May 24, 1998  
This Date's Issues: 2192•• 

Johnson's Russia List
#2192
24 May 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Interfax: Russian Economy At Zero-Growth Level, Economics 
Ministry Says.
2. Carl Olson: IMF Aid to Russia Questioned.
3. Interfax: Russian Oligarchs Begin Struggle for Missile Materials.
4. Reuters: Unpaid miners ease grip on Russia's railways.
5. Washington Post: Jim Hoagland, Charm War.
6. Pravda: Yuriy Glukhov, "Power Is Paralyzed. Situation Is Getting 
Out of Control; 'He Rules but Does Not Govern. That Definition Applies 
Increasingly to Boris Yeltsin and Not to the Queen of England."
7. The Economist: A guide to offshorny banking.
8. Interfax: Poll: Mixed Results on Russian View on Foreign Relations.
9. Itar-Tass: Yeltsin's Duma Representative Not Ruling Out Impeachment.
10. RIA Novosti: RUSSIA'S SECURITY COUNCIL GATHERS TOMORROW TO DEBATE
NORTH CAUCASIAN, COAL-MINING DEVELOPMENTS AS REPUBLICS MAKE EMERGENCY STEPS.
11. Reuters: Kiriyenko vows funding for Russian nuclear forces.
12. Reuters: Top heart surgeon slams Russian bypass record.
13. Intefax: Communist Party Starts Congress In Moscow. 
14. Interfax: Russian Political Leaders Forecast Lebed's Chances in 2000.
15. Moscow Times: Igor Zakharov, BOOKWORM: Old Dogs Can Learn Tricks of 
The Trade.
16. BBC: Caviar politics in Dagestan.
17. Reuters: Georgia urges world to help stop Abkhaz fighting.]

*******

#1
Russian Economy At Zero-Growth Level, Economics Ministry Says 

MOSCOW, May 23 (Interfax) - For the past two years the Russian economy 
has remained "at a zero-growth level," First Deputy Economics Minister 
Ivan Materov said at a Russian-French conference entitled "Market 
Regulation: The Lessons Taught by the Transition Period in the Russian 
Economy." 

Gross domestic product last year rose 0.8%, he said. Forecast growth for 
1998 does not exceed 1%, Materov said. However, the results of 
January-April 1998 show that the real volume of GDP has not changed 
against the respective period of last year, he said. 

"In strict terms, a GDP growth of 1-2% is not very significant," he 
said. It is more important that the Russian economy has overcome its 
period of decline, Materov said. 

The Russian government has managed to reduce inflation to rather low 
levels, he said. According to the Economics Ministry, annual inflation 
for 1998 will be 6%, against 11% for 1997. 

Experts are concerned about low investment activity in Russia, Materov 
said. Rather considerable financial flows exceeding investment in fixed 
capital by 200-300% are transferred to accounts with foreign banks or 
are used to buy foreign exchange, he said. 

The Economics Ministry does not expect an investment boom before the 
year 2000, Materov added. 

The T-bill market is "another vacuum cleaner" diverting investments from 
the real production sector, he said. 

Moreover, Russian exports have been hit by the fall in oil prices on 
world markets, Materov said. Russian exports for 1998 may fall by 8% 
against last year and the country may lose about $12 billion in export 
proceeds, he said. 

He also said that in the run-up to its admission into the World Trade 
Organization, Russia is being subjected to serious pressure by world 
exporters who believe that Russian customs tariffs are excessively high. 
The average customs duty currently stands at 14% and the maximum rate is 
30%, Materov said. 

The Russian government is going to cut the maximum tariff rate to 25%, 
he added. 

In ten years the average customs tariff in Russia will not exceed 6-7%, 
Materov said. 

*******

#2
Date: Sat, 23 May 1998 
From: olson@lafn.org (Carl Olson)
Subject: IMF Aid to Russia Questioned

Former Secretary of State George Shultz questioned the advisability of 
providing billions of dollars of IMF aid at a time when tens of billions 
of dollars of "capital flight" are continuing to leave the country. The 
IMF going into Russia are just being frittered away, and the ongoing 
"capital flight" shows that the Russian government is not really serious 
about using domestic resources for its domestic budget problems. Shultz' 
views were expressed in response to a question posed to him at a luncheon 
of Town Hall in Los Angeles, Friday, May 22.

Shultz has been on a campaign recently to point out the 
counterproductivity of much of IMF's bailouts of Mexico, South Korea, 
Indonesia, and Russia.

Carl Olson
Chairman, State Department Watch

********

#3
Russian Oligarchs Begin Struggle for Missile Materials 

MOSCOW, May 20 (Interfax) -- Russian oligarchs are abandoning the
struggle for oil and starting a struggle for fissile materials, Deputy
Chairman of the State Duma's Committee on Conversion of the Defense
Industry and High Technology Aleksandr Pomorov told a news conference in
Moscow Wednesday.
Dismissal of Viktor Mikhaylov as the nuclear energy minister "marked
the beginning of this major behind-the-scenes struggle between financial
tycoons Vladimir Potanin and Boris Berezovskiy," Pomorov said.
He linked the election of former Russian Security Council Secretary
Aleksandr Lebed as the governor of Krasnoyarsk territory with what he
called Berezovskiy's plan to take control of nuclear energy enterprises in
the region.
Pomorov called for cancelling the Russian-U.S. agreement on the use of
highly enriched uranium extracted from nuclear weapons. He criticized the
agreement as very unprofitable for Russia.
"Russia is selling uranium for a song" and some provisions in this
agreement run counter to the principles of nonproliferation of nuclear
weapons, he said.
The Duma has prepared a draft agreement to this effect "which will end
uncontrolled exportation of fissile materials," Pomorov said.

*******

#4
FOCUS-Unpaid miners ease grip on Russia's railways 
By Martin Nesirky 

MOSCOW, May 23 (Reuters) - Unpaid miners eased their economy-sapping 
grip firmly on the main Trans-Siberian route. 

Opposition Communists convened an extraordinary closed-door meeting in 
Moscow to discuss the crisis and a special monitoring team from the 
International Monetary Fund left for Washington after having scrutinised 
the country's creaking finances. 

``The mission, working closely with the Russian authorities, collected 
further information needed to complete its analysis,'' an IMF statement 
said. 

It was not immediately clear whether the IMF team would recommend its 
managers disburse the next $670 million slice of a $9.2 billion loan but 
Russian ministers said they were confident the Fund would give the green 
light. 

On large chunks of Russia's vital rail network, the signal was still 
firmly on red, although miners did lift their 10-day blockade on some 
lines in Siberia and southern Russia. 

A spokeswoman for the Kemerovo administration in southern Siberia, focal 
point of the protests, said by telephone that two lines had been 
reopened after talks between unions and Deputy Prime Minister Oleg 
Sysuyev. 

``The commission has finished work at Mezhdurechensk and Prokopyevsk and 
the blockade there has now been lifted,'' she said. A third bypass route 
around the main line could be opened later on Saturday. 

The spokeswoman said Sysuyev and regional governor Aman Tuleyev had 
flown by helicopter to another barricade to talk to miners, who have 
been holding up hundreds of trains to demand wage arrears be shelled 
out. 

In southern Russia, a goods train was allowed through on the north 
Caucasus line, Itar-Tass news agency reported. 

Mining union officials could not be reached for comment. 

President Boris Yeltsin said on Friday the miners' action had gone too 
far and was seriously damaging Russia's already delicate economy to the 
tune of millions of dollars. 

Much of Russia's freight, particularly across Siberia's inhospitable 
territory, moves by rail. 

Miners responded to Yeltsin's remarks by saying they would take an even 
more uncompromising stance. 

The Communists, Yeltsin's main foes and the predominant force in the 
State Duma lower house of parliament, looked set to come out with a 
similarly tough line from their Moscow congress. 

The meeting was initially called to discuss unspecified changes in the 
party's charter but Duma speaker Gennady Seleznyov, a Communist, said 
the agenda was now broader. 

``The main issues at today's forum are the party's charter and our 
attitude toward the socio-economic crisis in Russia,'' Interfax news 
agency quoted him as saying. 

There is little doubt Russia is in economic crisis. 

Market turmoil, sparked by Asian and domestic factors, has pushed 
Russian shares to 16-month lows. Interest rates have been jacked up by 
two-thirds to 50 percent to protect the rouble. 

Small wonder the new government of Prime Minister Sergei Kiriyenko is 
signalling it now expects no economic growth this year. Forecasts had 
previously pointed to one or two percent growth in gross domestic 
product, the best test of a country's economic wellbeing, after 0.4 
percent last year. 

The IMF said the mission had reviewed an ``urgent action programme which 
entails significant new measures that the government has prepared to 
address the difficult financial and social conditions.'' 

The statement gave no details of the new measures, but Finance Minister 
Mikhail Zadornov told the State Duma lower house of parliament on Friday 
Russia had agreed a tax and fiscal programme with the IMF. 

Zadornov also said the cabinet was close to completing a plan that would 
shave nearly $7 billion off the budget. 

*******

#5
Washington Post
May 24, 1998
[for personal use only]
Charm War
By Jim Hoagland

MOSCOW—President Clinton insists he will not come to Moscow for a summit 
with Boris Yeltsin unless the Duma ratifies the START II nuclear arms 
treaty. But Clinton's attempt to revive the politics of linkage is 
backfiring. Russian-American relations, adrift for months, are now dead 
in the water.

The Communist-dominated Duma is hostile to Yeltsin and to improved 
relations with Washington. By insisting that he will not come to Moscow 
before ratification, Clinton gives the Duma a whip hand over his 
diplomacy.

"The prospects of ratification are worse than they were three months 
ago," Foreign Minister Yevgeny Primakov told me in an interview. "We are 
doing everything we can, and I think it will be ratified, in this year. 
But when . . . well, I cannot say. It does not depend on the executive 
branch of the government."

Primakov's careful statement, made in tones of regret, reverses the 
official, unrealistic optimism previously voiced in Moscow and in 
Washington about imminent ratification. Earlier this month, Secretary of 
State Madeleine Albright indicated that she saw the Duma moving closer 
to ratification.

But the Duma last week postponed consideration of the treaty until 
September. Primakov said Yeltsin's recent battle with the Communists 
over a vote of confidence for Prime Minister Sergei Kiriyenko's new 
government, and the country's mounting labor strife, "may make this not 
the best time to raise the question" of linkage.

Primakov, who speaks with an authority Yeltsin allows no other minister, 
suggested that it is time for a summit without conditions. "It is not so 
necessary to connect the visit of President Clinton to ratification. In 
fact, this connection is creating some obstacles in the Duma now."

Primakov asserts that Duma ratification of the START II accord, 
negotiated by Yeltsin and President Bush, is clearly in Russia's 
interest. Already ratified by the U.S. Senate, the treaty obligates the 
United States in effect to match nuclear arsenal cuts that Russia is 
being forced to make unilaterally for budgetary reasons. Passage would 
also clear the way for Clinton to start his own strategic negotiations 
with Moscow.

The once promising Russian-U.S. partnership today looks wilted and wan. 
The American president has not set foot on Russian soil in two years; 
recent summits have been held in the United States or Europe. Albright 
has not visited in a year. Russian opposition to U.S. policies in Iraq, 
Yugoslavia and elsewhere has grown more spirited as Clinton has 
concentrated on NATO expansion and improving ties to China as his 
strategic priorities.

Primakov, a Middle East specialist who previously served as head of 
Russian external intelligence, minimized the problems in U.S.-Russian 
relations, saying "today we are not in a zero-sum game." He lavished 
praise on Albright, who had been "very strong, very able" in their 
frequent encounters at diplomatic meetings in Europe. "I trust her."

Albright has said the same of Primakov publicly and privately. But their 
mutual admiration society has not added great new content to the 
diplomatic relationship of the world's two greatest nuclear powers.

Primakov, who is as subtle and cunning as Albright is pugnacious and 
direct, replied in a rumbling baritone and with a shadow of a hidden 
smile when I suggested the United States and Russia still had 
conflicting interests in the Middle East and the Balkans. He focused on 
U.S. mediation between Israel and the Palestinians:

"Both the U.S. and Russia want stability in the region. We don't want to 
interfere. We think the Americans are doing a good job. A good job. 
Especially by Albright. And secondly, the United States doesn't want 
anybody else to be involved. They want to monopolize this. So I am 
content not to share their failure."

U.S. officials have accepted his assurances that Russia "does not have a 
state-sanctioned policy" to help Iran develop nuclear and missile 
technology, he added. "I have explained this to Albright. The CIA and 
the Russian counterintelligence service have discussed this as well, and 
we have similar contacts with Israel. It is clear to everyone we have no 
interest in helping Iran with weapons of mass destruction."

U.S. absolution of Russia on Iran does not go as far as Primakov 
suggests. But Washington has not directly challenged his public 
professions of wanting to curb Iran's access to missiles that could 
strike Russia. Clinton last week waived economic sanctions the Russian 
oil giant Gazprom had risked by dealing with Iran.

A survivor with the instincts of a Talleyrand, Primakov has invested 
heavily in building a strong personal relationship with Albright, and 
she has reciprocated. The Cold War has given way to a Charm War.

But the failure to move toward a new summit at a time when Yeltsin has 
made a strong recovery from his periodic illnesses underscores that 
serious partnership fatigue has developed between the world's two most 
powerful military nations. Clinton should reassess summit linkage, and 
his strategic priorities. 

*******

#6
Yeltsin Seen To Lack Control Over Current Situation 

Pravda
22 May 1998
[translation for personal use only]
Article by Yuriy Glukhov: "Power Is Paralyzed. Situation Is
Getting Out of Control; 'He Rules but Does Not Govern. That
Definition Applies Increasingly to Boris Yeltsin and Not to the
Queen of England"

Under the Constitution full power which any dictator might envy is
concentrated in the hands of the Russian president. But declared rights
are one thing, reality is another.
The "railways war," the wave of strikes and hunger strikes, the mass
demonstrations which have erupted onto the streets, and the rebellions in
Russia's provinces show that the Russian supreme authorities are already
almost incapable of controlling the situation in the country.
Events are developing on two planes, as it were. On the top there are
games inside the cabinet, the semblance of decisions, an avalanche of paper
in the form of edicts, the inflated pomp of presentations and awards, the
Duma talking shop, the duplicity and squabbling of the parties fed by the
regime and the nouveaux riches, and behind this the unconcealed plundering
of the country. Below are the desperate people, repeatedly duped and
without any hope left. The spontaneous protest rising up like a whirlwind.
The inability for years to find an answer to the most urgent problems
and the Kremlin's ostentatious flurries of activity have brought the
country to the brink of catastrophe.
Moreover, the supreme authorities have lost not only trust but also
almost all their attributes -- financial, political, power, and real levers
for influencing the situation.
The president has no money to settle debts with the millions- strong
army of miners, teachers, pensioners, doctors, scientists, and students. 
(Unless he sets the printing press in motion or slides into further debt to
foreigners. And will they give money anyway?)
There is no political party and parliamentary majority which could
cover the authorities and be capable of ensuring support for them. Even
Russia Is Our Home has disappeared into the bushes.
There is no "big brother" -- in the shape of the mass media which
could create a propaganda screen and persuade the people that everything is
going well.
There is no social base. The regime has not managed to acquire the
"fat deposit" of a middle class. Moreover, it is rejecting the "brains." 
Teachers, scientists, and the overwhelming majority of the intelligentsia
have turned out to be "redundant."
Nor does the president have a team. It is only being formed. Its
absence is combined with a rare ability to turn his former associates into
enemies and to become increasingly isolated in his "immediate circle,"
creating a clear zone around himself. Its formation is accompanied by fuss
and intrigues by the political and financial and economic elites which have
developed behind the back of the people's movement. They are trying to
manipulate the movement and use it for their own narrow selfish aims.
The authorities are also demonstrating a remarkably thick skin. They
have lost their pain threshold, the threshold of sensitivity to the
people's hardships. That thick skin could push them to extreme measures. 
But it is scarcely possible for the president to count on the power
structures, as he did in 1993, for a way out of the present crisis. The
people's demonstrations have become too broad and society and the army too
traumatized by Chechnya and the bombarding of the White House to allow
silently, as they did before, a repetition of what they have already been
through.
In a situation in which Russia is threatened with a very powerful
social explosion, the collapse of the economy, and further disintegration,
the cabinet of ministers that Sergey Kiriyenko has only just formed is from
the outset in the position of a kamikaze government. If its task is to
clear the way for B.N. Yeltsin's re- election for a third term and
redistribute state and privatized property among those who were late for
the "young reformers'" first share-out, then that is a truly doomed and
suicidal undertaking. If the president and the new government nonetheless
are really trying to halt the impending catastrophe and restore the normal
functioning of the state mechanism, then perhaps they still have a chance. 
But it is their last chance.

*******

#7
The Economist
May 23, 1998
[for personal use only]
FINANCE AND ECONOMICS 
A guide to offshorny banking 
P A P H O S ,    C Y P R U S     

WHEN Russians take fright, their money takes flight. The problem is that 
no respectable bank will readily accept money from a questionable 
source—and a Russian address invariably rings alarm bells. So Russian 
money ends up in some peculiar places. An unusual bunch of offshore 
centres has sprung up to handle some of the $200 billion channelled out 
of the country in the past decade, and probably a large part of the 
outflows triggered by the current crisis as well. 
Riga’s main advantage is proximity. The Latvian capital is barely an 
hour’s flight from Moscow. It is also thoroughly Russian-speaking and 
boasts a flexible banking system, which does not flinch at customers 
bearing suitcases stuffed with a million or two in $100 bills. 
Cyprus is another favourite. Clean, warm and orderly, with minimal visa 
requirements, it is currently Russians’ favourite location for a second 
home—closer than the south of France or Spain, and willing to bend all 
sorts of rules. Estate agents advertise in Russian and take payment in 
cash. But the banking system, although discreet and friendly, is 
underdeveloped. Most Russians find Cyprus too provincial for serious 
business. 
Traders opt for Istanbul or Dubai. The former now hosts the world’s 
liveliest (and safest) russophone commercial district. But the banking 
is less than world class. There is trade finance, but little else. 
For serious finance, Russians used to favour Switzerland, traditionally 
the world’s safest home for flight capital. But international pressure 
on the Swiss has forced a change of tack—and thus dented their 
reputation. “Those Swiss swindled Mobutu out of his money,” rages a 
Moscow banker with rich Russian clients. Despite a new money-laundering 
law at the start of this year, some Swiss private banks continue to tout 
energetically for business in Russia, making only sketchy enquiries 
about their prospective clients’ standing. Austria, which still allows 
anonymous bank accounts in some circumstances, is also attractive. 
Russians also like Berlin—but German bureaucracy involves too much 
scrutiny to be comfortable for big business deals. London is liked 
mainly for its high property prices, which make spending $1m on a house 
much easier than in other European capitals. 
As long as Russians are wary of keeping their capital at home and 
traditional financial centres are sniffy about their money, these 
offshore centres will thrive. Keeping Russian money of the ill-gotten 
sort out of the western financial system looks ultimately like a doomed 
endeavour. For a start, toughening money-laundering laws—as supported by 
the leaders of the big economies at their meeting in Birmingham, in 
England, a week ago—penalises genuinely successful entrepreneurs who may 
justifiably want to move some of their assets out of a country not known 
for protecting them. In any case, rich people will always find a way to 
a respectable bank. “Eventually a Russian bank will simply buy a western 
one and solve the problem that way,” says one Moscow-based financier. 

*******

#8
Poll: Mixed Results on Russian View on Foreign Relations 

MOSCOW, May 21 (Interfax) -- A recent poll of 1,500 Russians from
across the country suggests that while many support closer international
ties, they are also leary of the gains to be had from such contacts.
Twenty-eight percent of those polled by the Public Opinion Fund May 10
favored closer relations with countries abroad. Slightly fewer, 23% of the
respondents, said Russia should step up its ties with Western Europe. Of
these, 29% are under 30 years old and 34% have higher education.
Another 18% singled out the United States as a priority for closer
relations. Of these, 20% are under 30 years old and 22% have higher
education.
Nine percent of those polled said that Japan, South Korea and other
Asian countries should be Russia's chief partners.
Just 2% said international ties should be curbed.
H owever, 31% think that ties with foreign countries do more harm to
Russia than good. Of these, 46% support leader of the Communist Party
Gennadiy Zyuganov.
Some 47% of those polled said ties with the West were mostly
beneficial. Of these, 69% support First Deputy Prime Minister Boris
Nemtsov.

*******

#9
Yeltsin's Duma Representative Not Ruling Out Impeachment 

MOSCOW, May 21 (Itar-Tass) -- The Russian president's representative
in the State Duma, lower house of the parliament, Aleksandr Kotenkov, does
not rule out that the opposition will press with impeachment proceedings
against President Boris Yeltsin.
In an interview with Itar-Tass on Thursday, Kotenkov said under the
constitution, "the procedure of impeaching the president from the post is
opened on the initiative of not less than one-third of the deputy corps",
adding that the Duma's opposition factions have collected a sufficient 170
signatures of support of impeachment.
Kotenkov said he did not rule out that "the opposition at a convenient
time for it will raise the impeachment question at a plenary sitting of the
State Duma".
Having collected the signatures of support, the Duma is to set up a
special commission to probe into arguments of deputies who motion
impeachment.
The commission's summary, if in favour of impeachment, is to put on
the Duma's agenda formal charges against the president. If 300 Duma
deputies vote for impeachment, the lower house makes official accusations
of the president.
The Duma's impeaching material is to go to the Russian Supreme Court
and the Constitutional Court which are to make a summary on whether the
president's acts shows an element of crime, Kotenkov said.
The Constitutional Court is also to issue a judgement on whether the
constitutional impeachment proceedings were observed by the Duma.
Next, the impeachment proceedings are to be taken to the Federation
Council, or the upper house of parliament, which must make the decision on
impeachment by 300 votes within three months of the start of proceedings.
If the Federation Council passes no decision by the deadline, the
accusations against the president are turned down, Kotenkov said.
If two-thirds of the Federation Council vote for impeachment, the
president goes.
"I have a big doubt that 300 deputies will vote in the State Duma for
impeaching the president," Kotenkov said.
He said "this is the first barrier at which the process will stop". 
The second barrier is the summary of the Supreme Court.
"The fact is that the deputy initiators of the proceedings of
impeaching the president from the post simply do not read either the
Constitution or the criminal code," Kotenkov said.
He explained that "what they are trying to accuse the president of is
not laid down by our criminal law as a crime".
As for the Constitutional Court, it "can give a positive summary of
these accusations only in the case if the president's acts, on which the
initiators of impeachment are insisting, fall under concrete articles of
the criminal code," Kotenkov said.
"There is naturally none of that and for this reason the impeachment
procedure which leftist forces in the State Duma have started is doomed to
failure in advance as absolutely untenable," he said.

*******

#10
RUSSIA'S SECURITY COUNCIL GATHERS TOMORROW TO DEBATE
NORTH CAUCASIAN, COAL-MINING DEVELOPMENTS AS REPUBLICS
MAKE EMERGENCY STEPS

MOSCOW, MAY 24, RIA NOVOSTI - The federal Security Council
holds a closed emergency session tomorrow, President Boris
Yeltsin presiding, to discuss developments in the North Caucasus
and coal-mining regions--Russia's most acute issues of late.
The President is focusing attention on both, and devoted to
them a radio address to the nation last Friday. He reported
exhaustive information regularly coming to him from mining
areas, and reassured that the government was doing all in its
power to take the edge off the situation.
A presidential decree of May 8 demands mining problems
settled as soon as possible. The State Duma passed a
Cabinet-initiated bill to cut by a quarter the upkeep
expenditures of the presidential and governmental staffs and
parliament's both houses. The arrangement promises an extra R526
million for miners' relief.
Deputy Prime Ministers Boris Nemtsov and Oleg Sysuyev made
trouble-shooting trips to coal areas on massive strike. The Big
Four--a consultative council of the President, the
Prime-Minister and both parliamentary house Speakers-- dedicated
their latest session to the mining issue and appointed for
June's first ten days a representative conference of executive
and legislative bodies to debate a social relief programme
concerning miners, among others.
Fully aware of miners' justified indignation, the
President, however, warned them "not to overdo the thing" and
said that he was not intending an extraordinary monetary
emission or stripping other economic sectors to solve their
problems. He pointed out huge losses which their railway
blockades caused the nation, and added that protesters could not
ease their plight by sprawling across the tracks.
The federal centre is not alone to blame for the coal
problems, whose settlement depends even more on mining managers,
stressed Yuri Skuratov, federal Prosecutor-General, as he
instructed local prosecutors to look into the root of the matter
and see what particular outrages had triggered off rail
blockades.
The Security Council will also analyse an exacerbation of
the North Caucasian situation within the few last days--mainly
last Thursday's Makhachkala drama as the Daghestani State
Council premises were seized by armed supporters of Nadir
Khachilaev of the State Duma. President Yeltsin is closely
monitoring the developments, his press secretary Sergei
Yastrzhembsky said to Novosti. He received reports from the site
every hour throughout the Daghestani crisis, and ordered to
establish an emergency HQ for Daghestani settlement, led by
Sergei Stepashin, federal Interior Minister, who was urgently
summoned from a visit abroad for the purpose.
President Yeltsin met Prosecutor Skuratov Friday, the day
after the rising, to receive a detailed report about an
investigation started in Daghestan. As the prosecutor told
Novosti following the conference, it was no occasional riot but
an indication of logical and consistent latent trends. He
expects his staff to expose them, and intends to open their
finds to the public. Mr. Skuratov hopes for successful detection
of Daghestani attacks on the police and violent mass rallies.
Last Friday's emergency session of the republican State
Council severely denounced law-enforcement activities and
approved resignation for which Interior Minister Magomed
Abdurazakov was applying. Sergei Stepashin, his federal
counterpart, who was attending, optimistically pointed out
stability, law and order restored throughout Daghestan and in
its capital.
The neighbouring Chechnya determined extraordinary measures
to ward off a similar crisis. The Shari'a State Security
Ministry alerted its troops against possible criminal outbreaks,
Vice-Premier Kazbek Makhashev, supervising the army, police and
security, said to Novosti. The Chechen top is apprehensive of
provocations to create tensions in the republic. 

*******

#11
Kiriyenko vows funding for Russian nuclear forces

MOSCOW, May 23 (Reuters) - Prime Minister Sergei Kiriyenko vowed on Saturday
to maintain funding for Russia's nuclear 

Kiriyenko told Russian news agencies on his return from the secret nuclear
research city of Sarov, long known as Arzamas-16, that the government would
approve a special development plan for atomic weapons next month. 

``The state has supported and will continue to support, including financially,
its military nuclear programme,'' Kiriyenko was quoted as saying by Itar-Tass
news agency. 

``I could see once again that Russia's main wealth is people who achieve
excellent results even in dire economic conditions,'' he said of his trip to
Sarov. ``There is no need to worry about the country's defence capability.'' 

Cash-strapped and demoralised, Russia's post-Cold War conventional armed
forces are being cut and reformed to fit the new world order. But those
changes are going on beneath Russia's substantial nuclear umbrella. 

Military experts say nuclear units are the most reliable component of the
Russian armed forces. 

Kiriyenko said President Boris Yeltsin's advisory Security Council would meet
early in June to review his proposal for the sector as well as other matters. 

*******

#12
Top heart surgeon slams Russian bypass record

MOSCOW, May 23 (Reuters) - The surgeon who performed heart bypass surgery on
President Boris Yeltsin said on Saturday only a fraction of Russians needing
similar operations were fortunate enough to get them. 

Renat Akchurin told RIA news agency many Russian doctors were eager to carry
out such operations but lacked funds. He described the heart surgery service
in Russia as ``abominable.'' 

``Akchurin said that only 3,000 heart bypass operations are performed annually
in this country,'' RIA reported. ``At the same time, 350,000 to 400,000 people
need such operations each year.'' 

The surgeon met Yeltsin on Friday and declared the 67-year-old Kremlin chief
to be in excellent health 20 months after his quintuple bypass operation.
Akchurin said such surgery could prolong a patient's life expectancy by 15
years. 

Russia's health service has suffered from chronic underfunding during the
transition from a planned to market economy. In addition, many medical workers
are poorly paid or face long delays before they see their money. 

********

#13
Communist Party Starts Congress In Moscow 

MOSCOW, May 23 (Interfax) - A Russian Communist Party (KPRF) congress 
opened in Moscow Saturday behind closed doors. 

Party leader *Gennady Zyuganov* told journalists before the start of the 
congress that one of the main issues at the congress was the 
introduction of changes to the party charter. He did not specify what 
changes he was talking about. 

In addition, Zyuganov said, the party will draft a statement on the 
critical situation in the country. "We plan to discuss the situation 
that has developed in Russia's mining regions, in particular in the 
Kuzbass [Kuznetsk coal basin] and Rostov-on-Don. We also plan to develop 
a new strategy and tactics for the behavior of the KPRF in these 
conditions," he said. 

The congress will discuss changes and corrections to the Russian 
Constitution related to greater control for elected representatives over 
the actions of the government, he said. 

Zyuganov said that the congress would also look at the issue of 
impeachment of President Boris Yeltsin. He said that 205 Duma deputies 
had signed the document supporting impeachment. 

But State Duma Chairman Gennady Seleznyov, also taking part in the 
congress, said that the party would be unlikely to consider the 
impeachment issue. "The main issue at today's forum is the party's 
charter and our attitude toward the socioeconomic crisis in Russia," he 
said. 

******

#14
Russian Political Leaders Forecast Lebed's Chances in 2000 

MOSCOW, May 18 (Interfax) -- Aleksandr Lebed, elected last Sunday [17
May] governor of Krasnoyarsk region, will not become Russia's new president
in 2000, Liberal Democratic Party leader Vladimir Zhirinovskiy told
Interfax Monday.
"He will either find that he cannot govern even one region or he will
be made into a bogey or he will be given a lot of money to finance phony
successes in the region," he said.
In the latter case Lebed is likely to face Boris Yeltsin in the second
round of presidential elections which he will lose because whichever way
the voting goes the elections will be rigged in Yeltsin's favor,
Zhirinovskiy said.
He is confident that Lebed will fail miserably in Krasnoyarsk because
"Russia will not pull out of crisis in the coming 20 years and so Lebed
will not be able to deliver on his promises."
"He has gotten a measure of power as an addict gets his dose. When his
system gets more than it can handle, the addict dies. Lebed has gotten more
power than he can handle," Zhirinovskiy said. Lebed is very likely not to
run in the presidential elections while Yeltsin will do his best to become
a credible candidate in 2000 and the Left will be represented by (Duma
Chairman Gennadiy Seleznev) or (Communist Party leader) Gennadiy Zyuganov.
Independent MP Sergey Yushenkov, deputy chairman of Russia's
Democratic Choice, believes that Lebed owes his electoral victory chiefly
to his "brilliant electoral campaign," financed chiefly by national capital
lobbying for tight protectionist policies throughout the country.
He does not believe, however, that Lebed will win the presidential
elections in 2000. Lebed "is not likely to resolve the region's program in
the 18 months before the presidential elections but will become associated
in the people's mind with the official authorities with which the people
will be increasingly dissatisfied," Yushenkov said. The defeat of
incumbent governors in numerous regions proves this point, he said. "The
electorate is obviously unhappy over those who have been in power lately,
whatever party they belong to," Yushenkov said.
Albert Makashov, a communist MP, also does not believe that Lebed has
a chance to win the future presidential elections. "Lebed does not have a
positive economic program for Krasnoyarsk region which he does not even
know," he said.
"People voted more against the political course in the country than
for Lebed the way they had voted against Gorbachev by voting for Yeltsin," 
Makashov said. Lebed's noisy and costly program "was financed by
commercial banks rather than the central government but this was done on
the government's orders," he said.

*******

#15
Moscow Times
May 23, 1998 
BOOKWORM: Old Dogs Can Learn Tricks of The Trade 
By Igor Zakharov
Special to The Moscow Times

In most interviews given since the mid-1990s by the older generation of 
Soviet writers, the diehards nostalgically lament that the good old days 
are gone, and curse the present situation in the book market. They see 
the New Russian literary scene as being the realm of low taste and mass 
culture, the domination of cheap Western pulp fiction and illiterate 
Russian thrillers, and complain that the whole mess heralds the collapse 
of modern literature and the spiritual death of Russia, which was once 
known as "most reading nation of the world." 

Many young Russian journalists gladly play up these psychologically 
understandable complaints by elders with short memories. 

As a result, writes Boris Strugatsky, the most famous and popular 
Russian science fiction writer, we have now a distorted picture of the 
real publishing situation during the Soviet stagnation. 

Strugatsky, 65, has written about 20 sci-fi novels since 1956 with his 
older brother, Arkady, who died in 1991. Their books were extremely 
popular among readers, but considered suspicious by the authorities, who 
correctly saw the non-Soviet (or disguised anti-Soviet) character of 
their writing. 

"Of course I see the changes, and they are drastic ones," said 
Strugatsky, in a long interview published earlier this month in the 
Russian weekly Ex Libris. "It used to take two to three years to publish 
a book, and now it takes no longer than two or three months. Before, 
dozens of people participated in deciding whether to publish a book or 
not. Every participant had the right to ban publication and almost 
nobody had the right to push it forward. Now that question is decided 
very quickly by a limited number of people who consider, as a rule, only 
one factor: whether or not the book will sell... And I do not see 
anything wrong with this system. We now have a normal book market that 
publishes what the reader wants to read." 

Speaking in detail about what is known in Russian as fantastika, 
Strugatsky noted the great demand and supply of fantasy: "I do not know 
whether it is a deserved popularity, but it is enormous." 

Strugatsky is not a fan of fantasy. He said that he accepts only those 
literary worlds that have some connection with the reality in which he 
lives. His spheres are what he prefers to call "fantastic realism." And 
he named a few "wonderful writers" who work in this genre and are 
popular with the readers: Vyacheslav Rybakov, Andrei Stolyarov, Andrei 
Lazarchuk, Mikhail Uspensky, Eduard Gevorkian, Alexander Schyogolyev, 
Boris Shtern, Yevgeny Lukin and Pavel Kuzmenko. 

The list proves that not only fantasy is in bloom, said Boris 
Strugatsky. "As we say, vsem sestram po sergam (something for 
everyone)." 

********

#16
BBC
May 22, 1998
World: Analysis
Caviar politics in Dagestan

The violence in the southern Russian republic of Dagestan has drawn 
attention to the region's chief export - caviar. The BBC's regional 
reporter, Tom de Waal, reports that the two brothers who led the small 
armed revolt against the republican government are both involved in the 
caviar trade - and accused of illegally profiting from smuggling the 
luxury good to the West. 

Dagestan is one of the poorest parts of Russia. And yet the republic 
boasts some extremely wealthy people. Some are involved in the oil 
business and are making money from the transit of Caspian Sea oil across 
Russia. Others have access to one of the world's most exclusive luxury 
goods: caviar. 

The home of Dagestani politician Nadirshah KhachilayevThe attraction is 
obvious. Poaching and smuggling in the Caspian Sea, which holds about 
90% of the world's sturgeon, is continuing despite efforts to clamp down 
on it. 

Even a small fraction of the sums caviar can command in the West is 
unimaginable wealth for small Caspian Sea poachers, who can, if lucky, 
find a kilo of roe in a single fish. 

There are strict quotas on sturgeon fishing, but they are openly 
ignored. Stocks are declining rapidly and last year a protection order 
was issued to try to conserve stocks. 

In the early 1970s some 25,000 Belugas migrated annually up the Volga to 
spawn; by the early 1990s the number had fallen to less than 11,000 and 
was still falling fast. 

In this unstable region, it is often hard to distinguish between the 
poacher and the law-enforcer. Many officials are extremely corrupt and 
state salaries are much lower than the bribes the poachers can pay. 

Some of the republican bosses are also accused by their enemies of 
making illegal profits from their positions. One such is Magomed 
Khachilayev, who is head of the local fishing company, Dagryba. He and 
his brother Nadir, a deputy in the Russian parliament, led a small 
insurrection against the local government on Thursday, when armed 
supporters seized the government headquarters and parliament building. 

Nadirshah Khachilayev - Magomed's brotherThe Khachilayev brothers are 
both Laks, which is the fifth largest ethnic group in the national 
mosaic of Dagestan. They have been shut out of republican politics 
because of their ethnicity; but both are extremely rich and they were 
able to muster sufficient armed support on Thursday to take over the 
centre of Makhachkala. That was proof of how local government is weak 
and the region is being dominated by clan leaders and armed militias. 

Federal security forces are not safe from this phenomenon. A horrific 
explosion in an apartment block that killed 67 Russian border guards and 
members of their families in November 1996 was widely blamed on local 
mafia groups trying to stop smuggling. 

Since then the criminalisation of the region has only got worse. That is 
bad news both for regional stability and the future of the Caspian Sea's 
sturgeon. 
 
*******

#17
Georgia urges world to help stop Abkhaz fighting
By Lawrence Sheets 

ZUGDIDI, Georgia, May 24 (Reuters) - Georgia urged the international community
on Sunday to help stop fighting in its breakaway Abkhazia region while
refugees fleeing the area said their villages were being set on fire. 

The former Soviet republic's foreign ministry blamed the separatists for the
fighting, the worst clash between Abkhaz forces and Georgian irregulars since
an all-out war killed 10,000 people in 1992-3. 

``So we ask the Russian peacekeepers, the United Nations and the Friends to
Georgia countries to intervene and make the Abkhaz side stop military activity
and reinforcement,'' said a foreign ministry statement issued on Sunday. 

The Friends to Georgia group was formed by major western powers to try to help
solve the separatist dispute. 

A peace settlement is blocked by disagreements over the amount of sovereignty
Abkhazia should have but foreign mediators have already begun trying to end
the latest clashes. 

Refugees fleeing Abkhazia, which has run itself as an independent state since
winning the war, told Georgian television Abkhaz troops came in with heavy
reinforcements overnight and had been burning down their villages. 

Abkhaz separatist authorities told Radio Russia that Georgian irregular forces
had mined the approaches to the villages and built fortifications. 

Skirmishes in the Gali district -- the buffer zone between the two sides which
is predominantly populated by ethnic Georgians -- have often broken out since
war, but they have never escalated to such an extent. Tbilisi says the
Georgian irregulars are outside its control. 

A platoon commander from the 1,500-strong Russian peacekeeping force
patrolling the buffer zone reported intensive firing and said some
peacekeepers had been trapped by the Georgian fighters, Radio Russia said. 

Georgia's ambassador to Russia, Vazha Lordkipanidze, was due to meet Abkhaz
separatist leader Vladislav Ardzinba on Sunday in the separatist capital
Sukhumi to discuss a possible ceasefire, Itar-Tass news agency reported. 

Georgian government officials said on Saturday 9,000 refugees had fled in
recent days. 

Zugdidi, a regional centre near the de-facto border, is already home to about
70,000 ethnic Georgian refugees -- just under half of those forced to flee
Abkhazia five years ago. 

The U.N. has condemned the clashes, which have raised fears of a resumption of
the war, one of two which devastated Georgia after the break-up of the Soviet
Union in 1991. 

Repairs are underway to an oil pipeline crossing the country of 5.5 million
people, which will be used to bring crude to the West from the Caspian Sea.
Another, much larger pipeline, is planned. 

*******