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Johnson's Russia List


June 12, 1998   
This Date's Issues: 2217  2218

Johnson's Russia List
12 June 1998

[Note from David Johnson:
1. Reuters: IMF readies $670 million Russia payment, maybe more.
2. Pravda: Stanislav Menshikov, "The Kremlin Rings for the Fire 
Service, But the Fire Chief Has His Own Problems." ((Money Crisis 
Moves 'Border on Sharp Practice').

3. the eXile: Matt Taibbi, THE PEOPLE GO PITCHFORK.
4. The Guardian (UK): Voice of freedom silenced by Russia's local 
tyrants. James Meek on Larissa Yudina, a fearless newspaper editor who
became the latest victim of the regional rulers whom the Kremlin is too 
frightened to challenge.

5. Reuters: Duma Moves to Bar Yeltsin from Next Poll.
6. Reuters: Russia may be mulling atomic arms in Baltic -daily.
7. Bruce Rockwood: "War Against the People." (Chechnya book).
8. Timothy Thompson: American Business in Russia.
9. Pravda: Interview with Mikhail Titarenko, director of the Institute
of the Far East and China, "'Reforms Should Be Such That Everyone Benefits 
>From Them'." (Expert Views Russian-Chinese Relations).

10. Russia Today press summaries: Nezavisimaya Gazeta, In Eight Years of 
State Freedom, Everyone Who Wanted to Became Independent; and
Komsomolskaya Pravda, DiCaprio Fell in Love with a Russian Model.

11. Interfax: State Statistics Committee Calculations 'Accurate.'
12. AP: Soros Says No More Loans to Russia.
13. Itar-Tass: Duma Says Over 2,500 Soldiers Died in Russia in 
28 Months.]

Note: Nezavisimaya Gazeta (June 10) has published an article by Aleksandr 
Domrin, Ph.D. Candidate in Law and a Doctoral Student at the University of 
Pennsylvania, entitled "Johnson's Russia List", with the subtitle: "A Private 
Initiative of a Washington Researcher: Can It Influence Western Beliefs About


IMF readies $670 million Russia payment, maybe more
By Adam Entous 

WASHINGTON, June 11 (Reuters) - The International Monetary Fund on Thursday
cleared the way for a $670 million loan payment to Russia and said it could
make more financial aid available if Moscow needed it and agreed to IMF

The announcement may buoy Russian financial markets, which retreated this week
when a widely-anticipated international assistance package failed to

In a written statement released in Washington, the IMF said its executive
board would meet on June 18 to consider the $670 million disbursement from
Russia's existing $9 billion loan programme. 

The fund added: ``If it is judged appropriate and necessary, additional
financial assistance could be made available in the context of further policy

Russia, still struggling to build a functioning market economy, is already one
of the IMF's biggest borrowers. Its $9 billion Extended Fund Facility was the
IMF's second largest loan when it was signed in March 1996. It has since been
overtaken by big credits to Indonesia and South Korea. 

Payments to Russia have stalled repeatedly because the IMF is worried about
dismal tax revenues, but fund officials have recommended the payments start

Thursday's statement said IMF management had reached agreement with Russian
authorities on the country's economic policies for 1998. The agreement ``takes
full account'' of the government policy package announced in late May. 

``Provided that the actions to be implemented in the next few days are taken
as expected, it is foreseen that the IMF's executive board will meet on June
18 to consider completing the seventh quarterly review under the Extended Fund
Facility (EFF) for Russia,'' the IMF said. 

``The completion of this review will immediately made available a tranche of
$670 million.'' 

The IMF said its staff would continue to ``engage in intensive dialogue with
the Russian authorities,'' and stressed that further lending would require
Moscow to commit to additional economic reforms. 

An IMF spokeswoman had said earlier on Thursday that the fund was only in
``exploratory discussions'' with Russian authorities about how Russia could
raise extra cash and insisted there was no need for this at present. 

``There has been no request from the Russians and hence no negotiations, and
the IMF continues to believe that the resources available to Russia under the
EFF (Extended Fund Facility loan) are sufficient at this time, provided the
agreed policies are implemented,'' she said. 

Traders, watching a stubborn decline in Russian shares and aware of mounting
pressure on the ruble, have been waiting for signs that more money might be
made available soon, either from the IMF or from the Group of Seven
industrialised countries. 

``The markets are looking for some kind of international support package for
the Russian economy, presumably through the IMF or the G7,'' Anthony Thomas,
emerging markets economist at Dresdner Kleinwort Benson told Reuters in
Moscow. ``Until we see that, markets are going to be very nervous indeed.'' 

U.S. Deputy Treasury Secretary Lawrence Summers said on Thursday that deputy
finance ministers from Britain, Canada, France, Germany, Italy, Japan and the
United States had discussed aid for Russia when they met in Paris this week. 

``There was a consensus coming out of that meeting that we would certainly
support appropriate action from the international financial institutions,
measured with the pace of the steps that the Russians took to address the very
serious problems, particularly in the fiscal and tax administration area, that
it is facing,'' he said. 

Asked when additional money might be made available, he said: ``I think it
will come when it was appropriate and necessary, which depends on the steps
the Russians take and depends on how developments unfold. The IMF and
international community are watching the situation in Russia very closely.'' 


Money Crisis Moves 'Border on Sharp Practice' 

10 June 1998
[translation for personal use only]
Report by correspondent Stanislav Menshikov: "The Kremlin Rings
for the Fire Service, But the Fire Chief Has His Own Problems"

Rotterdam -- Western media continue to comment on the recent events in
Russia's financial markets. They note that the Central Bank of Russia's
interest rate was reduced from a panic-driven 150 percent per annum to 60
percent by the end of last week. In Western countries it is now 4-5
percent, and even at times of crisis rarely reaches 10 percent. The
Russian economy has been officially declared a "market" economy, but it is
clear how far it still has to go before it reaches the Western norm.
So, what happened last week, then? President Clinton himself acted as
fire chief, stating that he "supports the efforts" of the international
financial institutions to give Russia assistance. However, as IMF chief
Michel Camdessus had stated the day before, that there could be no question
of any extra aid from it, Western bankers were skeptical of Clinton's
words, while the Western media unanimously described his statement as
The Russian financial markets began to feel agitated as a result. It
turned out that the U.S. fire chief had merely added fuel to the flames. 
It was necessary for a "rapid response team" in the shape of such
"heavyweights" as, for example, U.S. Treasury Secretary Robert E. Rubin to
get involved. He appealed to private Western banks for help, stating that
a "threat to U.S. national security" had been created in Russia and that
the fire in Moscow threatened to spread to "the whole of Central Europe"
and even Argentina and Brazil. Rubin clearly acted according to the
principle that "the louder you shout, the better you will be heard." After
this statement many Western press organs sounded the alarm, adding their
own arguments about the "thousands of nuclear warheads" which could end up
in the hands of Russian Communists. Strange as it may seem, this flagrant
disinformation worked.
The American bank Goldman Sachs placed Russian government eurobonds
worth $1.25 (yielding 12 percent per annum) among their investment funds,
insurance companies, and so forth, although the public was not, contrary to
established practice, informed about the loan. However, there were even
more buyers than required. How did this happen? It is very simple: Rubin
had been in charge of the bank, one of the biggest on Wall Street, before
entering the administration. The "telephone law," which we are very
familiar with, had gone into action. As one of our classic authors wrote
many years ago: "Today a banker, tomorrow a minister; today a minister,
tomorrow a banker." And Wall Street stood to attention.
Moreover, a day later the Russian government was able to sell
short-term bonds worth $5.83 billion rubles [R] (that is to say, $945
million), but yielding 50 percent annual interest (that is to say, four
times more than in New York). There had been virtually no buyers a week
before the auction of short-term bonds. But then demand, albeit slack, did
materialize. Whether it was the peremptory bellow of Boris Yeltsin, who
had assembled our magnates in the Kremlin the day before, or the arrival of
"opinion" from across the Atlantic that worked, the Moscow investors forked
out on this occasion.
This was enough to douse the flames of the financial fire. The
Russian stock exchange has leapt up 20 percentage points in the last two
days. But anxiety persists, as the federal budget deficit, the growing
state debt, and the need to pay interest regularly have not disappeared. 
And even though bankers and investors do not, unlike the miners, block the
railroad lines, they are paid their money regularly and on time.
Incidentally, our government has for the first time in its practice
borrowed money against special short- term bonds for just one week. What
does this call to your mind, readers? When someone is desperate, he begs
for money on any terms -- even for just a few days. And everyone knows
there is nothing to pay it back with. The Finance Ministry is counting on
paying it back within a week from collected taxes, State Bank reserves, and
Wall Street handouts. These are operations which border on sharp practice,
but the reformers' government has no choice.
In Paris Kiriyenko acknowledged that almost one-third of Russia's
federal budget in 1998 is going on paying interest on loans from rich
Russians and foreigners. But this is the minimum figure, based on the
assumption that 25-percent annual interest will have to be made. But the
interest rate is now 50 percent, that is to say, it costs twice as much. 
To avoid going bust it will be necessary to /take money from the
population/ [passage within slantlines printed in boldface] -- to delay
wages even more and reduce spending on social needs.
How long will this vicious circle continue turning? Goldman Sachs has
lent Russia money for five years -- to 2003. Washington's plan is clear: 
It is to enable the present government and president to "leap over" the
critical watershed of 2000. Thereafter they do not give a hoot. But our
domestic investors give money only for the short term. They are reluctant
to wait until the presidential election. They are interested in what
happens tomorrow and the day after. In Reuter's estimation, in addition to
interest the government has to clear debts of 100 billion rubles [R] by the
end of August -- more than R40 billion in July alone. This will be
extremely difficult to do. So the Russian fire continues to smolder, only
a little water has been sprinkled on top of it, and it threatens to flare
up with renewed force.
[passage omitted citing Wall Street Journal on Robert Rubin's limited
room for maneuver and "anti-IMF article" by Jeffrey Sachs in New York


Date: Wed, 10 Jun 1998 15:37:31 -0400
From: "Mark Ames " <> 
Subject: eXile 

June 3, 1998
by Matt Taibbi
the eXile

You want to know how bad it is out there? Listen to this quote by Boris
Kravchenko of the Russian Federation of International Trade Unions, which
was one of two major unions (the other being RosUgleProf) which helped
negotiate the end of the railway protests last week. Kravchenko had been
asked if there were any other workers besides miners who participated in
the protests. His answer:

"Well, the first thing you have to remember is that these protests were not
organized by unions," he said. "They were spontaneous actions."

Did he mean that his union didn't take responsibility for the protests?

"No, we take responsibility," he said. "We certainly helped negotiate the
settlement. And the unions gave the protests a more civilized character.
But on the whole, these protests were not organized, coordinated acts.
That's not how they started."

There is every indication that the mass protests which threatened to cause
traffic in the entire country to grind to a standstill two weeks ago
started off as a French-revolution-style, grab-your-pitchfork-and-go random
spasm of raw underclass anger. There was no Star Chamber of union leaders
sending the order from Moscow for a ragtag group of about 200 miners,
teachers, doctors, and scientists to block the rails at tiny Prokopiyevsk
in the middle of the morning on May 20. They just smelled blood and went on
their own. 

Evidence indicates that, contrary to what the news reports are telling you,
Russia is not experiencing "labor problems." It's going through a
full-fledged social meltdown. That's what it's called when tens of
thousands of people, union members and non-union members alike, are willing
to lay down on railroad tracks in the middle of nowhere at the drop of a
hat, without any prompting at all. Or when within a two or three-month
period virtually every region and industrial center in a country with 11
time zones (see diagram below) is struck not only by work stoppages, but by
hostage-takings, property seizures, lock-ins, bombings and other
uncoordinated, spasmodic, and sometimes overtly criminal counterattacks
against employers and local authorities.

One hugely under-reported aspect of the railroad blockages, which were
tabbed "Miners' Strikes" in headlines everywhere, were the extremely large
number of people protesting who were not miners. Jim Catterson of the
International Chemical and Energy Works union, who edits the Pay Us Our
Wages cyber-campaign on the internet, said he was surprised by the lack of
attention paid the teachers, doctors, and other white-collar state workers
who were out there on the tracks with the miners. 

"You just didn't hear anything at all about it," he said.

According to Kravchenko, these people, who are loosely termed "budgetniki"
because they're supposed to be paid out of the state budget, made up as
many as one third of the protesters in some areas.

"In Kuzbass, budgetniki were at least a third of the protesters, if not
more," he said. "And there were budgetniki in almost all the other sites as

Imagine what kind of news reports we'd be reading in the United States if
doctors, teachers, and miners--people who don't even speak to each other
socially in normal situations--were to start lying down on train tracks
together in half a dozen cities across the country. What if assembly
workers from the General Dynamics plant in Quincy, Massachusetts piled into
vans with physical therapists and radiologists from Cambridge and
schoolteachers in Lexington to sit in the woods in some godforsaken hole
like Assonet to block the railroad tracks to Providence? You'd have to be
thousands of feet in the air in the highest of ivory towers not to see that
as the first groundswells of social apocalypse. 

"It certainly goes way, way beyond anything I've ever heard of," said Vito
Turso, a spokesman for the Central Labor Council for New York and a veteran
of American labor disputes. "It would be hard to place that in the context
of an American dispute."

Another striking aspect of the recent railroad blockages were the lack of
attention being paid to them as political actions impugning the legitimacy
of the Yeltsin government. After all, if the kinds of things that are
taking place now had taken place during Soviet times, the entire world
would be ablaze with apocalyptic headlines foretelling the end of
communism. In fact, a lot of the things that have happened lately are
eerily similar to Soviet-era anti-government protests. In March, for
instance, a group of Russian fishermen effectively defected in Lyttleton,
New Zealand, refusing to return home with their ship until they were paid
their back wages. And it is these very same protesting miners, of course,
who helped propel Boris Yeltsin into power through their protests against
the Gorbachev regime.

Back then, the world was willing to listen when Russians wanted to complain
about violations of their human rights. Write a single haiku in the Reagan
years about living next door to a KGB officer who flushed his toilets too
often, and you were an automatic candidate for the Nobel Prize for
Literature. Now, though, at a time when mass violations of human rights are
being committed on a scale not seen since the Stalin years--and even in its
heyday, the Gulag Archipelago didn't use the services of more unpaid
laborers than modern Russia--the complaints of individual Russians don't
seem to be finding much resonance anywhere. 

Not that the protests haven't been newsworthy. On April 9, more than 2
million Russians in 74 out of 89 regions participated in work stoppages. On
that same day, 100,000 workers marched in downtown St. Petersburg, with an
additional 100,000 marching in other parts of the St. Petersburg region.
The railroad blockages managed to hold up more than 600 trains on one line.
Teachers in Khakassia blocked all the highways out of the capital, while
scientists blocked the roads out of Vladivostok. The Polish Solidarity
movement looks like the Berkeley Student Union's 60's protests in
comparison to numbers like these.

Still, for some reason, our level of interest in the non-payment story
seems to be measured in terms of how far we think "they" are from storming
the streets with pitchforks and ousting the government which is acting as
custodian to our Russia-based mutual funds.

Over the last few years, Western audiences have become used to reading
stories about Russians not being paid their wages. In fact, that genre of
news article has become richly diverse, with stories about workers who are
being paid in everything from dildos ("Talk about getting the shaft!" said
Turso) to vodka, or even of teachers in the Koma province who were told by
the government that they could dig up public graves as compensation for
their salary debt. On the other hand, the almost daily ledger of violent
protests over the non-payment crisis has been more or less ignored. It took
a desperate, concerted nationwide effort by tens of thousands to bring
interregional transportation to a standstill, with groups threatening to
block six highways out of Moscow, to break the ice. 

In this atmosphere, Russians are left to conclude that unless people in the
West have a political motive to take them seriously, their problems will
exist only as entertainment for the outside world.

"A general strike warrants a few seconds on TV news, and otherwise you get
a complete blackout," said Catterson. 

People who follow trade and labor issues overseas said that the Russian
non-payment crisis, and the deaf ears the protests surrounding it have
fallen on, should be taken together as a warning to anyone who thinks his
rights are guaranteed in the new global world order. Lori Wallach of Global
Trade Watch, a Ralph Nader organization dedicated to international trade
issues, pointed out that the Russian non-payment crisis does not even
constitute a censurable violation in the laissez-faire ethics of today's
global capitalism.

"What is happening in Russia is totally legal according to GATT," she said.
"The only thing that would be illegal is if another country blocked the
import of Russian coal because Russian miners were mistreated. That
country, if it were a GATT member, would have to allow the import of
Russian coal no matter how many years Russian workers went unpaid."

So an entire country can stop paying its workers and still be

"Easily," she said. "Again, there are no laws in GATT which act on behalf
of individual rights. There are only laws which restrict a country's
ability to pass protective legislation. So you can have whole industries
supported by child labor and still be GATT compliant, but if you forbid the
import of a product because it's produced by child labor, you violate GATT.

"What's happening in Russia, in which workers are absolutely isolated from
any domestic or international protection, and are left to fight for
themselves at the risk of unemployment, this is totally in line with the
vision of international trade in GATT."

Workers in Russia can't even trust their unions, as evidenced by the fact
that their most explosive protest to date was undertaken without their
direction. Trade unions in Russia are the country's largest property
owners, so they don't have all that much incentive to challenge the status
quo. That might be why their rhetoric tends to be a lot more conciliatory

than the actions of their charges would seem to dictate. 

"No new protests are being planned," said Kravchenko, when asked when the
miners might go nuts again.

But since the government has agreed to eliminate debt according to
schedule, won't there come a point at which workers might protest again if
they're still not paid?

"Well, sure," he said. "But we're not the ones setting that timetable."

Who is setting that timetable? The workers themselves, of course--a
formally unrelated coalition of laborers, teachers, doctors, and
scientists, who'll act again basically when they get fed up again. They
could be sharpening the guillotine as we speak. Who knows? Not the unions.
Not anybody. Get ready for anything.


The Guardian (UK)
June 12, 1998 
[for personal use only]
Voice of freedom silenced by Russia's local tyrants 
James Meek on Larissa Yudina, a fearless newspaper editor who became the 
latest victim of the regional rulers whom the Kremlin is too frightened 
to challenge 

Last autumn Larissa Yudina, a liberal newspaper editor fighting a 
lonely, exhausting battle against an entrenched local tyranny in 
Russia's deep south, told the Guardian her simple wish: one country, one 
constitution. "I only ask," she said, "that all Russian laws, good or 
bad, operate throughout the whole country." 

This week the 53-year-old journalist, who never allowed her anger to 
degenerate into bitterness or fanaticism, was found murdered in a pond 
on the outskirts of the steppe city of Elista, with multiple knife 
wounds to her body and a fractured skull.

Sergei Vaskin, one of three suspects so far detained, had once worked 
for her chief opponent, Kirsan Ilyumzhinov, the eternally smiling young 
president of the Kalmykia region. Yudina had regularly accused him of 

Russia's tiny rag-tag army of liberal activists, which is vastly 
outnumbered by conservatives and nationalists, is presenting the murder 
as the clearest sign yet of the painful struggle for civil rights in the 

Yudina was the editor of the only opposition newspaper in Kalmykia, a 
poor region on the north-west shores of the Caspian Sea ruled as a 
personal fief by Mr Ilyumzhinov, who owns six Rolls Royces.

In 1995 Mr Ilyumzhinov was the only candidate in elections for a 
seven-year term, violating the Russian constitution on two counts. 
President Boris Yeltsin has not dared move against him.

After the disaster of Chechenia, when tens of thousands of civilians and 
soldiers died in a failed attempt forcibly to prevent a Russian region 
seceding, the unspoken compact between the Kremlin and the remaining 88 
federal territories has been that local rulers can do as they like, on 
two conditions - that they gather in votes for Mr Yeltsin and do not 
demand outright independence.

Throughout Russia, small numbers of liberal campaigners like Yudina have 
tried to bring the issue into the open, with little support from the 
government or the Moscow media. This week she paid the price.

In 1994, thugs employed by the local state bank marched into her offices 
in Elista, threw the staff out, and marched off with the computer 
equipment, as police looked on. The head of the local printing press was 
intimidated into refusing to publish the paper and Yudina had to move 
operations to cities hundreds of miles from Kalmykia.

Despite intimidation by police she continued to deliver and distribute 
the paper once a week by car.

The courts have ruled repeatedly that Mr Ilyumzhinov's actions against 
her paper were illegal, but their rulings have been ignored.

Kalmykia is not unusual among the "uncontrolled" regions. In Tatarstan, 
ethnic Russians are openly discriminated against by the Tartar ruling 
elite. In Bashkortostan, opposition media are ruthlessly stamped on and 
the regional president, Murtaza Rakhimov, has broken the law to ensure 
his re-election on Sunday. In Dagestan, a Russian MP has his own private 

All these regions contain a variety of ethnic minorities, legacies of 
Stalin's policy of divide and rule.

Mr Yeltsin may escape the consequences of inaction now but his heirs 
will have to face up to the dangerous tension building between Russian 
individuals and their local rulers. "As long as there isn't a single 
legal system in Russia," warned Yudina before her murder, "it will be 
difficult to maintain it as a state."


Duma Moves to Bar Yeltsin from Next Poll 
11 June 1998

MOSCOW -- (Reuters) Russia's opposition-dominated Duma launched an 
attempt on Thursday to rule out any lingering chance of Boris Yeltsin 
running again for the presidency. 

The Duma voted by 309 votes for and just one abstention to approve the 
first reading of a bill which would ban a second-term president from 
even registering as a candidate for a presidential election. 

The Duma, which goes into summer recess in mid-July, is not likely to 
hold the second and third readings of the bill until later in the year. 

The draft also has to be considered by the Federation Council and signed 
into law by Yeltsin himself. 

Under the constitution, no person can serve more than two four-year 
presidential terms anyway. 

But the Yabloko party, a liberal opponent of Yeltsin in the Duma and the 
initiator of the bill, believes the law has a loophole, which Yeltsin 
can use to throw the country into legal confusion. 

"The constitution bans serving more than two terms as president, but it 
does not ban running for a third term," Yabloko's Alexei Zakharov told 
the chamber. 

"He (Yeltsin) might win but could not then become president and this 
would violate voters' rights." 

But there would be no obvious gain to Yeltsin in taking this course. He 
would not, for instance, be empowered to nominate a replacement after 
his election to serve the term in his place. 

Yeltsin, who is 67 and serving a second term, has sent conflicting 
signals about his plans for the 2000 presidential election. 

His camp argues that Yeltsin's first term between 1991 and 1996 did not 
count because it was served under a Soviet-era constitution replaced in 

The Constitutional Court is due to consider the controversy later this 

Yabloko leader Grigory Yavlinsky, Communist Party leader Gennady 
Zyuganov, ex-paratroop general and Siberian Governor Aleksander Lebed, 
Moscow Mayor Yury Luzhkov and former prime minister Victor Chernomyrdin 
are all seen as potentially strong presidential candidates. 

Yeltsin's participation in the next poll could strongly reduce their 


Russia may be mulling atomic arms in Baltic -daily

MOSCOW, June 11 (Reuters) - A prominent Russian newspaper reported on Thursday
that Moscow might be compelled to base tactical nuclear weapons in its
Kaliningrad enclave if Baltic states ever joined NATO. 

Kaliningrad, a heavily militarised area, sits on the Baltic Sea between Poland
and Lithuania and is separated from the rest of the Russian Federation. 

The newspaper Russky Telegraf said Colonel-General Leonid Ivashov, the Defence
Ministry's international relations chief, had recently made clear Russia's
reaction would be ``extremely tough'' if the three Baltic states of Lithuania,
Latvia and Estonia joined the North Atlantic Treaty Organisation. 

Russia gritted its teeth when NATO agreed last year to open the door in due
course to Poland, Hungary and the Czech Republic -- all former Warsaw Pact
allies of the old Soviet Union. Washington has said no eligible country will
be excluded. 

But Moscow has drawn the line at the Baltic states, part of the Soviet Union
from the end of World War Two until it fell apart in 1991, being allowed in. 

Russky Telegraf said Defence Ministry officials were concerned that
Kaliningrad could be cordoned off, making it impossible to reinforce the
enclave with nuclear weapons during a time of crisis. 

``Russky Telegraf's sources believe all this could prompt Moscow to take a
decision on the necessity of permanently stationing tactical nuclear weaponry
in the Kaliningrad enclave,'' the newspaper said. 

Captain Anatoly Lobsky, spokesman for the Baltic Fleet, said by telephone from
Kaliningrad that Russia was deploying conventional S300 anti-aircraft missile
systems that were mobile and would help to compensate for troop cuts in the

``This weapon is purely defensive and aimed at air intruder targets,'' he
said. ``There are no nuclear weapons here.'' 


Date: Thu, 11 Jun 1998 11:31:31 -0400 (EDT)
From: Bruce Rockwood <>
Subject: "War Against the People"

The Wall Street Journal, June 9, 1998, page A16, col. 5, has a review
called "War Against the People" by Christian Caryl, described as Moscow
Bureau Chief for U.S. News & World Report, of "Chechnya: Calamity in the
Caucasus" by Carlotta Gall and Thomas de Wall (NYU Press, 416 pages,
$26.95) and "Chechnya: Tombstone of Russian Power" by Anatol Lieven (Yale
University Press, 436 pages, $35). Caryl calls the war in Chechnya "in
1994-96 ... a turning point in the history of moden nations---but few
people outside Russia seem to have notied. Reporting on the Balkan War
fied public indignation throughout the world, ultimately driving NATO to
intervention. By contrast, Boris Yeltsin's assault on his rebellious
province in the Caucusus raised hardly a whimper from the West. The favors
kept flowing to Moscow, despite the deaths of tens of thousands of Russian
citizens at the hands of their own government." The Gall-Wall book is
quoted as saying the west's approach was seen as "infuriated the Russian
opponents of war, who were also among the most pro-Western political camp
in Moscow. The rug had been pulled from beneath their feet." The review
considers the Gall-Wall book as an "excellent ground level account" while
the Lieven book gives a broader context to understanding the significance
of the war, although he thinks Lieven underestimates the power of the
neo-imperialist, authoritarian tradition in Yeltsin's Russia, by focusing
on the reluctance of ordinary Russians and the Oligarchs in Russia to
stomach nationalist wars.


Date: Thu, 11 Jun 1998 10:55:55 -0700
From: Timothy Thompson <>
Subject: American Business in Russia

It's interesting to read the very negative opinions of Russians written
by Americans.
Every time I am in Moscow I observe Americans sitting down for a drink
with other Americans to complain at length about Russians. The Russians
are lazy, lying, cheating, thieving, two-faced bums. This process
usually continues until the Americans adjourn for the evening to watch
some satellite rebroadcast of American professional sports.
Meanwhile, I see German businessmen sitting down with Russian
businessmen for (more than one) drink, to complain about the terrible
state of Russian affairs, and conclude yet another lucrative business
contract. The party breaks up well after midnight, with the German
businessman heading back in his Mercedes to his bed with a Russian call
girl in tow. Presumably, after a good Vodka-&-Viagra-assisted tussle
with his Natasha, the German sleeps soundly on a mattress freshly
stuffed with $100 bills. 
What is it the Germans know that we don't? Why are the Europeans,
especially the Germans, taking Russia seriously when we Americans are
not? Why are the Germans making money in Russia while we Americans are
pouring more money down Russian rat holes? 
We will, no doubt, hear more about how America is getting worked over
by the Russians. It's true -- it's all true. But -- since when are
Americans (and the American government) this timid tribe of innocents
abroad who require coddling in their dealings with career criminals
(sorry, Russian officials and businessmen). I thought Americans were
really tough. I thought we were the turnaround artists, the
Marshall-plan guys, the movers and shakers who got off the long airplane
flight to foreign lands and made "it" happen. 
It's a question for all your readers:
Why doesn't America take the opportunities in Russia seriously?


Expert Views Russian-Chinese Relations 

9 June 1998
[translation for personal use only]
Interview with Mikhail Titarenko, director of the Institute of
the Far East and China, by Yuriy Glukhov: "'Reforms Should Be Such
That Everyone Benefits From Them'"

[passage omitted analyzing Chinese reforms, economic experience].
[Glukhov] How does Russia fit into China's plans and what are the
prospects for Russian-Chinese cooperation?
[Titarenko] Naturally, Russia is of great interest to China both as a
partner with an enormous scientific and technical potential and as a source
of energy resources. The PRC is interested in setting up long-term
cooperation which would not be regulated spontaneously, at the level of
"shuttle traders," but would develop on a firm long- term basis under the
control of the central and regional administration. This regulation should
be in the interests of the state itself as a whole and not in the interests
of the pockets of some officials or other.
Unfortunately, there is a colossal discrepancy between the high level
of political trust and political cooperation between our countries and the
miserly volumes of economic and cultural cooperation. Russia's share in
China's foreign trade volume is less than 1 percent. China's share in our
trade is 2-3 percent. The volume of our trade and economic cooperation is
10 times less than China's trade with Japan and 8.5 times less than its
trade with the United States. Thus, the volume of Russian-Chinese trade
has declined and is now less than $6 billion while China's trade with Japan
has reached $60 billion. It is clear that without creating a firm economic
base our relations will be subject to various fluctuations. Yet there are
prospects and they only have to be realized. And the main thing is not to
turn China into an enemy but to see in it a partner and friend.
It should be said that the West is not very interested in Russia and
China building their relations on the basis of the principles of
constructive, friendly, good-neighborly partnership and collaboration. 
Certain circles are constantly casting us various pieces of misinformation.
They are constantly whispering to us: "The Chinese cannot be trusted." 
Guided by the cold war mentality, these same circles are seeking to make
Russia a tool for curbing China, trying to instill the idea that China is
an unreliable partner, that it is an enemy, that it will again make
territorial demands. Unfortunately, in Russia there are people and mass
media who for some reasons or other far-removed from reality but according
with the political tastes and self-seeking considerations of a particular
group, are seizing on and disseminating these ideas.
Yet China is our great neighbor. The history of Russian-Chinese
relations goes back about four centuries. All kinds of things have
happened in that long history. But the dominating trend has always been
toward the development of cooperation and good-neighborliness. After all,
Russia and China have been able to avoid serious conflicts and wars between
our countries. And if we are speaking of the present, these relations have
taken shape as relations of strategic partnership and collaboration
directed toward the 21st century. Both sides have made substantial efforts
to build cooperation on a trusting basis, on the basis of consideration for
each other's interests. Russia and China have pledged not to use weapons
of mass destruction and nuclear weapons against each other in any
situations. The two states have assumed commitments to reduce their armed
forces along the border and to ensure the transparency of borders for 100
km on either side.
[Glukhov] I want to remind you, however, that some people see the
border settlement with the PRC as the surrender of Russian positions. What
is your opinion?
[Titarenko] Indeed, when the border demarcation question arose, the
situation in the Far East and Maritime Kray was quite complex. In my view
the local authorities were trying to use the situation to earn political
capital, with no concern for state interests. I shall note that the
Chinese side adopted a very responsible approach the circumstances which
took shape. The Chinese side itself suggested the following scenario: If
some sectors switch to China in the course of demarcation and the Russian
population is interested in continuing economic activity there, it will
have no objection for its part. Russia did the same.
And here is the result. The problem of the border -- a very serious
problem which for many years poisoned the atmosphere of Russian-Chinese and
former Soviet-Chinese relations -- has now been 99.9 percent resolved. All
that is left is a sector totaling 55 km in length where the sides have
pledged to seek paths to a solution considering mutual interests and
preserving good-neighborliness and cooperation.
[Glukhov] How broad is the political base of collaboration between
Moscow and Beijing?
[Titarenko] The positions of Russia and China on many fundamental
issues of peace and security are very close, coincide, or are parallel. 
Both countries oppose a unipolar world and favor the formation of a
structure of relations based on equal rights between different economic and
political centers. The policy of hegemony and double standards should be
eradicated from the practice of international relations. That does not
mean that Russia and China are concluding some kind of alliance against a
third side. Friendship against someone is the legacy and mentality of the
cold war, although that tendency persists in the West as before. It is a
dangerous tendency. Unless an end is put to the inertia of the cold war
the other side could adopt positions based on the same logic. If Russia and
China are now prepared to make friends and cooperate with all countries,
then NATO's policy of advancing to the East, for instance, and the use of
methods of economic and political pressure on Russia and China could force
those countries to come to some retaliatory parallel actions for the joint
defense of their interests and national dignity against feeble attempts at
unilateral hegemonist action.


Russia Today press summaries

Nezavisimaya Gazeta
11 June 1998
In Eight Years of State Freedom, Everyone Who Wanted to Became 
The daily wrote about degrees of "independence" in connection with the 
upcoming holiday on June 12. 

Is said that Yury Yurkov, the head of the state statistics committee who 
was arrested this week on suspicion of manipulating data, has become a 
symbol of Russian "independence." Just days before the main holiday of 
the country, Friday's celebration of Independence Day, it became known 
that one federal department was living its own independent life. 

Eight years ago Russia became "independent," and this was secured on 
June 12, 1990, in the name of an official holiday. The daily said the 
absurdity of the holiday's name was obvious from the start: who did 
Russia gain independence from? "Tyrant" Mikhail Gorbachev? But the 
holiday's name remained for eight years. Only on June 10 of this year 
did President Boris Yeltsin suggest it should be called Russia Day. 

The daily said the old name was a bad example for autonomous regions and 
even some cities. It noted that Russia is facing a dangerous process of 
its territories becoming economically independent. Regions are issuing 
their own bonds when they cannot get the money from the budget or from 
international investors, and already some regions have not been able to 
pay and nearly declared themselves bankrupt. The daily noted 
sarcastically that they are becoming independent not only from Moscow 
but also from their investors. 

If a factory goes bankrupt, it can be sold. But what to do with a 
region? They will have to face their independence, the daily concluded.

Komsomolskaya Pravda
11 June 1998
Lead story
DiCaprio Fell in Love with a Russian Model 
The famous young American actor Leonardo DiCaprio ("Titanic," "The Iron 
Mask") has fallen in love with an 18-year-old Russian top model Alisa 

DiCaprio's female fans around the world are in despair. Is it true that 
the Russian "Alice in Wonderland" has won DiCaprio's heart? 

In an interview with Komsomolka, her mother Svetlana said she does not 
believe it. She said that it is not serious, because otherwise Alisa 
would have told her. Svetlana said the two met at a New York club, but 
that before that Alisa had been impressed by DiCaprio's performance in 
the "Titanic." Asked about possible marriage, Svetlana said it may be 
too early for Alisa to get married. 


State Statistics Committee Calculations 'Accurate' 

Moscow, June 10 (Interfax) -- The calculations on Russia's main
macroeconomic indicators done by the State Statistics Committee are
objective and accurate and do not need to be revised or corrected despite
the arrest of the committee's chairman, Yuriy Yurkov, committee Deputy
Chairman Vladimir Sokolin told a Wednesday [10 June] news conference.
The methods for calculations on the country's key macroeconomic
indicators had been developed over the course of several years by leading
national experts with the help of foreign specialists, he said.
The methods have stood the test of time and have been approved by
experts in the European Bank for Reconstruction and Development, the
International Monetary Fund and other major international organizations,
Sokolin said.


Soros Says No More Loans to Russia
11 Jun 1998

STOCKHOLM, Sweden (AP) - American financier George Soros said Thursday he has
no plans to make any more loans to Russia to help it ride out its economic

``I'm not planning any more loans ... I don't want to make a habit of it,'' he
told a news conference after giving a speech to the Stockholm International
Peace Research Institute.

Soros disclosed earlier this year that he guaranteed a loan to the Russian
government of several hundred million dollars in June 1997 to help it pay
overdue pensions.

In December, the Russian government approached Soros for a second loan, but he
turned down the request.


Duma Says Over 2,500 Soldiers Died in Russia in 28 Months 

Moscow, June 10 (ITAR-TASS)--The State Duma on Wednesday expressed
concern about the hard social conditions of Russian troops, owing to which
over 2,500 deaths in the Armed Forces have occurred over the past 28
"The number of killed servicemen is gradually increasing in the Army
and the Navy," the house said in a resolution. A total of 1,037 people
died there in 1996, 1,057 in 1997, and 477 from January to April, 1998.
The increasing statistics suicide was a special cause for concern to
the Duma. A total of 132 people committed suicide in the Army and the Navy
from January to April, 1998.
This phenomenon is explained by the fact that Russian servicemen's
financial situation is very poor and that they are not protected by the
law, the statement said.
"Months-long wage delays, the impossibility to provide the members of
officers' families with jobs, and constant housing difficulties--all these
problems increase moral and psychological strain significantly and are a
powerful push to commit suicide," the resolution stressed.
"The actions of officials that have caused this situation in the Army
and the Navy border upon crime entailing responsibility in compliance with
the penal Code of the Russian Federation," it said.
Due to the scarce funding of the Armed Forces, "the Army and the Navy
have virtually ceased to do combat training, and the amount of damaged
equipment is increasing, which poses a certain threat to national
security," according to it.
The Duma called on President Boris Yeltsin to ponder over stopping the
reduction of the Armed Forces until they received all the funding they
needed and the federal budget cleared its debt to the Defence Ministry.
Besides, the MPs proposed that Prosecutor General Yuriy Skuratov have
all the cases of suicide investigated into in order to give a clear-cut
legal assessment of the actions of officials.
The Duma also instructed the Accounting Chamber to probe into the
legality of the implementation of the 1997 budget where the provision of
finances for the Defence Ministry is concerned.


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