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19 June 1998
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[Note from David Johnson;
1. Reuters: Yeltsin says Russia ``hanging on.''
2. Christian Caryl: Request for information on the looting of Russia's
3. Fred Weir on labor protests.
4. John Danzer: How Lebed "SHAPES" Up.
5. Toronto Sun: Matthew Fisher on men and women in Russia. (Featuring
6. RFE/RL: Floriana Fossato .Chubais Regarded As Possible Panacea --
7. Trud: Vitaly Golovachev, HUMILIATION. (Latest public opionion poll on
8. Mayak Radio Network: Zhirinovskiy Warns of Impending Coup.
9. AP: Maura Reynolds, Gardening Key to Survival in Russia.
10. Business Week: Patricia Kranz, WILL THE RUBLE BRING DOWN THE
11. Itar-Tass: Duma Defense Committee To Draft Recommendations on
Yeltsin says Russia ``hanging on''
By Philippa Fletcher
KOSTROMA, Russia, June 19 (Reuters) - President Boris Yeltsin said on Friday
Russia's battered economy was ``hanging on'' and repeated his view Moscow
needed moral support rather than hard cash.
``Now there is a world financial crisis even strong countries like Japan are
suffering,'' Yeltsin told reporters after flying to Kostroma, a provincial
Russian town 320 km (200 miles) northeast of Moscow. ``We are hanging on for
On his first regional trip this year, Yeltsin plans to visit a monastery,
collective farm and a factory. He said he chose Kostroma, an ancient town on
the Volga River, at random by dangling a pencil over a map.
Yeltsin said he had already told leaders such as U.S. President Bill Clinton
and German Chancellor Helmut Kohl their backing was more important than
``I did not beg,'' he said. ``We don't need money, we need support. They
believe we will hang on and not weaken. Their announcements on that score are
decisive for all the investors and banks in the world.''
Yeltsin has said before that Russia does not need money from the West, a
sweeping statement usually taken to mean a rejection of a humiliating rescue
package rather than of International Monetary Fund or capital markets
His latest comments came just a day after government ministers said Russia
needed at least $10 billion from the IMF to help stabilise its turbulent
``The rouble is steady but at the limit. We in fact don't have enough money
for payments. This is where the delays come from,'' Yeltsin said, referring to
wage arrears that have prompted big protests by scientists, miners and other
workers across Russia. ``But it is a temporary thing.''
He said he would discuss a programme to tackle the crisis at a meeting with
the government and parliament on June 23.
``I will make a speech. Then we will confirm the programme,'' he said.
Yeltsin said an IMF mission arriving next week would be told by Russian
officials what steps the country was taking to overcome the financial crisis.
The IMF on Thursday decided to put off a decision on whether to disburse a
$670 million tranche of an existing loan, saying Moscow had not fulfilled all
its promises on reforms.
Russian Finance Minister Mikhail Zadornov told Reuters in Moscow on Friday he
was confident that three unspecified sticking points would be removed in talks
with the mission. The IMF has said it could also offer Russia extra help, but
with tough strings attached.
Kostroma is one of many Russian towns suffering from the effects of the
wrenching political and economic changes which have followed communism's fall.
Boris Korobov, mayor of the town of 300,000 people, cited a web of debts among
enterprises and state organisations, delays in paying wages and the city's
inability to meet energy bills which had meant cuts in electricity and hot
``We hope that all these issues, which are typical for the majority of Russian
towns, will be among the main themes which come up in the conversations with
the head of state,'' Itar-Tass news agency quoted him as saying.
The Kremlin leader, trying to restore investor confidence in Russia's shaky
economy, is seeking to rally the regions behind an austerity drive with a
series of trips to the provinces, of which Kostroma is first on the list.
Date: Fri, 19 Jun 1998 07:19:42 -0400
From: Christian Caryl <email@example.com>
I was wondering if any fellow List readers might have access to information
concerning the looting of Russia's natural resources (by which I mean, more
specifically, ostensibly state-owned resources that have been sold off,
embezzled or plundered - whatever you want to call it - for private gain).
It is obviously very hard to receive reliable figures on this. Any
information about methodological debates on this issue would be
My e-mail is firstname.lastname@example.org.
U.S. News and World Report
From: email@example.com (Fred Weir)
Date: Thu, 18 Jun 1998 20:32:37 (MSK)
For the Hindustan Times
From: Fred Weir in Moscow
MOSCOW (HT) -- Drumming their helmets on the pavement and
shouting for President Boris Yeltsin to resign, hundreds of angry
coal miners laid siege to Russia's government house this week in
what could be the beginning of a long, hot summer of labour
``I personally am sick and tired of waiting for something
to change. I'm ready to start making things change,'' says Ivan
Karmazin, a burly, 47-year old miner from Vorkuta, an arctic coal
centre 2,000-km north of Moscow.
Mr. Karmazin says he and his 200 comrades from the
Vorkuta mines will keep their vigil outside Russia's White House
until the government falls.
``I haven't been paid in almost a year, and as far as I'm
concerned they may never pay me again. I'm not here to beg for
money, I'm here to get rid of Yeltsin,'' he says.
Though it has received scant notice so far, Russia's
chronically unpaid and desperate workers are on the move. Wildcat
strikes and protests have exploded across the country in recent
weeks, some of them using radical tactics not seen since the
Russian Revolution 80 years ago.
At the heart of the crisis is the cash-strapped Moscow
government's chronic inability to pay public sector wages,
pensions and outstanding debts to state suppliers.
Financial panic, sweeping in from Asia, has brought stock
market crash, crippling interest rates and draconian cuts in
``The government has just stopped paying its bills to the
military, pensioners, public service employees and workers in
state industry,'' says Vladimir Spiransky, an analyst at the
Russian Academy of Science's Centre for Labour Studies.
``At the same time the government is squeezing struggling
industries to pay more taxes, slashing social supports and even
threatening to cut off electricity to towns that don't pay their
taxes. People who were just barely surviving before are now
driven to desperation,'' he says.
Last month coal miners in four key regions blockaded
railroads for ten days, bringing much of Russia's internal trade
to a halt. This week Vorkuta miners resumed their shutdown of one
of the country's main northern rail lines, vowing not to stop
until all their demands are met.
Teachers, doctors, defence industry workers, air traffic
controllers and even scientist have struck over unpaid wages and
collapsing working conditions this year, sometimes adopting
extreme forms of civil disobedience.
``Hunger strikes, hostage-taking, occupation of
government buildings and blockades are very new tactics for
Russian workers, but they are fast becoming the main means of
protest,'' says Mr. Spiransky.
The new militancy of Russia's 700,000 coal miners is
particularly ominous, as it was the miners who played a key role
in bringing down former Soviet leader Mikhail Gorbachev with
massive coal strikes nearly a decade ago.
Until recently the Yeltsin government has been careful
not to antagonize the miners, and has routinely headed off
protests by coughing up wage arrears.
But miners say they haven't seen a single paycheck so far
in 1998, and they are no longer willing to be fobbed off with
``We put Yeltsin in his job and now we will remove him,''
says Alexander Sergeyev, head of the Independent Miner's Union.
``This government has betrayed us times beyond counting and we
won't back down now until it's gone.''
Andrei Isayev, spokesman for the 50-million member
Russian Federation of Independent Trade Unions, says worker
discontent is close to the boiling point in several of Russia's
``Conditions are deteriorating beyond the limits of the
tolerable for workers in many parts of the country. We are
dramatically close to social breakdown in some of these places,''
``Serious labour upheavals in the coming months are
inevitable. Mass revolt is a distinct possibility.''
From: Telos4@aol.com (John Danzer)
Date: Thu, 18 Jun 1998
Subject: How Lebed "SHAPES" Up
I am not a fan of Lebed but it appears he is the man for the job.
For the last 25 years I have been developing a system of
classifying personality based on W.H. Sheldon's somatotyping (body-
typing). Sheldon came up with three dimensions for classifying the
human physique namely; endomorphy (gut dominant-fat), mesomorphy
(muscular-broad), and ectomorphy (nervous dominant-skinny). I have
added a fourth type that takes into account the effect the degree
of balance has on a person's temperament.
So this is how Lebed shapes up. Lebed is a balanced ectomorphic
mesomorph. Lebed's body systems rank as follows: 1. Muscular 2.
Sensory 3. Nervous 4. Visceral . We can contrast Yeltsin with
Lebed. I mentioned in a previous post that Yeltsin is Muscular-
Visceral. Muscular dominance makes a person want CONTROL. Having
the "gut" as his second system means Yeltsin wants CONTROL to
simply "happen". The "gut" is very passive.
Lebed on the other hand is Muscular-Sensory. The dominant system
describes what a person wants and the secondary system describes
how a person gets what they want. This means that Lebed "searches"
for control. The main activity of the sensory system is to scan
ones environment. A person who "searches for control" is
continuously scanning the environment looking for the opportunity
to extend control. He is an opportunistic controller. He will do
what the situation requires to be brought under control. In other
words he does what needs to be done. This means Lebed is an
"effective doer" in contrast to Yeltsin who is an "ineffective
Lebed will do the obvious things demanded by a situation with the
confidence that anyone who may question him later will acknowledge
that he did what HAD to be done. Chechnya is a good example.
Ending hostilities with the final solution being put off to the
future was what the situation demanded. Some nationalists hate
Lebed for this but they couldn't come up with a more effective
Lebed's strategy of joining Yeltsin's circle was to position
himself to take over when an ailing Yeltsin would prove to be too
sick to rule. His effort to stay in the public's eyes was futile
because the situation changed. Yeltsin got better.
Lebed saw the next obvious weakness(opportunity) in Russia. Power
is leaving the center and the Provinces are becoming more powerful.
As Governor of Krasnoyarsk he is in an excellent position to
solidify control over the Russia that will emerge when the center
collapses. I don't see him coming to power through some
predictable elective process in the year 2000. Lebed has hinted he
will step in at some critical point when the situation demands.
It is worth mentioning Lebed's favorite type of expression - the
aphorism. Aphorisms are a way of summing up an obvious situation
that dumbfounds the intellectual snobs who can't see beyond their
mental constructs. Effective action doesn't require a laptop
computer. A simple recipe is sufficient.
The troubling aspect of Lebed's temperament is that his last, and therefore
rejected system is the "visceral" system. The "gut" is dependent and
People with "gut" want to be liked and are willing to go with the
flow. Although Yeltsin wants control he wants to be liked.
Yeltsin is patient. Too patient. In contrast to Yeltsin Lebed
fears attachment and dependence. Lebed has colleagues but few
friends. Friends require accommodation and surrender of control.
Lebed will have no problem sacrificing people for what he considers
Is Lebed what Russia needs? Kiriyenko has plans. Chubais, the
master planner/programmer is again on the scene. Plans are great
when you have a stable system and plenty of time. Emergencies,
however, require effective action. Lebed is an effective doer.
It looks like a match. At the same time there is a downside. How
do you get rid of the Sheriff after he cleans up the town. Lebed's
campaign is for "Truth and Order". It will turn out to be
"Expedience and Control".
Anyone interested in this theory of personality can E-Mail me at
Somagraph@aol.com I will give you a web-site where I've posted
a full explanation.
Date: Thu, 18 Jun 1998 15:37:47 -0400
From: Mathew Fisher <R_MatthewFisher@compuserve.com>
Subject: June 15 - Toronto Sun, Matthew Fisher
Moscow - Russian women are an endlessly fascinating subject of discussion
whenever ex-patriots gather.
And not just for the obvious reason that so many women here are
drop dead gorgeous and not the burly, potato farming peasants of popular
One of the most frank people I've heard on Russian women is Michele
Berdy. A good-natured American humourist and feminist who has lived in
Moscow for most of the past 20 years.
"No question, Russian women do more for their husbands and lovers
than Canadian or American women ever would. They spoil them," Berdy said
over a long breakfast the other day.
"They take care of all the housekeeping, laundry, food
preparation and childcare, often while having a full-time job. On top of
this, they keep themselves in the European way. That is, they're
Berdy is a media consultant. Her job is to explain to Russian women
family planning and the dangers of sexually transmitted diseases such as
chlamydia and syphillis, which are at epidemic levels in Moscow and
Because of her unusually long exposure to Soviet and post-Soviet
Russia, Berdy is almost one of a kind among foreigners when it comes to
discussing how Russian women and men get along or the thigh-slapping
sexual myths which still persist here such as the widespread belief that
women need sperm inside them for hormonal reasons and that sexual positions
can determine the sex of a child.
Reproductive health is terra incognita for many Russian women and
almost every Russian man. Surveys show that between 90 and 95 per cent of
Russians approve of family planning and a women's right to have an
abortion. But that doesn't mean they understand either.
Far too often the primary means of contraception here is abortion.
Only Romania ranks higher than Russia for abortions per capita. As in
Romania it can be a dangerous process, too. Some 40 per cent of abortions
here result in complications. And inferitility is five times higher than
international norms. This is caused largely by abortions that go wrong and
untreated sexual diseases.
That abortion is of such importance as a means of birth control is
hardly surprising. Soviet authorities kept such a tight lid on information
on sex that even today there are women who believe sperm can be killed by
douching their vaginas with lemon juice and that walking with heavy weights
Thanks to such prudery and Soviet industrial priorities, Russia
still doesn't produce birth control pills. Almost no one has confidence in
Russian condoms, which tend to leak if they don't actually explode into
pieces of shrivelled rubber. As for domestically made diaphragms come in
only two sizes and are nearly impossible to find.
"Pregnancy is absolutely a women's problem," Berdy said. "Men have
no involvement, nor are they usually part of choosing or using
contraceptives. There is, for example, a feeling that condoms are somehow
unfair to a man because it means the woman doesn't love him."
Such ideas and the way women seem to serve men gives Russia a
reputation as an ultra-macho society. But like everything here, there is a
lot more to it than that. A partial explanation for the apparent
subservience of women may be that since World War II there has been a
severe shortage of men. So there is immense competition to get a man and
then to hold on to him.
"The idea often is: 'So what if he is a loan shark, throws tea
cups at me when he is angry and goes three times a year into the blackest
depression known to mankind, he's mine,' " Berdy, who is 43 and from
Upstate New York, said. "They genuinely feel sorry for men who are weak and
infantile and require help. They take pleasure from being mothers, fathers,
lovers and helpers. "What we can learn from them is their
capacity for forgiveness. They can love men unconditionally."
But there can be bad in this, too. For all Russian women's
kindness and concern, Berdy figured men may actually fair worse in
relationships than women.
"The negative side is that women here tend to be condescending
about men, viewing them as irredeemable screwups who need to be taken care
of. If the man isn't pond scum such treatment can be very heavyhanded. If
someone lets you get away with being a creep for a long time, you become a
creep. Instead of developing backbone, someone else develops backbone for
Yet Russian women seem more dependent on men than women in
northern Europe and North America. They still expect men to open doors, to
carry great stacks of packages like sherpas and to buy them expensive
"It can be upsetting to see how women are toasted at Russian
parties as if they are table decorations and that's what they look like,
too, because they tend to be well dressed all the time," Berdy said. "But
on the other hand, the standard here is for women control the purse
strings. In sexist American households husbands make all financial
Men are also allowed a kind of freedom here that seems outdated.
In public, at least, men are always seen to be in charge with their
partners standing half a step behind them. It is also difficult to find men
or women here who think Bill Clinton has done wrong with Monica Lewinsky or
with several busloads of younger women.
" 'What's the problem? That's great,' " Berdy said, paraphrasing
what she has heard. "He's a virile young man and they wish their president
"In Soviet times there was the cliche of the general with the
ballerina. These days it is the politicians and businessmen who have trophy
wives. (Presidential candidate Alexander) Lebed is a classic example. He's
a tough, hockey puck in-the-mouth kind of guy with a friendly, giggly,
"Stress, smoking and alcohol are the reason that a lot of middle
aged Russian men can't perform sexually. Having a baby with a young woman
proves you can still get it up. That means you're a 'mouzhik' - a real
Given these paradoxes, it is an open question whether Russia is a
patriarchal or a matriarchal society. Berdy and several Russian women I
asked said it was definitely a matriarchy. Most Russian men claimed it is a
Whatever the reality, convincing people that they should take
care of their bodies is a new concept. Berdy is playing a modest part,
developing public information campaigns that have resulted in the
distribution of brochures on family planning and reproductive health, as
well as TV spots, calendars, shopping bags and T-shirts bearing the same
"For various historical reasons there are blanks in Russian
knowledge and this is one of them," Berdy said. "Millions of people who
knew nothing about this now have more information.
"I know it sounds melodramatic, but I think that with the help of
doctors we can save lives and can help people lead happier lives."
Russia: Chubais Regarded As Possible Panacea -- Possible Scapegoat
By Floriana Fossato
Moscow, 18 June 1998 (RFE/RL) -- Reaction in Moscow to the appointment of
Anatoly Chubais as a special presidential envoy to international financial
institutions highlight three main points.
First, financial analysts and investors say the government and the
Kremlin have acknowledged the grave crisis that threatens a collapse of
Second, according to some observers, Chubais' appointment indicates the
government, under pressure from influential domestic business leaders and
international investors, is trying to produce both short- and long-term
measures to overcome the crisis. And, that these clearly include emergency
Western loans, as a way to gain time for the implementation of a
yet-to-be-announced, anti-crisis program.
And third, noting Prime Minister Sergei Kiriyenko has said his
government will need "all its courage and political will" to implement the
anti-crisis program (to be announced Tue, Jun 23), because "some of the
program's provisions will be unpopular," most Russian observers agree
Chubais is re-assuming his role as a possible panacea -- or a possible
scapegoat for Russia's financial troubles.
Chubais was appointed to the new post, following Kiriyenko's talks
Tuesday night with powerful Russian businessmen, who had met President
Boris Yeltsin on June 2. The group included almost all of the ten so-called
"oligarchs." Media-Most head Vladimir Gusinsky did not attend as he was
abroad. Reports say CIS Executive Secretary and billionaire businessman
Boris Berezovsky, who was not present at the meeting with Yeltsin, was
invited to the Tuesday meeting but it is not clear whether he attended.
However, Interfax news agency quoted Berezovsky as saying, before the
Chubais announcement, that he, Berezovsky, was "one of the initiators" of
Berezovsky also said that meetings between business leaders and the
government are "the only really constructive way out of the crisis" that
has hit the government, as well as businesses. Such meetings, he said,
indicate a "new consolidation of forces."
According to Berezovsky, who claims to be a Kremlin insider, government
officials and observers "should not play the hypocrite, because the current
authorities do not have real support" in the country" -- apart from the
controversial business leadership. He said Russia's top businessmen should
not be regarded as the "shadow government." But Berezovsky said that
businessmen, initiating meetings with Russian authorities, have the main
goal of "formalizing, finally, the relationship between business and power."
Andrei Piontkovsky, director of the Center for Strategic Studies, notes
in an interview with RFE/RL correspondents that some of the participants at
the meetings had been among Chubais' most resolute foes, following
privatization sales last year that had antagonized the businessmen and the
so-called reformers in government. Piontkovsky said some had previously
"tried to destroy Chubais."
Now, said Piontkovsky, the seriousness and the depth of the financial
crisis appear to have brought, once again, the government and the business
circles together to discuss a way out of the crisis, and, that Chubais
"will likely once again be responsible for the social cost of the
Chubais is expected to become the chief anti-crisis coordinator. But,
the presidential decree said he would not join the Cabinet again. He is
expected to hold a rank equal to a deputy prime minister.
Chubais lost his last government job as first deputy prime minister
March 23 when President Yeltsin sacked Prime Minister Viktor Chernomyrdin
and the entire cabinet. However, Yeltsin is reported to regard Chubais as a
competent administrator able to fulfill difficult tasks. Chubais is
expected to retain his post as Chief Executive of the state energy
monopoly, Unified Energy System.
The appointment also further clarifies Chubais' status. Last month,
Chubais -- no longer a member of government -- traveled to Washington for
talks with U.S. officials and representatives of the International Monetary
Fund and the World Bank. Chubais is regarded by many Western investors as a
'guarantor of reform.' And, responding to a swirl of rumors his Washington
visit set off, Chubais said the officials he had met in Washington were
"simply very good, personal friends."
Chubais is a man most Russians 'love to hate.' He is also anathema to
opposition deputies in the State Duma. They accuse him of corruption and of
selling-off state assets at far below value under pressure from Western
Before Chubais' appointment was officially announced, Duma Chairman
Gennady Seleznev, a prominent Communist, said the nomination "had been
initiated by foreign financial structures," and that the reaction among
Duma deputies would be "naturally negative." Besides Seleznev, Duma members
from almost all parliamentary factions had expressed their negative
reaction to Chubais' likely appointment. First Deputy Duma Chairman and a
member of the pro-government Our Home Is Russia faction, Vladimir Ryzhkov,
said the relationship between the Duma and the government is difficult
enough, and Chubais' appointment would likely make things worse. Ryzhkov,
also on good terms with Prime Minister Kiriyenko, said the Chubais
appointment comes at a moment when the government needs to cooperate with
parliament in order to pass much-needed fiscal legislation.
And a the deputy head of the pro-reform "Yabloko" faction, Sergei
Ivanenko, said Chubais' appointment shows that "the government is not going
to change old habits" of cultivating what he called crony capitalism
In his new role, Chubais will likely be the chief negotiator at talks
with a IMF officials, due to arrive in Moscow Monday.
The IMF representative in Moscow, Martin Gilman said this week that the
Fund is sending a delegation to Russia for an "extensive dialogue" on
possible aid and measures to stabilize the situation on Russian financial
markets. Gilman said Russian officials have not formally requested aid
beyond the current $10 billion Extended Fund Facility that the IMF has been
disbursing to Russia in installments since 1996. However, following
Chubais' appointment, speculation is rising on the possibility that the
IMF, dealing with an official it knows and respects, would be willing to
consider a new loan.
But, here again, some Russian observers are skeptical. Analysts say the
conditions of an eventual loan would probably be strictly connected with
fiscal and other measures that the government, as in the past, would be
unlikely to fulfill on schedule.
This week, Finance Minister Mikhail Zadornov refused to confirm reports
that Russia has secretly borrowed at least $200 million from Western banks
in recent weeks. In June and December 1997 -- when Chubais was still a
strong influence on economic and financial policy -- Russia borrowed
hundreds-of-millions of dollars from American billionaire George Soros and
from foreign banks. News of those short-term loans only emerged months
after the fact.
Andrei Nechaev, president of Russia's Financial Corporation and a former
economics minister, tells RFE/RL that Chubais "may have some chances to
obtain financial help from the West. However, the critical situation cannot
be changed only with Chubais coming as the fire-brigade," says Nechaev.
And, Center for Strategic Studies Director Piontkovsky adds that the
appointment shows that the government, once again, "is very far from having
a real solution to the economic crisis."
From RIA Novosti
June 18, 1998
By Vitaly GOLOVACHEV, Trud political analyst
Polls held by the National Public Opinion Research Centre
(VTsIOM) register a new alarming trend, the people's growing
negative attitude to the president.
Credit of Trust Exhausted?
The respondents were to answer the following question:
"Would you personally support a protest action (demonstration,
strike) demanding the resignation of the president?" In May
last year, only 30% answered "Yes" and "Rather, yes," while
over 50% were against such loud actions. Many respondents did
not approve of Yeltsin's actions as president, but did not
think it right to rock the boat then. A year ago, there were
nearly two times more opponents than supporters of such
Today, moderate sentiments are giving way to radical ones.
The number of those who are prepared to support harsh
anti-presidential demonstrations and strikes grew from 30% to
44%, while the number of opponents of such radical actions
dropped proportionately, to 38%.
The results of another poll show that the main shift in
the public mood took place exactly in May. In May 1997 through
April 1998, the number of those who disapprove of Yeltsin's
actions as president changed only insignificantly, from 72% to
71%. But in May 1998 people's trust for the head of state
plummeted: 80% of the respondents denounced the president's
actions. This is a kind of record in the history of opinion
Why is this happening? Maybe the public became
disappointed in market economy ideas and principles, don't need
freedom (including the freedom of enterprise) and initiative,
and are pining for the past totalitarian regime? Not at all.
Despite the incredible problems facing tens of millions of
Russian citizens and mistakes made by the authorities when
carrying out the reforms, only about a quarter of the
respondents think that the reforms must be stopped. Their
number even fell from 27% to 26% in the past year, which is a
significant sign. The bulk of the people are not against the
reforms, they are against the amateurish, inconsistent and
sometimes destructive manner in which they are carried out.
They are against the weakness of the authorities, embezzlement
everywhere, and the continued onslaught of sweeping poverty.
That is why 45% of the respondents couldn't answer the
question, "Should we carry on the reforms?" Because the
question is, which reforms? Reforms for who? In principle, the
idea is unquestionably good, and the public welcomed the
abundance of commodities, the absence of queues and the
bridling of prices. But if we continue to move not towards a
civilised market, but towards the total robbing of the country
and impoverishment of the people, there will be trouble. That's
why many respondents don't give a definite answer. They want to
believe that we will get to the right road after all, but they
In May 1998, over a half of the respondents assessed their
material situation as bad and very bad, 42% said they can no
longer bear this plight.
In March this year, the average monetary income in Moscow
was 3,000 redenominated roubles, while the average calculated
wage amounted to 1,755 roubles (3,448 roubles in Tyumen
Region). Statistical services say that well-off people make up
10% of Moscow's population. They get an average of 16,000
roubles a month, usually have a dacha, a new or foreign-made
car, and spend their leave abroad. There are quite a few very
rich people in Moscow, with a yearly income of 120,000 dollars
and more. Some studies show that 75% of hard currency cash
(which is billions of dollars) is concentrated in Moscow.
At the same time, about 900,000 Muscovites (10%) live in
humiliating poverty, with an average per capita income below
450 roubles, which deprives them of a healthy diet or an
ability to buy basic clothes. Independent experts have
calculated that the incomes of the 10% of the richest people
exceed the incomes of the 10% of the poorest Muscovites by 48
times (13.3 for the country as a whole). Stratification by
income has accelerated of late, and the contrast is seen
especially well in the capital.
The largest permissible ratio in the world is 10:1, but we
have long exceeded it and entered the zone where, as Western
analysts put it, begins the division of the social structure
into antagonistic groups.
We have also stepped over another critical line. It is
believed in other countries that the share of people living
below the poverty line should not exceed 10%. We have at least
21.6%. The highest permissible level of unemployment is 10%.
The State Committee for Statistics say we have 9.2% jobless
now, or 6.6 million "redundant" people. Another 1 million
people have been sent on unpaid "administrative" leaves. The
number of socially deprived is growing. Seeing no way out of
this situation, many of them commit suicide. A suicide is
registered in this country every 12 minutes, which adds up to
over 47,000 a year. Thirty-two suicides per 100,000 population
is 50% above the critical line estimated by the World Health
Organisation, a line beyond which begins mass frustration.
In a word, the reforms not just sent the living standards
of the people to a catastrophically low level, but created
other unbearable problems. If six years ago we had even
suggested that such problems exist, we would have been
denounced as slanderers or crazy lunatics. Wage arrears amount
to 66.8 billion roubles (or nearly 11 billion dollars), the
nation is dying out (we have 800,000-1,000,000 more deaths than
births every year), and Russia is turning into a criminal
country (we registered 471,000 grave and particularly grave
crimes, 424 people were kidnapped and 40 were taken hostage,
and 13 terrorist acts were staged in January-April this year).
These are the gloomy facts of our life.
In 1989, Russia's GDP amounted to 1,022 billion dollars
(in comparable prices), while last year it was only 465 billion
dollars. The US GDP grew from 5,981 billion dollars in 1989 to
6,785 billion dollars in 1996. In the past, Russia was 5.8
times behind the USA in this sphere, while now it is more than
15 times behind. The average per capita annual income in the
USA is 27,532 dollars, while here it is 2,749 dollars, or ten
times less. Despite the fantastic natural riches, Russia is now
one of the world's poorest countries.
Promises Remain on Paper
What kind of the reforms these are then, if they bring
only suffering to the people and destruction to the economy? We
can understand when the economy plummets temporarily and accept
social hardships at the initial stage of the reforms. But when
the people don't see a single positive change in the social
sphere six years after the beginning of the reforms, they are
bound to question the competence of their leaders.
While other countries pushed ahead, Russia fell back to
the 102nd place in the world in terms of the GDP per capita of
the population. We live mostly on promises (which is not that
much different from Soviet times). The speeches of our
president and his addresses to the Federal Assembly clearly and
unambiguously speak about the unsatisfactory progress of the
reforms and set correct tasks in the sphere of social
protection of the people. Yet we don't see any major positive
changes in this sphere.
It is very sad but we must admit that we have the power
crisis on our hands. This subject is discussed both in Russia
and beyond it. The US legislators believe that the main reasons
of our financial problems are corruption and bad management of
the country and of the efforts to overcome the economic crisis.
We are going to get another anti-crisis programme from the
new government, which will be blessed by the president. But
what will be the result? The authorities must brace up and
carry out truly effective reforms. If the real economy and,
most important, real people are left outside the reforms, as it
happened in the past, no promotion of democratic candidates
will help them to win the future "history-making" elections.
Where will Russia go then?
Zhirinovskiy Warns of Impending Coup
Mayak Radio Network
17 June 1998
[translation for personal use only]
Vladimir Zhirinovskiy, leader of the Liberal Democratic Party of
Russia, told a news conference in Moscow today that in Russia, I quote:
"There are all indications that a coup is possible." He said that at
present a scheme is being worked out to form a confederation led by
[governor of Krasnoyarsk Territory and former Russian Security Council
chief] Aleksandr Lebed. In this connection Zhirinovskiy said that
everything in Russia is on the verge of collapse and certain forces are
holding sessions at nights. They held a session yesterday as well,
Zhirinovskiy said. The LDPR leader claims that a certain new leader is
being prepared, mainly with the function of a dictator and new destroyer
Gardening Key to Survival in Russia
June 18, 1998
By MAURA REYNOLDS
ANZHERO-SUDZHENSK, Russia (AP) - Now that summer has come to this Siberian
coal mining town, Vladimir Barkov takes two showers a day.
The first rinses off the dust from his job in the coal mines. The second
washes off dirt from his yard - which is where he works to actually put food
on the family table.
``If it weren't for my garden, I don't know how we'd survive,'' he says.
Like many state workers, Barkov hasn't been paid in six months and cash is
extremely short. In recent years, millions of Russian workers have been going
months without being paid even though they still show up for work. Pensioners
also go months without receiving their state payments.
But in post-Soviet Russia, the key to survival is not money. It's farming.
``I grow potatoes, cabbage, tomatoes, and other vegetables,'' says the
44-year-old mine electrician, leaning over the fence that pens in his flock of
chickens and three goats. ``Of course we feed ourselves. There's no other
In many countries, it would be impossible to live for months on end without
getting paid. But Russia's economy wasn't built on supply and demand, and most
people still don't pay for many of the basics of life.
Take Barkov, for example. His house, a typical wooden cottage surrounded by
perhaps an acre of land, was given to him years ago by his mine, located a few
hundred yards down the road.
He doesn't have a mortgage, and he doesn't pay rent. His utilities cost about
$2 a month, but the state-run services don't cut you off if you don't pay.
He's still in good health, but most medical care is free if he were to get
Every day he works in his garden, either before or after his shift
underground. Even in the early days of Siberia's weak summer, his broad face
and hands are ruddy from the sun.
The truth of the matter is that many Russians, from coal miners to nuclear
scientists, are also subsistence farmers. Even most city dwellers have plots
of land in the country where they grow their own food.
In Soviet times, such plots produced more than 25 percent of the country's
total food supply and the bulk of its non-grain produce. That percentage has
only climbed in recent years, with 90 percent of potatoes, 75 percent of other
vegetables and 55 percent of all meat and poultry raised on privately
cultivated land, according to the Ministry of Agriculture.
Of course, it's still not easy for Barkov to live without pay. He needs money
to buy staples like bread, cooking oil and salt, not to mention clothes and
soap to wash off all the coal dust and garden dirt.
But often one member of his extended family will manage to get paid or collect
their pension, and that can be enough to buy a loaf of bread for 50 cents
every few days. His neighbors sometimes sell a bucket or two of home-grown
potatoes to a passing car to get a few rubles for cigarettes or vodka.
In fact, what seems to bother the miners here about not getting paid is less
the money than the indignity.
``It's insulting,'' says coal miner Anatoly Turmachok, one of thousands who
went on strike in Anzhero-Sudzhensk in May to demand better treatment by the
The striking miners sat down on the rails of the Trans-Siberian in May,
halting train traffic for 10 days to press a series of demands.
At the top of the list was new jobs for miners laid off when the government
closes the unprofitable mines. At the bottom, in last place, was that they be
``All the media said that miners want money, money, money,'' said Vladimir
Fokin, strike committee leader in Anzhero-Sudzhensk. ``That wasn't it at
Indeed, all it takes is a trip to the union office at the Sibirskaya mine to
illustrate the point. Even with the miners on strike, the door wasn't covered
with notices of rallies or union meetings.
It had just one sign: ``Garden plots distributed from 9 a.m. to 12 p.m.''
Business Week: June 29, 1998
International Business: RUSSIA
[for personal use only]
WILL THE RUBLE BRING DOWN THE BANKS?
A devaluation could shatter Russia's financial system
For Russian bankers, these are nail-biting times. Week after week, as the
government attempts to sell $1 billion or more in Treasury bills to roll over
its massive debt, speculation flares over whether a devaluation of the Russian
ruble is inevitable. Now trading around 6.2 to the dollar, the currency is
under severe pressure as jittery investors flee Russian markets. Only
emergency loans or aid from the West will prevent a collapse of the T-bill
market and the ruble, investors and financiers warn.
Russian bankers are particularly worried because a ruble devaluation of 20%
or more threatens to wipe out their entire banking system. Even before the
Asian flu spread to Russia, many of the country's banks were short of cash.
Now, plunging stock and government bond markets are devastating a key source
of their earnings. The weakening ruble is making it harder for banks to pay
off $500 million worth of syndicated loans that come due by August. Worst of
all, the banks are on the hook for some $200 billion in hard-currency forward
contracts with Western investors--a huge bet that the ruble will keep trading
at about its current rate. ``If there is a devaluation, practically every bank
will go bust,'' warns Lev N. Makarevich, analyst at the Association of Russian
Banks in Moscow.
LOST FAITH? A devaluation and banking crash would be a huge blow to the
Russian economy. That's true even though only a minority of Russians have bank
accounts, preferring to keep money under the mattress or in the state-
controlled Sberbank, which the government would never allow to fail. A
devaluation would reignite inflation and kill the limited faith Russians have
in recent years built up in the ruble. ``We would live in a different
financial system. The government might nationalize some banks,'' predicts
Alexei Vedev, chief economist of Moscow's Dialog Bank.
The only silver lining of a shakeout might be that stronger institutions
could emerge over time. Many of Russia's 1,700 banks have made their money by
speculating in currency or high-yield securities rather than by taking
deposits and making loans. That's why the Central Bank aims to cut the number
of Russia's banks to 200 through mergers or closures over the next few years.
For now, though, banks are scrambling to boost their liquidity. Many have
begun to sell off ruble assets such as T-bills and stocks--often at a loss.
The funds go to buying dollars so banks can make their scheduled payments on
syndicated loans. Even so, Tokobank, one of Russia's biggest banks, has failed
to make international settlements on at least $20 million of its $320 million
in foreign loans. The Central Bank took over management of the bank on May 8.
EXPORTING GOLD. The banks are also moving now to take advantage of last year's
government decision to break the Central Bank's monopoly on precious-metals
exports. Oneximbank--Russia's fourth largest--became the first bank to export
gold in late May. Oneximbank won't give details, but reports in the Russian
press say the bank has exported one metric ton of gold and 12 metric tons of
silver in recent weeks. An official from the Association of Russian Banks
predicts Russian banks could export a total of 10 metric tons of gold in 1998.
That would be worth about $760 million at today's prices.
The biggest cloud, however, hangs over the Treasury-bill market. Not only
have Russian banks relied on the ruble-denominated notes for chunks of their
profits, but they have also earned big fees by helping Western investors--who
flocked to the market last year--hedge their currency risk. To guarantee the
yield in dollars, investors bought dollar-forward contracts from Russian
banks. Although no one knows the exact amount, analyst Tim Dooley at brokerage
Flemings in London estimates that the banks could have $198 billion in forward
contracts still outstanding. To hedge their own risk, Russia's larger banks
bought currency options from small and midsize banks. Now, in effect, the
banking system risks collapsing in a domino effect.
That's why leading bankers will be watching warily as the International
Monetary Fund and Russia's government haggle over terms of emergency aid. If a
package comes through and Russia's markets calm down, the banks will gain
breathing space. Then the onus will be on them to get their financial houses
in order before it's too late.
By Patricia Kranz in Moscow
Duma Defense Committee To Draft Recommendations on START II
Moscow, Jun 17 (Itar-Tass) -- Some deputies have a "very superficial"
notion of the START II Treaty and prospects for its implementation, Roman
Popkovich, chairman of the Duma Defence Committee, told Tass on Wednesday
[17 June]. He commented on a closed-door meeting in the Academy of the
General Staff on Tuesday, entitled "Prospects for the development of
strategic nuclear forces in conditions of military reform, implementation
of the START I Treaty, as well as on the occasion of the coming into force
of new strategic arms reduction treaties."
Popkovich said the meeting laid down a good groundwork for the further
dialogue with deputies. They have been convinced that the START II Treaty
applies not only to strategic nuclear forces but also to the triad of
naval, air force and land forces. He said that a free debate with
representatives of the Defence Committee, the Defence Ministry and the
Foreign Ministry supplied answers to questions of strategic offensive arms
development and reduction that were not clear to deputies.
Reports were delivered at the meeting by chief of the general staff of
the Russian armed forces Anatoliy Kvashnin, commanders-in- chief of the
nuclear triad -- the strategic missile forces, the air force and the navy
-- the general designer of the Topol-M update missile complex being adopted
for service. Besides aspects of the ratification of the START II Treaty,
there was a debate on prospects for the development of strategic missile
forces and problems with their financing.
Kvashnin told Tass the debate was extremely useful, was not dominated
by politics and was to promote the Duma's decision on the ratification of
the START II Treaty.
Popkovich said the Defence Committee, jointly with the general staff
and other agencies, is to draft both a classified and an open variant of
recommendations. The Defence Committee is going to take part in preparing
a debate on strategic nuclear forces to be held at the next meeting of the
Russian Security Council.