June 19, 1998   
This Date's Issues: 2229 • 2230 • 
Johnson's Russia List
#2230
19 June 1998
davidjohnson@erols.com

[Note from David Johnson:
Reassurance: The regular daily JRL will continue as is, under my personal
care and feeding. BUT: I am expecting a large number or JRL recipients to
order the wonderful new video "America's Impact on Russia." If you wish to
take advantage of this fantastic opportunity contact Amber Sundsted at
asundste@cdi.org or call the Center for Defense Information at
202-332-0600. It's more than a bargain at $19 (plus shipping outside the US
and PAL conversion if necessary). (You will catch of glimpse of me
interviewing
Blair Ruble.)
1. Fred Weir on Chubais' comeback.
2. Jamestown Foundation Monitor: THE LOOMING NUCLEAR DISARMAMENT 
BURDEN.
3. Nezavisimaya Gazeta: Ivan Rodin, LAW-MAKERS WARN FOREIGN CREDITORS 
TO LOOK OUT. Duma's Reaction to Chubais' New Appointment.
4. Komsomolskaya Pravda: "Schwartzeneggers in Long Johns. Many Clothing 
Supply Depots Only Have Underwear Left."
5. Itar-Tass: Chubays To Get Western Aid Without Hurting Economy.
6. Moscow Times: Leonid Fridman, Teachers' Painful Protest.
7. Moscow Times: Leonid Bershidsky, MEDIA WATCH: State Merits Low TV Rating.
8. RFE/RL NEWSLINE: OLIGARCHS' SET TO FORMALIZE TIES TO GOVERNMENT
and YELTSIN AGAIN RENOUNCES THIRD TERM AMBITIONS. 
9. Washington Post: Benjamin Gilman, Stop Coddling Yeltsin.
10. Boston Globe: Lynnley Browning,Capturing Russia, hook, line, and
sinker. 
( Re Fen Montaigne's new book, ''Reeling in Russia'').
11. Renfrey Clarke in Moscow: RUSSIAN MINERS DEMAND: ``YELTSIN OUT!'']

**********

#1
From: fweir@rex.iasnet.ru
Date: Fri, 19 Jun 1998
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT) -- President Boris Yeltsin summoned Russia's
most hated politician, free market reformer Anatoly Chubais, back
into government last week to deal with the country's spiralling
economic crisis.
But analysts say even Mr. Chubais may have a hard time
convincing international lenders to pony up the $10 to $15-
billion Russia needs to stave off an imminent collapse of public
finances.
The International Monetary Fund is delaying a scheduled loan
payment of $670-million, hoping to force Russia to speed up structural
reforms and slash its social spending.
Mr. Chubais will have to convince an IMF delegation, due in
Moscow Monday, to release this money before talks can even begin
on the huge, urgent bailout Russia is asking for.
"The IMF is making impossible demands on Russia," says
Nikolai Petrov, an analyst with the Carnegie Endowment in Moscow.
"They want us to reduce the budget deficit by half, but already
Russian society is strained to the breaking point and we cannot
afford to make those kind of deep cuts."
Millions of public sector workers, pensioners and military
servicemen have not been paid at all this year, and the threat of
mass protests in some Russian regions is growing acute.
As the crisis deepened last week, Mr. Yeltsin reappointed
Mr. Chubais to government as special emissary to foreign
financial institutions, with the rank of deputy prime minister.
Opinion polls show that Mr. Chubais, a 43-year old economist

who has served in every post-Soviet Russian government, is
practically the most unpopular politician in the country.
Mr. Yeltsin has fired him twice before, most recently last
March. But after a meeting between Prime Minister Sergei Kiryenko
and several of Russia's top financiers last week, the President
signed a decree re-hiring him.
Mr. Chubais is blamed by many Russians for engineering the
post-Soviet privatization campaign that impoverished the majority
while creating a handful of super-rich tycoons. He has also faced
repeated allegations of corruption and influence peddling,
including charges that he accepted a $90,000 fee from a publisher
owned by a friendly tycoon, for a book he has yet to write.
"Chubais has been brought back because foreign bankers like
him and trust him. This is a very serious crisis, and he is the
country's best bet to secure outside help," says Sergei
Yushenkov, a liberal parliamentary deputy.
Russia's stock market has lost almost two-thirds of its
value since January, the government's debt is skyrocketing and
interest rates are hovering at a crippling 60 per cent.
Under severe pressure to defend the battered rouble with
hard cash, Mr. Chubais has made clear that Russia needs at least
$10-billion from the International Monetary Fund this month to
stabilize the situation.
Devaluation of the rouble would trigger instant price hikes,
a grim prospect in Moscow and other large Russian cities where as
much as 60 per cent of food and consumer goods are imported.
"For the Russian government, and the financial oligarchs
behind it, this is a matter of survival," says Mr. Petrov. "They
hope Chubais can finesse this problem and convince the IMF to
bail us out, but perhaps they overestimate his abilities. In the
final analysis, the IMF holds all the cards in these negotiations
and can dictate its terms to Russia."

********

#2
Jamestown Foundation Monitor
June 19, 1998

THE LOOMING NUCLEAR DISARMAMENT BURDEN. Perhaps wishing to divert attention
from the State Duma's continuing inaction regarding the START II treaty, an
unidentified Russian military official recently charged that the United
States was not complying fully with START I. His examples were rather
specious. He suggested that in testing British Trident missiles from
American submarines without providing telemetry data to the Russians,
Washington and London might be colluding to add more warheads to the U.S.
Tridents than the treaty allows. Anglo/American nuclear cooperation has
always rankled the Russians. The Americans were careful to protect this
long-standing program in the treaty text. The official also complained of
the "uncontrolled" elimination of U.S. MX missiles. He indicated that the
Russians feared that the United States might be trying to restore a nuclear
air-launched cruise missile capability to its fleet of B-1B bombers, citing
some structural modifications to the planes' landing gear that were being
performed in the field rather than at an industrial plant. In fact, while
the B-1B remains accountable under the START I treaty as a nuclear bomber,
the U.S. Air Force has removed even this capability from the

aircraft--leaving it only with a mission of delivering conventional ordnance.

The recent preoccupation with START II has obscured two facts. First, that
Russia has destroyed very few strategic nuclear delivery systems in the past
several years. Second, that it will be hard-pressed to meet its obligations
under START I, let alone assume the added burdens of START II. True, the
four post-Soviet nuclear successors to the USSR--Belarus, Kazakhstan, Russia
and Ukraine--collectively met the treaty targets for the first elimination
period which ended last December. They did so because Russia had destroyed
the bulk of its obsolete SS-11 and SS-13 missiles even before the treaty
entered into force, and because of the former Soviet missile sites that were
eliminated by Kazakhstan and Ukraine. Over the last three years, the
Russians themselves have destroyed only eight intercontinental ballistic
missile (ICBM) sites. To meet the treaty limits for the giant SS-18 ICBMs,
the Russians must destroy twenty-six launchers by the end of 2001. Should
the State Duma ratify START II, Russia would be required to eliminate the
SS-18s at the rate of more than twenty per year for the next eight years. In
addition, each year they would also have to cut some fourteen SS-19 and
SS-24 missiles. Unable to afford anything more than token strategic nuclear
rearmament--the two Topol-M ICBMs put into service last year--the Russians
will also have difficulty paying for nuclear disarmament.

*******

#3
>From RIA Novosti
Nezavisimaya Gazeta
June 19, 1998
LAW-MAKERS WARN FOREIGN CREDITORS TO LOOK OUT
Duma's Reaction to Chubais' New Appointment
By Ivan RODIN

The State Duma's members used bad words yesterday while
debating the new appointment of Anatoly Chubais who rose from
the ashes not unlike Phoenix. They simply hated the ex-vice
premier for his new function of drawing on foreign sources to
get money for Russia. 
Characteristically, no member of the lower house seemed to
have any doubt that Chubais is capable of finding the needed
resources, which circumstance worried them more than all
others. 
This is probably why the Duma's emotional reaction was not
the habitual hot air, but rather generated a decision to take
steps that would entail serious consequences for the Russian
markets of finance. 
Today, the Duma may pass a statement, or a warning, whose
essence boils down to the following: all foreign loans obtained
thanks to Chubais' efforts but not approved by the law-makers,
as the law says they should do, would not be viewed as the
Russian Federation's foreign debt commitments.
The president's envoy in the lower house Alexander
Kotenkov tried to tell the Duma that Chubais would have no
official standing and needed the rank of a deputy to the
premier solely to give him a status in his negotiations with
the money bags and the international financial bureaucrats. 
The president's envoy told this newspaper yesterday that
Chubais would not solicit new loans that may escape the
law-makers' keen attention. Simply, the newly appointed deputy
premier without portfolio would use his clout to ensure that

the programme of foreign loans, which has long been compiled
but not yet approved by the Duma, is finally implemented.

********

#4
No Money for Class A Uniforms 

Komsomolskaya Pravda
16 May 1998
[translation for personal use only]
Article by Viktor Karavayev: "Schwartzeneggers in Long Johns. Many
Clothing Supply Depots Only Have Underwear Left."

The parade held in Moscow on 9 May had one distinction. For the first
time since 1941, when the fighting men left for the front directly from Red
Square, the troops participating in the festivities (other than the
students of the academies) and even composite cadet battalions marched over
the stone blocks in camouflage.
What is this-a new trend in uniform? But no one has abolished the full
dress uniform. There is another reason: there was no money to dress the
soldiers and officers in full dress uniforms.
Unbelievable? But it is a fact: due to clothing difficulties, even
General Staff officers go to work either in civilian clothes or in
camouflage fatigues purchased at the flea market. According to Ministry of
Defense data, not a single kopeck has been allocated during the last 4
months for clothing allowance. Already in "courtyard" units stationed in
Moscow, soldiers are issued only the field uniform, which costs about
one-fourth as much as the semidress uniform. But even to receive it they
have to plead with the factories to fulfill the order against a debt which
has already reached 1 billion new rubles.
Army quartermasters are afraid that if money is not allocated for
clothing allowance in the near future, the factories will refuse to make
military uniforms altogether, and then the troops will have to dress up in
emergency reserves. However, there is also a limit to emergency reserves.
Some warehouses only have underpants and long underwear in the super-small
and big-man sizes left of the emergency reserves of underwear. But it is
not easy for commanders to obtain them: the demand greatly exceeds the
supply.

*********

#5
Chubays To Get Western Aid Without Hurting Economy 

MOSCOW, 17 Jun (ITAR-TASS) -- Former First Deputy Prime Minister
Anatoliy Chubays is making a comeback to the government to help Russia's
tiding over its financial crisis precipitated by the unprecedented plunge
of oil prices in world markets and the Asian financial crisis.
His art of negotiating with international financial institutions, in
particular the International Monetary Fund, has outweighed his
villain-in-the-case image of Russia's prime mover of the voucher
privatisation, and so-called oligarchs have selected him by rating voting
among four candidates for coordinator of efforts to solicit the Western
aid.
Sources told ITAR-TASS that the choice of Chubays was approved late on
Tuesday by Prime Minister Sergey Kiriyenko and Kremlin administration chief
Valentin Yumashev. The final decision is with President Boris Yeltsin.
Other candidates for coordinator in the rank of deputy prime minister
were monetarist architect of Russia's reforms Yegor Gaydar, newly appointed
Tax Service chief Boris Fyodorov, who used to be Russia's representative at
the World Bank, and the Duma lower house's Russia is Our Home [NDR] faction

leader Aleksandr Shokhin. The rating voting left Chubays the winner, if not
jubilant about his being entrusted for tooth and nail efforts to get for
Russia what word holds is over ten billion dollars.
The oil has ever been the key article of Russia's exports and the main
source of budget revenue. However, world oil prices have plummeted almost
three times, to an ever-lowest $8.8 for a tonne, and no pick-up is in
sight.
"Black gold" production has come to be loss-making, wages of oilmen
have sharply dwindled and the industry is planning major layoffs to
survive. Declining production hits the refining sector, with economy-wide
repercussions.
Projected budget revenues are becoming impossible. Only 2.5 billion
roubles has been collected in June, of the target 14 billion. The
remaining half-month will bring another 3.5 billion at the very best.
The Asian financial crisis is another blow to Russia, a country which
entered the world market system with a weak economy and mineral-oriented
exports making loss at times of its being hit by all of the world's
financial storms in which only the US appears to be faring well with its
exports oriented towards high technologies.
Even as deputy prime minister, Chubays is facing a hard job getting
money. He is well known and respected in the West, but that alone is not
enough. The IMF has made its terms for starting talks on more loans for
Russia, ranging from its adoption of tax and budget codes to fiscal rigor
in the oil industry and breaking natural monopolies into production and
transport components.
That said, Chubays, who is chairman of the board of governors of the
national electricity monopoly Unified Energy Systems, is facing the task of
getting money without strangling the Russian economy.
He and the government could have a helping hand from the consultative
council proposed by oligarchs, a think-tank to have as members Central Bank
Chairman Sergei Dubinin, Finance Minister Mikhail Zadornov and Economics
Minister Yakov Urinson.
If the council is set up, its unanimous vital decisions are likely to
be sealed as governmental decrees, even if they do not prove invariably
nice to the oligarchs themselves.
Odd as it might look, the oligarchs are also growing poorer from the
economic plight and their survival instinct is increasingly recruited.
The consultative council of oligarchs and government members in charge
of finance and economy can provide one of mechanisms to lever Russia out of
its systemic financial crisis and head off its ending up as a "hot autumn,"
the opposition's idiom for sweeping protests of the desperate nation.

********

#6
Moscow Times
June 19, 1998 
Teachers' Painful Protest 
By Leonid Fridman
Leonid Fridman is a professor of economics at Moscow State University. 
He contributed this comment to The Moscow Times. 

The teachers' strikes should send a signal to the government that the 
patience of a wide segment of educated society is limited. 

The news media have drawn particular attention to the waves of 
discontent among striking miners who last month closed down railroads 
and brought passenger and freight travel to a stop. 


Against the background of these extraordinary events, which threatened 
to disrupt the normal functioning of the economy, the demonstrations of 
students in Yekaterinburg, teachers in institutions of higher education, 
scholars and students in Moscow, as well as the recurring strikes of 
school teachers, have attracted far less attention. The stories have 
tended to be relegated to the inside pages of newspapers, and educators 
and students have been kept on the periphery of current political 
struggles. 

Along with the miners, however, teachers are the most active and 
numerous participants in strike movements in the country. While the need 
for restructuring the coal industry, which entails closing down 
unprofitable mines and creating new jobs for unemployed miners, has been 
widely acknowledged, similar "pro-market" reforms in education are met 
with growing opposition, particularly from teachers and their 
organizations. After a high-level official carelessly suggested that 
changes in education would involve the loss of tens of thousands of jobs 
in education, teachers and unions began to fight against this threat, no 
matter how firmly the government denied it. 

The need to introduce reforms is often based on faulty comparisons of 
higher-education institutions in Russia and the West. But to make cuts 
in staff on the basis of the number of educators per student in the 
United States or Britain is misguided, given that the level of technical 
equipment and the teaching process in those countries differ sharply 
from Russia's. As for teachers' material standing today, their wages 
during the past four decades have been almost cut in half. 

Back in 1991, President Boris Yeltsin issued Decree No. 1, which 
stipulated that education workers should receive similar wages to 
industrial workers. In reality, during the years of reform, the opposite 
took place. Since 1996, teachers and professors more and more often have 
not received their salaries on time. While teachers have lost 7 percent 
to 9 percent of their yearly salaries because of these nonpayments, the 
previous years of inflation have eaten up a much larger part of their 
income. But the psychological effect of not being paid wages on time is 
far more difficult and troubling. Moreover, unlike industry, 
construction or trade, the majority of whose enterprises are already 
privately owned, 98 percent of the wage arrears to teachers is owed by 
the federal or local governments. Given these conditions, teachers and 
professors are not expressing their dissatisfaction against a separate 
enterprise or the management of some stock company, but against local 
authorities and the federal government, which are violating laws, 
regulations and decrees that they themselves have issued. 

It is difficult for me to write this small article. The fact is, I am an 
economist by profession and have taught for 38 years at Moscow State 
University, and, in the distant past, like millions of fellow citizens, 
I was a student. As a research scholar, I understand that, in conditions 
in which production in Russia over the past seven years has decreased by 

40 percent and state expenditures have fallen even lower, the 
government's resources are objectively limited. Besides teachers and 
doctors, miners, farmers, scientists and officers are demanding an 
increase in state expenditures. They all with more or less justification 
make claims for a piece of the decreasing "budget pie." 

In the fight for government allocations, it is usually the strongest who 
win, or those whom the government fears most. Teachers, doctors and 
scientists these past few years have clearly not been counted among such 
people. This is probably why the miners have achieved much more than 
teachers, even though they have demonstrated in equal numbers. 

During Soviet times, official propaganda asserted the high role that 
school teachers played in society. In reality, school teaching enjoyed 
little prestige. The jobs were mostly filled by women, and the position 
of teachers grew relatively worse. It is a tragedy that in democratic 
Russia -- or, to be more precise, a country striving to be democratic -- 
this picture is being repeated. Once a part of what might be loosely 
defined as the Soviet middle class, the majority of teachers have now 
been cast down to the lower ranks of the social ladder. 

Here the comparison of miners and teachers is apt. If almost all the 
miners are men, then the overwhelming majority of teachers are women. 
The miners work with coal and the teachers with children. 
Psychologically, it is very difficult for them to strike and deprive the 
children of needed knowledge. I will never forget the words of the wife 
of a close friend, a teacher in an ordinary Moscow school, who while 
acknowledging the justice of her colleagues' demands, still refused to 
go on strike. She repeated again and again: "After all, the children 
aren't guilty of anything." And if, despite this, 400,000 to 500,000 
teachers in Russia decide to strike like the miners, then this is a 
threatening signal to the government. It shows that the patience of a 
wide segment of educated society is in no way unlimited. 

Although I understand in my mind that miracles do not occur in the 
economy, I still hope that the government will manage to find the 
additional means and provide for the preservation of one of Russia's 
most valuable resources -- a decent level of education for its young 
generation. 

********

#7
Moscow Times
June 19, 1998 
MEDIA WATCH: State Merits Low TV Rating 
By Leonid Bershidsky
Special to The Moscow Times

Going through Russian television ratings, it is impossible to miss one 
thing: RTR, the state television station that is the flagship of the new 
government-owned media holding, is not popular. 

In a sample week, from June 1 to June 7, not a single RTR show made the 
top 10 programs list in Moscow, according to Gallup Media. The channel's 
three best-watched shows were movies; RTR's news program, Vesti, 
languished at the very bottom of the newscast rating chart. 

For a company that reaches close to 99 percent of Russia's population 
and is now also affiliated with 88 regional television stations, which 
among them probably cover even the remaining 1 percent, this is pretty 

awful. Ratings like this are the equivalent of being booed off the air. 
But then the advantage of being state-owned is that this is not a 
threat. 

The Western view of Russian media tends to demonize the tycoons who own 
most news outlets here, but in my view the state is a far worse media 
owner than any robber baron. Apart from distorting and censoring 
information, it also encourages thievery and bureaucracy in the media. 
These factors combined turn a media company into an unmitigated 
disaster. 

VGTRK, the state media holding of which RTR is part, is now headed by 
Mikhail Shvydkoi, who has a reputation as an intellectual and a decent, 
fair man. It is a shame he inherited what he did. 

Last month, when Shvydkoi's predecessor, Nikolai Svanidze, quit his job, 
he told the St. Petersburg newspaper Reklama-Shans: "I've had enough of 
being accused of all the failures and problems of the channel. ... For 
some reason, I was chosen as the trash can that everybody could spit in 
through the media." 

Svanidze also said the company's staff no longer wanted him and he could 
not manage them. Svanidze's predecessor, Eduard Sagalayev, left the 
channel in 1996 after a number of staffers published an open letter 
accusing him of financial improprieties. It looks like whoever 
undertakes to run state television ends up with a management problem. It 
would be hard to imagine the head of a large private corporation whining 
upon his resignation. "I just couldn't control these people!" Such a 
manager would have a problem finding gainful employment. But state 
television chiefs are not your typical corporate executives: They do not 
run a business, they run a smokescreen. 

Last year, the Federal Audit Chamber, Russia's budget watchdog body, 
discovered that in 1996, VGTRK misused 20 billion old rubles in budget 
funds. It also received $90 million in bonds from the government, but 
the securities never showed up on the company's books. The audit chamber 
found that VGTRK had 10 illegal accounts in foreign banks through which 
it was channeling money abroad. A further check showed that some VGTRK 
officials, including Sagalayev and Svanidze, were officers 
simultaneously in private companies to which VGTRK contributed funds and 
property, but from which the state media behemoth never received any 
dividends. 

Yet the audit chamber never accused any VGTRK chiefs personally or 
recommen ded any harsh measures. The chamber's auditors, many of them 
with close ties to the leftist majority in the Russian parliament, 
remembered all too well what happened when they named names and 
recommended criminal proceedings after a check of state television in 
1995. 

President Boris Yeltsin then ordered the television company Ostankino 
closed and its assets transferred to ORT, the new semi-private station 
that was set up by business tycoons at the time. ORT is now controlled 
by magnate Boris Berezovsky, not by the state, and it's good at the 
ratings game. 

The upshot is simple. People like Svanidze and Sagalayev are not held 
responsible for the chaos at RTR. They are just allowed to get on with 
their lives, which in Svanidze's case means anchoring two shows on RTR. 


The financial improprieties are likely to go on under Shvydkoi, too: It 
does not really matter who's boss, that is just the way the system 
works. 

Something Shvydkoi might want to correct is the oppressive bureaucracy 
at RTR. According to Yelena Rykovtseva of the Sreda media journal, when 
the company was founded, the team that ran Vesti was subordinate to only 
four bosses: the RTR chief, the news broadcasting chief and his two 
deputies. Now the pyramid has increased to seven people. 

But I suspect the new chief cannot do anything about that, either. 
State-owned organizations, after all, are designed to employ as many 
people as possible and to protect them from overworking. 

********

#8
RFE/RL NEWSLINE Vol. 2, No. 117 Part I, 19 June 1998

OLIGARCHS' SET TO FORMALIZE TIES TO GOVERNMENT. Prime
Minister Sergei Kirienko and Russia's most influential
businessmen are to ask President Boris Yeltsin to appoint a
special council composed of business leaders to advise the
government on economic policy. According to the government's
information department, Kirienko and some 10 businessmen
agreed on the proposal during talks on the evening of 18
June, Russian news agencies reported. It was the prime
minister's second meeting with "oligarchs" in three days.
Not all the participants were named, but ITAR-TASS said CIS
Executive Secretary Boris Berezovskii was present, along
with most of the business elites who met with Yeltsin
earlier this month (see "RFE/RL Newsline," 2 and 3 June
1998). In late 1997 and early 1998, government officials
repeatedly promised to provide a level playing field for all
businesses and not to favor "oligarchs" with high-level
political connections. LB

YELTSIN AGAIN RENOUNCES THIRD TERM AMBITIONS. Speaking in
Kostroma on 19 June, Yeltsin announced that he will not run
for a third term as president, Reuters reported. He noted
that "it's not in the constitution. The constitution says
two terms." Yeltsin's remarks came one day after CIS
Executive Secretary Berezovskii told Ekho Moskvy radio that
it would be "the right decision" for Yeltsin to say he will
not run for re-election again. Yeltsin has said several
times that he does not plan to seek a third term, but his
advisers have occasionally left the door open on the
possibility. Berezovskii was one of the key financial
backers of Yeltsin's 1996 re-election campaign. He told Ekho
Moskvy that Russia's business elite may unite around another
candidate in the next presidential race, because, regardless
of their differences, financial and industrial groups share
"strategic goals" such as political stability. LB

*********

#9
Washington Post
June 19, 1998
[for personal use only]
Stop Coddling Yeltsin
By Benjamin A. Gilman
The writer, a Republican from New York, is chairman of the House
International Relations Committee. 

President Clinton has announced his support for a possible new IMF loan
to Russia, potentially totaling $10 billion. Instead of rushing to provide
that assistance to President Boris Yeltsin's government, we ought to stop,
ask some questions and seek changes in Russian policies.
Russian foreign policy today appears to have one unfortunate objective.
With his oft-repeated mantra of seeking a "multipolar world," Yeltsin's
foreign minister and former director of Russia's intelligence service,
Yevgeny Primakov, appears intent on creating challenges to America's global
leadership, challenges we must assume the United States will overcome only
after providing concessions to Russia.

Thus, just as the United States seeks to persuade Russia to participate
in the larger effort by the community of nations to fight proliferation of
weapons of mass destruction, enforce United Nations mandates in places such
as Iraq and pursue solutions to other global problems, Primakov appears
more interested in pursuing a price for Russia's cooperation.
Despite American concerns, the Yeltsin government has extensive
relations with Iran, a supporter of international terrorism intent on
becoming a regional military power in the Persian Gulf. Russia provides
advanced weapons and military technology to China, likely to contribute to
future challenges to the ability of American forces to defend our friends
in the Pacific, as Chinese missile firings off Taiwan have portended.
Communist Cuba, with Russian encouragement, continues to seek Soviet-design
reactors, despite American concerns.
As America seeks to stabilize the former Soviet states, Russia has
involved itself in ethnic conflicts on its periphery through covert arms
supplies and other means, and has cut its neighbors' access to energy
pipelines. Moscow has failed to ratify the START II arms reduction treaty
and demands questionable revisions in other arms treaties. Oddly, despite
its financial constraints, the Yeltsin government has found the means to
help finance the Soviet-style dictatorship of President Alexander
Lukashenko in Belarus.
Yeltsin's government is characterized as "reform-minded" but suffering
from massive tax evasion. The reality is a bit different. Yeltsin's
personal support for reforms has in fact been inconsistent. At key points
since 1991, he has simply withdrawn to his dacha, leaving lower officials
to fend for themselves. At other times he has reversed steps needed to move
forward.
But this unwillingness to pursue reforms vigorously has now caught up
with Yeltsin. Despite massive debt rescheduling, private loans,
considerable foreign aid and large loans from the IMF and World Bank,
Russia is now approaching a fiscal train wreck. The pain of planned budget
cuts might indeed be alleviated by an additional IMF loan, but another
worrisome reality in Russia -- corruption and related flight of capital --
underlines how temporary that relief would be.
Veniyamin Sokolov, a director of the Russian equivalent of the U.S.
General Accounting Office, recently visited the United States, speaking of
the routine theft of money from Russian government and industry. Russian
nuclear reactor operators, coal miners and other average workers have
protested over unpaid wages in recent years. It would seem that that
problem can now be traced to such theft.
A recent study brings home to us the consequences of this, estimating
that while Russia's foreign borrowings in recent years have totaled $99
billion, a full $103 billion in capital has been spirited out of the
country. Thus, much that Russia has borrowed has not gone into productive
investment to create a bigger tax base but has instead filled the gaps left
by the disappearance of billions of dollars worth of Russian capital.
Meanwhile, Russian households and entrepreneurs starve for such capital,
operating on a barter basis, which, again, cuts into Russia's tax base.
Now Russia's borrowing to pay its bills has created burgeoning
short-term debt payments. Last year, a quarter of the government budget
went to pay debt interest, and that figure will now rise.

President Yeltsin cannot simply make bellicose statements about tax
cheats and resume business as usual. And American officials should not
rationalize new loans by simplistically depicting a "reform-minded"
government. It is also not an answer to say that without loans
nuclear-armed Russia would fall apart, with subsequent instability placing
America at risk. Given current trends in Russia, such instability is
already likely, and soon, unless President Clinton insists on real change
in Russian foreign and domestic policy now.
If President Yeltsin fails to attack corruption at the highest levels,
Russian money will continue to disappear -- and the Russian people's
patience is not limitless. Unless Yeltsin engages in comprehensive economic
reform -- and stays engaged -- foreign investment in Russia will not grow.
Finally, if President Yeltsin doesn't begin to work sincerely with the
United States to prevent proliferation of weapons of mass destruction to
countries such as Iran and Iraq, and to resolve ethnic conflicts,
particularly in the Balkans and the Caucasus, Russian domestic instability
will be compounded by growing instability outside Russia's borders.
This is a pivotal moment in our relationship with Russia. Now is the
time to insist on steps by President Yeltsin that will put the
American-Russian relationship -- and reforms in Russia -- back on the right
track.

********

#10
Boston Globe
June 19, 1998
[for personal use only]
Capturing Russia, hook, line, and sinker 
By Lynnley Browning

Early on in what is one of the most engaging books about post-Soviet
Russia to emerge in recent years, Fen Montaigne describes that vast country
as ''an affliction, an incurable habit.'' But his is not a novelistic world
of tormented, Dostoyevsk ian self-introspection. 
In three rugged months spent fly-fishing from Murmansk to Magadan and
beyond, Montaigne plunges into the method and madness of an addictive world
he has come to love through years of reporting out of Moscow for the
Philadelphia Inquirer. 
From deserted Stalinist labor camps with secret trout canals to the
depths of the Siberian taiga, Montaigne traverses some of the world's most
beautiful and least-seen terrain, experiencing a side of Russia all but
forgotten amid the literature of struggle and rebirth after seven decades
of communist rule. ''Reeling in Russia'' - part travel adventure, part
window onto the soul of the wild life of a country forever on the brink of
disaster - is brimming with some of the most spellbinding and accurate
portraits ever of modern Russians. 
The beauty of this highly accessible book lies in Montaigne's sense that
to parse Russia, one must at some point escape the big cities and venture
into villages and wilderness. Montaigne is no tea-drinking urban
intellectual in need of the theater to understand the fatalism and
laughter-through-tears ethic that make this country tick. 
Like many of the hearty souls in his book, Montaigne is a muzhik - a
''real'' man, swilling vodka, traveling across roads resembling a lunar
landscape, warding off poachers, predatory con artists, and intestinal
parasites, and boldly striding into the rough-and-tumble world of Klondike
capitalism. 
In a tone engaged but distanced, and in a language denuded of adornment,
Montaigne details the lives of hermits and truckers, fishermen and madmen.
This is not an idyllic version of pastoral. Montaigne writes, accurately,
of a country awash in hopelessness, alcoholism, and a conviction that rules
are for the weak. But he also shows the real Russia to be generous,
friendly, and, at times, hard-working. 

At a 19th-century nobleman's former country estate, converted into an
insane asylum where inmates live on subsistence-level rations, a
wheelchair-bound patient greets Montaigne by proffering a treat of four
apples. ''In Russia, we don't give a guest just one,'' the patient smiles. 
The writer's friend Chumak, an extraordinarily foulmouthed but endearing
farmer in southern Russia, typifies the medieval conditions of this former
agricultural powerhouse. 
In the depths of far eastern Siberia, scrappy, entrepreneurial long-haul
truckers who make their living transporting Korean cookies to villages in
the middle of nowhere take Montaigne along for the ride, generously sharing
provisions. These truckers, for whom a breakdown in 50-degrees-below-zero
winters can be deadly, listen to their rickety Kamaz engines as carefully
as a Bolshoi Theater-goer does a symphony. 
And in a scene simply stunning for its beauty and rawness, Montaigne
tracks down a 72-year-old hermit in the taiga who lives by trapping furs,
fishing, and receiving occasional provisions from regional officials and
sympathetic truckers. In 1946 Fyodorovich was thrown into a nearby labor
camp for the crime of visiting his mother after the war. After serving his
sentence, he simply stayed. ''I just got used to it here,'' the friendly
hermit tells Montaigne, whom he treats to moonlit feasts and musings on life. 
Montaigne is not always the cultural anthropologist a journalist should
be, especially when he dismisses Soviet monuments and slogans as nonsense
or resorts to stale asides about the Bolsheviks. And he is a novice of a
fly-fisherman, maladroit in the art of deceiving one's prey - at least in
Russia. But the blunt, direct style that for most of his journey yields him
few trout serves him well as a narrator, and one need not be a fisherman or
a Russophile to gain pleasure from this book. 
Several times, Montaigne describes himself as bitten by the fishing bug,
enraptured by the art of beguiling his quarry. But what has really captured
and enchanted Montaigne's soul is Russia. His is an adventure of which
well-heeled Western anglers - kitted out in costly accouterments and
tangled up in expectations that the world must be ordered and rational to
make sense - can only dream. 

********

#11
Date: Fri, 19 Jun 1998 18:30:20 +0400 (WSU DST)
From: austgreen@glas.apc.org (Renfrey Clarke )
Subject: Russian miners demand "Yeltsin out!"

#RUSSIAN MINERS DEMAND: ``YELTSIN OUT!''
#By Renfrey Clarke
#MOSCOW - Early on June 11 a train drew into Yaroslavsky Station
in the Russian capital, bringing 150 miners from the Pechora coal
basin in the country's Arctic north. Linking arms, the miners
marched through central Moscow to the building that houses the
Russian parliament. After a brief demonstration, they again
headed through the streets to the main federal government office
building - the so-called ``White House''.
#More than a week later they were still there, reinforced by
hundreds of other miners from almost all of the country's coal-
producing regions. The picket provided stark evidence that a

month after the sharpest clash between miners and the state in
Russia's post-Soviet history, none of the grievances of coal
industry workers were any closer to being resolved.
#This was not the first time miners had come to Moscow, thronging
the space before the White House, chanting slogans and beating
their helmets rhythmically on the paving stones. But in the past
they had brought mainly economic demands - above all for the
payment of back wages. Now the issue of wages was almost passe.
Only one thing would satisfy the picketers - the resignation of
President Boris Yeltsin and his government.
#``That's the main demand now,'' Aleksandr Surin, from the
Komsomolskaya mine near Vorkuta in the north, declared on June
16. ``Any faith we had in the government ran out long ago.''
#Alongside the ornamental bridge where the rows of picketers were
seated, a banner echoed Surin's thoughts. ``Boris, we lifted you
up - we'll get rid of you too!'' Some days earlier miners' union
leader Aleksandr Sergeev had declared to television reporters:
``Just as million-strong meetings raised Yeltsin to power in
1991, we now hope to show with million-strong meetings that the
people are frankly tired of him.''
#Union sources put the total wage debt owed to coal sector
workers as high as 3.8 billion rubles, (more than US$600
million), with some workers owed pay from as far back as early
1997. Since the picketers arrived in Moscow, government
spokespeople have been at pains to insist that this sum is not
owed by the state. ``The government doesn't pay wages to miners -
managers of coal enterprises do,'' Deputy Prime Minister Boris
Nemtsov has been quoted as saying.
#But according to Ruben Badalov, deputy chairperson of Russia's
main coal industry union, this argument is fundamentally
misleading. The main reason why coal customers are not paying for
their fuel is because of government policies.
#``Indirectly, the government is responsible for about 70 per
cent of the debt to the miners,'' Badalov was quoted recently as
saying. ``If the government says there is no problem, what choice
do people have but to man the barricades?''
#For close to a week in late May the barricades kept Russia
effectively split in two, as miners and numerous supporters in
the Kuzbass coal district of Western Siberia blocked key rail
arteries and halted traffic to and from the country's eastern
regions. With similar blockades in other coal districts, the
miners at one point held more than 600 trains at a standstill.
#Lacking effective national coordination, the miners were
eventually ground down in talks with government leaders. Most of
the blockades were lifted in exchange for unspecific promises
that the government would pay part of the wage arrears, and would
provide new jobs for miners when their pits were closed. But in
the Pechora basin there was no compromise deal. The miners
finally unblocked the tracks, but rejected a plan for the region
presented by Economy Minister Yakov Urinson.

#As the weeks have passed and action on the government's promises
has failed to materialise, miners throughout Russia have
concluded that further efforts to reason with the authorities are
futile. At the Moscow picket, suggestions that the miners put
their trust in ``dialogue'' have brought sarcastic rejoinders.
``Continuing to demand that the government solve our economic
problems is useless, and it's even more pointless to hold talks
with them on political issues,'' trade union leader Aleksandr
Kolosulin, from the Pechora basin city of Inta, told the
newspaper <I>Trud<T>.
#The government's plans for the coal industry, indeed, have no
serious place for accommodation with the miners. For that matter,
these plans have no place at all for huge sections of today's
mine workforce.
#Over the past two years, the Russian government has collaborated
with the World Bank to ``reform'' Russia's coal sector. One of
the presumptions behind these plans is that Russian heavy
industry in the next century will be much smaller and weaker than
at the end of the Soviet period, and that its need for coal will
be dramatically less.
#To some degree, the coal output freed by the running-down of
heavy industry will be redirected towards exports. A huge coal
loading terminal is currently being built on the Gulf of Finland,
and according to Matt Salt of the Institute of Coal in London,
Russian coal exports are due to rise from 21-25 million tons in
1997 to 35 million by 2000.
#However, the government's main response to reduced domestic
demand for coal will be to close mines and lay workers off.
According to Salt, the Russian authorities plan to close 140 of
about 220 pits currently operating. Of total government funding
for the coal industry in 1998, the news service RFE/RL reports,
two-thirds has been assigned for mine closures. Employment in the
coal sector is likely to fall by a further 100,000 from a current
figure, quoted in the newspaper Segodnya, of 359,000. Up to
50,000 miners are reportedly to be laid off this year alone.
#To expedite this ``restructuring'', the World Bank has extended
a series of loans to the Russian government, with a sum of US$800
million approved in 1997. According to RFE/FL, the final US$200
million tranche of this loan is not to be released by the bank
until half the Russian coal industry is in private hands, and
operating without state support. Subsidies to the coal industry,
more than halved since 1994, are to end entirely by 2000.
#In the plans of the World Bank and Russia's new elites, the
Russian coal industry of the future is thus to be small,
privately owned, and largely export-oriented. Whether such a coal
sector could provide a basis for the eventual rebuilding of the
country's heavy industries is a moot point. But for the miners, a
more immediate cause of alarm is that the government aims to cut
them loose, on the tundra or in the Siberian forests, with
inadequate social support.
#Much of the money lent by the World Bank is to be spent on

providing severance entitlements to laid-off miners. But as a
rule, these sums are not enough to allow former miners to buy new
homes in areas where conditions are less depressed. Russia's
notorious housing shortage anchors coal workers in the decrepit
settlements where they at least have a roof over their heads.
#The interest which the World Bank shows in the miners stops once
they are paid out; according to RFE/RL, the bank has given little
funding or thought to helping redundant coal workers find new
jobs. For that matter, the idea that there are plenty of jobs for
Russian workers who are prepared to relocate or undertake
retraining is a myth.
#With the government ready to let them starve in the wilderness,
it is not surprising that miners see their only chance in a
sweeping ouster of the present state authorities. This prospect
is not as remote as might be thought. On June 18 <I>Trud<D>
reported survey findings which showed that during May the number
of Russian citizens who disapproved of Yeltsin's actions as
president stood at 80 per cent. The number prepared to support
``tough anti-presidential demonstrations, meetings and strikes''
had risen since May last year from 30 to 44 per cent.
#The call for mass action to force the Yeltsin regime out of
office vividly communicates the miners' anger, and has broad
popular appeal. But it would be much more effective as a
mobilising demand if it were backed up by a clear program of
measures indicating how a government loyal to working people
would set about solving the miners' problems.
#Such a program needs to make clear that the coal industry is the
government's responsibility - that private capital is neither
capable of solving the miners' dilemma, nor interested in doing
so. There are now almost no investors willing to put money into
Russia's coal mines, and the demand for the renationalisation of
industry assets that have been sold off in the past is a popular
one among the picketers at the White House.
#Relocation and retraining are not a viable approach to solving
the problems of most miners; coal industry workers need jobs and
wages where they are now. That requires reviving the industry
through restoring demand for its products. A significant step
toward achieving this goal would be to begin phasing out Russia's
atomic power stations. The crucial need, however, is for the
deliberately planned reconstruction of heavy industry, a major
coal consumer.
#A program such as this would articulate key interests of much
broader layers of workers than simply the miners. It could thus
help counter the efforts of Yeltsin's ministers in recent weeks
to depict the miners as a greedy, privileged group - as
industrial bullies forcing scarce funds out of the government
while doctors and teachers go unpaid.
#Such a program would also reaffirm the real status which the
miners have been winning for themselves during the past few years
- that of the most determined, forward-looking layer within the
Russian working class.


*********