May 27, 1998  
This Date's Issues: 2196•  2197• 

Johnson's Russia List
#2197
27 May 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Press Scents Ruble Devaluation.
2. AP: Communists Warn of Russia Collapse.
3. TIME: Andrew Meier, "One Day in the Life Of...." Solzhenitsyn caught
the horror of the Soviet GULAG, but today's seething, disease-ridden Russian prisons
are no better.
4. Michael Benfield: Centre-Region Relations in Russia - address by Dr.
Alexei Lavrov.
5. Baltimore Sun: Mark Matthews, Lavrov deftly counters U.S. sway.
Challenger: Russia's 
U.N. Ambassador Sergei V. Lavrov marshals opposition to U.S. policies. 
6. Pravda: Moscow 'Worried' That 'Kuzbass Experience' Might Spread.
7. Journal of Commerce editorial: Headed for a fall.
8. Moscow Times: Anatoly Korolyov, ESSAY: Habit of Blackening
Authorities Poisons 
Russia.
9. Nezavisimaya Gazeta: Tatiana KOSHKAREVA and Rustam NARZIKULOV,
RUSSIA KEEPS BEGGING FOR HELP. Russian Government Set to Devalue Rouble.
New Economic Take-Off Plan Can Only be Compared to 1991-Style Shock Therapy.]

********

#1
Press Scents Ruble Devaluation 
May 27, 1998

MOSCOW -- (Reuters) Some Russian newspapers forecast a possible devaluation
of the ruble on Wednesday, just hours after Prime Minister Sergei Kiriyenko
said he would not consider such a move as a way of bringing down rocketing
interest rates. 
"Russia is sending out requests for help and is preparing a devaluation
of the ruble," ran the front-page headline in the liberal daily
Nezavisimaya Gazeta, which is controlled by the influential business
magnate and politician Boris Berezovsky. 
The leading business newspaper Kommersant Daily ran a front-page item
saying the present crisis in Russia's financial markets was likely to
persist and, under the headline "Best get into dollars," said ruble
investments were too risky for now. 
"Investing in hard currency is today not only 100 percent sure but also
profitable in the light of a possible ruble devaluation," Kommersant said.
"According to expert opinion, the ruble could suddenly depreciate by 15
percent." 
The paper carried advice for ordinary Russians, who are used to keeping
some of their savings in dollar banknotes or dollar accounts after the
rampant ruble inflation of the early 1990s, to consider converting rubles
to dollars or gold -- but to make sure that if they did so they invested in
a reliable bank. 
"The financial crisis will inevitably also affect the banks, especially
the medium-sized and small," the paper said. 
"Measures will be taken to save the economy, whose consequences will be
comparable to the shock therapy of 1991," Nezavisimaya said, referring to
the ending by President Boris Yeltsin's first liberal government of Soviet
price control. 
Nezavisimaya said foreign investors could welcome a decline in the ruble
to seven or eight to the dollar from the present 6.2 and said it would
allow the authorities to reverse the sharply higher interest rates imposed
last week to defend the ruble, thereby "breathing new life" into Russian
industry. 
It said that if the International Monetary Fund and Russia's Western
partners failed to come through with significant amounts of new loans, then
Kiriyenko would be unable to defend the ruble at current levels and a
devaluation would follow. 
Yeltsin would ask for new money on a visit to Bonn on June 8 and 9, the
paper quoted an unnamed Kremlin official as saying. 

Even if new money did appear -- as Russian ministers have been
indicating it will from the IMF -- then a devaluation could still be useful
for the economy, Nezavisimaya said, as it would slash the dollar cost of
repaying mounting state ruble debts and also help Russia's exporters,
notably oil and gas companies. 
"The ideal option for the economy would be a devaluation carried out
against a background of big new credits," it said. 
Kiriyenko said on Tuesday that a devaluation would not be a long-term
solution to the problem of servicing the ruble debt and would damage the
economy's long-term prospects by denting confidence. He said there would be
no change in this year's ruble corridor against the dollar, set by the
central bank. 
However, noting that the central rate for 1998 was set at 6.1 rubles per
dollar, he added, according to Prime-TASS news agency, "we cannot move from
it by more than 10 to 15 percent". 
The central bank has set a ruble floor at 15 percent below 6.1 --
putting the official bottom at 7.015 rubles. 
In a sharp attack on Yeltsin, however, the paper said the president's
"unpredictable policy" had been a factor in previous economic crises and
could thwart Kiriyenko. 
Nezavisimaya owner Berezovsky was a key backer of Yeltsin's 1996
re-election campaign and remains close to the president's family. He is
also a leading player in maneuvers already under way for a presidential
election when Yeltsin steps down in 2000. 
The government newspaper, Rossiiskaya Gazeta, made little mention of the
financial crisis in its Wednesday edition. 
The communist opposition daily Pravda, in a front-page editorial,
predicted a ruble devaluation. ( (c) 1998 Reuters) 

**********

#2
Communists Warn of Russia Collapse 
By Vladimir Isachenkov
May 27, 1998

MOSCOW (AP) -- The Central Bank tripled its main interest rate to a
whopping 150 percent today in a drastic bid to halt the massive sell-offs
and sharp declines in Russia's financial markets. 
Amid growing signs of financial panic, the head of the Communist Party
declared that Russia is on the verge of collapse and needs early
presidential elections. 
``You've come here at the height of national catastrophe,'' Gennady
Zyuganov told members of the International Press Institute on the third and
last day of its gathering in Moscow. 
President Boris Yeltsin's government has been trying to calm jittery
markets in recent days, but to little avail. Foreign and domestic investors
have been fleeing the Russian market in droves. 
``Certainly Russians are panicking, selling anything they can,'' said
Martin Diggle, head of trading at Brunswick Warburg brokerage in Moscow.
``The market is all one way at this point.'' 
Speculation is growing that Russia will need a rescue package from the
International Monetary Fund, similar to the ones arranged after Asia's
financial crisis hit last year. 
The Central Bank said its benchmark interest rate, the refinancing rate,
was being raised to 150 percent from 50 percent, effective immediately. 
The announcement came as Russian stocks tumbled again today, down more
than 7 percent in early trading. The Russia Trading System is down more
than 50 percent on the year, making it the worst performing market in the
world. 
The ruble was relatively stable today, a lingering effect of heavy
Central Bank intervention, estimated at $400 million on Tuesday alone. 

A decade of economic turmoil has impoverished millions of Russians, and
a new round of price increases will test the patience of the country's 147
million citizens. 
The IMF is sending a senior representative to Moscow on Thursday, and
hoped to decide later this week whether to release the next $700 million
installment of Russia's $10 billion loan. 
But even with another installment, investors fear that the government's
short-term debt obligations are unmanageable, and Central Bank reserves
insufficient to defend the ruble. 
Zyuganov blamed the crisis on Yeltsin's free-market reforms, claiming
they had brought industry to a virtual standstill and impoverished the
majority of Russians. 
The government counters that Russia's economic problems stem from
decades of misguided economic policy and mismanagement during the Soviet era. 
Thousands of unpaid coal miners went on strike and blockaded several key
railways last week. Authorities managed to quell the protests by paying
some of the debts. 
Communists, who dominate the Russian parliament's lower house, have
repeatedly called for impeachment proceedings against Yeltsin. 
All such attempts have died without reaching the floor, partly because
Russian law gives the president sweeping powers. 
*********

#3
Date: Wed, 27 May 1998 
From: meier@pop.glas.apc.org (Andrew Meier)
Subject: TIME Prisons Story

TIME (Intl.), May 25, 1998
Andrew Meier/Moscow

"One Day in the Life Of...."
Solzhenitsyn caught the horror of the Soviet GULAG, but today's seething,
disease-ridden Russian prisons are no better.

When Sergei Kovalyov thinks about Russia's prisons, the word that
comes to mind is catastrophic. And Kovalyov knows prisons inside
out. The 67-year-old parliamentarian was sentenced to seven years in a
labor camp in the Urals in 1974 for "anti-Soviet activity;" from the other
side of the walls he is the former human rights commissioner to President
Boris Yeltsin. "Today's prisons mirror our catastrophic society," says
Kovalyov. "The evils that plague us, plague them: no health care, no
education, no fairness, no rule of law."
More than a million Russians are now behind bars throughout the
country, most of them in squalid, overcrowded, disease-ridden buildings
where idleness alternates with violence as the only pastime. Almost a
quarter of the inmates are awaiting trial--with an average stay of 10
months--and prison reformers claim one in every three prisoners is sick,
with tuberculosis and AIDS increasing at alarming rates, and hunger the
norm. And the system appears to be on the verge of collapse. After a tour
of pre-trial detention centers last year, Russia's prosecutor-general, Yuri
Skuratov, said that there is a real danger of a "social explosion" within
the penitentiary system.
Russia's prison budget is $1.3 billion; less than a third of that
spent each year by the State of California. And as the prison population
soars--it has grown 23% since 1991--cash-strapped prison authorities are
increasingly falling far behind the general international standards adopted
by the United Nations on the treatment of prisoners, which call, among

other things, for windows large enough for prisoners "to read and work by
natural light and...allow the entrance of fresh air."
Government figures are unreliable, but the Interior Ministry, which
runs Russia's prisons, says that in March this year there were 711,300
people in the 731 penal colonies across the country, the outposts Stalin
made infamous as labor camps. Another 21,000 young people are held in
juvenile colonies, and those in pre-trial centers usually number around
280,000. An estimated 25,000 people are in special psychiatric hospitals,
now run by the Health Ministry.
Stanley Williams, a 36-year-old American show business entrepreneur
living in Moscow, spent 22 months in the belly of the beast that is
Russia's
prison system. Arrested in 1996 in a police sweep near a Moscow disco,
Williams says police found "about 20 grams" of marijuana during a
search--without a warrant--of his apartment. After nearly two years between
a prison and a SIZO, as Russia's pre-trial detention centers are called, he
was finally brought before a court--and acquitted of all charges in
December last year.
Much of Williams' time was served in Moscow's largest SIZO, the
18th century Matrosskaya Tishina. Cells designed for 30 men are crammed
with 100 prisoners. They must sleep in three shifts on lice-ridden
mattresses. "When you're not sleeping, you're standing," says Williams.
"It's shoulder-to-shoulder, like riding in a bus at rush hour." During
summer, cell temperatures soar to 45 degrees Celsius, with no fresh air and
plenty of cigarette smoke. "All you can do is strip down to your
undershorts," he says. "The prison administrators provide the bare minimum
to keep a person alive. We had tea every morning. For lunchwatered down
soup and kasha [porridge]. For dinner, more kasha." Andrei Derevyankin, a
former dissident who at one time shared a cell with Williams, says, "It's
hell on earth. I'd never seen lice before, let alone had them. I'd never
seen so many rats, and the cell walls were carpeted in cockroaches."
A deputy warden at Matrosskaya says: "We have thousands of
prisoners to take care of, and don't worry, we take care of them." That
attitude comes from the top. In 1994, commenting on a new crime-fighting
decree, then-Minister of State Security Sergei Stepashin said: "I'm all
for the violation of human rights if the human is a bandit or a criminal."
As Russia's new Interior
Minister, Stepashin now oversees the prison system. Prison authorities have
little choice but to follow his line. Says Vyacheslav Tikhenko, warden of
the decrepit 18th century prison in Vladimir, 180 km east of Moscow, where
gangsters have replaced the dissidents of the Soviet era: "Every
Westerner who comes here lectures us about human rights, but I'm
fighting for money. My guards haven't been paid for six months." Yuri
Alexandrov, a former guard-turned prisoners' rights activist with the
nonprofit group Novy Dom (New Home) says: "There's just not enough money,
cells, or medical workers across the country to improve the system."
But the litany of abuse is so long, money alone is not the answer.

An Amnesty International report last year concluded that "torture and
ill-treatment occur at all stages of detention and imprisonment."
Amnesty said of the SIZOs that their "main purpose appears to be
to intimidate detainees and obtain confessions." In 1995, Yuri Kalinin,
then head of the prison authority, admitted that "... sometimes official
reports on prisoners' deaths do not conform to reality. People die from
overcrowding, oxygen starvation and poor conditions in the cells."
Tuberculosis has now hit epidemic levels. Officially, the incidence
among sentenced prisoners is 11%, but prison rights activists say TB
rates in places of detention run as high as 60 times those in the general
population. The Interior Ministry says there are 50,400 people with TB in
the penal colonies, almost 20,000 more in prison hospitals; prison
activists put the figure well above 150,000 sufferers. In the Vladimir
labor camp TIME visited, TB patients occupied half the 200 beds in the
prison hospital. As an elderly mother says of her son who contracted TB
after two months in Matrosskaya: "I understand taking away his freedom, but
why his health as well?" Officially, about 1,200 prisoners have aids, but
there are no figures for the number who are HIV positive; many prisons
simply don't have the money for testing.
Marina Rumshiskaya, a longtime prison rights advocate, says the
38,800 women housed in penal colonies throughout Russia fare slightly
better than the men. About half of them are in women's SIZOs. "There is not
so much overcrowding," says Rumshiskaya, "but with the poor food, filth,
sickness and work, it's hardly a vacation." She says many older women are
serving long sentences dating from the Soviet era for petty offenses that
are no longer considered crimes. Many of these female prisoners prefer to
stay in the colonies. Given the complete collapse of the Soviet social
safety net, they have few places to go and scant means to survive on the
outside.
And then there are the mental institutions. In the Soviet era, the
authorities silenced dissenters by diagnosing them insane and locking them
up. As Alexander Solzhenitsyn wrote in 1970: "The incarceration of
free-thinking
healthy people in madhouses is spiritual murder." Although the 25,000
people in these centers are now the responsibility of the Health Ministry,
the hospitals are still guarded by Interior Ministry soldiers and critics
claim abuse continues. "The treatment may be a little better, but you can't
call it progress," says Dr. Anatoli Koryagin, who served six years in a
Siberian labor camp for unmasking Soviet psychiatric abuse. "Now it's a
matter of money. When the country is starving, who is going to feed the
mentally ill?"
Alina Vitukhnovskaya, 24-year-old author of five books of poetry,
recently spent six weeks in Moscow's infamous Serbsky psychiatric institute
as part of an 18-month sentence for possession of 1.5 mg of an amphetamine.
Vitukhnovskaya found her stay in the Serbsky psychologically "terrifying,"
even though she was not medicated or given electric shock treatment. "The
judge sent me there so they'd find me insane," she says. In the end, the

Serbsky doctors didn't, and she was released, but Vitukhnovskaya hears
"Soviet echoes" when a poet found with a small amount of a drug--after an
illegal search--can "be locked away in a mental hospital."
Yuri Savenko, head of a group of independent psychiatrists that was
formed during the height of the Soviet repression of dissent, says that,
ironically, many of those in institutions now come from the military,
police and state security forces. These ministries have internal,
closed-door tribunals that are convenient channels for getting rid of
whistle-blowers. "More and more policemen and officers from the armed
forces and intelligence seek us out after they've been labeled mentally
ill," says Savenko.
Russia has oft promised reform, and later this year, official
insist, the prison empire will be transferred to the Justice Ministry. But
the move has been twice delayed. Civilians have never run Russia's prisons
and resistance is strong. Meanwhile, those who fight for reform say only a
legal revolution can slow the cycle of travesties and tragedies. For as
Kovalyov, who remembers well the bad old Soviet days, says: "Stalin, to be
sure, was a splendid torturer, but prison life in Russia today may well be
worse than it was under him."

TIME Moscow bureau: Tel [7-095] 974-8166/65 fax: 974-8150

**********

#4
From: Michael Benfield <Miben@email.msn.com>
Subject: Centre-Region Relations in Russia - address by Dr. Alexei Lavrov
Date: Wed, 27 May 1998 

Dr Alexei Lavrov has been recalled from the OECD to advise premier 
Kirienko. On Wednesday last week he delivered a paper to the first of a 
series of 6 four monthly seminars funded by the UK's ESRC (Economic & 
Social Science Research Council) under the theme "Regional Transformations 
in the Russian Federation". Held at Birmingham University he entitled 
this, Centre-Region Relations in Russia. While the paper was in Russian he 
spoke to it in English, but responded to questions in Russian, many of 
which were put in Russian. The translation tended, therefore, to be rather 
spasmodic and I may have picked up only parts of the proceedings. However, 
for what they are worth, I set out below my series of notes, since these 
seem relevant to current debate.

1. Most enterprises expect to pay their taxes without real money, i.e. they 
issue promissory notes (PN's), etc.
2. Enterprises are dealing with barter and PN's.
3. "Demonetarisation" is growing, although this is affected by some exte 
rnal conditions.
4. Regional and local authorities are fully involved in this process. If 
they accept tax payments in money, then invariably they are forced to remit 
this to Moscow. By accepting payments in PN's or other instruments (the 
term being used to refer to these collectively was Wechsels. They are able 
to keep these payments locally, rather than having to pay them to the 
Federal Authorities, which has no mechanisms for handling these.
This also enables regional and city authorities to support local 
enterprises.
5. There seem to be a very positive correlation between "demonetarisation" 
and local and regional budgets.

6. Any attempts by the FR to force enterprises to pay in real money would 
put most of them into liquidation (bankruptcy).
7. This process makes budgets even less transparent and unaccountable. It 
opens even more opportunities for corruption and, indeed, quite large sums 
seem to go missing.
8. This 'demonetarisation" is now reckoned to account for about 50% of 
regional and local budgets.
9. While monetary inflation may be under control, it is not clear what is 
happening in the non-monetary (barter, 'Wechsel') sphere. These 
'alternative' arrangements seem to prefer 'insiders' who can take advantage 
of the (informal?) system.
10. Although inflation is falling, barter is growing. This seems to be 
because this mode of payment offers a range of terms of settlement 
arrangements, according to the type of firm, group, location, etc.
11. Simultaneously, while regional governments are unable to pay wages, 
some are building roads, hospitals, etc. BECAUSE they are getting paid in 
kind. One 'story' is of Coca-Cola being asked to build a hospital rather 
than pay taxes in cash.
12. The Federal Budget only operates in money.
13. These demonetarised, 'alternative' forms of payment are now so 
prevalent that (some) local authorities are acting as brokers for such 
(barter) transactions.
This involves a complicated chain of transactions involving roads, 
electricity supply, rebuilding (say) an orphanage, etc. Such a deal may be 
calculated in RR, with amounts being allocated to each 
operation/service/contract, to establish what is due to each party. (I 
think one example was given where the exchange rate used was 40RR per USD). 
The net gain to the local authority budget is very small, but 'someone' 
gets away with quite a lot of money.
14. The control of this by, for example, the direct use of conditions on 
central budget to regional and local authorities is problematic because 
(apparently) the law doesn't provide for anything related to barter. Also, 
it appears that enterprises who pay via barter, wechsel, etc. are 
(formally) placed in a different category of payment.
15. The Federal authorities will not issue wechsels, etc. to regions AND, 
even if they tried to enforce formal payments (of taxes), this could cause 
real problems and local resistance.
16. The ministry of employment is not in a position to estimate the level 
of unemployment. The ministry of economy might be able to provide rough 
estimates of this.
17. There is a lack of incentive for local tax collectors to press for 
taxes to be paid in money. Barter and wechsels are easier to obtain. 
There is little attempt to gauge the effects of this on the regions, 
except for the setting of THREE CATEGORIES OF PAYMENT MEANS. Payments in 
cash come mainly from the Vodka producers.
18. Communist Governors and local authorities are the most amenable to this 
form of barter /wechsel payment (a priori Alexei Lavrov expects them to 
work in this way), although others may do.
19. Communist administrations are to be found in the poorer regions.
20. Moscow and Kaliningrad are the most highly monetarised
21. Even within individual regions there are differences in the levels of 

demonetarisation.

Clearly ways are being found by the authorities to work with the 'shadow 
economy'. Whether or not this includes the acceptance (if not legalisation 
of) illegal acts (which probably can't be controlled anyway) or associating 
with other forms of criminal activity, is uncertain. But, if the FR are 
effectively granting amnesties for non-payment of taxes, then who's to say 
that regional and local authorities aren't doing the same (in fact it seems 
they are merely diverting these), and/or creating moratoria during a 
'transition' period. So, is this, - or could this be - a more effective 
form of regional/local government?

Dr. Michael Benfield
Gaia Corps

********

#5
Baltimore Sun
26 May 1998
[for personal use only]
Sun Journal: Lavrov deftly counters U.S. sway
Challenger: Russia's U.N. Ambassador Sergei V. Lavrov marshals 
opposition to U.S. policies. 
By Mark Matthews 
Sun National Staff 

WASHINGTON -- If Saddam Hussein ever breaks free of the international 
punishment imposed after his 1990 invasion of Kuwait, he will owe a debt 
of gratitude to Russia's ambassador to the United Nations, Sergei V. 
Lavrov.
Lavrov has choreographed what diplomats say is Russia's sustained 
challenge to United Nations inspectors whose job it is to find and 
destroy Iraq's chemical and biological arms and missiles. France, China 
and Russia, working through Lavrov's skill, have nudged the Security 
Council to ease pressure on Baghdad.
Shrewd, aggressive and charismatic, Lavrov personifies Russia's new 
sure-footedness in acting as a counterweight to U.S. policy in the 
Persian Gulf, the Aegean and the Balkans.
Whether he proves an ally, irritant or adversary, Lavrov will likely 
remain a force for U.S. officials to reckon with. Some diplomats 
speculate that he could end up as foreign minister.
"I'm not a fortune teller; I have not heard these rumors," Lavrov says.
Iraq has come close to satisfying the United Nations' International 
Atomic Energy Agency that it has disclosed the extent of its past 
nuclear weapons program. Lavrov predicts that, by October, the agency 
will shift from the active investigation phase to long-term monitoring, 
designed to ensure that Iraq doesn't try to restart the program.
But Baghdad is a long way from satisfying the U.N. Special Commission, 
which probes Iraq's chemical, biological and missile programs. Arms 
experts worry that a softer U.N. stance toward Baghdad might allow 
Hussein to keep hiding his weapons program, eventually threatening U.S. 
allies and troops.
Increasingly, however, the U.N. inspection team is under harsh scrutiny 
by Security Council members that want to see the inspections ended and 
an easing of the sanctions imposed on Iraq after its invasion of Kuwait 
and subsequent Persian Gulf war in 1991.
Much of this pressure comes from Lavrov. Trim and darkly handsome at 48, 
he cuts a matinee idol's figure among the graying diplomats at the 
United Nations, holding forth easily in rapid-fire, idiomatic English.
His real talent emerges behind closed doors, in interrogating officials 
and in detecting political agendas in U.N. resolutions and statements. 

At less tense moments, he's a skilled doodler.
As the Security Council held its regular review of Iraqi sanctions this 
month, the Russian envoy invoked a U.N. procedure to convene an unusual, 
separate meeting. There, two visiting Iraqi ministers made their case 
directly to council members. The session served to rebut the assertion 
of Richard Butler, the chief U.N. weapons inspector, that little 
progress had been made since fall in accounting for Iraq's dangerous 
weapons.
Coached by Lavrov, the Iraqi foreign and oil ministers "gave a sober, 
factual briefing," says a Western diplomat who was present. They 
disputed points Butler had raised before the council, including his fear 
that Iraq might still possess fuel for long-range missiles.
Two days later, Lavrov fired off a series of questions to Butler, 
challenging, among other things, his report that inspectors had found 
mustard gas in Iraqi ammunition shells, a finding that, in fact, was not 
new.
A Western diplomat who has followed Iraqi weapons says Lavrov is engaged 
in "a sustained attack" on the U.N. inspectors' "credibility, 
techniques, staff, including Butler, and the evidence."
Lavrov counters: "It's not my purpose to challenge UNSCOM. But when 
UNSCOM reports in a way which is not clear, I try to clarify things. 
When they say there is evidence that Iraq has not provided a full 
account of [its] biological bombs, we just ask UNSCOM to be a bit more 
specific." On "several occasions," he says, UNSCOM has based reports or 
questions "on wrong assumptions."
Nizar Hamdoon, Iraq's ambassador to the United Nations, says he and 
Lavrov work cooperatively, usually meeting three or four times a week.
"He's always been following a technical, low-key approach, which he 
thinks can bring about better results," Hamdoon says.
Lavrov failed to persuade fellow council members to approve the 
appointment of a Russian deputy to Butler. But the U.N. team is expected 
to accept a Russian "political adviser," which diplomats view as an 
effort by Moscow to increase its influence over the inspectors.
"He's a master at negotiating text," says a senior Western diplomat, 
referring to the texts of resolutions and presidential statements, the 
two key ways the Security Council asserts its power.
Sergei Viktorovich Lavrov's steady, 26-year climb through the Soviet and 
Russian foreign service includes long experience with the United 
Nations. His earlier stint at the Soviet mission, from 1980 to 1981, 
coincided with a tumultuous period that began under Leonid I. Brezhnev 
and ended with Mikhail S. Gorbachev.
Lavrov welcomed Gorbachev's "perestroika," or restructuring. Speaking of 
the Brezhnev era in a 1987 conversation with Jeffrey Laurenti of the 
U.N. Association of the USA, he recalled: "Our job was to take speeches 
Brezhnev made and paste them into speeches our delegates would give to 
the U.N."
By the time Lavrov arrived back at the United Nations in September 1994, 
the Soviet Union was history, and Russia, after several years of 
cooperating with the United States, was chafing at its junior partner 

role.
Defying the West, Russia sided with its historic Serbian allies in 
Yugoslavia, cracked down on Chechen rebels and championed Iraq's 
resistance to international sanctions.
Though weaker than in the days of a Soviet superpower, Russia still 
wields a veto in the Security Council. As a result, its views must be 
accommodated when Washington wants the U.N. seal of approval.
With ready access to Foreign Minister Yevgeny M. Primakov, Lavrov gets a 
speedy reply from Moscow when he needs it, but has latitude, colleagues 
say, to make tactical judgments on his own.
By no means is Lavrov implacably anti-American. John Bolton, the State 
Department's point man for U.N. affairs in the Bush administration, 
recalls that in the early 1990s, the two of them shared "nearly uniform 
views on every U.N. question."
Analysts assign various reasons for Russia's support for Iraq: a desire 
for increased influence in the Middle East, potential profits from 
Iraq's eventual ability to export oil freely, and a wish to counter 
American power.
"There is a feeling [in Moscow] that when the moment for American-Iraqi 
rapprochement comes, oil companies will jump right away and it's not a 
bad idea [for Russia] to be on the ground first," says Dimitri K. Simes, 
president of the Nixon Center, a think tank.
Russia is asserting itself more in other regions. It opposes U.S. plans 
to tighten sanctions against Serbia for its violent crackdown against 
ethnic Albanians in Kosovo. And despite U.S. protests, Russia is selling 
anti-aircraft missiles to Greek Cypriots, threatening Turkey's air 
supremacy on the island.
Susan Eisenhower, chairwoman of the Center for Political and Strategic 
Studies, summarized Russia's global view in a recent report: "Reformers 
and Communists alike worry about America's unilateral tendencies, seeing 
the U.S.-led expansion of NATO and Washington's readiness to use force 
against Iraq as indicators of America's desire to dominate."

*********

#6
Moscow 'Worried' That 'Kuzbass Experience' Might Spread 

Pravda
23 May 1998
[translation for personal use only]
Article by Andrey Shcherbakov: "People Expect Not Words, But
Deeds From the Kremlin!"

Moscow's reaction to the miners' protest has amazed even those who are
accustomed to the irresponsibility of Kremlin politics. In Russia the
miners, reduced to despair, are demanding the president's resignation, but
Boris Yeltsin reassures Kiriyenko: Nothing special is happening, the
miners will kick up a bit of a fuss and then give up -- not for the first
time.
During the ceremony of the presentation of the new government to
Yeltsin, the president was extremely pleased by a phrase uttered by Culture
Minister Dementyeva, who promised him that her department would be a
ministry of positive emotions. It would appear that the Kremlin is
concerned not so much with informing the president about the impending
socioeconomic catastrophe as with keeping him in a "good mood." This is
suggested best of all by the words of Yeltsin himself who, even at the
meeting of the "Big Four," said nothing new.

The miners will clearly not be the source of any good mood for the
federal authorities. Moreover, they will not tolerate the harsh tone that
the government is trying to use in talking to them. According to our
information, Nemtsov's statement that losses will be recovered from those
responsible for holding up the trains has provoked indignation among the
striking miners. This tone today only seriously exacerbate the situation. 
The announcement of the introduction of a state of emergency in the
Kuzbass and the Kremlin's sluggish reaction to [Kemerovo Oblast Governor]
Tuleyev's decision have attracted special attention in the West. After
all, the regional authorities have effectively exceeded their powers by not
coordinating their decision with the federal center. The governor's
decision in the prevailing circumstances is perfectly justified: The
freight trains that have piled up in the oblast include many that are
carrying explosive materials. But the authorities in Moscow are already
worried that the current "Kuzbass experience" might spread to other regions
of Russia. It is said that Valentin Yumashev and Tatyana Dyachenko are
urgently preparing an analytical memorandum for Yeltsin on governors who
might well follow Tuleyev and introduce state of emergency in their regions
as a mark of protest against Moscow's absolute inability to resolve
socioeconomic problems. The swelling of such moods could perfectly well
shake the unity of the Russian Federation.

*********

#7
Journal of Commerce
27 May 1998
Editorial
Headed for a fall

Is Russia facing an Asian-style economic collapse? The signs are looking 
increasingly ominous. Investors this week continued to bail out of 
Russia's stock and bond markets in droves. The country's currency, the 
ruble, has been weakening.
What's causing this? Because of its stop-go economic reforms, Russia has 
never had more than a few months of financial stability since the old 
Soviet Union died in 1991. The economy was starting to improve last year 
when ripples from the Asian crisis began to take a toll.
But blame for the recent troubles may lie more with President Boris 
Yeltsin than with anyone else. Mr. Yeltsin's bizarre decision earlier 
this year to sack his prime minister and most of his Cabinet unnerved 
markets. The new team has failed to win the confidence of investors. 
Coupled with ongoing strikes and worsening budget problems, Russia looks 
ready for a fall. 

********

#8
For more articles from The Moscow Times, check out their website at


www.moscowtimes.ru

Moscow Times
May 27, 1998
ESSAY: Habit of Blackening Authorities Poisons Russia 
By Anatoly Korolyov 
Anatoly Korolyov is a writer whose most recent work is "Eron." He 
contributed this essay to The Moscow Times. 

We have all become addicts. 
And our drug of choice is the constant abuse of the people in power. We 
use political authorities as a way of yet again sticking in the needle 
of criticism and getting a dose of malicious anger. Every hour of the 
day, we curse our lives and the Kremlin. Everyone says the same thing: 
Things are going poorly for us, today is even worse than yesterday, and 

tomorrow we can expect a complete catastrophe. Russia is inevitably 
falling apart. General Alexander Lebed will start a civil war. The 
government is filled with fools. Islamist terrorists will steal a 
nuclear bomb, and so on. 
Honestly, we are all becoming addicts of abuse. 
Not long ago I had occasion to write a story about contemporary life in 
Moscow and sent it to my publisher in Paris. And soon after I received a 
letter of rejection. "Monsieur Korolyov," wrote the publisher, "your 
story is too gloomy. You describe Moscow as a true hell on earth. In my 
opinion, you are laying it on a bit thick. Things aren't that bad in 
Russia. I wish you success." 
At first I was upset. I thought, censorship has now appeared in the 
West. The Communist Party used to require that a writer paint Soviet 
life as a paradise, and now even Paris is demanding the same. But later 
I said to myself, perhaps the publisher was right. 
I like the changes that have taken place in Russia. I love new Moscow, 
but I am describing life in the darkest of tones. In my story, it is 
always snowing, and the main hero is Lenin's corpse. Why did I cook all 
this up? 
Here is why. For many long years we Russians lived under the weight of 
total censorship. Every one of our words was controlled, and any 
criticism of Kremlin leaders was strictly forbidden. This entire 
critical mass of meditation, humiliation, disappointment, irritation and 
resentment was preserved in the subconsciousness of the country, just as 
oil wells are hidden beneath the earth. And then censorship was lifted. 
And the black ocean under the earth rumbled and broke free as through a 
Texas oil well. The thick, evil black substance poured forth, and a hot 
match ignited it. 
These are the two colors of Russian social life -- the color of 
blackness and the color of fire. 
And this has already become dangerous. It is time to get this gushing of 
blackness reasonably under control. 
Criticism of the Kremlin can often go beyond reason. For example, the 
Russian press often writes that the country is run not by the 
government, but the president's family. I may be in the minority, but I 
consider that the family's active role in the president's life is a 
positive factor in his decision-making. It is precisely around the 
kitchen table and in private conversations between husband and wife, 
father and children, that certain values and ideas can be formulated. 
The president has been criticized because his grandson is studying at 
Oxford University. A writer at Nezavisimaya Gazeta said that if the 
grandsons of our elite are studying in the West, this means that their 
families do not believe in the future of the country and are teaching 
the children to live outside the homeland. 
Come to your senses, sir. There is nothing shameful about a young 
Russian person studying in Oxford or the Sorbonne. There is no betrayal 
of the motherland here. Sons of Arab sheiks and heirs to thrones study 
in England. Who would suspect them of secretly emigrating? It is 
precisely in a foreign school that the president's grandson will get 

fair grades. In Moscow he would be flattered and lied to. There, he will 
be treated like everyone else. 
In small doses, poison can cure a sick person, and in big doses it can 
kill him. It is time for the poisonous tongues in the press and 
television to cease their overindulgence. Things have gotten out of 
hand. It was bad that the tsar was assassinated, and it is bad that a 
decision has been made to bury him ceremonially. Who is to blame? The 
Kremlin. It is bad that our space stations are often out of order. It is 
bad that we spend so much money on space. It would be better to give the 
money to pay the wages of poor teachers. Any move the government makes 
is roundly met with catcalls. 
Not long ago we moaned at the sight of our decrepit old leaders in the 
Politburo. Today, the press and television groan that the Russian prime 
minister, Sergei Kiriyenko, is a young man, only 35 years old. 
Well, what about it? Let people throw stones at me, but the youth of the 
prime minister is a chance for the country to get out of its current 
crisis. What does it mean that he has little experience? He has little 
Soviet experience on how not to run the economy. 
Politicians have come to power in the regions with the support of 
protest voters against the government. Papers gladly write about the 
defeat of the so-called "party of power." Modern society cannot surround 
the authorities with a sea of black criticism and turn the Kremlin into 
an island. We should all rather search for agreement, consensus and 
constructive collaboration with the authorities for the sake of the 
country's prosperity. 
Similar persecution and schisms would not be possible in any civilized 
society. On most fundamental questions, U.S. President Bill Clinton 
enjoys the support of Congress just as British Prime Minister Tony Blair 
enjoys that of the parliament. Authorities without the support of 
elected legislatures are nothing. But the Russian State Duma, the lower 
house of parliament, has already launched three impeachment procedures 
against the president. And Russian political commentators in one voice 
say the ruble is about to collapse, or that the Far East, together with 
Siberia, is breaking off from Russia. 
I once called an acquaintance on a business matter, and he cut me off 
saying, "Did you see how Yeltsin gave his speech? Did you see how his 
hands were shaking?" 
I detected no sign of regret in his voice but rather joy. Who in the 
United States rejoiced when the president hurt his leg and went about in 
a wheelchair? 
What is happening with us? The situation only has to get a little more 
stabilized in the country before we start to be tortured by withdrawal 
symptoms. There isn't enough for our next dose of abuse. But you can 
always find a reason to shoot yourself up again: 
Have you heard the news? A double is ruling the country instead of the 
president. 

********

#9
>From RIA Novosti
Nezavisimaya Gazeta
May 27, 1998
RUSSIA KEEPS BEGGING FOR HELP
Russian Government Set to Devalue Rouble
New Economic Take-Off Plan Can Only be Compared 
to 1991-Style Shock Therapy


By Tatiana KOSHKAREVA and Rustam NARZIKULOV

Russia has started begging for alms once again.
Nezavisimaya Gazeta has learned from a high-ranking
Kremlin source that President Boris Yeltsin of the Russian
Federation can pay an unscheduled visit to Bonn June 8-9. The
Russian leader will be asking for money (DM several billion,
all told).
Russia is hard pressed for such money, which can stop the
domestic financial-market panic.
The IMF is also asked to lend a helping hand.
The Russian Prime Minister has stated that he continues to
negotiate the allocation of yet another special loan totalling
several billion dollars with the IMF.
The World Bank, which has also stepped in to save the day,
is ready to furnish additional monies for completely pacifying
Russian miners.
Russia would like to receive several hundred million
dollars (rather than several billion dollars) from the World
Bank.
Russia has always been hard pressed for money since 1991.
However, this country has never experienced such a serious
financial "hunger".
Sergei Kiriyenko has received a monstrous legacy this past
April, e.g. an empty treasury, tremendous debts, railroad
blockades, a rouble (that has been bled white) and that GKO
(short-term treasury note) pyramid that can come tumbling down
anytime now.
This is not just a bad legacy; such a legacy can't be
controlled in any way. Starting with the fall of 1997, Russia
was engulfed by some really unpleasant developments. At first,
its economy was damaged by the Asian crisis, which was followed
by a global oil-price slump.
Foreign capitalists began to pack later on, with the West
coming to understand that Russia has no other economic trump
cards except its raw materials.
However, the main pre-requisite for the present-day
disaster was created over the February-April 1998 time period.
All the main foreign currencies began to grow against the
US dollar, with the rouble's rate alone continuing to decline.
Foreigners came to understand that any increase in the
rouble rate's is being artificially hindered. Consequently, the
rouble will become devalued sooner or later.
The apparently unmotivated and posthaste repatriation of
capitals from Russia commenced throughout that period alone.
The April 1998 anarchy and the protracted government
reshuffle have dealt a coup de grace.
Kiriyenko was promoted to Prime Minister at a time when
uncontrollability turned into chaos.
One can only be surprised at the Russian Premier's
stalwart attitude. The overall situation is really gloomy.
Anyone else would have accused his predecessors of perpetrating
the current crisis; any other premier would have also "mugged"
a couple of Gazprom-type concerns, subsequently informing the
President about various successes and adding that Russia can
live quietly until fall.
Kiriyenko has chosen another option, which is seen as
something quite unprofitable by him but which gives this
country another chance.
The Government and the entire Russian economy would
breathe freely, in case Russia obtains the required loans.

Quite possibly, the Prime Minister would manage to
invigorate the real economic sector and local production.
Until now, not a single Russian government (of the 1990s)
has failed to accomplish this objective.
And, should Sergei Kiriyenko fail to accomplish this task,
in that case we'll have to wait for another Messiah for a very
long time.
The young Premier has gambled his reputation and this
country's foreign debt, which is going to reach exorbitant
proportions already in the near future.
Quite possibly, Russia will not receive any loans
whatsoever. Western investors continue to regard this country
as some kind of a "bottomless pit" (that gobbles up billions of
dollars) for quite a while now.
Right now, the President and the Government are asking for
a really tremendous sum of money (that was previously requested
by Russia only once -- that is, on the eve of 1996 presidential
elections).
Should Russia fail to receive the required sum, in that
case Sergei Kiriyenko will have to make a decision that can be
compared with the 1991-vintage shock therapy (in terms of its
consequences).
I'm talking about the Russian rouble's devaluation.
The devaluation effect is reminiscent of foreign loans.
Rouble-and-GKO debts would immediately become depreciated, what
with the federal budget experiencing less substantial loads.
Strange as it may seem, but foreign investors unanimously
agree that the Russian rouble should be devalued. However, they
will be the first to suffer when the US dollar comes to equal
7-8 roubles.
Nonetheless, they are ready to sustain "lumpsum" losses
for the sake of uninterrupted subsequent work.
Exporters would also stand to gain from such devaluation.
Consequently, the entire real economic sector would also
breathe a sigh of relief (See above).

The rouble's devaluation against the background of
substantial loans would become the most ideal economic option.
In that case, the Government's managerial potential would
double (to say the least), what with foreign investors rushing
to invade the local stock market.
The GKO-pyramid problem would be resolved by that partial
debt depreciation. Besides, huge sums of money could be
channelled into the Russian industry.
And, most importantly, the Russian Government would
receive breathing room, eventually moving to ensure a long-term
(rather than short-term) recovery inside the real economic
sector; incidentally, a short-term economic recovery was
registered here late in 1997.
However, this scenario has one drawback. The thing is that
President Boris Yeltsin has so far prevented any government
from working in a calm manner. Yeltsin's unpredictable policy
is seen as the main factor of all economic crises that were
registered during the last few years. Any subtle and refined
strategy on the Prime Minister's part can be torpedoed by some
unexpected presidential decision at a time when Yeltsin can
create additional "black holes" inside the federal budget.

********