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Johnson's Russia List


July 7, 1998   
This Date's Issues: 2251   

Johnson's Russia List
7 July 1998

[Note from David Johnson:
IMPORTANT: I somehow mixed up the numbering of JRL messages recently.
This returns to what I believe is the accurate version. Can I blame this on
the eXile emotional turmoil? Which reminds me: there are a goodly number of
recipient commentaries in this issue. Without casting aspersions on anyone
let me
reissue my occasional plea/request that all of us strive for civil,
contributions. I know that this is sometimes hard, particularly in the
world of
casual e-mail, but we will all be happier if some restraint is exercised. And
you won't wake up in the morning with e-mail hangover or regrets.]
1. Interfax: Yeltsin To Consider Guidelines Of Military Reform.

3. Tom Adshead: RE Aslund/Devaluation.
4. Jonas Bernstein: Re: Anders Aslund's op-ed.
5. Levent Hekimoglu: Caspian agreement between Russia and Kazakstan.
6. Dmitri Gusev: Apology (Re: Kolbasa in the Taibbi Article).
7. Masha Gessen: Response to Dorothy Rosenberg on taxes.
8. Interfax: Mourning Service Held In Moscow For General Rokhlin.
10. NTV: Lebed Embroiled in 'New Political Row' in Moscow.
11. Warsaw's Gazeta Wyborcza: Analyst Notes Turn in Russia's Polish Policy.
12. Garfield Reynolds: eXile Vorkuta article.
13. Journal of Commerce: Philip Gailey, Tale of two Russias.
14. New York Times: Grzegorz Kolodko, Russia Should Put Its People First.]


Yeltsin To Consider Guidelines Of Military Reform 

MOSCOW, July 7 (Interfax) - The government on Tuesday passed President
*Boris Yeltsin* draft guidelines of Russia's military reform through the
year 2005, Prime Minister Sergei Kiriyenko said when opening a joint
meeting between the Cabinet and the special commission for military reform. 
The meeting will focus on the government's defense production order,
financial support for defense enterprises and priority measures for
military reform, Kiriyenko said. 
The joint meeting was prepared thoroughly, he said. The Russian Security
Council had held a special session in the run-up to the joint meeting on
military reform, Kiriyenko said. 
"We should proceed from the need for strategic development of Russia's
armed forces and primarily the strategic nuclear forces," he said. 
The main task is to determine the necessary amount of funding for the
government's defense production order so that enterprises will not have
"false expectations," Kiriyenko said. 
Defense Minister Igor Sergeyev delivered a keynote report on the issue. 
The meeting is being held behind closed doors. 


Jamestown Foundation Monitor
7 July 1998

ECONOMIES. In its latest report, published today, the United Nations
Economic Commission for Europe gives an upbeat assessment of progress in the
Central and Eastern European transition economies in the first half of this
year. It warns, however, that the region as a whole is threatened by

continuing instability in neighboring Russia. The report says that, while
Russia appears to have successfully warded off the latest attack on the
ruble, which began in May, the country's long-term financial prospects
remain uncertain. The UN argues that, whereas ruble flight continues
unabated, Russia has become dangerously dependent on volatile capital
inflows from abroad to finance its budget deficit. The UN report says this
vulnerability can be overcome only by further far-reaching reform,
especially of the tax system. It also recommends a devaluation of the ruble.
(Financial Times, BBC, July 7) 

From: Tom Adshead <>
Subject: RE Aslund/Devaluation
Date: Tue, 7 Jul 1998 09:

I wanted to comment on Anders Aslund's article about devaluation. There is
no question that devaluation would be disastrous, for all the reasons that
he outlines and the markets are taking a beating right now for that reason. 

However, I think that the support package that he describes, although
probably more realistic, would fail to avert the run on the rouble and on
the GKO market that is looming. Right now the markets are so shaky that the
government needs to take a very strong stance on the rouble to give buyers
of rouble debt the confidence that there will not be a devaluation. I spent
last week in London talking to mainstream emerging market investors, and
they are not coming near Russia until something lasting is in place.

The package that Aslund describes would effectively address Russia's medium
term problems, but would not alleviate short term pressure on the rouble,
because market sentiment is so negative right now. This is more about market
psychosis than about real factors - the market thinks that the rouble must
go down, because everyone thinks that it must go down.

In my opinion, Russia needs a new exchange rate regime, possibly a tighter
band, backed up by significant reserves, such as would be provided by the
SRF. USD 14bn from the IMF, added to the Central Bank reserves of USD 16bn,
would provide a war chest to defend the rouble. This should be enough,
because there are not that many free roubles in the banking system,
especially since Sberbank will never attack the rouble. The 12 -18 month
time frame of the SRF would be less of a problem as hopefully it would never
be drawn down, as with the stabilisation fund in Poland in the early 90s.
So I think that a short term package is crucial, and could well obviate the
need for medium term support, because it could restore confidence to the
extent that Russia could go to the private sector for medium term finance,
especially given the current tax reforms under discussion. We estimate a
budget shortfall of about Rb 30bn (USD 5bn) this year, beyond the borrowing
requirement in the government's anti-crisis package.


From: "jonas bernstein" <>
Subject: Re: Anders Aslund's op-ed in The Moscow Times, posted on JRL, July 7.
Date: Mon, 06 Jul 1998 23:03:43 PDT

Anders Aslund's essay against ruble devaluation is interesting, but 
warrants a couple of comments.

First of all, while Mr. Aslund says the ruble is not overvalued, fellow 
eminent liberal economist Andrei Illarionov says it is, and that a 
devaluation is inevitable.

Secondly, I would like fellow JRL readers to take a crack at 
deconstructing the following section of Mr. Aslund's piece:
"At present, Russian stock prices have fallen by 75 percent from their 
peak last October. On the one hand, it shows how deep the crisis is. On 
the other, it indicates that Russia possesses very attractive assets 
that are available on a functioning market. In a recovery, Russia's 
equity market could easily attract $20 billion within a year."
By this logic, America's stock market crash in 1929 was as much a buying 
opportunity as a crisis. Does Mr. Aslund mean to say that if Russian 
stock prices were to fall by, say, a total of 99 percent, that would be 
even more compelling evidence that "Russia possesses very attractive 
assets that are available on a functioning market"?

He states that for Russia to attract $20 billion within a year, it will 
have to institute tax reform, ensure property rights, guarantee a level 
playing field in the economy, etc. True - so what else is new? I mean, 
don't these problems, in essence, constitute the reason why the Russian 
stock market went down 75 percent in the first place?

Indeed, there is something strangely circular about the reasoning in 
this op-ed -- kind of like a cat chasing its own tail as it hurtles 
toward the sidewalk from the roof.


Date: Tue, 7 Jul 1998 
From: Levent Hekimoglu <>
Subject: Caspian agreement between Russia and Kazakstan

Contrary to the optimistic tone of the AP story by John Iams that appeared
in JRL on Monday, the agreement initialled by Yeltsin and Nazarbaev is
unlikely to prove to be much of a breakthrough in the resolution of the
Caspian regime problem. Russia has had to revise its initial
proposal/demand for a condominium regime for the Caspian (a regime that
has no precedence elsewhere, despite the great diversity of prevailing
regimes in other crossboundary lakes of the world) numerous times, and in
the current deal with Kazakstan appears to have further compromised its
position by agreeing to a division of the seabed/lakebed. Well, the
appearance is misleading. 
The critical point here is not the Russian consent to a division of the
seabed but the Kazak consent to joint sovereignty (I cannot think of a
better term to express what the agreement reportedly entails) over the
Caspian waters, hence agreeing to an effective Russian veto over offshore
hydrocarbons extraction and transportation projects. The agreement is much
more a victory for Russia than it is for Kazakstan. What factors have
drawn the Kazaks into signing up to such terms needs to be discussed, but
it would certainly be premature to expect that Azerbaijan and Turkmenistan
(especially the former) will follow suit. 


Date: Tue, 07 Jul 1998 
From: dmitri gusev <>
Subject: Apology (Re: Kolbasa in the Taibbi Article)

I would like to retract some of my criticism of
the translations in Taibbi's article on Russian

miners and apologize to the author for the
distress my remarks apparently caused. 
This particularly refers to whether the author
had to translate the word "kolbasa". Matt wrote
me an e-mail, in which he explained why he made
certain stilistic choices, some of which I still
don't like.
As my own remarks and the followup by David Filipov
suggest, "kolbasa" is not easy to translate.
Admittedly, "servelad" is a lot like the summer
sausage, and is quite dissimilar from both
bologna and "kielbasa". But the word "sausage"
in English may sometimes mean a product
that no Russian would characterize as "kolbasa".
So not translating "kolbasa" may be a legitimate 
choice, after all. Note that "servelad" tends 
to be more expensive than either of the two
popular "kolbasa" varieties I thought of when I read
Matt's piece. But it is also easier to store,
which may explain its being part of the "tormozki".
I disagree with Matt's opinion that to translate
"pidoras" to "fag" "would take away the flavor."
"Pederast" is a "legitimate" word in Russian, and
"pidoras" is its slang distortion, not found in
the traditional dictionaries. Removal of the 
distortion actually does take away much of the flavor,
in my opinion. I certainly did not mean to accuse 
Matt of intentionally misquoting the angry miner,
though. I merely made a suggestion on how to
preserve the flavor better. I do not consider 
myself an ultimate authority on the matter of
translation of Russian slang expressions into
Matt asked me, "How would you "translate" khui yevo znayet?"
"How the fuck am I supposed to know?" would be my choice
of translation. Matt's version made it relatively difficult
for me to figure out what the original expression might have 
been. But, perhaps, it's just me being dumb.
More importantly, as I realized now, the tone of my comments 
was way too snubbish, and I apologize for that.


From: "Masha Gessen" <>
Date: Mon, 6 Jul 1998 21:58:44 +0400
Subject: Response to Dorothy Rosenberg on taxes

Dorothy Rosenberg's tone in her response to my message on taxes is so
righteous that I can only suppose that she works in a nursery school in
Voronezh for 160 rubles a month. In that case her resentment of my
astronomical (she can only imagine) salary is quite understandable, and I
can well forgive her the apparent desire to "track down the hidden income
of Ms. Gessen and her peers."

Strange, though, that Ms. Rosenberg cites from studies (deconstructing the
sorts of studies she cites would require a much longer message than I have
time to write) rather than from real experience, and that she finds it
necessary to distort my statements to buttress her point. To set the record
straight: I did not say that "most Russians" are involved in the sorts of
tax-evasion schemes that I described: those methods are generally employed
by employers who pay more than, say, $300 a month (I guess that would be
"rich" by Ms. Rosenberg's definition). I did say, though, that most
individuals who hold a single job are a part of some tax-evasion scheme or
another, and I will stand by that. I also said that the tax-evasion is

perpetrated for the benefit of the employer, not the employee, and I will
stand by that. When a worker at a sewing plant in Ivanovo gets paid in
towels, what does Ms. Rosenberg think that is? Barter? No, *that* is tax
evasion. That goes on the factory's books as either "material aid" or
"unsold goods written off." And what of the nursery school teacher in
Voronezh and her 160 ruble salary? Well, let's see, she gets another 10
rubles "for milk," 30 "for harm," 25 for holding a supervisory position
(she's the head teacher in her shift) and 50 once a quarter as a bonus.
That too is tax evasion, and the poor teacher is screwed because none of
that money is going to be counted in calculating her pension or her
unemployment benefits when the school shuts down next year.

Ms. Rosenberg thinks that no one but the wealthy think about their
pensions. This almost makes me suspect Ms. Rosenberg has never spoken to a
Russian. It's the wealthy who don't worry; go to the provinces and you will
see a lot of people who are quite concerned with their pensions and their
unemployment benefits, which are also calculated according to the average
monthly income before the layoffs. Someone wrote to me after that tax
message and asked why miners who don't get paid keep going to work. I
haven't had time to respond (my apologies to the writer), but the mechanism
is quite simple (I'm not talking about the psychology here--that's a
separate story): If the miner quits of his own accord, he's not entitled to
much in the way of unemployment benefits; if he stops going to work, he is
either an absentee or on strike, and either way he's earning nothing--after
a few months is a very good time for the mine to lay him off, because then
he's not entitled to unemployment benefits; whereas if he keeps going to
work even though he's not getting paid, officially he's still earning
something, so if he's lucky enough to get laid off, he'll actually get some
money for a few months. Don't tell me, Ms. Rosenberg, that he's not
thinking about that, because he's actually told me he is.

I also find it quite interesting how it can be that "the upper 10-15% buy
imported products" when 80% of the food consumed in this country is
imported. Oh, no, "Ms. Gessen and her peers" have eaten all the sausage!
(Or was it kielbasa?) Just for the record: The point Ms. Rosenberg missed
is that Ms. Gessen and her peers would very much like to have their hidden
income hunted down because we would lose little or nothing in terms of cash
but gain a lot in future security. We stand to lose a hell of a lot if we
find ourselves paying 20% more at the supermarket (yes, the expensive
supermarket where we shop). But, as I said before, the tax-evasion schemes
benefit the employer, not the employee, which is why there is little chance
there will be a crackdown on those.

Masha Gessen
chief reporter
Itogi magazine


Mourning Service Held In Moscow For General Rokhlin 

MOSCOW, July 7 (Interfax) - A mourning service is being held for Duma
Deputy Gen. Lev Rokhlin at the Officers' House of the Moscow military
district on Tuesday. 
Among the first mourners were ex-defense minister Igor Rodionov, Duma
Deputy Gen. Eduard Vorobyov and Chairman of the Duma's Security Committee
*Viktor Ilyukhin*, an Interfax corespondent reports. 

According to Moscow police, over 2,000 people, among them active-
service and retired officers and generals, have gathered outside the
The Defense Ministry is represented by Chief of the General Staff
Anatoly Kvashnin. 
The numerous representatives of the left-wing opposition carry red
banners with black ribbons. The mourning service is also being attended by
Duma deputies and faction and group leaders, ex-chairman of the Soviet KGB
Vladimir Kryuchkov, leader of the Communist Party sharing the CPSU platform
Oleg Shenin, and a delegation of the miners who are picketing the
government building. 
Among those present are Rokhlin's relatives, including his daughter and
Russian Duma Deputy Lev Rokhlin, who was also leader of the opposition
Movement in Support of the Armed Forces, was killed on Friday morning in
his countryside cottage. Rokhlin's wife Tamara has confessed to killing
him. The law-enforcement bodies argue that the murder was caused by a
quarrel. However, Rokhlin's relatives and opposition representatives doubt
this version. 
Communist Party leader Gennady Zyuganov, who was among the mourners,
told the press that the murder is rooted in "uncontrolled violence." 
He said that previous high-profile murders in Russia had not been
solved, which reflects "the authorities' ineptness." "The investigators
have hastened to launch just one version - a quarrel, thus trying to shake
off the responsibility of a very complicated investigation," he said. 
Leader of the State Duma's Legislation Committee Anatoly Lukyanov said
that "the most obvious things often prove to be unlikely in jurisprudence." 
He also said that Lev Rokhlin's death is "an enormous loss for the
opposition and for all honest and just forces in Russia." 
Leader of the Liberal-Democratic Party Vladimir Zhirinovsky said that
the general's murder was "politically motivated." Asked to name those who
may have been interested in ordering Rokhlin's murder, he said that the
general's murderers "have one and the same name - Authority." 
He also said that the special services of a Middle East country may have
been involved in the murder of General Rokhlin. 
Duma Deputy Gen. Boris Gromov expressed the hope that Rokhlin's death
"will not be used as a pretext for staging political shows and
provocations." In a statement, circulated on Tuesday, Gromov wrote that "it
is a terrible tragedy and must be viewed as such." 
He said, however, that the murder must be thoroughly investigated. 


From: (Dmitri Glinski)
Date: Mon, 6 Jul 1998 23:10:55 EDT 
Subject: Rokhlin 

Dear David,
attached is my submission for one of JRL's issues. It is an article that was
written in Russian for a Moscow periodical which now finds it impossible to
publish for political reasons. It was written before I read Mr.Blank's query,
but it may serve as one possible answer.
Yours, Dmitri

By Dmitri Glinski

Despite the brevity of his thorny political career, Lt. Gen. Lev Rokhlin
was one of that handful of the Russian military officers whose names are
easily recognized by ordinary Russians. It is striking that his murder, on
the night of July 3 at his dacha in Naro-Fominsk, has been barely noticed
by the Western press. In Russia, even if no direct evidence of the
political character of his assasination is ever found, this tragedy is
still likely to have far-reaching repercussions.
Rokhlin, a professional military man, had been wounded twice in the
Afghan War and later served as Commander of Russia's Northern Group of
Forces which conducted the initial operations of the Chechnya War, between
December 1994 and February 1995. At that point, he was removed from
Chechnya by then-Defense Minister Pavel Grachev, reportedly for voicing his
discontent with the brutal tasks that his army was ordered to perform.
Soon, Rokhlin became famous as the only military commander to have declined
the Order of Hero of Russia, Russia's highest military decoration. In
Chechnya, said Rokhlin, the Russian Army was waging a war against Russian
citizens, and in such a war commanders should not accept awards and honors.
In September 1995, he was enlisted as the candidate No.3 of the
parliamentary slate of Our Home Is Russia (NDR), led by Chernomyrdin, who
at that time postured as the leading "dove" on Chechnya, with the goal of
undermining the political infuence of the initiators of the war - Grachev,
Korzhakov, Barsukov, and Yegorov. For NDR, recruiting the unpredictable
Rokhlin was a risky gamble, but the party of Gazprom was desperately short
on popular vote-getters, and it needed to differentiate itself from the
widely detested regime by including at least one prominent troublemaker on
its slate.

The NDR functionaries promoted Rokhlin to the Chairmanship of the Duma
Defense Committee, where his tenure was conditional upon continued support
from their party. They reasoned that in this position he would be least
likely to criticize the government, because if he were to do so he would
risk losing his new prestigious position with all its perks. This logic has
recently been spelled out by such a provocative ideologue of the Yeltsin
regime as Vladimir Zhirinovsky, who remarked that "if someone gives up a
position of power on his own accord, this means that he has either been
exposed as a criminal, or that he is a plain fool." In Zhirinovsky's
classification, Rokhlin certainly qualified as a fool. In June 1997, he
broke with NDR and moved into an irreconcilable opposition, which
predictably led to his removal as Chairman of the Defense Committee.
Rokhlin thus became the third leading figure of the Yeltsin era consciously
to put his convictions above survival in office - after Grigory Yavlinsky,
who resigned from the cabinet in November 1990, and Sergey Glazyev who did
the same in September 1993.
The immediate reason for Rokhlin's final shift to the opposition was
Yeltsin's brutal treatment of the military high command. On May 22, 1997,
Yeltsin presided over a scandalous session of his Defense Council, which
was deliberately broadcast live on television. At this session, he dressed
down his loyal Defense Minister, Igor Rodionov, for not implementing
military reforms (an apriori impossible task in a chronically underpaid and
underfed army), and announced his firing, along with the Chief of the
General Staff, Samsonov. Soon afterwards, Rokhlin and Rodionov proclaimed
the foundation of the All-Russian Movement in Support of the Army, Military
Science and Industry, to resist the financial and psychological destruction
of the military sector. The new organization's members and sympathizers
included a number of people and professional associations who had
previously been loyal to the Kremlin. Now, they openly called for Yeltsin's
resignation or impeachment.
For Russia's ruling elite, the most disturbing thing about Rokhlin was
that he did not conform to the bogey-man stereotype of the Red-and-Brown
opposition, as it is daily conjured up by Russia's reanimated Agitprop
[Soviet-era propaganda machine]. He did not speak the wooden language of
the Communist Party propaganda, he openly rejected ethnic nationalism and
xenophobia, but he also did not try to ingratiate himself with the West, as
so many disillusioned ex-Yeltsinists have tried to do. As a
parliamentarian, Rokhlin repeatedly displayed his committment to democratic
procedures and rejected the idea of a military dictatorship, that has
become so popular among Russia's authoritarian market reformers. His whole
conduct was typical of the Russian military intelligentsia, which, for all
its profound and sincere patriotism, has been traditionally loath to claim
a political role for itself and reluctant to engage in what it sees as
sordid Moscow intrigues. This military culture of aversion to politics was
never comprehended by those Western and Russian analysts, especially on the
political right, who have spent years forecasting a "Latin American"
scenario for Russia and busily looking around for a Russian Pinochet or de
Gaulle. (An understanding of this culture would explain, for example, why
Alexander Lebed is generally not seen by Russian soldiers and officer corps
as their political spokesman - on the contrary, many Russians view his
image and agenda as crafted along alien Latin American models.) Rokhlin was
very much a product of this anti-political culture and, while bluntly
ouspoken in his anti-governmental pronouncements, he kept repeating that he
wanted nothing to do with politics. And indeed, he did not do what most
Russian politicians practice to enhance their profile and influence. 
Precisely by virtue of his being above the fray, Rokhlin was one of the
potential moral leaders of a unified anti-oligarchical opposition of the
unprivileged Russians, if such a popular movement were ever to materialize.
Rokhlin, in fact, had repeatedly spoken out in favor of such a unified
front, that would bring together the democratic intelligentsia who saw its
ideals betrayed by the self-styled reformers, and the nostalgic masses who
had lost their modest well-being and stability with the destruction of the
Soviet system. Rokhlin once suggested that the Russian protesters against
the Yeltsin regime should resort to the same methods that were used by
Eastern Europeans in 1989 to get rid of their Communist nomenklatura; these
words struck the chord with many Russians who had taken part in the failed
attempt at the democratic revolution in 1989-91 and who now increasingly
feel that a genuine democratic transformation of their country would have
to be directed against the present system and its "reforms" , designed to
perpetuate the power of the nomenklatura and the mafia. 

All this makes plain that Rokhlin's presence in public life was rather
uncomfortable for the regime that had become accustomed to the easy job of
manipulating its scarecrows such as Anpilov and Zhirinovsky, as well as the
domesticated opposition in the Duma. The Moscow media controlled by the
notorious Seven Bankers went out of their way to deride, discredit, and
isolate Rokhlin. "We will brush these Rokhlins aside", Yeltsin once
promised in a television speech. Now, almost exactly a year after he dared
to break with the regime, Rokhlin has been "brushed aside" by a mysterious
gunshot which killed him in his sleep. Initially, the authorities claimed
that Rokhlin's wife had confessed to the killing, but later other relatives
reported that she had been forced by threats to accept the responsibility
for his murder.
Rokhlin's death comes at an extremely troublesome moment. After almost
seven years of looting the country, the late Soviet
nomenklatura-turned-capitalists are confronted with yet another major
financial crisis. The Kremlin and its allies face an unappealing three-way
choice of their rescue strategy: either to allow further growth of the
already exorbitant foreign debt (with another set of IMF conditionalities
attached), or accept a devaluation that would make both the financial elite
and the entire nation worse off, or, perhaps, to replenish the exhausted
treasury by a dramatic takeover of some financial resources and property
accumulated by the oligarchs. This new expropriation, which would imply a
complete change of Russia's political landscape, is disturbing to
contemplate, and yet, given Russian history and the unparalleled rapacity
of the present ruling elite, it is a fairly realistic scenario. The Kremlin
response to such a revolutionary threat is likely to be a pre-emptive
strike designed in order to intimidate or destroy all opposition having at
least a minimal potential to destabilize the system.
Rokhlin's assasination is even more ominous because it comes in the
aftermath of yet another murder, that of Larisa Yudina, the editor of an
opposition newspaper in the southern Russian town of Elista, the capital of
the constituent republic of Kalmykia. Yudina, who by coincidence was a
leader of the regional branch of Grigory Yavlinsky's Yabloko, was found
dead with multiple knife wounds and a fractured skull on June 8. The two
suspects arrested in the case happen to be former assistants of Kalmykia's
president, Kirsan Ilyumzhinov. Ilyumzhinov, a polished and English-speaking
millionaire-turned-politician, dispersed his parliament in 1994 and
extended his term without elections - all this, of course, for the sake of
"free market reforms" and "investor confidence". The suspects had been
serving prison sentences for other crimes, but before Yudina's murder they
were released from jail, reportedly through Ilyumzhinov's personal
intervention. Ilyumzhinov himself is known as a fervent advocate of Yeltsin
and his policies who enjoys preferential treatment in the Moscow corridors
of power.
Unlike Rokhlin's movement, Yabloko and its leaders enjoy strong
connections and respect among Western public. Any suspicious murder of a
prominent Yabloko member in Moscow would certainly stir anti-Yeltsin
sentiment in foreign media and thus badly hurt the Kremlin's chances for a
new infusion of cash from the IMF, whose Board of Directors will decide on
the new loan on July 30. But the murder of a low-profile provincial
journalist, who probably had no personal contacts abroad, is eminently
suitable for intimidation purposes.
As of today, there is no immediate evidence linking these two human
tragedies, and if any exists, it is unlikely to emerge as long as Russia's
present authorities stay in power. But the mere sequence of events and
their circumstances suggest that being a civilized and principled
opposition to the Kremlin's Liberal Bolshevism is becoming physically
dangerous. It is worth noting that opposition activity in Russia becomes
especially life-threatening at the time when the Kremlin is seeking cash
from the IMF and when the rising tide of protest threatens to obstruct the
flow of bucks by exposing the 1991-98 "reforms" as a gigantic fraud at the
expense of the silent majority of Russians and Western taxpayers. Those few
persistent critics of the regime who have not been bribed, have not
emigrated and have not been silenced by the general impoverishment now will
have to ponder the fate of Larisa Yudina and Lev Rokhlin. 


Lebed Embroiled in 'New Political Row' in Moscow

1 July 1998
[translation for personal use only]
>From the "Segodnya" newscast

A new political row has blown up in Moscow. Governor Aleksandr Lebed
is arguing with the federal government. It looks as if Lebed is feeling
quite confident. He is putting it this way: the entire stock of marble
goes from Krasnoyarsk Territory to Moscow. How can you do without me?
[Correspondent Vladimir Chernyshev] One could say that it was
virtually a family affair that we witnessed this evening in the government
headquarters. Deputy Prime Minister Boris Nemtsov received the famous two
brothers who are governors. In this particular case, the family pecking
order was not observed. First the younger Lebed brother visited Nemtsov's
brother, and only after that did the elder brother go in.
The Lebed brothers came to see Nemtsov so as to sign the so- called
agreement on restoring the finances to health. Each governor is free to
choose whether or not he signs such an agreement on financial relations
between the federal centre and the regions. Aleksey Lebed, the leader of
Khakassia, was not long in Nemtsov's office. The agreement was signed and
Nemtsov said that Khakassia is a region in depression, and thus it needs
assistance from the federal centre. And the federal centre is promising
the region that assistance.
[Nemtsov] Of course, the federal government will do everything it can
along with the authorities of Khakassia to improve the situation. The main
thing is to get payments connected with the Sayan-Shushenskoye
hydroelectric station into order.
[Correspondent] Incidentally, the younger brother of the Krasnoyarsk
governor did not miss the opportunity to toss some reproaches at the
[Aleksey Lebed] The document presented by the accounting chamber
allows us to state quite clearly that the actions of structural
subdepartments of the Russian government, including the Finance Ministry,
have caused damage to the economy of the republic of Khakassia of some 400
million rubles this year.
[Correspondent] Aleksandr Lebed spent much longer - about two hours -
talking to Boris Nemtsov behind closed doors. The size of the territory
which he rules presented the former general with a chance to demonstrate
his famous brusqueness. After such an exhausting chat, Nemtsov mentioned
the length in his usual humorous manner.
[Nemtsov] It was quite a time. But the point is that Aleksandr
Ivanovich [Lebed] and I do not meet so very often.
[Correspondent] Nemtsov did not conceal the burden on his shoulders
and admitted he did not manage to come to an agreement with Aleksandr Lebed
in the course of the two hours. They decided to think about the conditions
of the agreement for a while yet. Lebed was aphoristic as ever. The
territory is not yet ready to sign the agreement with the government.
[Aleksandr Lebed] You do not get into heaven when you have committed
too many sins.
[Unidentified female correspondent] Who committed the sins? The
federal center or Krasnoyarsk?
[Aleksandr Lebed] Various people. The treaty on transfer of functions

and of powers exists but there is no single instance of it being applied in
practice. Who knows what is meant by interbudgetary relations between the
territory and the government.
[Correspondent Chernyshev] It seems that the government in the person
of Nemtsov discovered once more today that the relationship with the new
Krasnoyarsk governor promises many unexpected things. Aleksandr Lebed,
talking about the future, did not use many words but was full of stoical
[Video shows Nemtsov and Aleksey Lebed, and later Nemtsov and
Aleksandr Lebed speaking to newsmen in the foyer outside Nemtsov's office]


Poland: Analyst Notes Turn in Russia's Polish Policy 

Warsaw Gazeta Wyborcza in Polish 
1 July 1998
[translation for personal use only]
Report by Bartlomiej Sienkiewicz, deputy director of the Eastern
Studies Center: "A Gentle Russia"

Over the past six months Russia's imperialist rhetorics have been
softening, but also Russian elites have clearly begun changing their views
on the place of Russia in the contemporary world. A recent report entitled
"Strategy for Russia III" developed by the Council for the Foreign and
Defense Policy of the Russian Federation which groups the Russian political
and analytical establishment, albeit in veiled form, challenged the
principle of operating on the international arena from the position of an
imperial superpower, noted the total failure of the reintegration concept,
and acknowledged the irreversible emergence of independent states on the
ruins of the USSR. Moreover, the document suggests that the West is a
strategic partner with which Russia should maintain the closest possible
ties. Added to that should be the voices of several publicists and several
statements made by Foreign Minister Yevgeniy Primakov. The claim that
Russia is beginning to realize that it can no longer speak in an
imperialist tone when the national per capita income is at the level of the
African state of Benin thus becomes legitimate.
This is a very significant and precious change. Its consequence will
be larger attention -- in the positive sense -- paid to Central Europe. 
The hitherto policy toward our region was a variant of that pursued by
Gromyko in the Brezhnev era: first we will say "no," then we shall see.
At the same time, the biggest growth of Poland's trade -- 15 percent
higher than last year -- took place specifically in turnover with Russia. 
We are an important economic partner for Russia, and the Russians are
beginning to appreciate that. Commenting on President Kwasniewski's visit
to Moscow, the ORT public television network pointed out that Poland is
Russia's fourth biggest trade partner after the United States, Japan and
China. This is an expression of pragmatism which is not always present in
the Russian media.
A consequence of such an evolution of attitude could be a huge
improvement of mutual relations. It is worth recalling a statement
Primakov made during a recent meeting in Moscow with Polish Foreign
Minister Professor Bronislaw Geremek: "We are swallowing this frog
[reference to NATO enlargement -- ed.], but do not ask us to be happy about

it." The fact of the matter is that Poland did not expect Russia to be
happy about "swallowing the frog." It behaved with huge reticence, without
a trace of triumphalism, which I see as a huge achievement of the Polish
politicians, regardless of their color. We are currently reaping the fruit
of that reticence.
It is also worth noting once astonishing sentence Yeltsin said and
which news agencies picked up. In conversation with the Polish president,
he highly praised Poland's relations with Ukraine, the Baltic states and
Belarus, stating that further developing them would be useful. This could
mean that Russia is ceasing to perceive Polish activity in the area between
the Baltic and the Black Seas exclusively as a threat to its presumed
sphere of influence. Perhaps these are not merely words, but a reflection
of the idea that Poland is becoming an interesting partner for Russia in
this region. This would be a very far-reaching and very positive change of
attitude toward Poland if it assumes equality of rights. It has to be
stressed, however, that for the time being this is a theory construed on a
single sentence Yeltsin has said.


Date: Tue, 07 Jul 1998 
From: Garfield Reynolds<>
Organization: St. Petersburg Times
Subject: eXile Vorkuta article

just wanted to put my two kopecks in on the Exile. I thought the coal
piece was the best piece on Russia that I have read all year. And I am
stunned and depressed that the first response any one could come up with
was some quibbles regarding the language, some of them misguided and all
of them essentially irrrelevant. And after all, Matt Taibbi was THERE in
Vorkuta, an isolated area that could have a few quirky differences from
Russian as generally spoken... as if that mattered.

What did matter was that Taibbi made all the cliched and banal realities
of unpaid workers and thieving managers viscerally real, bringing us
face to face with the hapless victims of Russia's reforms, the human
beings crushed by capitalism's often-lauded "creative destruction." 

Yours sincerely,
Garfield Reynolds,
Business/Managing Editor, The St. Petersburg Times


Journal of Commerce
7 July 1998
[for personal use only]
Guest Opinion
Tale of two Russias
Philip Gailey writes for the St. Petersburg (Fla.) Times. This article 
was distributed by Scripps Howard News Service. 

My first thought upon arriving here from Moscow was, "I'm in Europe. I 
must have taken the wrong flight by mistake." St. Petersburg is as 
beautiful and grand as Moscow is drab and immense.
I can understand why Peter the Great abandoned Moscow and founded this 
city on the Baltic Sea to open a window to the West. This is a city of 
Baroque architecture, grand palaces, museums, art galleries, theaters, 
canals, bridges, cathedrals and other magnificent monuments to Russia's 
culture and history.
Both cities are showing economic and social stress, as is all of Russia. 
But St. Petersburg smiles, while Moscow frowns.
Here is where the 1917 revolution began with a shot fired by the 
battleship Aurora in the Neva River to signal the Red Army's assault on 

the czar's Winter Palace. It was a blank shot, but it changed the course 
of Russian history. Here is where Vladimir Lenin took command of the 
revolution that would subject Russia to 70 years of communist terror and 
repression. To visit any one of the obscenely opulent palaces of the 
czars is to understand why the peasants rose up from squalor and poverty 
beyond conception and toppled their rule.
To see St. Petersburg is to also understand why the communists moved the 
capital of government back to Moscow after the revolution. There is too 
much beauty, grace and symmetry in St. Petersburg, and a monolithic 
government that subjected Russians to a stark and repressed existence 
would have felt uncomfortable here.
If the communists were looking for a holy city for their movement, 
Moscow was a perfect choice. Neither European nor Asian, Moscow shows 
the ugly face of its past. It may be permanently scarred. I can only 
imagine how stifling it must have been during the long night of 
communist rule.
The czars who built St. Petersburg and the commissars who built Moscow 
had one thing in common -- both built to strike visitors with the awe of 
immensity. In St. Petersburg, the palaces, museums and war monuments are 
huge, even monstrous.
The czar's Winter Palace is now the center of the Hermitage, one of the 
world's great art museums. The palace has 1,054 rooms, 2,000 windows, 
2,000 doors and 120 staircases. According to the Guinness Book of 
Records, which listed the Hermitage as the largest art gallery in the 
world in 1988 (there are five buildings in all), "One must walk 15 miles 
to see each of its 322 galleries in which 3 million objects of art and 
antiques are displayed."
In Moscow, the communists also thought size matters, but the 
skyscrapers, apartment houses and hotels impress with strangeness rather 
than beauty. The city's "socialist realism" architecture is boring and 
in some cases vulgar. One of the few visual climaxes in Moscow is the 
Kremlin, the brooding, brick-walled medieval fortress on a bluff 
overlooking the city.
During the Cold War, the very mention of "the Kremlin" in news reports 
had an ominous ring. The Kremlin, I came to believe, was the center of 
all that threatened our way of life in the free world. It was a synonym 
for evil, a dark and spooky place from which Kremlin leaders plotted to 
spread communism around the world while keeping their finger on the 
Soviet Union's nuclear trigger.
Now I have been to the Kremlin, and my imagination will never be able to 
restore that old image. As it was during Soviet times, the Kremlin 
remains the heart and soul of Moscow, as well as its main tourist 
What a jumbled and incongruous place it is. Inside the Kremlin walls are 
to be found not only the center of government, with its modern 
auditoriums and ornate banquet halls, but onion-domed cathedrals, 
spirals, vast museums housing the treasures of the czars and, of course, 
Lenin's tomb, a black, square, modernist mausoleum that looks as out of 
place as the upscale shopping mall across the square.
Walking in Red Square more than seven years after communism collapsed, 

it was hard for me to conjure up the old newsreel images of Soviet tanks 
and missiles on parade. Looking up at the reviewing stand, I tried to 
imagine those dour-faced Kremlin leaders who once reviewed the displays 
of Soviet military might, only to have my thoughts interrupted by street 
peddlers hustling Lenin T-shirts, fur hats and Red Army medals. The 
Kremlin, once the Mecca of communists the world over, is being 
desecrated by tourists and street capitalists.
After five days in Moscow, where the weather was gray and damp and the 
old bureaucratic mentality can still be encountered in hotels, shops and 
restaurants, I came up for air in St. Petersburg.
We lucked out on the weather -- sunshine and blue skies instead of the 
usual overcast and rain. For two of the four days I was here, street 
festivals, including one featuring free beer, transformed the downtown 
into a huge party. I read the local English-language newspaper with a 
familiar name, the St. Petersburg Times, and paid $2 to have my picture 
taken with a Russian bear named Boris (not the Russian president).
My ignorance of Russia is still vast, but at least I saw enough during 
my 10 days here to shed some of the old stereotypes I brought with me. 
If nothing else, when someone mentions the Kremlin, I will have pleasant 
memories to draw on. 


New York Times
July 7, 1998
[for personal use only]
Russia Should Put Its People First
Grzegorz W. Kolodko, a visiting fellow at the World Bank, was Deputy Prime
Minister and Finance Minister of Poland from 1994 to 1997. 

WASHINGTON Last year Yegor Gaidar, the architect of Russia's early
economic reforms, predicted that by the end of 1998 Russia would be where
Poland was at the beginning of 1992 -- that is, well on its way to a market
Well, that should not have been his yardstick for the Russian economy. 
As a former Polish Finance Minister, I believe that if Poland had
continued the policies pursued up until 1992 (the infamous "shock therapy")
we would now be where Russia is today -- that is, in a seemingly permanent
financial crisis. 
"Shock without therapy," as we called it, was Poland's attempt to
privatize without a social welfare net. The idea was to liberalize and
privatize as quickly as possible. This led to growing poverty and
unemployment as well as social and political tension. 
Poland had a fundamental institutional problem, just as Russia does now.
The core of Russia's troubles is not the turbulence in its financial
markets or the fallout from the Asian crisis, but mismanagement. An economy
in which 45 percent of the national budget must go to the ever-rising costs
of servicing the nation's debt, in which the new rich do not pay their
taxes and the new poor cannot make ends meet, and in which what was said
yesterday does not matter tomorrow -- that is not a market economy. It is a
mess, and the crisis is far from over. 
Yet Russia and the International Monetary Fund are throwing hot grease
on the fire by insisting on stringent measures in return for a bailout.
Russia has been forced to impose prohibitively high interest rates and cut
30 percent of its budget for "unessential" programs. Thus, it is not paying
salaries or pensions just to pay the interest on the public debt. In other
words, for the illusion of fiscal and monetary prudence, Russia has to kill
its own economy and shred its social safety net. 
In Poland, we finally discovered how to manage our economic affairs by
establishing a way to introduce a market economy without hurting the people. 

Poland privatized companies gradually (while insuring true
competition), controlled trade and opened up financial markets. As a
result, inflation fell and unemployment and domestic debt declined, as did
foreign debt. Output and consumption soared. 
But there was another, equally important facet of our success. Poland
did not look to the international financial community for approval.
Instead, we wanted Polish citizens to go along with these reforms. 
So salaries and pensions were paid and adjusted for inflation. There
were unemployment benefits. We respected our own society, while doing tough
negotiating with international investors and financial institutions. 
Indeed, the most dangerous threat to Russia is a counterrevolution
against the market sparked by the growing -- and justified -- grievances of
its people. 
If this threat is understood by Russian leaders, then indeed it is not
too late. But the United States and other leading industrial nations,
international financial institutions and Wall Street must understand this
as well, and not impose another I.M.F. bailout. This would only create
social dissension without addressing Russia's fundamental problems. 
Russia needs good advice. But the international financial community is
not able to provide it. There is an inherent conflict of interest. 
Russia and the world must understand that the interests of, say,
Siberian miners and short-term portfolio investors are even farther apart
than the interests of a fish and a fisherman. 
Perhaps development policies for Russia should be coordinated by the
Organization for Economic Cooperation and Development, the group of
advanced industrial democracies that has vast economic knowledge but no
money to use as a cudgel. 
Polish folk wisdom says it is never too late to make a change for the
better. Let us hope that this will prove true for Russia as well. 



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