we rely more on a
technology-based system than a human-based system. So ... it is important
to actively work with the sites to help make this transition to a more
technology-based security system." 

According to Sheely, the program is designed to run from 1992 to 2002 and
will cost the U.S. about $800 million. He says the program is designed to
last 10 years because that is the time experts determined was needed to
upgrade and secure all the identified facilities in the former USSR that
use or store nuclear materials. 

Explains Sheely: "I think we all believe and understand that nuclear
security isn't a point in time -- it is a lifelong commitment. So, we don't
want to give anyone the impression that nothing needs to be done after the
year 2002, but [the program] focuses more on the rapid upgrades and getting
quick-fixes in place as soon as possible." 

Sheely says the program operates under a broad umbrella agreement between
the U.S. and all the countries involved in the program. In addition to
that, some of the countries have additional and more specific agreements,
he adds. 

Sheely says the umbrella agreement permits U.S. experts to go to the
facilities and determine the quantity and quality of the nuclear material.
Sheely says the program is most concerned about weapons-usable, fresh
radiated plutonium and highly enriched uranium. 

If this material is present, Sheely says the experts will conduct a
security review to determine if the material is well-protected. If not, the
experts began an analysis of what needs to be done to safely secure the

Explains Sheely: "The objective of this program is to work with these
facilities to rapidly install MPC&A upgrades -- physical protection
upgrades, material accounting upgrades, and material control upgrades, so
that we can improve the security of the material where it is stored, where
it is used, and prevent it from leaving. The terminology that has been used
is that this is the first line of defense against nuclear proliferation and
nuclear terrorism." 

Sheely says the first major area of concern is physical protection --
meaning the actual physical barriers that prevent people who work outside
the facility from taking the material. He explains that these measures
include hardening the walls where the material is stored, bricking up
windows, replacing wooden doors with reinforced metal doors, putting in
special high-tech fencing, and adding security cameras and special lighting
to the facility. 

Sheely says that once an outsider is prevented from entering, the second
area of concern is to protect the material from people who work at the

He explains that this involves material control -- meaning that access to
the nuclear matter is kept to only those people working at the facility who
actually need to use the matter in their research or work. 

To tighten security in this area, metal detectors, badge readers and
nuclear materials portable monitors -- devices that can detect nuclear
material -- are installed, Sheely says. He adds that a two person rule is
often enacted -- ensuring that no one person is allowed to have access to
the material alone. 

Explains Sheely: "It takes a two person rule -- two people have to
simultaneously enter in their information, and in some cases even the
geometry of their hands have to be read, to verify they really are who they
say before they can have access to the material." 

According to Sheely, the last area of security is called material
accounting. This involves measuring and weighing the material and
determining its enrichment, he explains. All of the data is computerized in
a digital inventory where the material can be carefully tracked and

Sheely says as much of the work as is possible is contracted to local
companies in the countries where the program is operating. He adds this is
an important part of the program since the objective is taking a joint
approach to solving nuclear security issues, and is not about the U.S.
imposing its will or ideas. 

But Sheely says one of the most difficult parts of the job is gaining the
trust of the people in the countries where the program operates. 

Explains Sheely: "We have 40 years worth of Cold War, and many times it
takes a lot of relationship building, discussions, training and exchange of
visits before we can get a common understanding and a good relationship
built so we can start signing contracts and get equipment installed." 

Sheely says the program is also sometimes hampered by limited
telecommunications abilities and other problems like a lack of electricity
or power in some of the countries. But he says the people involved in the
program have learned to be innovative. 

For example, Sheely says his team was active in the recent removal of
nuclear material from Georgia. 

Says Sheely: "The work in Georgia was a specific case where there were some
other factors, such as limited power to the facility to operate modern
security systems, [which required] the team had to be very innovative in
what they put in place to secure the material there." 

Michael Haase, a manager for the MPC&A program in Russia, told RFE/RL that
the U.S. confirmed as early as January 1996 that Georgia had a small amount
of nuclear material in its possession which was virtually unprotected. 

Haase says: "We were able to go in very quickly and install some interim
security measures while the long-term solution -- which was....transporting
the material out of Georgia to the United Kingdom -- was in a lengthy
negotiation. So, one of the things this program did....was going in within
a period of a few weeks and putting in some rapid upgrades and alarm
systems, including a large brick barrier in front of the storage vault." 

Haase, who spends about 20 weeks of the year traveling to the countries
involved in the program, says that the program has been quite successful
since its inception. 

He says a measure of that success is due to the fact the program has
operated essentially free of political interference and pressure. 

For example, Haase says his team's work in Belarus was not affected by that
country's changing political climate. He says that the security upgrade of
the Sosny Institute of Nuclear Power Engineering in Minsk was successfully
completed at the end of 1996, and additional staff training and procedural
reviews continue unhampered. 

Explains Haase: "We do come across a lot of hurdles as we proceed with our
work, but we do work jointly to overcome those. And we are not coming in to
try and impose our methods on these institutes, it is truly a cooperative

Haase says the best part of the program is fostering friendships and
relationships with the people involved in the program. He adds that it is
also gratifying to see the work completed successfully and realize that
perhaps the effort has made the world a bit safer. 

Says Haase: "I'm glad we are seeing the fruition of our work and we are
seeing some concrete results from the program." 


Date: Wed, 20 May 1998
From: George Oswald <> 
Subject: Re JRL 2186 #4/McIntyre on Data fraud

There is a paper which discusses the underlying issues of obtaining useful
statistics. Although some three years old, it is still actual today.
Available at:

The problems of obtaining useful statistics are:

The usefulness of even short term forecasts appears to be doubtful.
Poor compatibility of Eastern European economic data with the Western
Problems pertinent to all economies that undergo fundamental structural
Incomplete information, its low quality and reliability.
Measurement problems caused by price distortions and inflation.
Hidden employment and hidden unemployment.
Output measurement.


BALYNINA/ -- It is necessary to make changes in the Constitution
so that the President would not be elected by voters but by
several representatives of each of 89 regions. This view was
voiced in a talk with journalists by governor of the Novgorod
Region Mikhail Prusak. He believes that in this case the
President will report not to the "mythical people" but to
concrete persons.
"It is our duty to change the Constitution and to build
power which would be genuinely approximated to real life so that
reforms could be carried out in the country", the governor
Speaking about the activity of the present government,
Prusak noted that there must be four priority directions in its
work - adoption of customs and tax codes, pursuance of a policy
of reduction of tariffs, and support for Russian commodity


Russian PM Faces Economic Challenge
May 20, 1998

MOSCOW (AP) - Russia's clamorous opposition has given Premier Sergei Kiriyenko
the customary 100 days to prove that his new government can deliver economic

The economy itself is giving the premier no such grace period.

Over the past week, unpaid coal miners across the country have moved from work
stoppages to blocking key roads and railways. Stock and bond prices have
dropped sharply, and the ruble has teetered, fueling rumors of an imminent

Can the youthful premier cope with the crisis? There is little likelihood that
Kiriyenko can quickly fix Russia's enormous problems, which are the legacy of
decades of failed policies and mismanagement.

But he is showing more vigor and skill than his many critics - on the left and
the right - ever expected, and his supporters say it's far too early to give
up hope on Russia's stalled economic reforms.

It has been only two months since President Boris Yeltsin stunned the nation
by plucking the politically untested former oilman to head the government and
demanding that Parliament approve his obscure choice.

The legislators balked. Kiriyenko was too young, too unknown, too obviously a
puppet who would never stand up to Yeltsin, they insisted.

Under threat of dissolution, Parliament reluctantly approved Kiriyenko, 35,
who has only one year's experience in government, as oil minister.

But Kiriyenko's candor in discussing economic problems has so far proved his
most potent weapon in the rough-and-tumble arena of Russian politics. After
years of Yeltsin administration officials ignoring or playing down the grim
state of the country and the economy, Kiriyenko has surprised many with his

``We must live within our means,'' Kiriyenko proclaimed, trying to set a new,
modest tone for the previously spendthrift government.

Kiriyenko also has tried to work with his political enemies, another rarity in
Russia. He has made a point of consulting with all political parties and
factions, both before and after his confirmation.

As for the opposition's response to Kiriyenko, the mere fact that it is giving
him time to prove his mettle suggests that it is taking him seriously. In
Russia, as in the United States, pundits tend to wait 100 days before
pronouncing a verdict on a new leader.

Kiriyenko stands to benefit from his predilection for straight, sober talk - a
contrast with former Premier Viktor Chernomyrdin's rosy reassurances that
economic recovery was just around the corner.

In fact, Russia's economy has been deteriorating for months. Government
revenues from the country's biggest export earners, oil and gas, have dropped
along with world prices. Kiriyenko and the Central Bank chairman have warned
that the country's debt is spiraling out of control.

Faced with myriad economic problems, Kiriyenko has so far focused attention on
the most dire of them - paying the money owed to millions of state workers and
pensioners. To do that, he has to increase tax collection and reduce spending.

To further narrow the budget deficit, Kiriyenko has recommended that the
government staff be cut by at least 30 percent within the next four months and
that spending for Parliament, the Cabinet and the president's office be
reduced by a quarter.

To increase revenues, Kiriyenko has ordered a long-overdue revamping of the
tax code. Bankruptcy proceedings against failing state companies will be
accelerated, and police will go after those who've avoided paying taxes on
such high-revenue items as alcohol.

Kiriyenko will face resistance at almost every turn, and most of the
initiatives won't take effect immediately. This week's labor unrest and market
volatility underline that time is a luxury Kiriyenko doesn't enjoy.

He is fortunate to be following Chernomyrdin's sluggish government, which
didn't manage to implement even those reforms within easy reach. The new
premier has already disbanded some ministries and reduced his deputies from 10
to three.

Kiriyenko's biggest potential disadvantage is his near-exclusive political
dependence on Yeltsin. The president has a tendency to dump government
officials when the going gets tough - and Kiriyenko's reform program won't be

But the man who was dismissed as hopelessly young and inexperienced has at
least made clear that he intends to tackle Russia's enormous problems more
aggressively than his much older and more seasoned predecessor.


International Herald Tribune,
May 21, 1998
[for personal use only]
Celebrity, Status and Sirloin in the New Moscow
By Jim Hoagland The Washington Post

MOSCOW - The Monolith Club reflects the private sensibility of Russia's 
new elite: exclusive, expensive and deeply concerned about its security 
and reputation. To get to the piano bar, the lavish dining room or the 
health club, its 300 members and guests step through a metal detector at 
the entrance that would do most airports proud.
For an American visitor, the metal detector is an update on the ''Check 
Your Guns'' signs hung in the saloons of the Wild West a century ago. 
The Monolith, and the score or more other upper-tier hideaways that have 
sprung up in Moscow in the last two years, provide oases of alcohol and 
glamour in the rough and tumble of frontier capitalism that rages just 
outside the door.

But there is no Russian Miss Kitty to encourage you to down a vodka. 
There is instead a tasting of premium Scotch whiskies in the piano bar, 
where a vocalist from San Diego is belting out Frank Sinatra tunes. You 
are greeted in this saloon by the flashbulb of an accomplished young 
Russian photographer who can be coaxed into showing you the impressive 
portraits he has done of Sharon Stone, Robert De Niro, Allen Ginsberg, 
Luciano Pavarotti and a galaxy of other notables he has encountered here 
or abroad.

The Monolith is a slice of globalized life in post-Soviet Moscow, where 
celebrity and status exert as strong a pull as they do in any Western 
capital. For the first time in a dozen trips to Moscow over the past 
dozen years, I find myself occasionally looking around this club or my 
hotel room and having to think hard to recall which city I am visiting.

That in many ways is progress. The distinctive grimness of life, the 
constant tension and general deprivation of Soviet times, are not things 
to be missed.

The buzz in the Monolith is familiar for the visitor from Bill Clinton's 
America. Here, too, Topic A is the stock market.

Russia's Wall Street has taken a pounding over the past week and lost 16 
percent of its value. The ruble, after a long period of stability, is 
again under attack. The new downturn in Asia is ricocheting around the 
globe, and Russia is taking the first big hit. Several diners wonder 
what George Soros, the Wall Street financier who made a billion off the 
last British pound devaluation and has invested big here, is doing. But 
no one is sure.

There is a sense of fortunes rising and falling at some of these tables 
between the fish soup and baked sturgeon (unless you have ordered the 
New York strip sirloin). It is a yin and yang moment of capitalism, 
familiar in the West but new here, when intimations of adverse reality 
suddenly chill the forced euphoria of a tentative boom.

Or, as Italy's Antonio Gramsci, the most humanistic of communist 
intellectuals, put it in a different context: ''The pessimism of the 
intellect is a good corrective to the optimism of the will.''

The room is filled with Russians who have risen above the pessimism of 
the intellect and seized their moment with both hands.

On each visit to the new Moscow I am reminded of the financier created 
by the English novelist Anthony Trollope at the end of the 19th century:

''Such a man rises above honesty as a great general rises above humanity 
when he sacrifices an army to conquer a nation. Such greatness is 
incompatible with small scruples. A pygmy man is stopped by a little 
ditch, but a giant stalks over the rivers.''

Fortunes in Russia today are made primarily in energy, other extractive 
industries, banking and media conglomerates. It is a mark of the times 
that diplomats feel that Anatoli Chubais, once Boris Yeltsin's 
right-hand man, has suffered no loss in influence by moving out of 
government to take over the national electricity corporation, a dominant 
player on the stock market.

But the Russians who are in touch with the world economy are a tiny 
minority in a country that is far from being a rags-to-riches story. 
This is still a rags-and-riches story: Life expectancy in Russia 
continues to fall, with today's population of 147 million projected to 
drop to 123 million by 2030 if no corrective action is taken to deal 
with the nation's alarming and mounting health problems.

Russia has operated on willpower for most of the past decade, running, 
stumbling, climbing back to its feet on a road it is still discovering. 
Russia remains a journalistic dream: a new story, with a still 
unforeseeable outcome, as well as a news story.


Moscow Times
May 21, 1998 
SEASON OF DISCONTENT: It's Official: Russia Is Not Rich Country 
By Andrei Piontkovsky
Special to The Moscow Times

One fashionable contemporary writer once wittily said the only thing 
left for us to expect is that Boris Berezovsky will privatize Space and 
Vladimir Gusinsky will privatize Time. As for Berezovsky, it seems he 
has taken this forecast in all seriousness and launched into privatizing 
the entire so-called post-Soviet Space. And the object of privatization 
of Gusinsky, Vremya, or Time, has lately undergone serious deformation, 
which has lowered its commercial attractiveness. 

Political time in Russia has always been unique. The past is 
unpredictable; the present insignificant; and the future bright and 

Over the past 80 years, promises of a happy future have been the main 
political technology of the authorities in their relations with an 
obedient and trusting people. For 70 years the authorities promised to 
bring the country to the radiant heights of communism, and during the 
past 10 years other authorities (who for some reason are made up almost 
exclusively of the very same people) have promised to lead us to the 
promised land of a market economy. 

Finally, on May 5, the authorities broke with this almost century-long 
paradigm of promises to their subjects. The super-young reformer Prime 
Minister Sergei Kiriyenko pronounced the following historic words: "We 
must honestly tell the people that Russia is a rather poor country." 

Contemporary consciousness is cinematographic, and according to the laws 
of Eisenstein montage another frame immediately springs to mind. A few 
days earlier the very same Kiriyenko, answering a question from a 
television news anchor, said with poorly disguised self-satisfaction, 
"Well, I am a rather not-poor man." 

It may be that among the reasons Russia is a "rather poor country" is 
that thousands of Kiriyenkos gently glided from their seats as 
secretaries of regional party committees into the seats of bank 
presidents and oil company bosses, quickly becoming rather not-poor 

I am not against as many citizens as possible becoming rather not-poor 
and even very rich. I am against the situation in Russia in which, as we 
were informed by yet another regional Komsomol secretary, Menatep head 
Mikhail Khodorkovsky: "the only real business in Russia is politics, and 
it will always be that way." 

If this is truly the case, then Kiriyenko is right and Russia will 
always remain a poor country. 

But a country cannot be poor in general or poor by definition. What does 
poor mean? Poor in what? Resources, territory, a qualified workforce? A 
country can be poor in only two instances: Either it has a lazy and 
incompetent population or it has a third-rate and thieving political 
class made up of "rather not-poor people." 

This political class understood that lying about a bright future was no 
longer possible and seems prepared to abruptly change the political 
technology of holding on to power. The future is abolished and only an 
eternal present of a country doomed to poverty will remain. 

This is the philosophy of the hospice. Sick people never get better. 
They know that they are doomed. Moreover, it would never occur to anyone 
to change over to a new head doctor or replace the service staff made up 
of "rather healthy" people. 


Moscow Times
21 May 1998
DEFENSE DOSSIER: You Can't Pin Lebed Down 
By Pavel Felgenhauer
Special to The Moscow Times

Retired general Alexander Lebed has made a spectacular return into the 
national political arena by winning the governorship in Krasnoyarsk. 
Lebed now seems to be well set on a course that could take him straight 
to the Kremlin as Russia's next president in 2000. 

Lebed's military and political career, however, has been a sequence of 
dramatic ups and downs. When his career has seemed to be doing fine, 
Lebed has time and again almost deliberately got himself into trouble 
and this may happen yet again. 

In the fall of 1996, Western observers and the Russian public believed 
that Lebed was the real tsar in the Kremlin, not the seriously ill 
President Boris Yeltsin. What is more important, Lebed himself truly 
believed and stated publicly that Yeltsin was practically dead and the 
inevitable transition of power would happen in a month of two. Even 
after his ouster in October 1996, Lebed continued to anticipate a sudden 
presidential election and refused to run for governor in Tula or any 
other region. 

It turned out that Lebed was absolutely wrong. So Russia's self-styled 
tsar was facing political oblivion. A run for the Krasnoyarsk 
governorship was a desperate move that worked out in the end. But this 
does not at all mean that Lebed's capacity for blundering has fully 

It is hard to predict what Lebed will do next and even harder to pin him 
down on anything. His political and economic views are fluid, and his 
ideology appears to vary according to his audience. Lebed is a natural 
political turncoat. All his political alliances have broken up in 

Many civilians consider Lebed a "war hero" and a "brilliant soldier." 
But in the army he has no such reputation. Lebed served as paratroop 
commander in Afghanistan, but sources in the airborne forces say his 
tour of duty was relatively short and did not involve any serious 
combat. In all of his other military postings, Lebed also did not 
actually prove that he is an efficient wartime military commander, much 
less a "war hero." 

Lebed failed to graduate from the General Staff Academy, Russia's top 
military school, and this is a stain on his reputation as a qualified 
military officer. Lebed became a lieutenant-general in 1992 only because 
then-Defense Minister Pavel Grachev seriously bent the rules to promote 
his buddy. (Grachev and Lebed later had a falling out). 

Many in the army believe Lebed is an upstart officer-turned-politician. 
When in 1996 Yeltsin ousted Lebed as security tsar, many in the West 
were seriously expecting disturbances, or maybe even a military coup. 
Nothing happened. The Russian army is of course disgruntled, as are many 
other sections of society. Lebed apparently hoped to exploit this 
discontent, but it didn't work out. The Russian military is not, for the 
time being, taking orders from Lebed. 

The armed forces are not Lebed's main constituency, but this may be to 
his advantage. Russia has not won a serious battle since 1945. Wars in 
Afghanistan and Chechnya were bloody debacles. So military chiefs are 
not very popular in society today. Generals are perceived by many 
Russians as fat cats who steal everything they can lay their hands on, 
sell arms to Chechens and other enemies, starve their soldiers and so 

Being a general is not the best possible qualification for becoming a 
successful politician in this country. Russia is not Israel. Many 
retired generals have attempted a political career in recent years, but 
their successes have been very limited. Lebed apparently followed some 
good advice during his Krasnoyarsk campaign and did his best to distance 
himself from the military. He never appeared in military dress as he 
often did before while campaigning. In Krasnoyarsk Lebed specifically 
stressed that he would not rule as a general if elected. 

He obviously has learned from previous fiascos. But nobody knows how 
profound these changes are. Nevertheless, in 2000 Lebed might get money 
and support from Boris Berezovsky or other tycoons, who may decide that 
only Lebed can prevent a communist victory and the renationalization of 
banks, oil companies and other industries. 

An arrogant and ill-tempered paratrooper may become the president of a 
nuclear superpower in 2000. Such a choice may be a good bet for big 
business, although I believe that a dull, unimaginative Communist would 
be more predictable. A Lebed presidency, however, could turn out to be a 
windfall for defense correspondents and national security analysts. 

Pavel Felgenhauer is defense and national security affairs editor of 


The Independent (UK)
May 21, 1998
[for personal use only]
Protest cripples Siberian railway
By Phil Reeves in Moscow 

THE new government of Boris Yeltsin is facing its most severe challenge 
so far as industrial protests ripple across Russia, led by the coal 
miners, who have cut the country in half by blocking the Trans-Siberian 

Hundreds of trains were at a halt in different parts of the country 
yesterday as angry miners - whose industrial muscle helped oust Mikhail 
Gorbachev from power in 1991 - sat on the tracks in a protest against 
six-month pay delays and sweeping pit closures. 

The government, led by the recently appointed 35-year-old Prime 
Minister, Sergei Kiriyenko, has set up an emergency centre in Moscow, 
solely devoted to dealing with the miners' protest. Yesterday he met 
with trade union leaders and emphasised the need for a negotiated 

Industrial protests are common in Russia as it grapples with the 
transition to a market economy but the latest are attracting more 
attention than most. The Railways Ministry said 296 freight trains and 
120 passenger trains were held up in three main areas - the south near 
Rostov, the line to Vorkuta in the Arctic, and around the Kemerovo 
region in Siberia. 

In the latter, the governor, Aman Tuleyev, declared a state of emergency 
in the Kuzbass coalfield because all rail access to the area was cut 
off. He warned that some stranded trains carried chemicals and 

Protests have been bubbling away for some time. Several months ago, 
Siberian miners took their bosses hostage. The protests have gained 
momentum in recent days, widening to include teachers, who marched in 
Moscow yesterday, and students in St Petersburg. Doctors, pensioners, 
scientists and teachers have joined miners on their sit-ins. 

The most publicised protest has been on the Trans-Siberian, the world's 
longest railway line, at Prokopyevsk in Kemerovo, half-way between 
Russia's Pacific and Baltic coasts. Yesterday protesters cut off a track 
that had been used to bypass sit-ins, closing down the line altogether, 
severing Russia's east-west rail artery. 

Earlier this month Boris Yeltsin pledged to ensure that all the miners 
would be paid. But he has been burdened by a tranche of economic 
problems. The government maintains a large part of the problem is the 
failure - or inability - of commercial clients to pay the mines for 
their coal. 


Date: Wed, 20 May 1998
From: "Michele A. Berdy" <>
Subject: gaidar interview

May 20
Hi, David. When I was going through some back issues of Izvestiya, I found
an interesting interview with Yegor Gaidar on why Yeltsin sacked
Chernomyrdin. Since I don't think this viewpoint has been represented on
JRL, I've translated it (in part). For folks who would like to see the
original in full, it was printed on April 28, 1998 under the title
"Yeltsin’s Last Chance."

--Yegor Timurovich, why was Chernomyrdin’s cabinet unexpectedly sacked? (...)
--Of course, only the president can answer this question fully. All I can
do is construct a kind of hypothesis based on my understanding of the
situation in the country and in the ousted cabinet. The word «know» in our
conversation would be better replaced with the word «think.»
--Do you think the decision might have been impulsive? Several newspapers
wrote exactly that: Friday the president simply got up on the wrong side of
the bed...
--Yes, the version that the president made a spontaneous, completely
unexpected and unpredicted decision was repeated in various forms in the
domestic and foreign mass media. ‘Everything was going well, things were
calm and stable, when suddenly Yeltsin got a burr under his tail and shook
everything up.’ This completely differs from my perception of what
actually happened.
--But there must be a reason why the word «unpredictable» has stuck to the
--A great number of those who write about what is happening in the highest
echelons of power in Russia don’t understand what is really going on there.
Some things they just don’t know ­ which is understandable, since people
in power are never going to act out in the open. But very few people can
sift through the available facts and store them up to «lay out the cards,»
as it were, and find the logic in unfolding events. That’s why most people
first present a model that doesn’t match reality at all, and then, when the
model falls apart, they cite «unpredictability.»
There was plenty of evidence that the cabinet was having problems. After
the arduous vicissitudes of summer and fall 1997, the cabinet turned into
a kind of system of checks and balances. When the cabinet has too many
strong political players, it ceases to function as a collection of top
managers. Other priorities emerge. Instead of thinking about, for
example, how to most effectively reform natural monopolies, attention is on
something else ­ how to set up checks and balances to keep another of the
strong players from strengthening his position too much. 
--But isn’t that what the president is constantly doing?
--Yes, it is. But the difference here is crucial. The president is the
head of the government. What’s happening in society and at the highest
echelons of power is terribly complex and could have enormous consequences.
Although not everyone likes this, the president has the right to set up
his own system of checks and balances. The cabinet is another matter. It
is problem-solving body. There is no reason for it to copy in a smaller
scale the actions of the president, since it has different, functional
tasks ­ to take actions to solve problems. And when it begins to copy the
president, it simply ceases working.
his was very clearly seen in the two sessions of the VChK (Emergency
Committee) on companies with the worst tax arrears. At the first session
chaired by Chubais one decision was reached; at the second under the
chairmanship of Chernomyrdin, the opposite decision was taken. This
happened every step of the way. Whatever the problem, the result was a new
squaring off of the political players. This confirmed one fact: the
cabinet had lost its ability to work as a single team. (...) When the
cabinet is a collection of independent players, it isn’t capable of forging
a consistent economic policy or gaining the trust of investors; it is
constantly giving off contradictory signals. Everything seems stable, but
nothing is moving, the cabinet isn’t heading anywhere. I think that
somewhere at the beginning of the year the president, who has a very acute
political sense, realized that he faced a difficult choice: either maintain
stability, which is very tempting ­ it’s all familiar and comfortable,
people have gotten used to working together ­ or drastically change the
situation in order to getting moving again. That means shaking things up.
--But why didn’t anyone think to prepare the public for this kind of event?
To use your words, ‘it’s all familiar and comfortable, people have gotten
used to working together’ -- and suddenly, like a thunderbolt, the cabinet
is sacked, the Duma might be dissolved, there might be new elections...
--Surely you see that I’m not the person to ask.
--But what explanation would you give?
--There is a certain logic in a decision like this being sprung
unexpectedly on society. The least desireable situation is to have a
cabinet that is still carrying out its duties, knowing that any day it will
be sacked. All kinds of complex games go on: who will be fired and who
will remain; who will be appointed in the place of those who are fired.
Coalitions form; back-stabbing starts; the appointments of various figures
are blocked... There isn’t a chance of work getting done.
--And that’s exactly what we observed for a month.
--Of course, a month is a long time. The shorter the time lag between the
old and new cabinets, the better for the country. But it didn’t work out
that way. Although it might have. For that to happen Boris Nikolaevich
should have announced that he fired Chernomyrdin and appointed Chubais or
Nemstov as acting prime minister while nominating Kirienko. I assure you
that the Duma would have voted for him a long time ago.
--By the way, about Kirienko. He was as unexpected as the sacking of the
--So? Would it have been better to just shuffle the deck with the same old
cards? And compare the reaction of the public when the totally unknown
Kirienko was appointed with their reaction today, after his speech at the
Duma, several interviews and statements. Everyone saw he was an
intelligent, cultured, strong person, who could take a blow and respond
appropriately. I assure you that if he works effectively, in 2-3 months
people will say, «Well, of course ­ a smart, young, energetic person was
appointed to head the government ­ what did you expect?» Everything
depends on his success.
--You say that everything depends on success. But let’s imagine the most
likely course of events. The Duma, forced to accept Kirienko, doesn’t
ratify the tax code and other crucial laws; it doesn’t decide the issue of
land ­ in a word, it ties the prime minister’s hands completely. And in
2-3 months the Duma will say that the cabinet is useless and oust it.
--Of course it would be nice to have a good Duma. Alas, we have what we
have. But despite all that, there are a great number of problems that can
be solved by the executive branch. Take, for example, reform of the
«power» structures. This has been talked about for years. Now a strong
minister of defense has been appointed, a man who really wants to reform
the armed forces, and there is a clear, understandable policy to
restructure the system; there is work and people to do it; there are
visible results. Even in the absence of a law. It’s possible to act like
this in a number of areas.
--Was it absolutely necessary to get rid of Chubais?
--I don’t know. But I do know that a cabinet without Chubais will be
weaker than one with him. No doubt about it. This is a great loss that
will be hard to compensate. People like Chubais are few and far between.
--Our oligarchy, in particular Berezovsky, did a lot to bring Chubais down.
What did they achieve?
--In my view, for themselves ­ nothing. They did what they set out to do,
but the result is zero.
--Doesn’t it seem to you that behind-the-scenes figures have recently begun
to play too great a role in the government? We didn’t notice when the
presidential council disappeared, while meanwhile the concept of «family»
has become embedded.
--There have always been behind-the-scenes figures and there always will be
­ in any government. The level of influence of Raisa Maximovna or Hillary
Clinton shouldn’t be underestimated, right? I can tell you what I know.
Yeltsin is independent. I suppose it’s possible to convince him of
something or slip some document by him, but decisions on the key and
cardinal issues he makes himself.
...the position of Yabloko is to some extent absolutely logical and
consistent. Yavlinsky is against any policy carried out by the authorities
that Yavlinsky isn’t in charge of. If today the authorities supported tax
reform, Yabloko would be against the reform. If tomorrow the authorities
refused to carry out tax reform, Yabloko would be against the fact that
they refused. And so on. Yavlinsky’s position is logical ­ it’s simply
another logic. It’s the logic of individual party interests, a
demonstration of how oppositional they are...
--Let’s get back to the urgent issues. Kirienko was confirmed. The
cabinet has been formed. What should we expect from him in the next few
months? What would you consider a success?
--It would be a success if, after a few months of hard work, the cabinet
could revive the situation of October 1997. What does that mean? Low
interest rates. More and more credits for the economy. Banks chasing after
businesses that need credit. Industrial growth clearly starting and
continuing along with an increase in hard currency reserves. A real rise
in living standards, and so forth. In 1997 we really started along this
path and then got thrown off. The financial crisis in South-east Asia
hindered us; our own political mess hindered us. For a start we have to go
back to where we were when we got thrown off. And then move forward.
--How long do you give Kirienko’s cabinet?
--The cabinet has 100 days of relative freedom of movement. And it will
have six months to demonstrate it results to the country.
Nikolai Bodnaruk


RFE/RL NEWSLINE Vol. 2, No. 95 Part I, 20 May 1998

"Russkii telegraf" on 19 May blamed "Nezavisimaya gazeta"
for the recent collapse in the market for government
treasury bills (GKOs). "Russkii telegraf" argued that the
widespread sell-off of GKOs was not an inevitable result of
events in southeastern Asia. It charged that an article in
"Nezavisimaya gazeta" alleging that the GKO market is a
dangerous "debt pyramid" was translated and widely
distributed to foreign investors (see "RFE/RL Newsline," 15
May 1998). It also accused "Nezavisimaya gazeta" of
publishing unfounded claims that a law on shares in the
electricity monopoly Unified Energy System will lead to the
"nationalization" of company shares currently held by
foreigners. "Russkii telegraf," which is owned by
Oneksimbank, claimed that a ruble devaluation and declining
share values for Russian companies would be advantageous for
Boris Berezovskii, an Oneksimbank rival and financial backer
of "Nezavisimaya gazeta." LB

"Nezavisimaya gazeta" on 20 May claimed that the Central
Bank is "ready to sharply devalue" the ruble but wants the
president or prime minister to take the political
responsibility for such a decision. The newspaper compared
Russia's current financial condition to a patient in a coma
who can be saved only by a major operation--in this case, a
ruble devaluation. "Nezavisimaya gazeta" also noted that in
a recent article for the weekly "Ekspert," Central Bank
First Deputy Chairman Sergei Aleksashenko acknowledged that
devaluation is one instrument for improving a country's
trade balance, even as he argued against devaluing the
ruble. "Nezavisimaya gazeta" challenged the official
government viewpoint that there are no "objective" reasons
for the current market turmoil in Russia. It also warned
that Russia's financial crisis "is developing on the
Indonesian model." LB



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