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Johnson's Russia List
20 June 1998
[Note from David Johnson:
1. AP: Yeltsin Wants Trust, Not Cash.
2. Jerry Hough: Lebed.
3. Alan Fahnestock: ex-patriots/ Hear, hear, Mr. Ames.
4. Moscow Tribune: John Helmer, WORLD BANK SAYS REFORM BAD FOR
5. Sherrell Goggin: response to matt fisher's submission on Russian
6. William Wolf: Response on Mark Ames on Limonov.
7. Feature Story Productions report on murder of Larisa Yudina in
Kalmykia. Prepared for National Public Radio by Eve Conant.
8. The Face of Russia--PBS: http://www.pbs.org/weta/faceofrussia/
9. Rossiiskaya Gazeta: POPULATION PREFERS HARD CURRENCY.
10. Journal of Commerce: Philip Gailey, Russia's robber barons.
11. Moscow Times: Dmitry Zaks, President Gives Local Leaders a Kick.
(Visit to Kostroma).
12. Itar-Tass: Experts Say Corruption Costs Russia R50 Billion Yearly.
13. AP: Yeltsin's Ex-Bodyguard Plans Book. (Korzhakov).]
Yeltsin Wants Trust, Not Cash
June 19, 1998
By MITCHELL LANDSBERG
KOSTROMA, Russia (AP) - Russia is holding up fine despite its economic
problems, and would rather get a vote of confidence from the West than its
money, President Boris Yeltsin insisted Friday.
Yeltsin's upbeat comments echoed what his government was saying during last
month's market plunge - but contrasted sharply with new efforts by Kremlin
officials to gain an infusion of Western cash.
Russia expects $9 billion to $10 billion in new aid from the International
Monetary Fund next week, said Oleg Zhukov, a spokesman for the finance
minister. And Anatoly Chubais, the man Yeltsin appointed to work with
international financial organizations, confirmed that Russia was preparing for
``big talks'' for ``big credits.''
``The situation is very grave, but we are holding up,'' Yeltsin said during a
visit to the central Russian city of Kostroma.
He said a simple gesture of support from international financial organizations
would suffice to keep foreign investors in Russia and prevent markets from
``We don't need money,'' Yeltsin told reporters in Kostroma, about 200 miles
northeast of Moscow. ``We need their trust in Russia. ... And a statement to
that effect would be decisive for all investors and for all banks in the
The hugely unpopular Chubais, who was brought back into Yeltsin's inner circle
this week after twice being fired, said Russia needed $10 billion to $15
billion to stabilize its battered economy.
Zhukov said the IMF is likely to extend Russia's existing $9.2 billion, three-
year support loan. The Central Bank will likely get a $3 billion boost in the
form of a special reserve facility, he said.
The Central Bank says it has combined foreign currency and gold reserves of
$15.7 billion. But it's estimated that foreign investors hold around $20
billion of ruble-denominated government bonds.
Neither the Central Bank nor the IMF were available to comment.
Chubais will meet Tuesday and Wednesday with acting IMF Chairman Stanley
Besides the new aid, the two are expected to discuss the IMF decision to delay
the latest installment of the existing loan. Western bankers say the IMF wants
to be sure that Russia is committed to improving tax collections, slashing
spending and carrying out other reforms.
Meanwhile, Yeltsin told students in Kostroma that he would not seek a third
term because ``the constitution would not permit that.''
The constitution limits presidents to two terms and Yeltsin has repeatedly
denied that he would run again, but his aides have kept speculation alive and
have suggested his first term shouldn't count because it began during Soviet
Lawmakers opposed to Yeltsin mustered enough votes in the lower house of
parliament Friday to begin preparing an impeachment motion. But the State Duma
gave itself 18 months to launch the proceedings, suggesting the effort might
lose steam, like several previous attempts.
However, the Communist-initiated vote was the first time that the Duma has
managed to set up a panel to prepare a formal indictment.
Date: Thu, 18 Jun 1998
From: "Jerry F. Hough" <email@example.com>
I wish that Dale Herspring would follow his own advice and give
us more about his sense of what Lebed would be.
Clearly one's judgment about Lebed's chances depend on when the
election is held, on what the economic conditions are, and on whether he
is already president. I would have thought that his chances are
extremely high, barring an great economic turnaround. Besides the
disenchanted, he stands to pick up many of those who have called
themselves democrats. Yavlinsky has no hope. Luzhkov might be strong
in 2000 as the candidate of the party of power in improving conditions,
but too many seem to think that Russia needs a Pinochet rather than an
American city boss of the 19th century. It was truly chilling to watch
Jim Billington's show on Russia last night and hear Nemstov say that all
Russia needs is rules. It is a view popular around Washington too.
The question of what it would mean to have a general in power
strikes me as open. A series of top generals over the last 15 years,
including Rutskoi with whom I have spoken on the subject, have the sense
of the need for alliance with the West. The old generals were shaped by
World War II, the newer ones by Afghanistan and the geostrategic
realities of the 21st century. They see the threat to Russia from the
south and southeast and, hence, reintegration into the West as crucial.
Lebed's statements about NATO seem to reflect a similar view. He is
offended by the American refusal to live up to the verbal agreements to
Gorbachev in 1989 and 1990 about expansion of NATO, but he understands it
is not geostrategically significant. The foreign policy problem of a
Lebed is that any general worried about the South is going to be
concerned about the new states on Russia's southern border. It is easy
to see how an action-reaction sequence with the US could get out of hand.
It is hard for me to see how anyone can be confident about
Lebed's internal policy. Most generals, Russian and American, have
become cautious bureaucrats. That is not Lebed. The argument for
Lebed is that he is decisive and that perhaps he alone can persuade
business that he is serious about corruption. But he won't do that with
speeches alone. Moreover, it is very hard to say which of his past
views he still holds. His memoirs treated Aleksandr Yakovlev as a
traitor. He made his reputation protecting Russians in the Near
Abroad. In our polls, Russians by a 3 to 1 margin think the West is
trying to weaken Russia with its economic policy, and Moscow 17 years old
agreed in 1997 by nearly 2 to 1. Does one really think that Lebed is
sophisticated enough to disagree? When asked what he thought about the
new Russian government, Tatarstan president said at the Duma that he
didn't see any Russian government, only a Jewish government. (He
applied such a label to 3 of the 4 among the premier and deputy
premiers.) Luzhkov seems to agree or to talk as if does. Is Lebed more
sophisticated? Who knows? As he says, a military man always learns to
hide his plans from the enemy--and he does not make clear who is the enemy.
The real question about Lebed and the military tradition is
whether he thinks a military man should basically stand aside like the
military in many Third World countries and basically let a civilian
premier rule. He doesn't seem the type, but who knows? The even more
important question is who he would choose out of the civilians. A
generation of Soviet economists did the most detailed work on incentive
systems and their impact on managerial decisions. All of that has been
lost on the young economists and their allies. The market just
exists, they thought. Jump the chasm to the other side and all will be
right. Now rules are the magic panacea. The question is what
incentives are created by the rules, not just whether they are
enforced. Economic actors in Russia have been rational actors. The
crazy policy of privatization created powerful incentives for economic
actors to direct all investment into takeover politics; the decision of
the government to focus on off-budget subsidies to the big cities instead
of industrial policy gave a wide variety of people the incentive to
respond to the opportunities the former created for graft and to avoid
the unprofitable industrial investment.
The key question is agriculture. Only the Communists have
opposed the exploitation of the countryside, and the urban-based
politicians have avoided agricultural reform out of fear it would
increase food prices in the big cities. But the expenses on imported
food have been irrational, and they will get much higher if the ruble
falls. Agricultural reform is crucial, and the question is how to
handle the problem in the city. A Lebed following a Communist-approved
policy in this respect might not have a problem in the streets, but if he
does, he would act decisively.
Whoever the ruler is, the question is whether incentives are
created to pour investment into concrete economic activity. That means
closing down the old incentive system, not expand it through yet more
desperate attempts to buy some more months by selling off more resource
industries. In the American government, each Department is closely tied
with "its" interest group--Defense with the defense industry, Agriculture
with the large farmers, Commerce with business, Health and Welfare with
the social service professionals, Education with the educators. The
interest group of Treasury is the financial institutions, and as recent
articles on the politics of the bankruptcy reform show, they are among
the biggest campaign contributors. The perceived interests of the
financial institutions has been the free flow of short-term money and
entry into foreign markets. The monetarist economists have been the
ideologists of such a policy, and hence they had been dominant in
Treasury. The old great economists such as Keynes and Schumpeter who
understood the importance of politics and institutions are now forgotten.
The strength of American policy toward China is that Defense,
Commerce, and Treasury are all actors, and hence a series of American
interests are more or less balanced. The disaster of American policy
toward Russia is that there have been no checks and balances. Clearly
there are actors such as Joseph Stiglitz in the World Bank who see things
differently from IMF. One hopes that there are others who are thinking
about how to reduce American political exposure in Russia and how to
manage a situation that seems in a dead-end. Ideally the President
might say something favorable about Chinese economic reform in China and
how it shows the importance of the state in economic development.
Ideally he would defend human rights in terms that are different from
democratization that would praise the Chinese for moving for more rights
in some realms and that would indicate that they can afford to go
further. Maybe even his remarks could be pointedly shown to the
Russians. But if one wants my odds on the likelihood of something like
this happening, well ...
From: Fahnest542@aol.com (Alan Fahnestock)
Date: Fri, 19 Jun 1998
Subject: ex-patriots/ Hear, hear, Mr. Ames
A pet peeve --- please inform your readership that those of us who spend time
overseas are not "ex-patriots", as if we had ceased somehow to feel affection
for our respective countries of origin. The word is "expatriate", presumably
derived in a fairly conventional manner from the verb of the same spelling.
Could not agree more with Mark Ames concerning the validity of your inclusion
of Limonov's varied and various diatribes. The gentleman in question clearly
has a few loose toys in the attic, but this minor defect has seldom served to
keep powerful communicators from affecting the rest of the human race in one
way or another. Far better to have some clue regarding what's on his mind,
lest one find oneself facing him and his across a bargaining table in Munich
From: "nikst" <firstname.lastname@example.org>
Subject: Are you optimistic about Russia's future?
Date: Sat, 20 Jun 1998
Here is the question for readers of JRL, which (in my opinion)
are the most competent in the field:
Are you optimistic about Russia's future?
Have your say and find out what other people think:
Click on the Web Poll link.
Date: Fri, 19 Jun 1998
From: email@example.com (John Helmer)
Subject: WORLD BANK SAYS REFORM BAD FOR BUSINES
>From The Moscow Tribune, June 19, 1998
WORLD BANK SAYS REFORM BAD FOR BUSINESS
By John Helmer
A little known World Bank survey of Russian entrepreneurs has discovered that
Russian regions which have resisted the government's
privatization and reform policies are regarded as less corrupt and better
places in which to do business.
According to an unpublished World Bank report by Randi Ryterman and
Barbara Weber, Ulyanovsk's "semi-socialist" and "non-reformist"
administration is given high marks by local businessmen who were questioned
about their attitudes towards market conditions, contract enforcement,
and performance of the legal system.
"Managers in Ulyanovsk finds laws to be more stable than do managers in
other regions," the World Bank officials reported. They say the Ulyanovsk
courts can be counted on "to render fair decisions, and are confident the
rules of the court will be followed to a greater degree than in any other
The reason why Ulyanovsk scores better with Russian businessmen than such
frequently touted reform centres as Nizhny Novgorod, Yekaterinburg or Moscow
is that the traditional communist-era power of the region has not been
dismantled or replaced.
That, concludes the World Bank team, has allowed "strong local government,
which is in control of political, legal, as well as many economic
-- to limit and control the influence of the mafia."
This dramatic conclusion suggests that the World Bank already knows that the
economic reform policies whicgh Bank leaders, along with the International
Monetary Fund, are urging on the Russian government, are bound to fail,
producing instead more criminal penetration of the market place, official
corruption, tax avoidance, and flight of money abroad.
The World Bank report also helps to explain why reform leaders like Anatoly
Chubais and Boris Nemtsov, the former governor of Nizhny Novgorod, are
ineffective in Russia's regions; why Kremlin candidates have been losing
regional elections recently; and why an alleged criminal running for mayor
was recently preferred by a majority of Nizhny Novgorod voters to the Kremlin
Ken Wollack, President of the Washington-based National Democratic Institute,
expressed surprise at the World Bank conclusions. The institute, which has a
Moscow office, finances programs meant to build effective political
institutions and support the economic reforms of Chubais and Nemtsov.
If the evidence shows that reforms are undermining Russia's central and
regional governments, generating more, not less trust in market-oriented
business, Wollack conceded there may be a problem with the reform strategy
The U.S. government has been sponsoring regional investment incentives,
capped by tours to regional capitals by Vice President Albert Gore. These
cover Samara, Khabarovsk, and Novgorod. The U.S Chamber of Commerce in Moscow
has an even broader regional focus, says Scott Blacklin, the Chamber's
president. This embraces northwestern Russia, including St.Petersburg,
Leningrad oblast, and Vologda.
"The greatest concentration of American investment is in the St.Petersburg
area," Blacklin said. "This includes Wrigleys, Coca Cola, Caterpillar,
Philip Morris and R.J.Reynolds."
Blacklin commented that the World Bank survey results did not surprise
him. "There is a certain attractiveness for investors in having a strong
hand at the tiller. Another approach combines strong local government
with the readiness to put market mechanisms in place. That's the case
in Novgorod, where we've just completed a mission."
Ryterman and Weber conducted their survey of 470 Russian firms in Ulyanovsk,
Nizhny Novogorod, Moscow, St.Petersburg, Sverdlovsk, Irktusk, and Primorsky
Krai. They also interviewed local government and court officials. The
results appeared at the end of 1996. Curiously, they are not
mentioned in last year's World Development Report, issued by the World
Bank last June. Comparing the Russian entrepreneurs surveyed earlier with
businessmen in 69 countries, the World Bank concluded that the credibility
of Russian government was among the lowest in the world. The report also
noted that one of the results was a growing inequality of resources
and living standards between Russia's regions.
An independent research project by American economist, Robert McIntyre,
recently found that Ulyanovsk also leads in delivering a higher standard
of living for its inhabitants than the national average, significantly
higher than in such reformist regions as Nizhny Novgorod and Samara.
Ulyanovsk, writes McIntyre in his study, resisted pressure from
the Kremlin, creating "what was in effect a country within a country."
Controls were enforced over local farm producers to prevent food from
leaving the region until local needs were satisfied. Price rationing
was introduced over bread, meat, sugar and other basics, in combination
with free-market sales. Wholesale and retail distribution networks were
policed to prevent criminal takeover. Local taxation funded welfare
payments and subsidies. A type of regional mortgage was invented to
stimulate local housing construction.
McIntyre says his research suggests that opposition to the government's
economic policies in Ulyanovsk doesn't mean that market reforms are blocked. "
On the contrary," he emphasized, "they facilitate the development of
low-criminalization market processes."
At the World Bank, there is an added warning for the Russian government not to
try to resolve the current financial crisis by imposing spending cuts that
will aggravate regional distrust and add fuel to the fire of regional
resistance and protest.
Russians trust individuals, they don't trust institutions, Ryterman and
Weber report. "Reduction of government spending should be made in a way that
sustains the trust individuals place in the ability of state institutions
to perform well."
Date: Fri, 19 Jun 1998
From: firstname.lastname@example.org (Sherrell Goggin)
Subject: response to matt fisher's submission on Russian women
While I certainly agree with most points made in Mr. Fisher's
submission, a few points seem to be misleading or, to my mind, untrue.
 While many Russian women may well "take care of all the
housekeeping, laundry, food preparation and childcare," in most
families that I know, this is not the case, and for those who it is,
it is not usually by choice.
 On Russian women's attire, he writes "they're beautifully
groomed." However, might this be to compensate for their physical,
and in particular, their facial weariness? From what I've seen,
Russian women age a heck of lot faster then American. I've always had
people mistake me for 10 or so years younger than I really am, and not
out of politeness, nor because I've aged particularly gracefully. To
me, it just shows what a harsh toll their life takes on them!
 Last, Mr. Fisher writes:
"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."
I've never noticed this in my five trips to Russia, and in fact, men
and women usually walk arm-in-arm, which I hope Mr. Fisher will agree
is a little awkward when the woman is a few steps behind.
Date: Fri, 19 Jun 1998
From: "William K. Wolf" <Wolf.email@example.com>
Subject: Re: limonov
Dear Mr. Ames,
I read your comments to my letter of June 16 with great interest,
but I would like to point out that my note was addressed not to you, but to
the editor of Johnson's Russia List. I sent the letter as reader feedback
for David Johnson and it never occurred to me that he would publish it.
Guess that shows my lack of foresight
Your interest in the letter, however, is understandable because I
criticized an article that originally appeared in your publication. I hope
I didn't offend you--that was certainly not my intention. You, obviously,
have the right to publish whichever "authentic voices" you see fit. By the
way, since you see profanity not as a detriment to good journalism but
rather as a benefit, why not incorporate real Russian obscenities, i.e.,
mother curses, in your publication? Maybe this would help you achieve the
bold, unpretentious style you admire.
My aesthetic tastes differ from yours, however, and so I criticized
the Edward Limonov article. My conviction is that profanity is
inappropriate in public discourse. To you this may seem quaint, even
retrograde, but I think that such language is crude and offensive (though it
hardly makes me "queasy"--I confess that I, too, was infatuated with
profanity briefly as a teenager). Hence my suggestion to Mr. Johnson that
all submissions to the JRL be required to meet at least minimal levels of
Finally, for the record, in my June 16 letter I did not, as you
stated, request that Mr. Limonov be banned from Johnson's Russia List. In
fact I never mentioned Mr. Limonov's name--I criticized not him, but his
article. Nor did I call for a silencing of the "radical opposition" as you
implied. J.S. Mill had it right when he touted the benefits of dissent in a
free society. My argument was only that it is desirable that such dissent
be expressed in a civil manner--and through the filter of an editor, when
Date: Fri, 19 Jun 1998
From: "Jennifer Griffin" <firstname.lastname@example.org>
Subject: SILENCING THE OPPOSITION
I was hoping you would have space for this on Johnson's list. Eve and I
travelled to Kalmykia in May to profile the republic's President for Fox
News. Much to our dismay, our interview with newspaper editor Larisa
Yudina was the last she gave before being brutally murdered in June.
She was one of the few vocal opponents of Kirsan Ilyumzhinov, Kalmykia's
President, who just days after Udina was killed announced on Russian
television that he planned to run for the President of Russia in 2000.
This is the piece Eve prepared for NPR.
Date: Wed, 17 Jun 1998 19:43:05 +0400 (WSU DST)
For Personal Use Only
THE FOLLOWING PIECE WAS PREPARED BY FEATURE STORY PRODUCTIONS, MOSCOW.
FEATURE STORY REPRESENTS RADIO AND TELEVISION CLIENTS WORLDWIDE, AND HAS
OFFICES IN WASHINGTON, DC, LONDON, MOSCOW, AND JERUSALEM.>
SILENCING THE OPPOSITION
INTRO: The murder of investigative journalist Larisa Yudina has focused
attention on freedom of speech in post-Soviet Russia. Police in the
southern republic of Kalmykia where Yudina was murdered have detained
three suspects. Two men have confessed to the crime, both are former
aides to the republic's president Kirsan Ilyumzhinov. The collapse of the
Soviet Union was supposed to have brought a new era of press freedom. But
many journalists, particularly in Russia's far-flung regions, have found out
the hard way that speaking out can still be dangerous. Reporter Eve Conant
who was the last person to interview Ms. Yudina before her murder, prepared
TAPE STARTS WITH AMBIENCE
OUT-CUE "... Eve Conant in Moscow."
AMB 1: BRING UP SOUND FUNERAL MARCH
TRACK 1: What was considered THE voice of opposition in Kalmykia has
silenced. Larisa Yudina was buried in the city cemetery the republic's
capital, Elista. Her body was found with a fractured skull and multiple
knife wounds at the bottom of a pond. The night before the 53 year old
journalist received a call from a man offering documents -- documents
that would help in her investigation of government corruption in Kalmykia.
Yudina went down to the entrance of her building in her slippers. That was
the last time she was seen alive. Journalists who go to Kalmykia are
assigned minders, so an interview with Yudina several weeks before her
death could be arranged only late at night.
AMB 2: BRING UP SOUND INTERVIEW UP AND UNDER NEXT TRACK (loop sound if
TRACK 2: Yudina lived in a simple apartment with her husband Gennady. She
talked about her belief that president Kirsan Ilyumzhinov was the focal
point of corruption in Kalmykia. The 36 year old millionaire developed a
cult of personality, driving around his poverty-stricken republic in a Rolls
Royce and suppressing any dissent.
ACT 1: LARISA YUDINA (IN RUSSIAN)
VO:"DEMOCRATIC FREEDOMS AND HUMAN RIGHTS ARE VIOLATED HERE MORE THAN
IN RUSSIA. WE HAVE LAWS WHICH CONTRADICT THE RUSSIAN CONSTITUTION. I
LIVE IN RUSSIA, BUT I'M NOT SURE THAT RUSSIAN LAWS PROTECT ME HERE."
TRACK 3: Grigory Yavlinski is a leading figure of the Russian
of the liberal Yabloko faction in which Yudina was active. He says that
she was right to be afraid.
ACT 2: YAVLINSKI, IN ENGLISH: "I THINK THIS IT WAS DEFINITELY THE INTEREST
OF THE ADMINISTRATION OF KALMYKIA TO KILL THIS JOURNALIST. THERE IS NO
DOUBT ABOUT THAT. "
TRACK 4: Larisa Yudina is not the only Russian journalist to die because
of her reporting. According to the New York-based Committee to Protect
journalists from the former Soviet Union have been killed since its
break-up. All these deaths are believed directly linked to the victims'
journalistic activities. Russia was recently ranked with Algeria as one
of the most dangerous countries for journalists. Alexei Simonov, president
of the Glasnost Defense Foundation which monitors press freedom:
ACT 3: SIMONOV IN ENGLISH. "NOT A SINGLE CASE WHEN A JOURNALIST WAS KILLED
WITH EVIDENT CONNECTION WITH HIS PROFESSIONAL OBLIGATIONS WAS SOLVED INSIDE
TRACK 5: Larisa Yudina was well aware of the danger. She discussed her
struggles to publish her newspaper "Soviet Kalmykia Today" despite constant
threats and obstacles. She had no help from the local media, whom she
considered mouthpieces for the administration.
ACT 4: YUDINA IN RUSSIAN.
vo: "RUSSIAN JOURNALISTS WHO COME HERE SAY THEY HAVEN'T SEEN PAPERS LIKE
SINCE BREZHNEV'S TIME. THEY CAN RUN UP TO 15 PICTURES OF ILYUMZHINOV IN
AN ISSUE. "
TRACK 6: Eventually Yudina published her paper in neighboring Volgograd and
Stavropol. Before her death she had been preparing a story on Kalmykia's
off-shore zone status and how money from it would go directly into
President Ilymzhinov's personal accounts. She described an attack on her
newspaper office by security guards employed by a bank with links to the
ACT 5: YUDINA, IN RUSSIAN
VO:"I TRIED TO CALL THE PROSECUTOR'S OFFICE, BUT THEY TORE THE RECEIVER
FROM MY HANDS. THEN I USED MACE AGAINST THEM AND THEY JUMPED OUT INTO THE
CORRIDOR. THE HEAD OF THE SECURITY SERVICE APPEARED AND SAID 'I'LL KILL
HER NOW' AND SHOT OFF HIS GUN. LATER WHEN THE INVESTIGATING TEAM CAME THEY
CLAIMED THERE WERE NO >BULLET HOLES ON THE CEILINGS NOR THE WALLS."
TRACK 7: When President Ilyumzhinov was asked last month about Larisa
Yudina, he responded.
ACT 6: ILYUMZHINOV IN RUSSIAN.
vo: "THE OWNER OF THIS NEWSPAPER IS A COMMUNIST. THE PAPER IS PRIVATELY
AND SHE RAN OUT OF MONEY. SO SHE TURNED FOR HELP TO VOLGOGRAD, A CITY
RUN BY COMMUNISTS."
TRACK 8: Although the paper she edited continued to bear the name Soviet
Kalymykia Today, Yudina vehemently denied being a Communist. Alexei
Simonov of the Glasnost Foundation recalls a recent discussion with Yudina.
ACT 7: SIMONOV, IN ENGLISH " WE ASKED HER-AREN'T YOU AFRAID? AND SHE
SAID 'I AM TOO TIRED TO BE AFRAID. I AM ALWAYS TOO TIRED TO BE AFRAID.'
AND THIS IS ALSO RARE, MOST OF US ARE NOT YET TIRED TO BE AFRAID."
TRACK 9: Fear among Russian investigative reporters is, indeed, real.
The international watchdog group Reporters Sans Frontieres has called on
president Yeltsin to protect journalists throughout the Russian Federation.
Faced with such public outcry, Russian federal authorities have taken over
the investigation of Larisa Yudina's death. But for now, the newspaper
editor's name remains the latest on a growing list of unsolved murders.
For National Public Radio, I'm Eve Conant in Moscow.
Subject: The Scout Report -- June 19, 1998: The Face of Russia--PBS
Date: Sat, 20 Jun 1998 08:21:00 +0400
The Face of Russia--PBS [RealPlayer, QuickTime]
This site from PBS complements its three-part series of the same name. The
series and site interpret the cultural history of Russia from 850 AD to the
present. Exploring art, music, cinema, prose, and poetry, the show
concentrates on Russian cultural history in three cities: Kiev, Moscow, and
St. Petersburg. The site is highlighted by a detailed, partially annotated
timeline; RealPlayer excerpts of interviews with Maxim Kantor, Dmitry
Likhachev, and Mstislav Rostropovich, among others; artwork (including
RealPlayer and QuickTime movies of selections from drama and cinema); and a
reference section that includes a glossary, bibliography, lesson plans, and
the Cyrillic alphabet. [JS]
>From RIA Novosti
June 16, 1998
POPULATION PREFERS HARD CURRENCY
By Alexander POTEMKIN
According to Central Bank data, in 1997 Russia imported
hard currency in the sum of 43.2 billion dollars (of which 38.2
billion dollars by banks). It exported 29.7 billion dollars
(mainly by "shuttle traders" - 17.2 billion dollars - and by
tourists - 7.3 billion dollars).
The bulk of the increase of hard currency in the country
fell to the nonbank sector - 13.4 billion dollars. In 1996 the
increase of hard currency was substantially smaller - 9 billion
dollars. The growth of the volumes of cash foreign currency
retained in the country was caused, first, by the lowering in
1997 of the rates on individuals' deposits by more than 1.5
times. Secondly, by the crisis in the financial market in
October-December of last year (it was in the fourth quarter of
1997 that the increase of hard currency in the sector of
nonfinancial establishments and households was the highest -
5.9 billion dollars). All this stimulated the population to
accumulate savings in foreign currency.
Journal of Commerce
22 June 1998
[for personal use only]
Russia's robber barons
BY PHILIP GAILEY
Philip Gailey writes for the St. Petersburg Times. This article was
distributed by Scripps Howard News Service.
More than seven years after Communism collapsed and the Soviet empire
disintegrated, Russia is an incongruous and jumbled place, bedraggled
with its past as it struggles toward a future built on democracy and
After living for 70 years in a hermetically sealed police state,
stifling in its rigid thought control, Russians are breathing the fresh
air of freedom. But in some ways the trappings of Russia's new
free-market democracy are more impressive than the reality.
Its economy, and to an alarming degree its government, is dominated by a
few robber baron capitalists. Its press, though free, is far from
independent. Its television stations and newspapers are owned or
controlled by tycoons who use them to promote their own selfish
financial and political interests. Its democratic institutions are weak,
and its laws are ignored by the government and the tycoons when it suits
Polls show many Russians feel as disengaged from politics today as they
did under the Soviet system, not a healthy sign for a developing
"Russia faces a watershed decision," writes Grigory Yavlinsky, an
economist and leader of Yabloko, a democratic, reformist party, in the
latest issue of Foreign Affairs magazine. "The vital question for Russia
is whether it will become a quasi-democratic oligarchy with
corporatist, criminal characteristics or take the more difficult,
painful road to becoming a normal, Western-style democracy with a market
economy. Communism is no longer an option."
About the only thing Russians are certain of is that the future of
Russia is uncertain. The latest financial crisis is a reminder of just
how fragile Russia's economy is.
The Russian government is juggling $150 billion in foreign debt, running
huge budget deficits and resorting to the kind of legerdemain we used to
see in Washington budget-making.
The financial markets have begun to settle down. To his great relief,
Russian President Boris Yeltsin avoided his most feared step: devaluing
the ruble, a move that would increase prices for ordinary Russians and
risk social and political upheaval.
For the moment, Mr. Yeltsin and his new prime minister, Sergei
Kiriyenko, a 35-year-old technocrat, may have averted a financial
meltdown. Mr. Yeltsin, whose erratic behavior and haphazard leadership
keeps bringing Russia to the brink of economic disaster, has been better
at crisis management that soothes the financial markets than at the
day-to-day governance needed to fix Russia's economy.
Is the Yeltsin-Kiriyenko government prepared to deal with the
fundamentals of Russia's staggering economy?
According to some estimates, Russian workers, including soldiers and
miners, are owed more than $10 billion in back wages by the state and
private companies, many of which are owed huge amounts of money by the
government. There is not enough money to pay workers and adequately fund
government pensions because tax collection is a disaster area. About
half of Russia's economy is underground, beyond the reach of tax
collectors. Corruption and foreign bank accounts hide billions more.
While many workers are forced to live on bartered goods, Russian tycoons
are robbing the country of its wealth and stashing their profits abroad.
The Economist recently estimated that $200 billion had left Russia in
the past decade.
Although Russia is wealthy in natural resources -- it sits astride about
20% of the world's known oil reserves and 40% of its natural gas fields
-- that wealth is benefiting a few politically connected tycoons who
enrich themselves while the average Russian continues to lose economic
ground. Real incomes have fallen by a third since 1989, and government
pensions have lost 40% of their original value.
Ordinary Russians cannot become better off as long as the government
favors robber-baron capitalism. An estimated 70% of Russia's financial
wealth is concentrated in Moscow, where the nouveau riche are driving
luxury cars, snapping up luxury apartments and spending exorbitantly in
shops and restaurants that cater to the new elite.
There is no middle class between the new rich and those Russians who are
living in shabby, one-room apartments, struggling to survive. No wonder
the rarest sight in Moscow is a smile on the face of a working Russian.
Many believe what saved Mr. Yeltsin in the 1996 presidential election
was turning Russia's wealth over to a corporate oligarchy in return for
political support. And in a post-election interview with the Financial
Times, one Russian banking tycoon boasted that the country's seven
largest banks controlled more than half of the Russian economy.
Why should the rest of us care about Russia's economic and political
stability, or the rise of the robber barons? In his commentary in
Foreign Affairs, Mr. Yavlinsky provides a chilling answer:
"In October 1996, Vladimir Nechai, the director of a nuclear complex
near the Ural city of Chelyabinsk, killed himself because he lacked the
money to pay his employees and could no longer ensure the safety of his
plant's operations. His suicide underscored the most serious threat to
all players in the post-Cold War world: loss of control of the Soviet
arsenal of nuclear, biological and chemical weapons . . .
"Under the rule of a corrupt oligarchy, uranium and anthrax could become
black market commodities available to the highest bidder."
June 20, 1998
President Gives Local Leaders a Kick
By Dmitry Zaks
KOSTROMA, Central Russia -- President Boris Yeltsin came to this sleepy
provincial town Friday to check out some prizewinning cows, twiddle with
the buttons of a factory machine, and lash out at every administrator he
came across for slacking off at work.
Along the way, he also promised -- yet again -- not to violate Russia's
constitution by seeking a third term in office.
Presidential spokesman Sergei Yastrzhembsky explained that Yeltsin was
in Kostroma, a leafy town of 260,000 people that hugs a gentle stretch
of the Volga River 335 kilometers east of Moscow, to see for himself the
state of the Russian hinterland. "He wanted to see one of the
problematic regions. Kostroma is one of the typical problematic regions
of Central Russia," Yastrzhembsky said.
And there are problems here. Earlier this month, all the hot water was
turned off because of a nonpayments crisis. Pensioners are still owed
their May checks.
Even the emergency spring-cleaning job ahead of the president's visit
did not erase all signs of discontent: A road-sign marking the exit from
town had been defaced with spray-paint to indicate "An end to Yeltsin."
The Russian leader, looking sprightly if a touch testy Friday, was on a
mission to give local officials and businessman a sharp kick up the
Viktor Kulish, proud owner of the Karavayevo farm factory and breeder of
some of Russia's most respected cows, was one of those on the receiving
end when Yeltsin and his entourage dropped in on the farm.
Kulish's 106 dairy cows are hand-milked by just six maids. He is not
making a profit, but then he runs a state subsidized farm, so he and his
work force can scrape by. He glows when talking about his cows, though,
which are the product of generations of careful breeding and are famed
in parts of Russia for their creamy milk and cheese.
Then Yeltsin came. The president gave Kulish an earful. "How many calves
per 100 cows?" Yeltsin demanded. Eighty-eight, Kulish replied.
Yeltsin frowned. "I don't understand. If you said 98 or 99, that's
something." And when the farmer pleaded in defense, Yeltsin growled:
"Don't tell me you're improving. I've already heard about those things
from the Bolsheviks."
Yeltsin's agriculture minister, Viktor Semyonov, chipped in. "You'd
better get back to your textbooks," he told Kulish.
The farmer was left standing discouraged as the Kremlin people moved
out. "I've nothing to be blamed for," Kulish said. "But I did not get
Production is also running at about one-third of capacity at the Great
Kostroma Linen Factory, whose general director is Yevgeny Alyayev, a
red-faced bulky man.
There is not much demand for his flower print beach towels and baby
outfits. Alyayev is hoping for a bailout investment, either from the
Kremlin or a Dutch firm curious about possibilities in the Russian
It was not an easy day for Alyayev either. First, pointing at the linen
weaving machines, Yeltsin demanded to know why they were not all made
the same size.
"Some are to make children's clothing," the director offered. "I guess
that's OK then," the president said.
But when it came down to the issue of cash, Yeltsin squarely told
Alyayev off. "You are asking for 100 million [rubles, or $16 million].
And where will that money go?" Yeltsin asked. Then he cut short the
factory owner's stammering response.
"Stop. Stop. Stop. I know that money will only finance your easy
lifestyle," Yeltsin said. "I might issue some money for this place, but
none of it will go through you."
Yeltsin did, in the end, relent, signing his name to a promise to issue
cash for the textile factory soon. The Kostroma budget also benefitted
from a large chunk of federal money just sent to the local pension and
state worker funds, both of which were owed about $500,000 each.
In recent years, the 67-year old president has made a habit of leaving
Moscow for brief, warm weather stints in the provinces, Some observers
have hinted -- though Yastrzhembsky denies this -- at Yeltsin is using
the trips to test the water for a third run at the presidency in 2000.
The Constitutional Court is expected to rule later this year on whether
Yeltsin can do so. The Russian Constitution sets a two-term limit, but
Yeltsin was first elected to office in 1991 under the now defunct Soviet
Replying to a question about four more years in office from a college
student Friday, Yeltsin gave a well-schooled answer.
"No, this is not planned under the constitution ... The constitution
provides only for two terms two terms." Or in other words: Yeltsin will
not run again if it violates the constitution, but if the court decides
he can, he is not ruling it out.
In a throwback to Soviet practice, the Kostroma administration spared no
expense to make sure that the city was spick and span for the visit by
Yeltsin, the first Russian ruler since Tsar Nicholas II in 1913 to come
The Kostroma paratroop division, was sighted Thursday with shovels in
hand clearing debris from a just-paved main street. A whole city center
bus shelter sprung up from nowhere in the course of a sunny afternoon.
And nobody dared touch anything green -- everything from fences to
street poles to benches had just been coated in that bright springtime
The Kostroma region's Communist-backed governor, Victor Shershunov,
explained: "In the Soviet Union, we had some good traditions that I
don't think should ever be forgotten. We will never forget them here."
Experts Say Corruption Costs Russia R50 Billion Yearly
MOSCOW, June 18 (Itar-Tass) -- Corruption leaves Russia with annual
losses of over 50 billion dollars, or more than the spending of the 1997
budget on science, education, health and culture, said Georgiy Satarov, the
Russian president's former aide.
Satarov, who is currently the president of the Information Science for
Democracy fund, on Thursday presented to a press conference a report of the
Council on the Foreign and Defense Policy.
The report, called Russia and Corruption: Whose Upper Hand, cited
experts of the public group Technologies: 21st Century as saying that small
businesses across Russia spend a monthly 500 million dollars to bribe the
The annual bribing budget amounts to an estimated six billion dollars.
Expert extrapolations estimate that about ten per cent of the overall
profit of small and medium-size business goes into corrupt deals.
These losses are recompensed by being inbuilt into prices of
commodities and services.
Satarov said corruption-breeding factors include "difficulties of
overcoming the legacy of the totalitarian period", economic recession,
political instability and awkward legislation.
Writers of the report said Russia's legislation on ownership remains
Additive factors are inefficiency of institutions of power, a weak
civil society, public alienation from power and immaturity of democratic
Solutions lie in revision of current legislation which Satarov said
should focus on unraveling obscurities in laws that provide loopholes for
bureaucratic corruption and arbitrariness.
Multiple by-laws hedging current laws must be done with, corrupt acts
differentiated in the penal code and duties and fines revised, Satarov
Yeltsin's Ex-Bodyguard Plans Book
June 20, 1998
MOSCOW (AP) - A year after his first ``sip and tell'' book about Boris
Yeltsin, the president's former bodyguard reportedly is planning another.
Alexander Korzhakov's first book portrayed the president as a suicidal heavy
drinker who is unfit to govern. His claims were treated skeptically by many
Russians, who believed he was motivated largely by revenge for Yeltsin's
decision to fire him.
Korzhakov did not specify what his new book would cover or when it would come
out, the Interfax news agency reported Friday.
The former head of the presidential security service and Yeltsin's closest
confidant for 11 years, Korzhakov was ousted in a Kremlin power struggle in
June 1996. Since then, he has threatened to tell scandalous stories about the
nation's political and business elite, including Yeltsin.
The first book, titled ``Boris Yeltsin: From Dawn Till Dusk,'' contained
little new information about Russian politics and its scandalous chapters
mostly involved tales of Yeltsin's heavy drinking.