May 28, 1998   
This Date's Issues: 2198  •2199

Johnson's Russia List
#2199
28 May 1998
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Yeltsin Calls Clinton About Economy.
2. AP: Greg Myre, Russia Economy Suffers New Blows.
3. Reuters: Press Has Contradictory Cures for Crisis.
4. Sherrell Goggin: Economic regions.
5. Rus-Amer Chamber (Washington, DC): ADVERTISING TO RUSSIAN BUSINESSES 
IN THE US.
6. Ariel Cohen: New book.
7. Ludmila A. Foster: Canadian gold co..
8. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: Missile Act Is a Red
Herring.
9. Mark Ames (the eXile): Jean MacKenzie.
10. USIA: PENA BRIEFS REPORTERS ON U.S. POLICY IN THE CASPIAN REGION.
11. Itar-Tass: Duma Chief Says Majority of Deputies Against Land Ownership.
12. Komsomolskaya Pravda: Regional Elections Seen Behind Presidential
Staff Shakeup.
13. Interfax: Over 100 Russia-US Ventures Planned in Sakhalin in 1998.
14. Jamestown Foundation Monitor: HARSH RHETORIC OUT OF MOSCOW ON NATO 
ENLARGEMENT.
15. RFE/RL NEWSLINE: MOSCOW COURT DEFIES HIGHER COURT RULING ON 
RESIDENCE PERMITS.
16. Obshchaya Gazeta: Alexei Arbatov, DON'T COUNT YOUR WARHEADS BEFORE 
RATIFICATION.
17. Russia Today: Rod Pounsett, Ethnic Tensions Threaten Stability in CIS.]

********

#1
Yeltsin Calls Clinton About Economy 
May 28, 1998

WASHINGTON (AP) -- Russian President Boris Yeltsin telephoned President
Clinton today to outline measures to stabilize Russia's economy, and
received assurances of U.S. confidence in those efforts. 
The two leaders reviewed Russia's negotiations with the International
Monetary Fund to ``ensure that Russia stays on a sound economic track,''
said White House spokesman Mike McCurry. 
They also discussed Russia's efforts on tax reform and attracting
investment, and Clinton reiterated his support for the reforms being
carried out by the Russian Federation's economic team. 
``While the Russian Federation clearly faces some economic potholes in
the road, they know how to pave them,'' McCurry said. ``There's a high
degree of confidence in the work President Yeltsin's team is doing.'' 
Clinton and Yeltsin also discussed Pakistan's nuclear tests and concerns
about a nuclear arms race on the Asian subcontinent. 
``They agreed they need to stay in close touch and work together to
defuse tensions in South Asia,'' McCurry said. 

*******

#2
Russia Economy Suffers New Blows 
By Greg Myre
May 28, 1998
An AP News Analysis 

MOSCOW (AP) -- After years on the intensive care list, Russia's economy was
showing signs of recovery this year and seemed headed for its best
performance in a decade. 
So why is it suddenly flirting with disaster once again? 
Striking coal miners, slumping oil prices and fickle foreign investors
delivered a swift series of blows that has President Boris Yeltsin's
government struggling to ward off another full-blown crisis. 
Russia has not yet suffered an Asian-style meltdown, though the problems
there spooked investors here, and rumors of an impending crisis have been
percolating for several months. 
So far, only the suit-and-tie world of bankers, traders and investors
has been hard hit by the tumbling markets. There's still no evidence of
upheaval in Russia's day-to-day economy. 
Prices are stable. The ruble, with lots of help from the Central Bank,
has dipped only a bit. Millions of Russians remain impoverished, but life
hasn't gotten worse in the past few weeks. 


Still, there's a palpable feeling that the clouds won't clear without a
multibillion-dollar bailout package arranged by the International Monetary
Fund or someone else. 
``When you have this psychological feeling, this fear on the part of
investors, it's almost like a storm that keeps buffeting the boat until the
investors know there is international support to back up the government,''
said Charlie Ryan, general director of the United Financial Group, a Moscow
investment company. 
And there are several very real problems hurting Russia: 
--Hardly anyone pays taxes. The government has yet to learn how to
collect taxes, and therefore can't pay workers. This chronic problem came
to a head earlier this month when striking coal miners blockaded several
key railways. 
Yeltsin's government can consider itself lucky that Russian workers are
so quick to compromise. The miners returned to the pits after being
promised only a portion of six months of back wages. If the millions of
unpaid workers went on strike until they got their money, the economy
really would grind to a halt. 
--Capricious investors. In the global economy, foreign investors possess
enormous influence over struggling economies such as Russia's. 
During the last two years, investors had been infatuated with Russia,
sending the stock market up more than 100 percent and making it the top
performer in the world even though actual economic growth was negligible. 
This year, with the economy performing at roughly the same level,
investors are fleeing and the market is down 50 percent, the worst
performance in the world. 
Russia's immense natural resources lured the investors, and probably
will bring them back. But until they return, Russia will be short of money,
and the economy likely will tread water at best. 
--Slumping oil prices. Oil is Russia's most important export, but with
prices lower than $15 a barrel, the government is getting much less money
than anticipated. There was an ominous development this week when the
government tried to auction off Rosneft, the largest oil company still in
state hands. The asking price was $2.1 billion -- and no one bid. 
The great danger facing Russia is a currency collapse, which would send
prices rising and affect all of the country's 147 million people. 
The Russian government still thinks it can keep the ruble stable and
control inflation by itself, but ultimately it may need a bailout, if only
to restore confidence. 

*******

#3
Press Has Contradictory Cures for Crisis 
28 May 1998

MOSCOW -- (Reuters) Russian newspapers agreed on Thursday that the country
was deep in economic crisis, but offered different interpretations and ways
to get out of it. 
Many of the newspapers led on Wednesday's heavy falls on Russian
financial markets, the big rise in treasury bill yields and the tripling of
interest rates to 150 percent. 
"Russia is on the eve of financial revolution," the liberal newspaper
Nezavisimaya Gazeta said, suggesting the ruble should be devalued -- a
measure ruled out by the government. 
"Instead of devaluing, Russia wants to set up a special fund made up of
Western credits to buy back treasury bills that no one needs anyway," the
daily said. 


It said that if the government did not devalue the ruble, it would be
devalued "from below" -- meaning it would lose value anyway because of the
financial crisis. 
The influential business newspaper Kommersant Daily took a different
view. It said the choice was between ruining the whole banking system and
buying back treasury bills, which it called "the mightiest means of
influence," at a high price. 
"Yesterday's dramatic events on the financial market may, paradoxically,
serve the government well if the central bank finds the money to buy up
low-priced T-bills and thus cut the internal debt," Kommersant said. 
"Even without money from the International Monetary Fund the central
bank -- unless it is interested in the death of the banking system -- will
have to buy T-bills from banks. Otherwise it will not be able to tackle the
liquidity crisis." 
It said the crisis could determine the future of Prime Minister Sergei
Kiriyenko. 
"The fate of Kiriyenko is in the hands of (central bank chairman Sergei)
Dubinin," it said in its main headline. 
Shares started rising again on Thursday as President Boris Yeltsin met
Kiriyenko, Dubinin and Finance Minister Mikhail Zadornov. 
Russian news agencies said that during the meeting Yeltsin had dismissed
the idea that there would be a financial crash. 
Nezavisimaya Gazeta generally welcomed Wednesday's central bank decision
to increase interest rates but said they could not now be raised any higher. 
The popular daily Moskovsky Komsomolets offered no cures and did nothing
to ease the mood of panic. 
"The world community has abandoned Russia. In just hours the situation
has returned to the levels of two years ago during the presidential
election," it said. 
Both Kiriyenko and Dubinin have repeatedly ruled out a devaluation. But
Nezavisimaya Gazeta said a devaluation could help by slashing the cost in
dollars of repaying state ruble debts and also help Russia's exporters,
notably oil and gas companies. 
The government newspaper, Rossiiskaya Gazeta, made little mention of the
financial crisis. The pro-Communist opposition daily Pravda doubted that
the ruble would survive the crisis intact.

*******

#4
From: sherrell.m.goggin@ccmail.census.gov
Date: Thu, 28 May 98 13:23:52 -0500
Subject: request for the list

I work in the International Programs Center of the Census Bureau, and 
we're trying to collect digitized maps of all countries in the world 
(and digitizing them ourselves if we're unable to find them). 

Currently we're working on Russia--does any one know about those 15 
economic regions??? Are they official administrative zones, and if so, 
are they comprised of other republics/krais/oblasts, or are their 
boundaries completely different??

If you only know that Economic Region 1 is comprised of oblasts x, y, 
and z, that's fine, but if you actually have this digitized, you'll 
earn our undying gratitude.

Thanks in advance,
Sherrell Goggin
sgoggin@census.gov
301-457-1451



********

#5
Date: Thu, 28 May 1998
From: "Rus-Amer Chamber (Washington, DC)" <rusric@erols.com>
Subject: Re: ADVERTISING TO RUSSIAN BUSINESSES IN THE US

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********

#6
From: "Cohen, Ariel" <cohena@heritage.org>
Subject: New Book
Date: Thu, 28 May 1998

Dear Friends and Colleagues:
I am glad to announce that Greenwood Publishers, the company that
owns Praeger, has announced the paperbook edition of my book, Russian
Imperialism: Development and Crisis, scheduled for this fall.
The paperback edition of the book, which is currently utilized in
several graduate and undergraduate course at the U.S. Army War College, GW,
Union College, etc., will be aimed at the textbook market.
It is good to know that a conservative perspective on czarist Russia
and USSR's development and decline can penetrate the (mostly liberal)
academia.

*********

#7
Date: Thu, 28 May 1998
From: "Ludmila A. Foster" <ludmila@erols.com>
Subject: Canadian gold co.

David: Reuters reported today that there was a cyanide poisoning in the
CAMECO Canadian gold mine in Kyrgyzstan. Does anybody know if this
company is part of the empire of Boris Birshtein, a recent immigrant to
Canada, who also owns Seabeco and several other companies and banks?
********

#8
Moscow Times
May 28, 1998 
DEFENSE DOSSIER: Missile Act Is a Red Herring 
By Pavel Felgenhauer 

Despite the desperate efforts of the White House, the U.S. Congress last 
week almost unanimously passed a bill on sanctions against foreign 
individuals and organizations who help Iran's ballistic missile program. 
Russia is not specifically mentioned in the text of the bill, but U.S. 
legislators and administration officials made no secret of the fact that 
sanctions would be directed against Moscow. 
The penalties imposed by the Iran Missile Proliferation Sanctions Act do 
not seem to be too severe. Organizations and individuals put on the 
black list will not get any U.S. financial assistance for at least two 
years, will be prohibited from buying U.S.-made dual-use technology and 


so on. The sanctions bill is primarily a political gesture. Vladimir 
Lukin, a leading liberal from the Yabloko faction and chairman of the 
State Duma committee on foreign affairs, told me, "The U.S. sanctions 
bill is a slap in the face for Russia, and we in the Duma should somehow 
react to it." 
Lukin says he might introduce a bill in the lower house of parliament to 
sanction U.S. companies that have been recently accused of passing vital 
missile technology to China. Lukin believes such a bill would expose the 
stupidity and double-standard nature of the U.S. action. But such a move 
would hardly amuse the Communist-led majority in the Russian parliament. 
The Communists and their allies are today digging in their heels to 
oppose anything that comes from the West. The first victim is likely to 
be the long-overdue START II nuclear disarmament treaty. 
U.S-Russian relations are as low as they have been at any time since 
1991. Moscow has repeatedly denied that it is in any way supporting 
Iran's ballistic missile effort. But U.S. authorities do not accept 
Russia's denials, while at the same time they themselves have not 
produced any credible evidence of any serious Russian proliferation 
offenses. 
Documents produced by Iranian opposition emigres were published in the 
Israeli press, but the State Department and the Pentagon say they are 
false. In March, customs officials in Azerbaijan stopped a Russian 
shipment of 22 tons of stainless steel, which could be used to make Scud 
missiles, before it crossed the border into Iran. But Scuds are 
short-range missiles that cannot possibly reach Israel from Iranian 
territory. Off the record, Russian officials say U.S. officials have 
unofficially agreed not to count the stainless steel shipment as a 
missile proliferation incident. 
Then what does count? Where is the evidence? Or is it the case that, in 
the U.S., Russia can be accused and convictedof any crime without any 
evidence whatsoever? 
Israeli military intelligence has for many years been deliberately 
puffing up an Iranian "rocket threat" to avert defense budget cuts and 
to get U.S. funding to deploy the very expensive Israeli-made Arrow 
anti-ballistic missile system. The implication that Russia is the main 
culprit in the Iranian missile project obviously enhances the 
credibility of the Israeli story. 
Israel's best long-term defense against hostile missiles is genuine 
peace with its Arab neighbors, especially if peace is established before 
Iran even begins to test its medium-rage Shahhab-3 missile. But peace is 
what the present right-wing Israeli government, led by Prime Minister 
Binyamin Netanyahu, and the Israeli military apparently want to avoid at 
any cost. Posing as a "U.S. ally in imminent peril" from nonexistent 
Iranian missiles could help Netanyahu avoid U.S. sanctions when he 
finally kills the Middle East peace process. 
But why is the U.S. Congress and, apparently, the CIA supporting the 
Israeli anti-Russian smear campaign? Some in Washington seem to want a 
new quasi-Cold War with Russia. Others are part of the pro-Israeli lobby 
or cannot resist its pressure. Lukin, who was this month in Washington 

with a Duma delegation, says the majority of the U.S. ruling elite is 
simply indifferent. Russia is considered unimportant, and influential 
Americans are fighting each other. The sanctions act and scandals 
involving the transfer of ballistic missile technology only create a 
pretext for Congress to batter U.S. President Bill Clinton. 
The Russian experiment in running a democracy increasingly seems to be 
going bankrupt, but the United States and the West appear to be either 
hostile or indifferent. In effect, Western actions only increase the 
possibility of an authoritarian backlash. Russia is seeking urgent help, 
but the IMF has no money left. Indonesia and Korea are considered more 
important. 
Pavel Felgenhauer is defense and national security affairs editor of 
Segodnya. 

*********

#9
From: "Mark Ames " <exile.editor@matrix.ru>
Subject: Jean MacKenzie
Date: Thu, 28 May 1998

Jean MacKenzie's latest installment of her column, "Cassandras and
Pollyannas," may have struck JRL readers as bizarrely obvious, but if taken
in context, it is actually a bold piece. Her point--that Russia may indeed
be experiencing a bonafide "crisis"--is of course laughable, sort of like a
columnist for the Krakow Yiddish Times wistfully writing in a 1940 column
that she might go out on a limb and call the situation a "crisis," even if
it makes her look like a Cassandra.

However, there is a kind of Aesopian, subversive subtext to MacKenzie's
piece that I would like to draw attention to. The newspaper she writes for,
The Moscow Times, has taken an even more-bizarre--indeed, wildly
irresponsible--line, from the beginning of this crisis dating back to late
October, that these events ARE NOT HAPPENING. I could quote zillions of
editorials and articles, but let me just quote a few. 

On March 13 of this year, following a Moody's credit rating service
downgrade of Russian debt, the Moscow Times ran an editorial entitled:
"Downgrade By Moody's Badly Timed". Here, I will quote: 
"Credit rating agencies like Moody's Investor Services are supposed to warn
investors about risks ahead. But in its recent decision to downgrade its
appraisal of Russia, Moody's is lagging well behind the times. 

"The point [...] is that [the financial crisis] occurred from November to
January. Since then the news has been, if not outright positive, then at
least encouraging. 

"Nonetheless, Moody's has chosen the middle of March to downgrade Russia's
credit rating. 

"... Moody's has clearly failed if it sees its mission as warning investors
of storm clouds on the horizon. October and November were the times to
downgrade Russia's debt, not now. Stock market analysts were saying on the
pages of The Moscow Times in the fall that the market was overvalued. 

"It looks as though Moody's is adopting a cautious stance now to make
amends for its failure to predict the crisis in Asia. This is not adding
much value for its customers."
In January of this year, when the market dropped some 30%, the financial
problems never made the front pages of the Moscow Times. A one-month, 30%
drop in the Dow Jones indexes in America would have people screaming bloody


murder, but for some reason that I can't explain, the Times chose to
downplay it. The most I remember about this was a 6-square piece buried in
the middle of the finance page. In late February, when everyone was waiting
for Yeltsin to finally return to the Kremlin to give his ministers a
shaking down, the MT's editorial warned its readers that "those expecting a
bloodletting will be sorely disappointed" and that the Kremlin shouldn't
focus only on financial problems, which the Russian people are "tired of,"
but rather "sexually transmitted diseases, AIDS and tuberculosis" because
"those are the kinds of issues people want to hear". Over the past couple
of weeks, when the situation passed from crisis stage to meltdown stage,
the Moscow Times ran a series of articles and editorials with headlines
like "Russia is not Indonesia" and last Friday's editorial, "Russia Won't
FOllow Path of Indonesia." 

"Seen from the outside, there might seem to be close parallels between
Russia and Indonesia, where President Suharto has just been forced to
relinquish power. In Western television reports, stories about the chaos in
Indonesia are followed by pictures of Russian coal miners closing down the
country's railroads. World financial markets see Russia as the next domino
to fall in the Asian crisis. 

"But despite appearances, there are fundamental differences between Russia
and a rotting autocratic regime such as Indonesia. Russia is more stable,
more democratic and, dare we say it, better placed to cope with its
economic problems. 

"The wave of strikes spreading across Russia now reflects real suffering in
some sections of the community. The Communist Party and sections of the
oligarchy dissatisfied with the new government have seized on the protests
for their own purposes. 

"But this discontent on the depressed periphery is not necessarily
indicative of Russia's economy as a whole, where the worst is mostly in the
past. The economy may not grow hugely this year, but neither is it likely
to contract. Many industries, for example automobiles, distribution and
food processing, are recording impressive growth. 

"The new government faces a difficult time weathering the ill wind from
Asia and the fall in world prices. But it has a much better understanding
of them and a much better chance of overcoming them than Indonesia. Russia
knows corruption, but Suharto ran his country like a family business. 

"...unlike in Indonesia, the legitimacy of the government is not in
question. Both democratically elected President Boris Yeltsin and Prime
Minister Sergei Kiriyenko, who was approved by the State Duma, have a clear
popular mandate to take the necessary measures. 

"There are no grounds for euphoria, but it is worth putting things in a
long-term perspective. Russia is moving on the road to stability." 

JRL readers who do not live here but are seasoned Russia-watchers may be
shocked to read what appear to be paid-for advertorials, but in fact, this
is the party line of MacKenzie's paper. There are even dark, ominous
overtones that shocked a seasoned nihilist like myself, such as blaming the
coal miners for essentially being Communists, and attacking the Western


press's coverage in a sort of Pat Buchanan, "nattering nabobs of
negativism" way. Very strange and ominous, especially coming from a
Western-style newspaper!

It really wasn't until today's edition that the Moscow Times even began to
acknowledge a crisis existed, although I have to say that today's articles
by Mark Whitehouse and Sujata Rao on the meltdown were, finally, unbiased,
un-cheerleaderish, responsible and well-written. 

Put in this context, one would understand MacKenzie's subtext better: she
works for a newspaper that, until yesterday--after the market has fallen
70% from its highs, banks are on the verge of collapsing, the ruble may
collapse, political instability is at its highest since 1993, and interest
rates are at economic-growth-killing levels--until today, her newspaper
refused to acknowledge that a crisis existed, and her editor was probably
accusing her of being a Cassandra. So kudos to you, Ms. MacKenzie, for
sticking your neck out in your own newspaper and raising the possibility
that a crisis exists, and for reminding readers that in the end, Cassandra
was indeed right.
Mark Ames
Editor
the eXile

********

#10
United States Information Agency
27 May 1998 
PENA BRIEFS REPORTERS ON U.S. POLICY IN THE CASPIAN REGION 
(Baku-Ceyhan pipeline a priority) (470)
By Joseph Mellott
USIA Staff Correspondent

Istanbul -- Energy Secretary Federico Pena met with journalists May 27
at the "Crossroads of the World" conference to answer questions about
U.S. policy in the Caspian Sea region. He noted that the conference
was the first time the heads of the three U.S. agencies active in
promoting U.S. overseas trade and investment -- the Export-Import
Bank, the Overseas Private Investment Corporation (OPIC), and the U.S.
Trade and Development Agency (TDA) -- were participating together in
such an event.
Answering reporters' questions, Pena said that projects such as the
proposed Baku-Ceyhan pipeline from Azerbaijan to southern Turkey,
which the U.S. supports, will have to be economically viable for
private investors for those plans to become a reality.
Ex-Im Bank, OPIC and TDA are closely coordinating their efforts to
facilitate the success of such projects, he said, noting that the
"unique cooperation" of the three agencies is a "service" to U.S.
companies.
Asked about announcements of a natural gas deal between Iran and
Turkey, Pena said it was his understanding that recent statements
referred to an existing deal that had been revived. He pointed out
that, as such, Turkey's involvement and prioritization of the
Baku-Ceyhan pipeline had not changed and he did not expect it to. He
said to "watch what happens" and see where investment and activity
goes when weighing the merits of any such project.
Finally, Pena was asked whether the recent waiver of sanctions against
French, Russian and Malaysian companies for their involvement in the
development of the Iranian South Pars Field project -- sanctions
called for by Congress under the Iran-Libya Sanctions Act (ILSA) --
involved a "quid pro quo" for getting the European Union to back the
Baku-Ceyhan pipeline. Pena responded that it was clear from the


U.S.-EU statement on Caspian Sea resources during the U.S.-EU Summit
earlier this month that they are working together and are in agreement
on approaches to the region.
He said he expects construction on the Baku-Ceyhan pipeline to start
reasonably soon. It is an "achievable goal," Pena said, and Turkey and
other countries in the region are actively working together to ensure
"consistent treatment" for investors in the construction of the
pipeline through various countries. This is crucial as investors gauge
the economic feasibility of the project, he said, commending Turkey
and the other countries in the region for turning their attention
toward equalizing treatment and determining tariff rates, concessions,
and other issues to move the project forward.

*********

#11
Duma Chief Says Majority of Deputies Against Land Ownership 

Moscow, 25 May (ITAR-TASS) -- The chairman of the State Duma, Gennadiy
Seleznev, today speaking to staff of the Institute of the Federal Border
Service of Russia, once again called against the introduction of private
ownership of land in our country. "A total of 305 out of 450 deputies of
the State Duma are categorically against the introduction of private
ownership of land, and they supported a draft land code of the Russian
Federation which does not envisage the possibility of setting up a free
sale and purchase of agricultural land", Gennadiy Seleznev said.
Meanwhile, he said that the majority of parliamentarians "will stick
steadfastly to this position".
[Passage omitted; the speaker reaffirms that the majority of the State
Duma deputies are against the introduction of private ownership of land].

*********

#12
Regional Elections Seen Behind Presidential Staff Shakeup 

Komsomolskaya Pravda
26 May 1998
[translation for personal use only]
Report by Aleksandr Gamov under the "Reshuffle" rubric: "Will
Komissar be Kremlin Commissar?"
Yesterday proved productive in terms of dismissals and reshuffles at
the Kremlin.
The most notable event was the dismissal of Deputy Chief of
Presidential Staff Viktoriya Mitina. As Sergey Yastrzhembskiy said at a
briefing, she was released from her post "in connection with a series of
events in the Russian regions, in particular in Nizhniy Novgorod."
With regard to Nizhniy Novgorod, the Kremlin is clearly being
disingenuous: Mitina has already suffered once, by receiving a severe
presidential reprimand, for the fact that the Nizhniy Novgorod mayoral
election was won by twice-convicted entrepreneur Andrey Klimentyev. So the
reason for her dismissal was probably the "series of events," namely
General Lebed's victory in the Krasnoyarsk gubernatorial election.
Yesterday news agencies hurried to report that Mitina would be
re placed by Vladimir Putin, who until recently headed the president's Main
Control Administration. However, as Kremlin sources have revealed, the
"commissar's" duties could go to Deputy Chief of Presidential Staff Mikhail
Komissar. And Putin (who, incidentally, is a former Soviet foreign
intelligence staffer) will investigate a mass of other complex issues.
New Deputy Chief of Presidential Staff Igor Shabdurasulov, who until


now has worked as chief of the government apparatus's Culture and
Information Department, will replace Komissar in strengthening public
relations and overseeing the group of speechwriters.
In my view, there is a good reason for all this. Boris Yeltsin is
evidently tired of watching the electoral process in the regions slipping
out of the Kremlin's control....

********

#13
Over 100 Russia-US Ventures Planned in Sakhalin in 1998 

Yuzhno-Sakhalinsk, May 26 (Interfax- Eurasia) -- At least 100
Russian-American joint ventures will be set up during the year for the
Sakhalin offshore projects in the Far East, Governor of Sakhalin region
Igor Farkhutdinov told a Tuesday press conference in Yuzhno-Sakhalinsk
after returning from a week long tour of Alaska.
He said only 17 such ventures are registered today which is "clearly
insufficient." He said one of the purposes of his Alaskan tour was "to
increase the competitiveness of Russian companies, those from Sakhalin in
particular, intending to participate in the development of the Sakhalin
shelf."
According to Farkhutdinov, Russian companies are unable to compete in
tenders where the price is the decisive factor ahead of the time and
quality of operations. The absence of modern technologies does not permit
the Russian side to win these tenders, he said.
Their competitiveness in projects related to the development of
offshore oil and gas fields may be increased through forming joint ventures
with foreign companies, primarily from Alaska, having vast experience in
extracting, transporting and refining hydrocarbons and offering services to
oil companies.

********

#14
Jamestown Foundation Monitor
28 May 1998

HARSH RHETORIC OUT OF MOSCOW ON NATO ENLARGEMENT. On the eve of talks
marking the first anniversary of a major NATO-Russian cooperation agreement,
a top Russian Defense Ministry official has published an article criticizing
NATO on several counts and harshly warning the Alliance against expanding
onto the territory of the former Soviet Union. Colonel General Leonid
Ivashov, head of the Defense Ministry's main department for international
military cooperation, said in yesterday's Nezavisimaya gazeta that Moscow
continues to oppose NATO's enlargement plans. He also said that a decision
to admit former Soviet states--a reference aimed presumably at the three
Baltic countries--into the Alliance would prompt Moscow to increase its
strategic forces in Northwestern Russia and to reconsider its commitments to
unspecified arms control agreements.

Moscow has long made clear its opposition to any move by the alliance to
admit former Soviet states. Ivashov's words, however, were among the
strongest to be expressed by any Russian official on the subject. "At all
levels," Ivashov said, "we openly say that if former Soviet republics become
candidates for admission into the alliance, then the situation in Europe
will become unstable and the geopolitical situation will change."

Ivashov also criticized, moreover, NATO's refusal thus far to discuss in
detail its plans for developing military infrastructures in newly admitted
member states. Moscow is "extremely concerned over the issue of transparency


in the development of NATO military infrastructure, especially on the
territory of new Eastern European members of the alliance," he said. In the
same vein, he warned the West against using the NATO-Russia Founding
Act--the agreement signed a year ago between Moscow and the Alliance--as a
"smoke screen" to obscure plans to move NATO military structures closer to
Russia. If the alliance does this, he warned, and if it fails to transform
itself into a political organization, then "it is natural to assume that the
life of this unique document [the Founding Act] will prove short."

Finally, Ivashov said that despite the signing of the Founding Act, "a
mechanism for partner relations [between Russia and NATO] has not yet been
created." He suggested that, because of this failure, a NATO military
mission will be allowed to start its work in Moscow by the end of this year,
but it will not be housed in Russia's Defense Ministry." (Russian agencies,
May 27) Citing the fact that a Russian military mission is working at NATO
headquarters in Brussels, Alliance officials have called for the analogous
NATO mission to be located at Russia's Defense Ministry. The establishment
of the missions is called for in the Founding Act.

*********

#15
RFE/RL NEWSLINE Vol. 2, No. 101 Part I, 28 May 1998

MOSCOW COURT DEFIES HIGHER COURT RULING ON RESIDENCE
PERMITS. A Moscow municipal court has ruled against a
citizen who appealed against the city authorities' refusal
to register him as a long-term resident of the capital,
"Kommersant-Daily" reported on 27 May. Andrei Inozemtsev, a
native of Lipetsk Oblast, sought a five-year registration
but was told that residence permits can be issued only for
up to six months. The Constitutional Court has ruled that
city authorities do not have the right to refuse to register
Russian citizens as local residents, and Inozemtsev cited
that ruling in his court appeal. The Moscow court upheld the
city's registration rules, although the authorities did not
send a representative to the hearings. Moscow Mayor Yurii
Luzhkov has vowed to retain the "propiska" system of
residency permits, despite the conclusions of the
Constitutional Court (see "RFE/RL Newsline," 12 and 13 March
1998). LB

********

#16
>From RIA Novosti
Obshchaya Gazeta, No. 21
May 1998
DON'T COUNT YOUR WARHEADS BEFORE RATIFICATION
I don't think the START-2 Treaty will be ratified soon,
Alexei ARBATOV told Alexei BAUSIN

Last week the State Duma discussed the START-2 Treaty,
which provides for large-scale reductions of Russia and
American nuclear weapons. Signed by Boris Yeltsin and Bill
Clinton in 1993, it has not been ratified yet by the Russian
Parliament.
The deputies were expected to approve the establishment of
a commission on the final analysis of the treaty. But after a
heated discussion, they decided to postpone discussion until
September. Aleksei ARBATOV, deputy head of the Duma defence
committee and director of the Centre of Geopolitical and
Military Forecasts, commented on the problems hindering the
ratification of the treaty.



Arbatov: The USA hinted that there will be no
Russo-American summit until the Duma ratifies the treaty. Why?
The thing is that the USA is to make the decision on
allocations on military programmes for many years ahead.
Consequently, it needs to know what will happen to the START-2.
If the State Duma blackballs it, the USA will have to allocate
more on its strategic forces. If the State Duma ratifies the
treaty, the USA would allocate more money on general-purpose
forces.
The situation is virtually the same in this country, but
the sums at issue are smaller. We need to determine what to do
for many years ahead, and approve military programmes for the
next 10-20 years. It is very important to decide if these
programmes will be elaborated within the framework of the
START-2 or beyond it. Besides, the START-2 presupposes the
signing of the next, START-3 treaty. 
The hearings on the treaty lasted for a long time. It was
decided to send a request to the government on the plans for
the development of strategic forces, related funds, and
allocations on the fulfilment of the treaty. Last year a number
of important additional documents were approved, first and
foremost the agreement prolonging the START-2 until 2007 at
Russia's request. Other documents are the protocol on the
delimitation of strategic and tactical ABM systems, which is
vital for the START-2, and the framework agreement on the
START-3, with quite a few provisions and even framework
figures. 
The START-2 treaty cannot be ratified without the
discussion of these additional documents. And that is why the
parliament has addressed this problem very closely. 
It is clear that the treaty must not be put on the shelf,
but we cannot determine the deadlines without discussing these
documents. Who knows, maybe discussions will last not a month,
as we expect, but half a year. 
It should be taken into account that we will have to
reduce our nuclear forces all the same, for technical and
financial reasons.

Bausin: Some analysts believe that a part of the Duma
deputies want to use ratification as a bargaining chip in
relations with the executive authorities. 

Arbatov: There is nothing unusual in this. The same
happens in all other parliaments, including the US Congress.
Jesse Helms, chairman of the Senate Committee on Foreign
Relations, ensured, last year, the ratification of the treaty
banning chemical weapons in return for the liquidation of the
Arms Control and Disarmament Agency. He hates disarmament as
much as many of our deputies, but he is acting more smartly. 
The more important a treaty is for the executive
authorities, the greater will be piece of pie which the Duma
will want to get in return. The executive authorities should
understand this. This is a normal political process. 

Bausin: Do you think that the executive authorities really
want the ratification of the treaty? It cannot be said that
they have been consistently working with the Duma in this
sphere.

Arbatov: This is a priority task for the executive
authorities, if we agree that such departments as the Defence


Ministry or the Foreign Ministry are a part of the executive
authorities. Thank God, our Defence Minister understands these
problems very well, and knows how important this treaty is for
Russia. Yevgeny Primakov is advocating its ratification, too.
But in this country everything is decided by the President and
his staff, who cannot pool forces in order to push the treaty
through the Duma.
The President does not want to engage in political talks
with the Duma, because he thinks that foreign policy and
security issues are the spheres of his monopoly power. Judging
by Yeltsin's stand in the past few years, the ratification of
the START-2 is not a priority task for him. But since the USA
regularly raises this question, he has to recall it, too. 

Bausin: What would be the result if the Duma had to make
the decision on ratification tomorrow?

Arbatov: The treaty wouldn't have a chance. 

********

#17
Russia Today


http://www.russiatoday.com
May 25, 1998 
Ethnic Tensions Threaten Stability in CIS
By Rod Pounsett 

The recent protests and violence in Latvia clearly show that so-called
ethnic Russians living in territories of the former Soviet Union are a
major headache for Moscow that will not go away. 
This headache could worsen into a serious illness. 
Despite recent pensioners' protests and a bombing, many observers are
amazed at how relatively quiet the massive numbers of Russians scattered
throughout the former Soviet Union have been. As one expert put it,
"They're the dogs who haven't yet barked." 
Others think it is a question of whether or not these people of Russian
blood living in CIS nations are genuinely Russian, or some new breed with
unique characteristics. According to Dr. Neal Melvin of Leeds University in
England, national identity is a major problem for many of these exiles and
could be one reason why their plight has remained fairly low-key. 
Yes they speak the language and they use their Russian antecedence
whenever it suites their purpose. But can they really regard themselves as
true Russians when most come from mixed ethnic backgrounds from various
other regions of the former Soviet Union? 
Even in Russia itself, relatively few people can claim to have pure
Russian blood. In fact Russian nationality has always been more a question
of where you are registered, and under whose administration you belong,
rather than inherited rights by bloodline. 
I suspect no meaningful sense of identity has been passed on to Russians
in exile (when I say exile, I do not necessarily mean forced exile) because
the Russians at home have not yet honed and polished their own sense of
national identity. In other words, they have had no leadership from their
homeland. 
It was not so long ago that if you asked a Russian resident the name of
his country he or she would have instantly, and proudly, replied "The
Soviet Union." Yet if the you had asked the same question of an ethnic
Latvian or Georgian they would have replied, again without hesitation,
"Latvia" or " Georgia" ­ even when those nations were part of the Soviet
Union. 
The Russian Federation did, of course, exist as part of the Soviet
Union, but few of those who lived and were registered there overtly
considered themselves Russian, as opposed to Soviets. 


It is rather like my fellow Brits. Most Englishmen are quite happy to
declare themselves as British, whereas a Scot is always Scottish, an
Irishman Irish and a Welshman Welsh (let's not get into Northern Ireland).
Reviewing recent history, it is only since the collapse of the Soviet Union
that a new form of Russian nationality and patriotism has re-emerged. 
Nevertheless, as Latvian demographics demonstrate, this is not a
question of small pockets of Russian expatriates who call upon their
homeland for help every time they get in trouble. 
Nearly half Latvia's population is said to be ethnic Russian. In Riga,
the capital, ethnic Russians make up 70 percent of the population. In
Kazakhstan, ethnic Russians amount to a third of the population. There are
some territories of the former Soviet Union where the proportions are much
higher. 
In total, they comprise many millions, and almost without exception they
are regarded with hostility by the native governments and populations where
they now live -- suffering diminished rights of citizenship and various
other forms of discrimination, both socially and in the workplace. 
Yet, apart from occasional clashes with locals, poorly organized
demonstrations and the odd bomb explosion here and there, the Russians have
remained a relatively silent body in the CIS nations. They are recognized,
however, as a potentially massive powder keg awaiting ignition, the damage
from which could be catastrophic for Russia. 
Robert Service, professor of Russian history and politics at London
University, said these Russians have not yet had the time or opportunity to
organize. Apart from the few who have profited from collaboration with
their hosts, they have been too busy trying to survive and scrape together
a living. 
"There's been a reluctance by Russians throughout the former Soviet
Union to get as involved in politics as we thought they would,'' he said.
"They're the dogs who haven't yet barked, and everyone's been surprised by
that." 
Service said we cannot assume exiled Russians will remain silent. Its an
issue that should be taken seriously both in Moscow and the West. Anatol
Lieven, of the International Institute for Strategic Studies and author of
a book about Russian nationalism called, "Chechenya -- Tombstone of Russian
Power'', believes this identity crisis among Russian exiles and their
failure to mobilize parallels the situation in Russia. 
"The failure of these Russian disparates to mobilize can be linked to
the reasons why we haven't seen a serious mobilization of the trade union
movement in Russia or the formation of major political parties,'' he said.
"Post-Soviet society is just not easily mobilized." 
Lieven theorizes that the lack or organization relates back to the
Soviet days, when little social structure existed beyond the Communist Party. 
Professor Service, however, cited recent unpredicted events in Indonesia
as an example of latent discontent exploding once the flame was ignited.
"It's a case of the law of upheaval, the experts are experts after the
event," he added. 
I do not think it would take much to trigger a similar explosion amongst
exiled Russians, especially if the views of people like former Soviet
government spokesman, Mikhail Bruk, gain momentum. In Soviet times Bruk was
one of the few journalists authorized to speak to the West. Like many other
retired Russians, he now lives in Latvia. 


He is disgusted with the way Moscow has so-far considered the rights of
his fellow expatriates in places like Latvia. He feels they have been
abandoned, along with the principles of the former Soviet empire, which he
continues to extol. 
"Yeltsin, like Gorbachev before him, is a criminal and he's destroying
our country,'' said Bruk. "What's needed is another Stalin to restore order
and the country's pride." 
Not all Russian exiles are as extreme as Bruk, of course, but they do
include a high proportion of hard-line communist believers, especially in
places like Latvia, where vast numbers of the nomenclature establishment
and retired military took advantage of privilege and assisted settlement
under the Soviet regime. Their lack of rights today can only be interpreted
as a backlash from the Soviet days. 
Many of them maintain influential contacts with contemporaries at the
center of Moscow, which is perhaps why we hear more noises from Moscow
about the plight of Latvian Russians than overt support for Russian
expatriates elsewhere in the former Soviet Union. It may also be a reason
why their numbers have become more politically active -- military types and
former Communist Party officials (apparatchiks) with organization skills
have been taking the lead. 
Lieven's thoughts reminded me of U.S. international affairs expert
Rogers Brubaker's trinitarian formula for predicting the behavior of ethnic
minorities. Their behavior will be determined by three factors: internal
dynamics, encouragement from their ethnic homeland and behavior toward them
by the host country. 
If Brubaker's theory is correct, the message from Moscow points to
trouble. Russian Foreign Minister Yevgeny Primakov has given a somewhat
muted warning that Russia is prepared to use its size and power in defense
of its nationals. 
Meanwhile, the Latvian government and some sectors of the community have
displayed an increasingly negative disposition toward their Russian guests.
Clearly if either the Russian or Latvian governments continue to raise the
temperature we could witness a transformation of the internal dynamics
among the exiles. 
And that would apply to any other areas of the former Soviet Union where
large numbers of Russians are guests, reluctant or otherwise. 
I think you also have to take into consideration international opinions
and intervention. The international community must take care not to
exacerbate the situation by ill-advised commentary or intervention. If it
aligns itself too strongly with the Russian exiles, this may encourage the
Russians to be more vociferous. 
That, in turn, would persuade Moscow to adopt a harder line. How then
would the international community react to a Russia, echoing tones of
former regimes, threatening all sort of reprisals against its neighbors? 
It's a very real threat that bears watching in the coming weeks, months
and years. 
Rod Pounsett writes a weekly column for Russia Today.

********