May 26, 1998  
This Date's Issues: 2194•  2195• 

Johnson's Russia List
#2194
26 May 1998
davidjohnson@erols.com

[Note from David Johnson:
1. John Danzer: LEBED'S ISLAND.
2. Moscow Times: Tycoon Snubs Lebed. (Berezovsky). 
3. Reuters: Yeltsin attacks ex-PM and media over crises.
4. AP: Russia: Miners' Strike Hurt Economy.
5. Moscow Times: Edwin Dolan, Kiriyenko Government Has Little Time 
to Fix Economy.
6. RFE/RL: Ben Partridge, Daghestan: Fears Of Instability Deepen.
7. BBC: No wages, but resourceful Russians get by.
8. The Press (New Zealand): Kevin Taylor, View of Russia 'outdated.' 
9. Yo'av Karny: Gusinsky is Becoming a Media Mogul in Israel.
10. VOA: Stephanie Ho, CHINA'S GORBACHEV.
11. Vek: Andrei Ryabov, THE KREMLIN MUST BEFRIEND LEBED. If It Wants 
To Survive Fighting Him.
12. Moscow Times: Richard Dion, Hope for the Caucasus.
13. Interfax: Russian Recent Troubles Attributed To Weak Authority.
(Chubais).
14. Reuters: Gov't Establishes Inner Cabinet.]

*******

#1
From: John Danzer <Telos4@aol.com>
Date: Mon, 25 May 1998 
Subject: LEBED'S ISLAND

Lebed is a man with a plan. What is his plan? He dropped a hint
right after his election as govenor. Victory can be as
intoxicating as wine. When our brain is floating in endorphins we
tend to express ourselves without fear. So what did Lebed say?

The Associated Press release by Mitchell Landsberg quotes Lebed as
saying "Krasnoyark has become the political center of Russia, and
partly of the whole world."

This made me search through my JRL archives to look for more clues
as to what Lebed means.

Consider these statements.

"Krasnoyarsk region has become the arena of a battle of national,
and in some ways planetary, scope."

"All the factories are here, (Krasnoyarsk) but all the taxes are
paid there (Moscow)."

"If you want to see Russia, you must depart 150 kilometers from
Moscow and further. You must go to the Urals and beyond them. It is
there that you will see Russia."

"I want to get out of Moscow; you can't do anything there," 

"I want to create a model -- a new center of power, whence
the reconstruction of Russia will begin and which will teach people
to respect it and not allow crooks to heap ignominy upon it."

"I am interested in earthly reform. Land reform to stimulate
production, local tax collection. . . . If they are interested in
the future, let them go there alone."

My question is why would a man who wants to get out of Moscow be
eargerly pursuing the job of President? Lebed is not really
concerned with some elections in the year 2000. He talks about the
year 2000 elections to make the present authorities think he is
playing the same game. Lebed wants to be in the position to pick
up the pieces after the current difficulties run their course. He
wants to be President of Russia, - a NEW Russia consisting of a
federation of independent states with it's government in
Krasnoyarsk.

Next Lebed wants to lead the World Island. Is there another reason
he would use words like "whole world" and "planetary" when speaking
of his plans. 

*******

#2
For more articles from The Moscow Times, check out their website at
www.moscowtimes.ru

Moscow Times
May 26, 1998 
IN BRIEF: Tycoon Snubs Lebed 
Interfax

MOSCOW -- Boris Berezovsky, recently appointed executive secretary of 
the Commonwealth of Independent States, said Monday that new Krasnoyarsk 
Governor Alexander Lebed would be "extremely dangerous as the president 
of Russia." 

"I supported the idea of Lebed becoming the governor of Krasnoyarsk 
territory, but on the other hand I think Lebed would be extremely 
dangerous in the capacity of the president of Russia," Berezovsky said 
at a world congress and the 47th general assembly of the International 
Press Institute in Moscow. 

"I think today we have four realistic alternatives in the political 
arena: Lebed, [Moscow Mayor Yury] Luzhkov, [Communist leader Gennady] 
Zyuganov and [President Boris] Yeltsin," he said. 

*******

#3
FOCUS-Yeltsin attacks ex-PM and media over crises
By Alastair Macdonald 

MOSCOW, May 25 (Reuters) - President Boris Yeltsin met senior officials on
Monday to plot a way out of Russia's maze of troubles, including a slump in
the financial markets, a crisis in the coalmines and simmering violence in
frontier provinces. 

His spokesman announced the creation of government task forces to restructure
the coal industry and coordinate policy on ethnic regions in the Caucasus, but
the meeting was most striking for its pointed criticism of the former
government of ex-Prime Minister Viktor Chernomyrdin and of the Russian media. 

While the Kremlin could praise ministers for soothing passions in the mines
and in the Moslem region of Dagestan, there was no cheer on the financial
markets, where shares fell 5.31 percent taking losses this month to more than
30 percent. 

Yeltsin chaired the extraordinary meeting of his Security Council primarily to
discuss protests by unpaid coal miners that snarled Russia's rail network last
week and a flare-up of violence in Dagestan, neighbouring separatist Chechnya.

``The deterioration of the situation posed a threat to political stability in
the country and in several cases to its national security,'' spokesman Sergei
Yastrzhembsky said. 

Emergency action by Prime Minister Sergei Kiriyenko's new government -- mostly
comprised of ministers who served under Chernomyrdin until March -- appeared
to have resolved both those problems for the time being. The miners cleared
the rail tracks in return for pledges of cash and Dagestan, where armed men
seized a government building on Thursday, appeared quiet. 

The Council pointedly laid much of the blame for these two debacles at the
door of Chernomyrdin's government. Chernomyrdin has won only lukewarm backing
from Yeltsin for his bid to succeed him in a presidential election due in the
year 2000. 

``One of the reasons for such a deterioration (in the mines) was that the
previous government did very little in practice to restructure the coal
sector,'' Yastrzhembsky said. 

``An overwhelming majority of government orders and decisions on stabilising
the socio-economic situation in North Caucasus regions, including Dagestan,
have been found after checks to have not been carried out by the previous
government.'' 

Kiriyenko, energy minister in the last cabinet, added to the sense the new
team wanted a break with past problems by saying the miners' ``problems had
been building up for a long time.'' 

Now, he said, Yeltsin had approved a restructuring plan, partly paid for by an
$800 million World Bank loan, and the government intended to implement it. 

Also criticised over the miners' dispute was the media. 

Yeltsin on Monday summoned the heads of three national television networks to
the Kremlin on Thursday. Yastrzhembsky said their coverage of the ``rail war''
had gone ``beyond reasonable limits,'' without explaining how. 

Yeltsin himself slammed media proprietors for distorting the news for their
own ends. ``The media owners are sometimes the worst censors. They openly
interfere in editorial policy,'' he said in a speech to an international media
watchdog body. 

He summoned leading financiers and industrialists to the Kremlin for Friday to
hear their views on getting out of the present financial market crisis,
Yastrzhembsky said. 

He may also take the opportunity to chide some of them, who are also media
owners and not averse to flexing that muscle for political ends. 

Asked whether the Kremlin believed speculation that some business groups might
have been encouraging the miners' action, which had partially paralysed an
already fragile economy, Yastrzhembsky said: ``This is a matter of concern for
the presidential administration. But I don't know the answer.'' 

Kiriyenko has warned that the cabinet simply lacks the cash to pay off state
debts to the mostly private coal sector. Its room for manoeuvre narrowed on
Monday when its borrowing costs rose above 50 percent for the first time in 18
months. 

Moscow officials have blamed ``Western speculators'' and a spillover from
Asian emerging markets for their troubles. 

Analysts said positive word from the International Monetary Fund on releasing
a further $670 million of a $9.2 billion loan could calm the markets. An IMF
fact-finding mission left Moscow on Friday, giving no clear indication of what
it had concluded. 

*******

#4
Russia: Miners' Strike Hurt Economy
May 25, 1998
By VLADIMIR ISACHENKOV

MOSCOW (AP) - A coal miners' strike and recent violence in southern Russia
have badly damaged the country's economy and threatened its stability, the
Security Council said Monday after an emergency meeting.

Meanwhile, Russia's Communist Party - the main opposition group in parliament
- renewed its call for new elections, saying that the country has lurched from
crisis to crisis under President Boris Yeltsin's administration.

The Security Council, an advisory body of senior government officials, decided
to create a permanent government committee to keep track of coal-mining
regions, and another body to monitor trouble spots in and around southern
Russia.

Railway blockades by striking miners and clashes involving Muslim gunmen in
the southern region of Dagestan ``threatened the country's political
stability, and, in some cases, its national security,'' Yeltsin's spokesman
Sergei Yastrzhembsky quoted the council as saying.

Yastrzhembsky blamed both crises on the policies of the former government,
which Yeltsin fired in March and replaced with a younger team instructed to
speed up reforms.

Miners on Monday dismantled barricades on the Trans-Siberian and most other
railways after a two-week strike, saying they would return if the government
fails to pay several months of overdue wages and meet other demands.

The blockades stranded more than 600 trains throughout Russia at the peak of
the strike, costing railroads $58 million in lost revenues and another $123
million for such things as protecting freight in idled trains, the Railway
Ministry said.

In the troubled Dagestan region, two separate clashes killed three policemen
during several days of unrest.

One incident began when hundreds of gunmen loyal to a local Muslim leader
stormed a government building in the capital of Makhachkala. The other broke
out when police tried to disarm Muslim militants in the village of Karamakhi,
about 20 miles southwest of the capital.

The Communists' call for new elections follows a new effort to impeach
Yeltsin. Last week, the group gathered 205 signatures in the 450-seat State
Duma, parliament's lower house, for the impeachment campaign.

The Communists oppose Yeltsin on most issues, but have been particularly upset
with him during the recent weeks of crises.

Yeltsin's office dismissed the impeachment move as a publicity stunt.

Also Monday, Russia's stock market fell slightly more than 5 percent when
foreign investors continued to abandon a country faced with chronic economic
problems and social unrest.

The market has tumbled more than 40 percent this year after being the world's
top performer for the past two years.

*******

#5
Moscow Times
May 26, 1998 
Kiriyenko Government Has Little Time to Fix Economy 
By Edwin Dolan 
Edwin Dolan is president of the American Institute of Business and 
Economics. 

Can Russia hang on to its hard-won economic stability and move forward 
to real economic growth? The accomplishments of the government of Viktor 
Chernomyrdin were to bring inflation under control, stabilize the ruble 
and put GDP growth in the plus column, albeit by a wafer-thin margin. 
This was done by solidly orthodox means, stopping uncontrolled printing 
of money and switching to borrowing to finance the budget deficit. But 
will the current crisis sweep away those gains? 

An important part of the answer can be found in a classic article 
titled, "Some Unpleasant Monetarist Arithmetic," written nearly 20 years 
ago by U.S. economists Thomas Sargent and Neil Wallace. They pointed out 
that although a government that switches from printing money to 
borrowing can tame inflation, the effect will be permanent only if 
certain stringent conditions of "monetary arithmetic" are satisfied. If 
the conditions are not fully met, the government can still buy time to 
fix problems, but if the purchased time is not used constructively, 
initially prudent borrowing will eventually generate a debt pyramid and 
inflation will return. 

What, exactly, are the conditions of monetary arithmetic that will 
determine whether Russia can hold on to its stability and start really 
growing? 

Factors that favor stability: a relatively small burden of debt when the 
stabilization effort starts, relatively long repayment terms for the 
part of the debt denominated in foreign currencies and surplus of 
exports over imports. All of these factors are working in Russia's favor 
today. 

Factors that weaken the economy: a large government budget deficit, high 
interest rates, slow or negative real economic growth and a high 
percentage of short-term financial inflows from abroad relative to 
long-term direct foreign investment. These factors are working against 
Russia. 

Balancing the favorable and unfavorable factors, Russia stands in the 
following situation: Russia gained substantially from the London and 
Paris Club negotiations last year, which eased repayment terms for the 
foreign debt it inherited from the Soviet Union. Meanwhile, though, it 
became dependent on volatile flows of international hot money to support 
sales of short-term, ruble-denominated securities on the internal 
market. By a stroke of really bad timing, its solid trade surplus was 
undermined by plunging energy prices. 

On the domestic front, the government's internal debt, under 30 percent 
of gross domestic product, is still small. Several candidates for 
Europe's new monetary union would view such a figure with envy. 
Furthermore, the government has brought its "primary" budget deficit -- 
the deficit calculated without including interest payments -- almost 
into balance. The catch is that skyrocketing interest rates are making 
the burden of servicing Russia's relatively small internal debt 
unbearably large, thereby putting the budget as a whole, interest 
payments included, far in the red. Meanwhile, depressed energy exports 
and growing labor unrest make significant real economic growth doubtful 
again this year. 

Until quite recently, it looked like the balance of forces had turned in 
Russia's favor. In January, for example, economists for the respected 
publication Russian Economic Trends ran a series of projections based on 
the Sargent-Wallace type of monetary arithmetic. Even their most 
pessimistic projection, with just 2 percent GDP growth, 30 percent 
interest rates and a continuing 2 percent primary budget deficit, gave 
the government several more years to get its house in order. 

These projections suggested that Russia could survive any one of the 
following unfavorable developments: no economic growth, interest rates 
stuck near 30 percent or a continued primary budget deficit of 1 
percent. It could not, however, survive two or more of these negative 
developments. Nor could it survive even one of the following still more 
negative possibilities: a further decline of GDP, a sustained primary 
deficit of 2 percent or more, interest rates over 40 percent for more 
than a few weeks or a devaluation of the ruble. Unfortunately today, the 
most pessimistic projection of January looks like the best that can be 
hoped for. 

The strategy of stopping inflation through borrowing is like hunting a 
tiger with a single-shot rifle: If you don't hit the target the first 
time, you won't get a chance to reload. Russia has fired its one shot. 
The beast has been hit, but it is not yet down. At first it looked 
mortally wounded and likely to drop at the hunter's feet. Suddenly, we 
are not so sure. 

The time purchased by the Chernomyrdin government has been squandered, 
but structural problems are not yet solved. Given the iron dictates of 
monetarist arithmetic, the government of Sergei Kiriyenko now has not 
years, but just weeks or months to fix structural problems. Top on the 
list to be fixed is the tax system, which imposes far too great a burden 
on business for the revenue it collects. Next is the expenditure side of 
a budget that eats up a bigger chunk of GDP than in most countries at 
Russia's level of development, but yet cannot supply schools with 
textbooks, hospitals with reliable hot water or soldiers with decent 
rations. Above all, the government must end the shameful practice of 
solving its budget problems through forced borrowing from the most 
vulnerable elements of the population via wage and pension arrears. If 
these problems are not fixed very soon, the wounded tiger of inflation 
is going to take one more leap and swallow Kiriyenko, together with his 
whole team, at a single bite. 

********

#6
Daghestan: Fears Of Instability Deepen 
By Ben Partridge

London, 25 May 1998 (RFE/RL) -- The brief seizure by gunmen of a 
government building in the southern Russian republic of Daghestan last 
week has deepened fears of instability in a conflict-prone region 
strategically located on the Caspian Sea. 

The incident, which ended peacefully, underlines the volatile situation 
in the mainly Muslim republic on Russia's southernmost border, bordering 
Chechnya, Georgia and Azerbaijan. 

Daghestan, largest of the north Caucasus autonomous republics, is of 
crucial interest to Moscow because it controls the sole railway line 
connecting Russia with Chechnya, and is currently negotiating the rights 
to run a Caspian oil pipeline over its territory to Russia. 

International oil companies are watching the Daghestan internal 
situation closely because any instability there could affect their plans 
to pipe Caspian oil and gas through the North Caucasus. 

Daghestan (Land of the Mountains) is a region of great ethnic diversity. 
Its 2 million people are mainly of Caucasian or Turkic origin comprising 
a total of 34 ethnic groups, including Avars (28 percent), Dargins (16 
percent) and Kumyks (13 percent). No ethnic group constitutes a clear 
majority or occupies a dominant position. 

Daghestan has the lowest proportion of Russians of any area of the 
Russian Federation and it is one of the poorest. Some 70 percent of the 
population are said to live below the poverty line, while unemployment 
is twice the Russian national average. 

Analysts say structural conditions within the republic suggest that 
existing disputes could escalate because of a recent economic collapse, 
growing ethnic strife and a soaring crime rate that has triggered a mass 
emigration of Daghestan's Russians to other areas. 

The analysts, who cannot be identified, also say the "knock-on" effect 
of the Chechen war, coupled with the postponement of a decision on 
Chechnya's political status, is adding to Daghestan's economic and 
political difficulties, creating a volatile environment. 

Local pressures have been aggravated by the return of thousands of 
ethnic Daghestanis from other parts of the former Soviet Union, and the 
influx of an estimated 100,000 Chechen refugees. 

These population shifts have intensified inter-group competition for 
scarce land resources and led to serious disputes over land allocation. 
Local Akkin Chechens, for example, who were deported by Stalin in the 
1940s, are demanding a return to their ancestral lands and the 
relocation of the peoples currently living there. 

The analysts say the claims over land and access to resources have 
prompted the emergence of ethnic movements. The first serious ethnic 
clashes took place between Kumyks and Avars in 1991. There have also 
been smaller conflicts triggered by disputes over land distribution and 
resettlements from mountain areas. 

Young males are abandoning rural areas for urban centers all over 
Daghestan, but the xenophobia against people of "Caucasian nationality" 
elsewhere in Russia has forced them to stay home. 

This process has caused the marginalisation and criminalisation of 
society; growing anti-Russian sentiment among young Daghestanis; and a 
loss of belief in the state and the rule of law. 

There has been a growth in illegal and semi-legal military groups, 
including city gangs, volunteer corps and private security companies. 
Weapons are becoming an increasingly common sight. One analyst says: 
"Real power has been transferred away from the elected authorities and 
into the hands of the masked gunmen." 

There have been many assassination attempts in recent years. Fourteen 
political and business leaders were killed in 1996-97, seven of them 
members of the Daghestani parliament. 

The Chechen factor looms large. Daghestanis strongly supported the 
Chechen secession movement, and many Daghestani militants fought on the 
Chechen side. But after the peace agreement between Moscow and Grozny, 
renewed border clashes and Chechen raids on Daghestani territory led to 
an increase in anti-Chechen feeling 

Yet Daghestani society is split on the question of relations with 
Russia. Daghestanis ask themselves: should the republic follow the 
Chechens in seeking secession, or should they remain loyal to the 
Russian Federation? Chechen leaders are trying to influence the 
situation by encouraging a split with Russia, a move they hope could 
lead to the formation of one state with Chechnya in future. 

But the analysts say Daghestani leadership, although split, does not 
want to follow the Chechens in seeking secession. They prefer to remain 
loyal to the Russian Federation as a means of countering increasing 
Chechen influence in the region's politics. Moreover, Daghestan is 
heavily reliant on Russian government subsidies. 

What is the solution? Analysts say improvements in Daghestan are likely 
to be found only within the broader framework of a regional agreement 
between Russia, Azerbaijan and Georgia, and in conjunction with a 

********

#7
BBC
May 21, 1998 
Despatches
No wages, but resourceful Russians get by
The economic crisis has left working Russians to depend on one another 
for survival
By Russian Affairs Analyst Stephen Dalziel 

The news that Russian miners are protesting at the non-payment of their 
wages for as much as six months inevitably raises the question: if 
people aren't being paid, how do they live? 

Russian miners who are demonstrating over unpaid wages are simply the 
tip of the country's poverty iceberg. Millions of workers in both the 
state sector and newly-privatised industries are owed wages going back 
sometimes over a year. 

Growing fresh produce has helped Russians survive the worstMany of these 
people survive thanks to the ingenuity they developed during the years 
of shortages under Communism. Barter - exchanging goods for other goods 
or services - was a necessary fact of Soviet life, as a way of obtaining 
little luxuries which money simply couldn't buy. It's now come into its 
own again, but more importantly, as a way of surviving from day to day. 

Many Russians provide much of their own food, grown on their small plots 
of land in the countryside. The excesses of the Russian winter taught 
them long ago how best to preserve fruits and vegetables for months at a 
time - another skill which is now proving invaluable for survival. 

The link with the newly-rich and newly-formed upper level of Russian 
society can also prove useful for the less well-off. Family ties are 
still strong enough for many of those who have already made their 
millions to spare some for their poorer relatives. 

And it's this element of the equation which could prove crucial for the 
Russian government. The longer this goodwill survives, the more time the 
government will have; if it starts to die out as the divisions in 
society grow larger, it will ring serious alarm bells for Mr Yeltsin and 
his government. 
 
*******

#8
The Press (New Zealand)
May 25, 1998
View of Russia 'outdated' 
by Kevin Taylor

New Zealand has an outdated image of Russia as a country that does not 
pay its debts, says a Ministry of Foreign Affairs and Trade official. 
Peter Bennett, the director of the ministry's European division, said in 
Christchurch that Russia was now a market economy and was New Zealand's 
fastest growing export market. 

Last year exports to Russia increased 64 per cent. This year Russia 
surpassed the United Kingdom as New Zealand's biggest market for butter. 

Russia is New Zealand's 17th largest export market. 

"Russia is certainly growing in importance to New Zealand." 

Dr Bennett, who will become New Zealand's ambassador in Rome in 
September, said he had visited Russia twice in the last year and found 
New Zealand's view of the country "somewhat outdated". 

"Russia has moved on from the days when it was closed and Soviet, and it 
has moved on from the days when there was that unpaid debt to New 
Zealand." 

Russia was still a risky export market, but there were good prospects. 
It was a long-term market, not one for opportunists. 

"What we have in Russia is a growing middle class and they are the sort 
of people buying our products." 

Dr Bennett said New Zealand would be in contact with Russia a lot more 
now the country was joining Apec. 

New Zealand businesses needed to look closely at Russia as a potential 
export market -- and not just for dairy and meat products. There was 
also potential for consumer goods. 

He said the value of trade with Russia -- $320 million last year -- was 
understated as another $40 million to $50 million in New Zealand goods 
entered the country through Western Europe. 

Dr Bennett said Russia had changed enormously from the Soviet days. Its 
economy was coming out of an extensive reform process. 

Growth prospects for the Russian economy were considered to be "quite 
reasonable". 

He said the economy was not yet "out of the woods" but it was a market 
economy and the basis for growth had been set. 

******

#9
Date: Mon, 25 May 1998 09:26:34 -0400
From: "Yo'av Karny" <karny@mci2000.com>
Subject: Gusinsky is Becoming a Media Mogul in Israel

I thought you and your readers might be interested to know that as of
yesterday, May 24, Vladimir Gusinsky has established major presence in the
Israeli media market, well on his way to becoming a local media mogul and a
power broker of some consequence in the Israeli economy. 

It has been announced that he is purchasing 25 percent of Ma'ariv, the
country's second largest tabloid, for $85 million. That comes on top of his
recent purchase of 10 percent of the shares in MATAV, a major Israeli TV
cable operator. He is also a partner with one of Israel's wealthiest
businessmen, Shmu'el Dankner, in a private company called DanMost ("Dan"
for Dankner, Most for Gusinsky's Most banking and media group). DanMost is
expected to be the chief importer of Russian gas to Israel whenever a
somewhat reluctant Israeli government approves such a transaction.

As of late, Gusinsky has taken a fairly condescending view toward Israel
and Israelis. For example, in a wide-range interview with Globes, an
Israeli business newspaper, on May 14, he criticized the country's lack of
serious commitment to economic liberalization and further privatization, as
well as the systemic failures of the Israeli society. 

You might think that a person so unversed in the machinations of a
democratic culture would exercise greater restraint in talking to
foreigners who have just marked the 50th anniversary of the creation of
such a culture. However, Gusinsky, by his own admission, does not treat
Israel as a foreign country. When asked by his Globes interviewer about the
nature of his interest in an Israeli newspaper he said (I quote from the
Hebrew in which the interview was _not_ conducted):

"I am Jewish, and I wish to take a part in the development of my country."

Q: Is that a form of Zionism?

A: This is a form of patriotism.

Q: Patriotism is normally what a person feels towards the country of his
residence.

A: For Jews it is more complicated. I live in the former Soviet Union, and
there were times in which Russian relations with Israel were bad. And we,
Russian Jews, felt a bit torn. In sports, for example, 'our [team]' was
both Russian and Israeli. We would have been elated both by a Russian
victory and an Israeli one. Whenever Russians played against an Israeli
team we didn't know whom to root for, it was difficult for us.

Q: An internal split of sorts?

A: Not a split. It is the same as a child who is asked whom he loves more,
his father or his mother.

Later in the interview he is quoted as saying: "There are a million
Russians who live in Israel and feel that this is their stepmother. As I
have said recently in a convention of Russian Israelis, a Russian should
feel here not second-class but first-class -- and he ought fight for that,
and he will fight. Russian Jews have special mentality. They are used to
fighting for their survival. Do you know what is the difference between the
pre-war generation of Jews and our generation, born after the war? That we,
as children, kept on hearing 'zhid' [Russian pejorative for Jews] -- and we
never felt fear. We fought back.

"In Israel people have been surprised by the fact that 70 percent of
Giv'ati [an elite brigade of the Israeli army] is Russian. I haven't been
surprised. Russian Jews are good soldiers."

Asked about the origins of his vast wealth, said by the paper to reach $400
million, he replied: "This is not new money, nor is it easy money. American
friends of mine ask me, 'How did you manage to make so much money and so
fast? I tell them, It has not been so fast. For ten years I have been
working hard. I am a bad Jew because not only do I work on Sundays, I work
on Fridays and Saturdays as well, and my wife says that I am both a bad
husband and a bad father, and my mother says that I am a bad son."

He then criticizes the attitude of the Israeli government toward the local
media market as "typical communist mentality, and after all I can testify
first-hand to what a typical communist mentality is."

Ma'ariv, which Gusinsky has now become a junior shareholder in, is a
partner in the exceedingly popular Channel Two of Israel's television. It
has other media holdings as well, including a publishing house. The paper
is presently owned by an Israeli family with vast economic interests both
in Israel and overseas, the Nimrodi family. Politically the paper is
considered centrist. Gusinsky's own views of the Middle East conflict are
described by Globes as "moderate," that is, presumably, supportive of the
continuation of the peace process. Most Russian Jews in Israel have shifted
rightward, and their leader, Natan Sharansky, is a key adviser of PM
Netanyahu. He is said to be a leading contender for the long vacated
position of foreign minister.

*******

#10
Voice of America
DATE=5/25/98
TITLE=CHINA'S GORBACHEV
BYLINE=STEPHANIE HO
DATELINE=BEIJING

INTRO: ALTHOUGH FORMER SOVIET LEADER MIKHAIL GORBACHEV MAY NOT 
EXACTLY BE A HERO FOR RUSSIANS, HIS EXAMPLE OF OVERHAULING THE 
SOVIET UNION'S COMMUNIST POLITICAL SYSTEM HAS PROVIDED 
INSPIRATION FOR DEMOCRACY ACTIVISTS IN CHINA. HOWEVER, CHINESE 
ACTIVISTS SAY BY COMPARISON, THEY SEE LESS MOVEMENT TOWARD 
POLITICAL REFORM FROM CHINA'S CURRENT GROUP OF SEPTUAGENARIAN 
LEADERS. V-O-A'S STEPHANIE HO REPORTS ONE REASON MAY BE FOUND IN
CHINESE OFFICIALS' FEARS OF INSTABILITY. 

TEXT: CHINESE LEADERS, AS WELL AS ACTIVISTS PUSHING FOR REFORM, 
HAVE WATCHED EVENTS IN THE FORMER SOVIET UNION AND EASTERN 
EUROPE, OVER THE PAST DECADE WITH INTEREST.

IN LATE DECEMBER, 1989, FORMER ROMANIAN LEADER NICOLAE CEAUCESCU 
-- WAS PUBLICLY EXECUTED AFTER A POPULAR UPRISING. IT WAS TRICKY
FOR CHINESE MEDIA TO CARRY NEWS OF THE EXECUTION, BECAUSE ROMANIA
HAD BEEN ONE OF CHINA'S CLOSE COMMUNIST FRIENDS. ALSO, THE EVENT
OCCURRED JUST A FEW MONTHS AFTER THE TIANANMEN SQUARE 
DEMONSTRATIONS, AND THE IMAGE OF A DICTATOR BEING PUT TO DEATH BY
AN ANGRY PUBLIC MAY HAVE HIT A LITTLE TOO CLOSE TO HOME.

THEN, WHEN THE SOVIET UNION BROKE APART IN 1991, CHINA WAS STILL 
REELING FROM THE AFTERMATH OF THE GOVERNMENT'S BLOODY TIANANMEN 
SQUARE CRACKDOWN.

CHINESE LEADERS SAW THE TURMOIL THAT FOLLOWED THE OVERTHROW OF 
COMMUNISM IN THE FORMER SOVIET UNION AND EASTERN EUROPE, AND 
DECIDED TO TAKE AN OPPOSITE APPROACH TO POLITICAL REFORM. THEY 
STRESSED ECONOMIC REFORM FIRST, SAYING POLITICAL CHANGE WILL 
INEVITABLY COME LATER.

AS A REMINDER OF THIS, CHINESE PREMIER ZHU RONGJI -- IN HIS FIRST
NEWS CONFERENCE AFTER HE TOOK OFFICE THIS MARCH -- MADE IT CLEAR 
HE DOES NOT LIKE TO BE COMPARED TO FORMER SOVIET LEADER MIKHAIL
GORBACHEV.

// ZHU AND TRANSLATOR ACT //

(CHINESE) AS FOR MYSELF, I DON'T HAVE MUCH TO SAY. WHATEVER 
THE FOREIGN MEDIA CALL ME, CALL ME CHINA'S GORBACHEV OR ECONOMIC 
CZAR OR ANYTHING ELSE, I'M NOT HAPPY ABOUT THAT.

// END ACT //

OUTSPOKEN FORMER CHINESE CIVIL SERVANT TURNED BUSINESSMAN FANG 
JUE READILY AGREES THAT PREMIER ZHU IS NO GORBACHEV -- SAYING 
NO ONE IN THE CHINESE LEADERSHIP WANTS TO DO WHAT GORBACHEV DID.

// FANG CHINESE ACT -- IN FULL, FADE OUT //

MR. FANG SAYS CHINESE LEADERS -- INCLUDING ZHU RONGJI -- OFTEN 
CRITICIZE GORBACHEV AND BLAME HIM FOR THE COLLAPSE OF SOVIET 
COMMUNISM. THEREFORE, HE SAYS, IT IS NOT APPROPRIATE FOR 
OBSERVERS TO BELIEVE THE CHINESE PREMIER HAS ASPIRATIONS TO 
REFORM CHINA'S POLITICAL SYSTEM.

PEKING UNIVERSITY ECONOMICS PROFESSOR, SHANG DEWEN, SAYS HE 
ADMIRES MR. ZHU FOR BEING A VERY CAPABLE MAN. HOWEVER, AS TO 
WHETHER TO CALL PREMIER ZHU "CHINA'S GORBACHEV", PROFESSOR SHANG 
SAYS IT REMAINS TO BE SEEN HOW CHINA WILL DEVELOP IN THE FUTURE.

// SHANG CHINESE ACT -- IN FULL, FADE OUT //

PROFESSOR SHANG SAYS THE COMMUNIST PARTY IN CHINA IS VERY 
DIFFERENT FROM THE COMMUNIST PARTY IN THE FORMER SOVIET UNION.

HE ADDS THAT POLITICAL REFORM IS A COMPLICATED ISSUE, AND WILL 
TAKE A LONG TIME TO BRING ABOUT IN CHINA. 

********

#11
>From RIA Novosti
Vek, No. 20
May 1998
THE KREMLIN MUST BEFRIEND LEBED
If It Wants To Survive Fighting Him
By Andrei RYABOV

On the level of the national-scale politics, the latest
Krasnoyarsk elections have brought to light a new dimension to
the eternal strife between the powers that be and the
opposition. The president and the government used to be the
former; the Communist-dominated opposition in the State Duma
used to be the latter. 
The situation has now been changed. The former are all
federal political structures, and the latter are Russia's
provinces.
Why? Simply, when the national-scale political forces
engaged in yet another squabble in the conditions of the acute
socio-economic crisis, the Russian provinces started viewing
Moscow as an alien body which exists by and for itself. 
In this context, it did not matter whether Lebed had any
knowledge of the Krasnoyarsk Territory or just heard it existed
somewhere in Siberia, and whether the retired general had any
programme of socio-economic transformations or nothing of the
kind. 
Judging by all, the Moscow political establishment has
appreciated the danger in the wake of the Krasnoyarsk
gubernatorial elections. It is not fortuitous that the talk of
the day in both the corridors of power and the Moscow political
"in" crowd is that Lebed stands a good chance to win the 2000
presidential election.
The psychology of the Moscow elite may soon snap: they say
that as soon as the Krasnoyarsk victor rides into Moscow, there
will be a long line of financial 'oligarchs', governors, big
and small politicians and other people of influence at the door
of Lebed's senatorial office. 
Well, if the federal authorities continue to gauge their
own efficiency by endless promises and the continuous reshuffle
in the top echelons of power, rather than by realistic
improvements in the socio-economic sphere, the newly elected
Krasnoyarsk Governor will stand a very good chance of being the
only candidate capable of standing up to the Moscow political
beau monde.
One can hardly hope that in the two years remaining until
the next presidential election Lebed will bog down in the
problems of the Krasnoyarsk Territory and lose some of his
charisma, for which reason his chances to triumph in the year
2000 will taper. Generally speaking, Lebed does not really
needs the laurels of Siberia's transformer to successfully run
for the presidency. 
Using the mounting potentiality of the 'protest vote', the
general will have no difficulty explaining to the electorate
that all his flops on the regional level are explained by the
adverse policy of the federal centre. Moscow's political
circles have already coined a saying: Today's Lebed is
yesterday's Yeltsin. To remind: in 1990-1991 all attempts of
the late USSR's leaders to discredit Boris Yeltsin in his
capacity of the Russian Federation's top man ended in a
political fiasco and the Soviet Union's disintegration. 
Does Moscow's political establishment have a Lebed
repellent? If the federal centre chooses the tactic of
gradually involving Lebed into a joint effort to continue the
reform drive, instead of opposing the Krasnoyarsk Governor on
every point, Lebed will find it hard to run in the next
presidential election as a die-hard opposition candidate. 
On the contrary, if relations between Moscow and
Krasnoyarsk come to resemble the times of the cold war, the
Moscow political establishment will hardly stand a chance to
check the general's striving for the top seat in the Kremlin.

********

#12
Moscow Times
May 26, 1998 
Hope for the Caucasus 
By Richard Dion 
Richard Dion is director of economic research at the Center for 
American-Eurasian Studies and Relations in Washington, D.C. He 
contributed this comment to The Moscow Times. 

With about 250 million people and huge deposits of energy, the Newly 
Independent States could emerge as a significant entity in the age of 
integrating economies. However, aside from the corruption and weak 
legislatures in many of these countries, the unresolved conflicts in 
Nagorny Karabakh, Chechnya, Abkhazia, South Ossetia and Tajikistan 
remain a serious impediment to economic growth and foreign investment. 

At least four unresolved conflicts are located in the Caucasus. But 
there is a glimmer of hope because fighting has largely ceased for the 
moment. This has allowed for some semblance of order, preventing 
thousands of refugees and internally displaced persons from running 
further. Prisoners of war have also been exchanged. 

The final status of the breakaway republics, however, is far from 
settled. Conflict is one of the most important problems facing the 
Commonwealth of Independent States. Only when resolutions to these 
conflicts are found will these states be able to prosper. 

The last several years have brought Russian complicity in each of the 
four conflicts, either overtly or covertly. Russia has had a difficult 
time in adjusting to its role in post-Soviet politics. Instead, it has 
waged war on the Caucasus, both economically and also physically, and 
brought it to its knees. A large portion of its actions has to do with 
its concern that it will be left out of the picture when it comes to 
energy profits and transportation routes. 

Yet there is some sense of hope based on recent events. 

Russia is slowly coming around to the idea that Chechnya is de facto 
independent and increasingly willing to grant it independence. The 
declaration several months ago signed between Georgian President Eduard 
Shevardnadze and the Abkhaz leader Vladislav Ardzinba -- and overseen by 
Russian Foreign Minister Yevgeny Primakov -- said Tbilisi and Sukumi 
would settle their differences not on the battle field, but around the 
negotiating table (although factional fighting has intensified over the 
last week). The United Tajik Opposition and the Tajik government are 
also trying to implement a peace agreement. 

Despite the advances made in some conflicts, the resolution of the 
Nagorny Karabakh problem is far from over. There was some hope earlier 
this year when Azerbaijani President Heidar Aliyev used the oil carrot 
with Armenia, suggesting that an export route could go through Armenia 
and then on to Turkey. Armenia has stuck to its argument that the right 
of self-determination should be used to resolve the crisis. Azerbaijan 
sticks to the principle of territorial integrity, vowing to offer the 
region an autonomous status. With the election of Robert Kocharyan as 
Armenia's president, a resolution does not look promising. 

When the West wants to resolve armed conflict and is willing to handle 
casualties, it can. Taking the case of the former Yugoslavia, the West, 
not driven out of strategic necessity but more out of moral authority, 
stopped the war and essentially forced a peace on the warring parties. A 
great deal of this had to do with the promise of the North Atlantic 
Treaty Organization to use force should they fail to accept a peace 
treaty. 

The large difference between Bosnia and the Caucasus stems from the 
immediacy of each threat. The fate of Bosnia was an immediate threat 
because it was just a matter of time until the Bosnian Serbs would 
control virtually all of Bosnia. In the case of any of the conflicts in 
the Caucasus, there has been some form of peace for some time. 

Shevardnadze has repeatedly asked for a "Bosnian" approach to Abkhazia. 
No matter how laudable this idea may be, it is very unlikely. The 
Balkans were (and still are) complicated enough. The Caucasus would be 
equally, if not more, difficult because of the alliances and networks 
between clans and minorities, not only in the three Caucasian countries, 
but also in southern Russia. 

Foreign investors are justifiably frightened about investing in conflict 
regions. Despite the many unanswered questions, mostly concerning 
transport routes, however, they have invested significantly into the 
energy industry on the southern rim of the former Soviet Union. But once 
the oil starts flowing, there is a serious chance of a renewal of 
hostilities in several frozen conflicts. 

Based largely on that fear, all warring parties should meet for an 
extended period of time (say, for two weeks or longer), perhaps even at 
the presidential level to resolve their disputes as quickly as possible. 
Whether it is billed as a CIS meeting or otherwise is irrelevant. The 
main thrust should be to discuss the region's conflicts and make a final 
push for a resolution. 

President Nursultan Nazarbayev of Kazakhstan recently suggested that a 
CIS conflict management mechanism be established. Unfortunately, the 
idea has been largely ignored. For the benefit of the entire region, not 
too mention the reputation of the CIS, this idea should be considered 
more thoroughly. 

The states of the Caucasus may try to avoid Russia, but it cannot be 
avoided. Russia, either through its military bases in Georgia or arms 
shipments to Armenia, is an integral part of the puzzle. 

It is only through direct negotiation with it that these conflicts can 
be resolved. Once permanent solutions have been achieved, then foreign 
investment coupled with political stability can lift the region from a 
no man's land to a bona fide bridge between Europe, Asia and the Middle 
East. 

*******

#13
Russian Recent Troubles Attributed To Weak Authority 

MOSCOW, May 25 (Interfax) - The root cause of the recent trouble in 
Russia is "the overall weakening of the authority," former Russian First 
Deputy Prime Minister Anatoly Chubais, now head of the Unified Energy 
Systems of Russia (UES) governing body, said on Russian TV program 
Sunday night. 

With the economic tension continuously high, it could be kept under 
control only with tight daily control but the government had not been 
appointed for a month, he said. 

The government was physically unable to carry out its duties for a 
month, Chubais said. 

The law on the UES passed by the State Duma was a politically calculated 
blow delivered to the Russian securities market and economy, he said. 

Those who cashed in on the law and those who passed it were probably in 
collusion, Chubais said. "This act sacrificed the energy sector whose 
capitalization lost $2 billion within a day to vested interest," he 
said. 

Chubais promised that the UES management would do its best to protect 
the interests of the proprietors and the sector. 

*********

#14
Gov't Establishes Inner Cabinet 
May 23, 1998

MOSCOW -- (Reuters) Russia's month-old government has set up an "A team" 
inner cabinet to streamline the way Russia is run, a spokesman said on 
Saturday. 

He said by telephone the "presidium" comprised: 
Prime Minister Sergei Kiriyenko 
Deputy Prime Minister Boris Nemtsov 
Deputy Prime Minister Oleg Sysuyev 
Deputy Prime Minister Victor Khristenko 
Science and Technology Minister Vladimir Bulgak 
State Property (Privatization) Minister Farit Gazizullin 
Finance Minister Mikhail Zadornov 
Foreign Minister Yevgeny Primakov 
Defense Minister Igor Sergeyev 
Interior Minister Sergei Stepashin 
Economy Minister Yakov Urinson 

There are more than two dozen ministers in the broader cabinet. 

Kiriyenko promised when appointed prime minister last month that he 
would make the government administration more efficient and responsive. 
The presidium will be able to tackle the country's main problems without 
getting bogged down. 

********
-------
David Johnson
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