July 9, 1998   
This Date's Issues: 2254• 2255 • 

Johnson's Russia List
#2255
9 July 1998
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Aide Says Yeltsin Is in Poor Health.
2. Interfax: Russian Citizens Expect More Protest Actions - Poll.
3. Intefax: Start-2 Ratification, Russian-U.S. Contacts Must Not Be Linked -
Yastrzhembsky.
4. Reuters: Central Bank Says Reserves Fall to $15.1B.
5. Dorothy Rosenberg: Response to Masha Gessen on taxes.
6. General Dvorkin on START-II.
7. Tom Armbruster: U.S. Embassy Moscow's Fact Sheet on Nuclear Cooperation.
8. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: Russia Mourns 
Failed Rebel. (Lev Rokhlin).
9. Radiostantsiya Ekho Moskvy: Russia's Morozov: Rokhlin 'Obstacle' to
Berezovskiy,
Lebed.
10. Reuters: Russia pressure on Balts counterproductive-U.S. (Strobe
Talbott).
11. RIA Novosti: TRADE UNION LEADERS ACCUSE THE GOVERNMENT OF 
BREAKING THE SYSTEM OF SOCIAL PARTNERSHIP, AND ARE DETERMINED TO 
PROTECT THE ORGANIZERS OF COAL MINERS' PROTESTS FROM PROSECUTION.
12. Moscow Times: Tatyana Matsuk, Why Science Is So Poor.
13. Jamestown Foundation Monitor: DUMA OFFICIAL PREDICTS SPRING ELECTIONS
and GOVERNMENT PROFFERS OLIVE BRANCH ON NATIONALITY ISSUE.
14. Moscow Tribune: Igor Zaslonov, Dovgan Too Young for Vodka.
15. Time magazine: Robin Knight, Is The Caspian An Oil El Dorado?]

********

#1
Aide Says Yeltsin Is in Poor Health 
By Vladimir Isachenkov
July 9, 1998

MOSCOW (AP) -- A senior aide to Boris Yeltsin suggested today that the
Russian president has trouble maintaining a full-time work schedule due to
poor health and should not even think about running for a third term. 
``You can't say that Yeltsin is in ideal physical shape, that he's full
of energy and activity to work round the clock,'' Igor Shabdurasulov,
Yeltsin's recently appointed deputy chief of staff, said in an interview
with the Russky Telegraph newspaper. 
``It seems to me that he has become so tired, both physically and
psychologically, that it outweighs every politician's natural desire for
power,'' Shabdurasulov said. 
His comments drew a swift response from Yeltsin's spokesman Sergei
Yastrzhembsky, who said the aide ``expressed his own viewpoint, which does
not reflect the opinion of the leadership of the presidential
administration.'' 
Yeltsin's uncertain health periodically prompts rumors that he is
seriously ill. A new round of unsubstantiated rumors began today,
apparently originating in foreign financial markets. 
The Kremlin said Yeltsin was well and holding meetings as planned. 
Yeltsin and his doctors say the president, who underwent heart bypass
surgery in November 1996, has fully recovered and is in good shape. Yeltsin
makes regular public appearances and has made clear he intends to serve out
his current term, which runs two more years. 
However, the president spends much more time than before at his country
residence outside Moscow. During the week, he rarely spends five full days
working at the Kremlin. And while Yeltsin, 67, still makes working trips
inside Russia and abroad, he travels less frequently than during his early
years in office. 
Shabdurasulov's comments were surprising because top Kremlin officials
generally refuse to speak about the president's health. 

Yeltsin has repeatedly said he does not intend to run for another term
in 2000, but he has not flatly ruled it out. 
Russia's constitution, approved in 1993, limits a president to two
terms. But some Kremlin aides say that Yeltsin's first term, from 1991 to
1996, doesn't count because it began before the Soviet Union collapsed and
the current constitution took effect. Russia's Constitutional Court is
expected to rule on the issue later this year. 
Shabdurasulov said Yeltsin himself is still hesitating about whether to
run again. ``He hasn't made a firm decision yet,'' Shabdurasulov told the
newspaper. 
Shabdurasulov served as a spokesman for former Prime Minister Viktor
Chernomyrdin, who was fired in March. In April, Shabdurasulov was named
deputy presidential chief of staff in charge of media relations. 
********

#2
Russian Citizens Expect More Protest Actions - Poll 

MOSCOW, July 9 (Interfax) - The population of Russia lives in anticipation
of social tensions. Sixty two percent of Russian citizens think that the
wave of protest actions will continue to rise. In April 1997, this opinion
was shared by 45% of Russian citizens, according to opinion polls held by
the Public Opinion Fund. 
The polls were held at the end of April 1997 and at the end of June
1998, each involved 1,500 urban and rural residents. 
Seventeen percent of those polled this year, compared to 25% last year,
think that protest actions will remain at the same level. 
Five percent of the respondents, compared to 10% last year, said that
protest actions will probably diminish. 
Seventy six percent of Communist Party leader *Gennady Zyuganov's*
supporters, and 56%-62% of supporters of other political leaders expect
protests to become more frequent. 
All of these figures characterize the Russian citizens' opinion of the
situation in Russia as a whole. Pessimism was less evident in answers to
questions about the situation in the respondents' own places of residence. 
Thirty percent of those polled said they anticipated a rise in protest
actions in their places of residence (compared to 36% in April 1997.)
Whereas in 1997 the ratio between pessimistically- and
optimistically-minded respondents in Russia as a whole and in individual
places was 36% to 45%, this year this ratio is 1:2. 

*********

#3
Start-2 Ratification, Russian-U.S. Contacts Must Not Be Linked -Yastrzhembsky 


MOSCOW, July 9 (Interfax) - "Moscow thinks that the START-2 Treaty must be
ratified by all means," presidential spokesman *Sergei Yastrzhembsky* told
the press Thursday. 
He said ratification was extremely important from all points of view,
including military, political and economic. 
Regarding U.S. President Bill Clinton's visit to Moscow, scheduled for
the beginning of September, he said that "all attempts to link official
contacts with the ratification of the START-2 Treaty, made by some circles
in the United States, are counterproductive." 
As a result, summit contacts have been frozen and problems which can
only be solved at summit level have cropped up, he said. "We welcome the
U.S. president's decision [to visit Russia]," Yastrzhembsky said.

*********

#4
Central Bank Says Reserves Fall to $15.1B 
July 9, 198

MOSCOW -- (Reuters) Russia's central bank said on Thursday its foreign
exchange and gold reserves on July 3 totaled $15.1 billion, down from $16.0
billion on June 26. 
The central bank did not comment on the drop in reserves. It has been
battling to support the ruble in the face of a financial market crisis that
in the past two months has sparked rumors about a devaluation. 
The bank had more than $20 billion in foreign exchange and gold reserves
before Asia's crisis spread to other emerging markets last year. 
Reserves had risen to $16 billion from $14.7 billion on June 19
following a big Eurobond issue and receipt of a $670-million loan tranche
from the International Monetary Fund. 

*******

#5
Date: Thu, 9 Jul 1998 14:09:10 +0400 (WSU DST)
From: Dorothy Rosenberg (lpsdrrm@glas.apc.org)
Subject: Russian Taxes, or so much for civil discourse, 

After Masha Gessen's ill-tempered diatribe, I would like to
return to the point, which was neither a comparison of our
personal incomes nor relative degrees of self-righteousness, but
Russian taxes and who does or does not pay them.
Personal income taxes: Employees, i.e. anyone who is paid a
wage or salary is now subject to a graduated income tax deducted
prior to payment (12% is withheld from a total projected income
of less than 20,000 rubles, 1% in Moscow due to Luzhkov's
road-building tax). Employers pay a matching percentage which
goes into the pension and social insurance funds. Supplementary
payments, bonuses and honoraria also have taxes withheld prior to
payment. 
Only individuals earning more than 20,000 rubles per year
are required to file an income tax declaration and pay an
additional 8% on income up to 40,000 or an additional 15% on
income beyond that. As the vast majority of Russians earn less
than 20,000 rubles, they do not file income tax declarations,
having already paid their taxes in full via withholding.
Tax dodging is the failure to declare money incomes and was
best exemplified by the personal income tax declarations filed by
Boris Yeltsin, Victor Chernomyrdin, etc., which were duly mocked
in the press. Private citizens with access to secondary cash
money incomes (or employer initiated schemes such as described by
Ms. Gessen) may also avoid taxes by failing to withhold or
declare. 
Tax avoidance on non-money incomes is a different issue. As
pointed out in Andrey Baturin's Pravda article carried on this
list (Monetary Policy Viewed, June 2), much of the domestic
economy no longer functions on a money basis. There is a
distinction between self-production for self-consumption and
payment-in-kind or barter (i.e. exchange without use of money or
the use of money substitutes). Much of the Russian economy was
driven into the latter through the application of simple-minded
monetarism (reduce inflation by reducing the money supply) and
budget deficit reduction (budget cuts or failure to transfer
budgeted funds), producing the arrears and non-payments crises.
This in turn became an excellent opportunity for employer-

initiated schemes to avoid paying pension and social welfare fund
contributions, failing to withhold personal income taxes, not to
mention not paying or underpaying wages and suppliers.
The avoidance of business taxes involves another set of
complex manuoevres including the use of barter and
money-substitutes. Some simply reflect the lack of state control
over export revenues (absence of means to enforce the repayment
of producers and suppliers or taxes). In some cases, payment in
kind may be a deliberate tax dodge, but many enterprises do not
receive money reimbursements. Then there are the financial
sector, customs and excises, etc.
The point is that shifting to consumption taxes will not
solve the Russian government's economic or tax collection
problems (many of which have been created by the government's own
policies) and, in fact does not even address them. These are
called regressive taxes -- this is the technical economic term --
because they necessarily take a larger proportion of income from
the poorest strata of the population than from higher income
groups. Consumption taxes will simply increase the tax burden on
that segment of the population which is already paying all or
most of its taxes and is least able to cope with a further
reduction of its living standard and will further suppress
domestic demand, production and employment.

*********

#6
From: "Egor Engelhardt" <egoreng@dialup.ptt.ru>
Subject: General Dvorkin on START-II
Date: Thu, 9 Jul 1998 

Dear David,
Please, add this message to your list
General Vladimir Z. Dvorkin posted his answers for START-II discussion on
"Rossija i zagranica" forum July the 8th


http://www.russ.ru/forums/zagran/383.htm

Thank you in advance.
Egor Engelhardt,
moderator

********

#7
From: "Armbruster, Thomas H" <armbrustth@moscowpoa.us-state.gov>
Subject: U.S. Embassy Moscow's Fact Sheet on Nuclear Cooperation.
Date: Thu, 9 Jul 1998 09:49:00 -0400
X-Priority: 3
Mime-Version: 1.0

Attached is U.S. Embassy Moscow's Fact Sheet on Nuclear Cooperation.
Tom Armbruster, Environment, Science and Technology Officer, U.S.
Embassy Moscow

FACT SHEET
U.S.-RUSSIAN NUCLEAR COOPERATION

THE BILATERAL NUCLEAR ISSUES BEING ADDRESSED BY THE U.S. AND RUSSIA ARE
EXTREMELY COMPLICATED AND SENSITIVE, INVOLVING MULTIPLE U.S. AND
RUSSIAN AGENCIES AND ENTAILING NATIONAL SECURITY, POLITICAL-MILITARY,
AND ENVIRONMENTAL ASPECTS. DESPITE THE COMPLEXITY OF THE ISSUES, THE
U.S. AND RUSSIA HAVE WORKED SUCCESSFULLY TOGETHER ON A WIDE VARIETY OF
JOINT PROJECTS AIMED AT SAFEGUARDING, STORING, AND DISPOSING OF THE
PLUTONIUM AND ENRICHED URANIUM THAT POSED COLD-WAR THREATS, POSE
POTENTIAL TERRORIST THREATS, OR POSE LONG-TERM ENVIRONMENTAL THREATS.
THE U.S. PROVIDES SUBSTANTIAL SUPPORT TO IMPROVE NUCLEAR SAFETY AND
SECURITY IN RUSSIA THROUGH PROGRAMS SUCH AS: 

NUCLEAR MATERIAL SECURITY: THE U.S. GOVERNMENT HAS AN EXTENSIVE PROGRAM
OF COOPERATION WITH RUSSIA INTENDED TO IMPROVE SYSTEMS OF NUCLEAR
MATERIAL PROTECTION, CONTROL AND ACCOUNTING IN BOTH THE CIVIL AND
MILITARY SECTORS. THE PROGRAM HAS IMPROVED PHYSICAL SECURITY AT
FACILITIES WHICH STORE WEAPONS GRADE NUCLEAR MATERIAL AND IS INTENDED TO


MODERNIZE THE ACCOUNTING SYSTEMS USED TO TRACK NUCLEAR INVENTORIES.
SINCE 1994, THE PROGRAM HAS UPGRADED MATERIAL SECURITY AND CONTROL AT
CLOSE TO 40 RUSSIAN FACILITIES WITH TENS OF TONS OF MATERIAL INCLUDING
TWO PRINCIPAL NUCLEAR WEAPONS LABORATORIES.

HIGHLY ENRICHED URANIUM PURCHASE AGREEMENT: THE 1993 BILATERAL
AGREEMENT CONCERNING HIGHLY ENRICHED URANIUM EXTRACTED FROM NUCLEAR
WEAPONS CALLS FOR THE U.S. TO PURCHASE SOME 500 METRIC TONS OF
WEAPON-DERIVED HIGHLY ENRICHED URANIUM OVER 20 YEARS TO BE USED FOR
CIVILIAN REACTOR FUEL IN THE U.S. THE U.S. ESTIMATE OF THE OVERALL
VALUE OF THE AGREEMENT IS APPROXIMATELY $12 BILLION. MATERIAL PURCHASED
BY THE U.S. PURSUANT TO THE AGREEMENT IS ROUGHLY EQUIVALENT TO OVER
1,000 NUCLEAR WARHEADS. THE AGREEMENT INCLUDES TRANSPARENCY MEASURES TO
ENSURE THAT ONLY WEAPON-DERIVED MATERIAL IS BEING PROVIDED BY RUSSIA. 

PLUTONIUM PRODUCTION REACTOR CONVERSION: THE U.S. AND RUSSIA HAVE
CONCLUDED AN AGREEMENT THAT WILL LEAD TO THE CESSATION OF THE PRODUCTION
OF WEAPONS-GRADE PLUTONIUM IN RUSSIA. RUSSIA HAS THREE REACTORS IN
OPERATION WHICH PRODUCE WEAPONS -GRADE PLUTONIUM. THE AGREEMENT CALLS
FOR THE REACTOR CORES TO BE CONVERTED SO THAT THE PRODUCTION OF
WEAPONS -GRADE PLUTONIUM ENDS BY THE YEAR 2000 WHILE STILL ALLOWING THE
REACTOR TO PRODUCE HEAT AND ELECTRICITY. RECOGNIZING THE IMPORTANCE OF
THE SAFE OPERATION OF THESE REACTORS FOLLOWING THEIR CONVERSION, THE
DEPARTMENT OF DEFENSE HAS ENGAGED THE NUCLEAR REGULATORY COMMISSION TO
ASSIST THE RUSSIAN REGULATOR (GAN) IN PERFORMING ITS SAFETY REVIEW.

NUCLEAR SMUGGLING: RUSSIA IS PARTY TO THE G-8 PROGRAM TO COMBAT NUCLEAR
SMUGGLING AND HAS DESIGNATED A POINT OF CONTACT FOR INFORMATION SHARING
AMONG THE G-8 WHEN REPORTS OF NUCLEAR SMUGGLING ARISE.

NUCLEAR SAFETY: SINCE 1988 THE U.S. AND RUSSIA HAVE WORKED TO IMPROVE
THE SAFETY OF RUSSIA+S CIVILIAN NUCLEAR REACTORS. IN THE CONTEXT OF THE
G-7+S 1992 LISBON INITIATIVE, THE U.S. INTENSIFIED ITS COOPERATIVE
PROGRAM TO IMPROVE THE SAFETY OF SOVIET-DESIGNED REACTORS IN THE NEW
INDEPENDENT STATES AND CENTRAL/EASTERN EUROPE. RUSSIA CONTINUES TO BE
AN IMPORTANT FOCUS. THE PROGRAM HAS A THREE-PRONGED APPROACH TO IMPROVE
OPERATIONAL SAFETY, PROVIDE NEAR-TERM RISK REDUCTION, AND STRENGTHEN THE
NUCLEAR REGULATORY AUTHORITY. THE GOALS OF THE U.S. PROGRAM ARE TO WORK
WITH RUSSIA TO IMPROVE THE NEAR-TERM SAFETY OF SOVIET-DESIGNED REACTORS,
WHILE SUPPORTING THE EARLY CLOSURE OF THE OLDEST REACTOR TYPES AND THEIR
REPLACEMENT WITH ALTERNATIVE ENERGY SOURCES. WITHIN THIS FRAMEWORK,
THE U.S. HAS WORKED BILATERALLY WITH RUSSIA, AS WELL AS MULTILATERALLY
THROUGH THE G-8 AND THE NUCLEAR SAFETY ACCOUNT AT THE EUROPEAN BANK FOR
RECONSTRUCTION AND DEVELOPMENT, TO IMPROVE SAFETY AT 12 RBMK AND 13 VVER
REACTORS AT 7 SITES IN RUSSIA. THE U.S. DEPARTMENT OF ENERGY HAS
COOPERATED CLOSELY WITH THE MINISTRY OF ATOMIC ENERGY IN THIS REGARD.
THE U.S. NUCLEAR REGULATORY COMMISSION ALSO WORKS CLOSELY WITH
GOSATOMNADZOR (GAN), THE RUSSIAN NUCLEAR REGULATORY AUTHORITY. IN
ADDITION, INTERNATIONAL SAFETY CENTERS HAVE BEEN ESTABLISHED IN RUSSIA
AND IN THE U.S. TO CARRY OUT GENERAL REACTOR SAFETY RESEARCH.


PLUTONIUM DISPOSITION: THE U.S. AND RUSSIA UNDERTOOK A PARALLEL STUDY
TO DETERMINE THE BEST AVAILABLE OPTION TO RENDER EXCESS WEAPONS -GRADE
PLUTONIUM UNUSABLE FOR NUCLEAR EXPLOSIVE PURPOSES. TECHNICAL
EXPERIMENTS WILL FOLLOW. OPTIONS INCLUDE BURNING PLUTONIUM IN CIVILIAN
NUCLEAR REACTORS AND PERMANENT IMMOBILIZATION IN GLASS ALONG WITH HIGHLY
RADIOACTIVE WASTE. THESE TWO OPTIONS ARE EACH BELIEVED CAPABLE OF
DISPOSING OF UP TO 50 METRIC TONS OF PLUTONIUM IN 20-40 YEARS.
COOPERATIVE THREAT REDUCTION (CTR): THE COOPERATIVE THREAT REDUCTION
PROGRAM FUNDS THE ELIMINATION OF WEAPONS OF MASS DESTRUCTION ON THE
TERRITORIES OF BELARUS, KAZAKHSTAN, RUSSIA, AND UKRAINKE. IN RUSSIA,
CTR EMPHASIZES PROJECTS FOCUSING ON NUCLEAR WEAPONS PROTECTION, CONTROL,
AND ACCOUNTING, AS WELL AS ELIMINATING CHEMICAL WEAPONS AND THE
CESSATION OF THE PRODUCTION OF WEAPONS-GRADE PLUTONIUM.

SAFE INTERIM STORAGE OF NUCLEAR FUEL: NUCLEAR FUEL ASSEMBLIES IN
NORTHWEST RUSSIA FROM DECOMMISSIONED NUCLEAR SUBMARINES AND THE CIVILIAN
ICEBREAKER FLEET ARE RAPIDLY ACCUMULATING. THIS NUCLEAR FUEL INCLUDES
DAMAGED AND SPECIAL FUEL ASSEMBLIES THAT CAN NOT BE REPROCESSED IN
RUSSIA. THEY ARE STORED IN DECOMMISSIONED SUBMARINES, ON FLOATING
VESSELS OR BARGES IN DETERIORATING WET STORAGE TANKS OR UNDER EXPOSED
CONDITIONS ALONG THE ARCTIC COAST. THE U.S., RUSSIAN AND NORWAY ARE
WORKING TO ADDRESS THESE PROBLEMS BY DEVELOPING A PROTOTYPE 45-TON METAL
AND CONCRETE TRANSPORTABLE INTERIM STORAGE CASK. THE CASK WILL SAFELY
HOLD FUEL PENDING EVENTUAL PERMANENT DISPOSITION.

MAY 28, 1998

********

#8
For more articles from The Moscow Times, check out their website at


www.moscowtimes.ru

Moscow Times
July 9, 1998 
DEFENSE DOSSIER: Russia Mourns Failed Rebel 
By Pavel Felgenhauer
Special to The Moscow Times

Lev Rokhlin was the only Russian combat general who genuinely 
distinguished himself during the war in Chechnya. In early January 1995, 
Rokhlin led an 8,000-strong task force into Grozny. There he discovered 
that two vanguard Russian brigades had been defeated by the Chechen 
fighters and their commanders killed in action. All other Russian 
divisions had, in effect, withdrawn to the outskirts after the 
unsuccessful attack. 

Scattered remnants of the vanguard were being cut down by the Chechens. 
The Russian army was virtually falling apart. Its commanding general, 
Anatoly Kvashnin, lost control of his men. Not only the Chechens, but 
also many frustrated Russian officers, believed that the war was over. 
Of course, the Russians had full command of the skies and overwhelming 
firepower superiority. But this did not mean much if commanders and men 
were not willing or able to fight fierce hand-to-hand battles to the 
bloody end. In similar circumstances in August 1996, the Russian forces 
collapsed in Grozny, and the war was truly over. 
In 1995, Rokhlin's men continued to fight, and eventually, the entire 
Russian army rallied and began a slow, bloody offensive, reducing 
central Grozny to a pile of rubble. There Rokhlin was at his best -- 
stubborn, ruthless, full of energy, forcing subordinates to do their 
jobs "above and beyond the call of duty," ready to risk his life under 

fire at the front to rally his men and all the while enjoying the 
action. 

When I met Rokhlin in mid-January in Grozny, he had such a bad sore 
throat from overexposure that he could not speak, but only whisper. The 
military doctors on the spot said they could not tell for sure that this 
was not cancer. At the same time, Rokhlin's wife became seriously ill 
and was hospitalized. Moscow offered Rokhlin a relief of command in 
Grozny on grounds of health and family. But he volunteered to stay on 
until victory in mid-February, when the battle was over and Grozny was 
captured -- only to be surrendered again to the Chechens in August 1996. 

It seems that in today's Russia, no one needs combat generals who are 
actually capable of taking charge and forcing things to happen. Since 
the '70s, the Russian army has been shamed in every major engagement. 
Successive Soviet and Russian governments have failed to make good on 
their promises of reforms to benefit the people. Constant failure on all 
fronts has become the main operational mode of the Russian ruling elite. 

General Rokhlin's combat successes were not welcome. He made other 
generals look stupid and incompetent. Rokhlin was hastily replaced in 
February 1995 and never returned to the front. Instead, Kvashnin was 
promoted to become the overall military commander in the North Caucasus. 
Several months after the final Russian military debacle in Chechnya, 
Kvashnin was further promoted and is today the chief of general staff -- 
the No. 2 man in Russia's military hierarchy. 

In 1995, the then Defense Minister Pavel Grachev urged Rokhlin to leave 
active service and become a State Duma deputy and chairman of the lower 
house of parliament's defense committee as a member of the 
pro-government Our Home Is Russia faction. 

But Rokhlin was ill at ease in the Duma because there was too much talk 
and too little real action. Rokhlin tried to get seriously involved in 
planning military reform; he tried to get close to Alexander Lebed, 
Russia's former security tsar, but was constantly pushed away by 
everyone. 

Rokhlin got cornered, but being a combatant, he did not accept defeat 
and instead became a rebel. One year ago, Rokhlin publicly announced 
that President Boris Yeltsin was "destroying" the armed forces and then 
set up the Movement in Support of the Army to press for Yeltsin's 
resignation. 

But Rokhlin's anti-Yeltsin crusade turned out to be futile. Rokhlin 
wanted to be in charge, but the Communists and nationalists had their 
own leaders, who snubbed him and eventually voted to replace him as 
defense committee chairman. Entangled in the political maze, Rokhlin was 
seen by many as just another one of those Duma opposition buffoons. 

Of course, after Rokhlin's death last week, everything seems different. 
Thousands of mourners turned up at Rokhlin's funeral. The political 
conspiracy theories that surround his death are laughable, but that is 
not important. Today, Rokhlin has become an icon, a martyr of the 
anti-Yeltsin, anti-liberal, anti-Western cause. Rokhlin has ultimately 
failed, so Russians will adore him. 


Pavel Felgenhauer is defense and national security affairs editor of 
Segodnya. 

********
#9
Russia's Morozov: Rokhlin 'Obstacle' to Berezovskiy, Lebed 

Radiostantsiya Ekho Moskvy
July 6, 1998
[translation for personal use only]

General Lev Rokhlin was not to many people's liking but, first of all,
he was an obstacle to Boris Berezovskiy and Aleksandr Lebed. This is what
Aleksandr Morozov, deputy head of the Movement in Support of the Army, said
today. He said that Lev Rokhlin had information showing that both
politicians where among those who organized the miners' protests, seeing
them as a rehearsal of a large-scale fall campaign aimed at bringing down
authorities in Russia. [passage omitted: Morozov disagrees with course of
investigation]
On 8 July, the day after Lev Rokhlin's funeral, the Movement in
Support of the Army will hold an extraordinary congress in Moscow, possibly
to determine who might stand as future leaders.

*******

#10
Russia pressure on Balts counterproductive-U.S.

RIGA, July 8 (Reuters) - The United States on Wednesday reaffirmed
Washington's support for the right of the Baltic states to choose to join NATO
and condemned Russian pressure against their entry as counterproductive.'' 

U.S. Deputy Secretary of State Strobe Talbott was in Latvia for a first
meeting of the U.S.-Baltic Commission cooperation body, formed in January. 
A statement released after the meeting said all parties at the talks welcomed
work that would progress the Balts toward ``the open doors of the Euro-
Atlantic community's evolving and expanding institutions, including the new
NATO.'' 

The Baltic states have made NATO membership a top foreign policy goal but
Russia vehemently opposes expansion of the alliance into the region, which for
around 50 years was the former Soviet Union's bulwark against the Western
alliance. 

Talbott said the Balts had the right to choose their own defence policy. 

``I think it is counterproductive for any of the other countries of this
region, large or small, to question that right and to engage in
rhetoric...pressure tactics or intimidation,'' Talbott said. 

``...that kind of tactic will only increase the fears and anxieties of these
countries represented here about the strategic intentions of their large
neighbour,'' he added. 

Although not directly connected to defence issues, Latvia has recently been
under a wave of pressure from Moscow, which accuses the Baltic state of
discrimination against its large Russian minority, most of whom are stateless.

The Balts were rejected from the first wave of NATO enlargement, believing
this was mostly due to Russian opposition. However, they still hope to join at
a later date. 

Talbott stressed that NATO was no longer aimed against Russia and was a force
for international military cooperation, rather than an offensive body that was
aimed eastwards. 

******

#11
TRADE UNION LEADERS ACCUSE THE GOVERNMENT OF 
BREAKING THE SYSTEM OF SOCIAL PARTNERSHIP, AND 
ARE DETERMINED TO PROTECT THE ORGANIZERS OF COAL 
MINERS' PROTESTS FROM PROSECUTION
KEMEROVO, JULY 8, 1998 /from RIA NOVOSTI CORRESPONDENT Yury


Tyurin/ -- At today's conference of the leaders of the
Federation of Independent Trade Unions of Russia, Federation
Chairman Mikhail Shmakov spoke of "total opposition" on the part
of the trade unions to the social measures provided for in the
government program. According to Shmakov, the incomes of the
population have fallen by 5 percent in recent months, the
government's wage debts to public sector workers have risen by
16 percent to now reach 10 billion rubles, while the wage
arrears of employers have approached 56 billion rubles.
Shmakov reported that the leaders of the trade unions are
pushing for the formation of a trilateral commission to discuss
the schedule for debt settlement.
The conference approved the proposal of the Federation to
hold a nation-wide act of protest in the first half of October.
The Chairman of the Federation of Independent Trade Unions
of Kuzbass, Anatoly Chekis, addressed regional trade unions with
a request to protect from possible prosecution the organizers of
the blockade of the Trans-Siberian Railroad in May and June.
Today, Chekis forwarded a telegram to Russian Attorney General
Yury Skuratov, declaring that if prosecution of protesters
begins, their "trade unions will have to stand up for them," RIA
Novosti was told at the press service of the Federation of
Independent Trade Unions of Kuzbass. 

*******

#12
Moscow Times
July 9, 1998 
Why Science Is So Poor 
By Tatyana Matsuk
Special to The Moscow Times

The science crisis is only the continuation of the disintegration of the 
Soviet nomenklatura system, which includes scholarly institutes. 
Scientists joined the ranks of the picketing miners last month in front 
of the government building. Their demands were political: the dismissal 
of the president and government. The Academy of Sciences union leader, 
Viktor Kalinushkin, explained the reasons for doing so. In his view, the 
majority of workers in scientific institutions believe that the country 
is becoming a source of raw materials where science is not needed. But 
it is a northern country that requires an economic course for the 
development of advanced technologies. The government leadership rejects 
or does not even consider the proposals by scholars for economic 
development. Only people other than those now in government can change 
the present course. 

According to the director of the Institute of Earth Physics, Vladimir 
Strakhov, who twice in 1996 went on hunger strikes, Russian science, 
which once had some of the most powerful schools in the world, is now in 
critical condition. If life continues in the same direction for another 
two to three years, the scientific community will cease producing 
world-class results. There are two basic problems: 1) Scientists are 
forced to look for extra work outside their specialties, while losing 
their professional qualifications; 2) Basic instruments and equipment 
have not been updated for eight years and all the material provisions 
for scientific research are in a terrible state. 

This is the first time since the Russian Civil War that such a situation 
has arisen. But the crisis should not be considered a purely external 

problem in relation to science. The problems did not begin with 
perestroika or the period of reforms that came later. What is happening 
now is only a continuation of the disintegration of the Soviet 
nomenklatura system, of which institutions of higher education and 
scientific institutes were a part. 

By the 1970s it was already extremely hard to land a job in academic 
research organizations or prestigious scholarly institutes without 
patronage or family ties. And it was much more difficult to build a 
career there. The Russian tradition of putting the continuation of 
scientific work above personal relations had been forgotten. Children 
and relatives of brilliant old professors began to take their places 
regardless of their abilities. For example, one of the sons of a Moscow 
State University professor, who now has a senior teaching post in 
mathematics, was once nicknamed "Flunkie." At the graduate level, mostly 
Komsomol, Communist Party and union leaders were accepted "by 
appointment." 

In many institutes, women and Jews were no longer taken in. The same was 
true of other groups, especially peoples of Caucasian descent. The 
quality of research, of course, did not improve as a result. 

Seeing their positions as sinecures, the pseudo-scholars and so-called 
organizers of science often canceled the best domestic scientific 
projects and proposed instead copying morally and technically obsolete 
Western models. This is one of the reasons why Russia is terribly behind 
in computer technologies. Such "useful work" was done by the many 
institutes attached to various branches of industry that were scientific 
only in name. 

Science in the Soviet Union was above all oriented toward orders from 
the military. When perestroika began, true scientists hoped they would 
finally get the chance to realize their own projects in the civilian 
sector of the economy and in public life. But the heads of many 
institutes and the subdivisions that served them decided to use the 
situation to their own ends. The number of people who fed off science 
turned out to be greater at the time than those who truly wished to 
engage in it. 

Heads of laboratories began to demand from their scientific colleagues 
that they rewrite old reports in order to sell them under the guise of 
new work. Then the main source of income -- and a very substantial one 
for the administration -- was to rent out productive space, including 
libraries, for example, to commercial organizations, exchanges and 
banks. 

Contacts with the world community were one of the privileges of the 
scientific nomenklatura, which it rushed to exploit under the new 
conditions in Russia. The nomenklatura used this privileged position to 
distribute grants in their favor, go abroad with their families on 
exchanges and sell everything they could there. 

Like many of my young and active colleagues, I left official science. 
Some stopped their research activities altogether, some tried to work on 
their own and others went abroad where, in their opinion, the level of 
students and scientific research is generally lower than in Russia. 


But as it turned out, the brand name of the place of work still means 
far too much -- not only within the nomenklatura system but for 
colleagues abroad. After several years of swimming on market waves I was 
forced to return to the Academy of Sciences. Practically nothing has 
changed there. In the institutes, where there are virtually no young 
people left, life continues as if in a parallel world: Too many 
inhabitants there have a poor conception of what is really happening 
outside. 

Now that the hungry scientists have finally gone out to protest, the 
leaders of the majority of institutes -- who in Strakhov's words are 
accustomed to "beating out money through the apparatus," which means 
government hand-outs through personal connections -- are trying to 
continue to live as before. These are the people who represent Russian 
science in the eyes of Western colleagues. If this view of Russian 
science, like the economic course of the government, does not change 
soon, then not only will Russia suffer but so will the rest of the 
world. And this does not even take into consideration the increasing 
presence of Russian scientists in countries like Iran where they would 
be better off not being. 

Tatyana Matsuk, a sociologist, holds a doctorate in computer science. 
She contributed this comment to The Moscow Times. 

********

#13
Jamestown Foundation Monitor
July 9, 1998

DUMA OFFICIAL PREDICTS SPRING ELECTIONS. Vladimir Ryzhkov, first deputy
speaker of Russia's State Duma, told a press conference yesterday that
parliamentary elections might well be called in March or April of 1999.
Drawing attention to how acute the country's social and economic problems
are, Ryzhkov said that, come the fall, President Yeltsin may have no choice
but to call a snap election. (Russian agencies, July 8) Yesterday's news was
ominous. Faced with an acute shortage of cash, the government was forced to
tap into its reserves to service its debts. (Financial Times, July 9) The
government is also having to face the fact that its hopes of a quick cash
fix by privatizing Rosneft, the largest oil company still in state hands,
are likely to be dashed since the sale is unlikely to proceed. Bids had been
invited by July 16 but the two consortiums most likely to bid have already
announced that they will not be taking part. (See Monitor, July 7)

Some 1,500 defense workers rallied in downtown Moscow yesterday to protest
unpaid wages and call for early presidential and parliamentary elections. In
Vladivostok, 4,000 disgruntled workers took to the streets. (Russian
agencies, July 8) The Russian media, never chary of speculation, are full of
predictions of imminent coups and snap elections. The State Duma is taking
all the precautions it can to ward off the threat of dissolution. Since the
president may not dissolve parliament while impeachment charges are pending,
the Duma has tasked a multiparty commission with drawing up a bill of
indictment. The commission met for the first time on June 29 and plans to
work through the summer vacation. Its task is to have a charge sheet ready
for use by the Duma at any moment that the president makes a move toward

dissolution. (Kommersant-Daily, June 30) 

Ryzhkov said yesterday, however, that the commission's multiparty character
means it is doomed from the start. "The communists are likely to accept all
charges, while Yabloko is likely to reject all except launching the war in
Chechnya," he said. The most likely outcome, he predicted, is three separate
indictments: one accepting all the charges, another accepting some of them
and a third terminating the commission's work. (Russian agencies, July 8)

GOVERNMENT PROFFERS OLIVE BRANCH ON NATIONALITY ISSUE. Russia's Justice
Minister Pavel Krasheninnikov says that the government has approved a
proposal by his ministry to amend the Law on the Status of Citizens. The
amendment would allow Russian citizens to include retroactively their
nationality (that is, their ethnic identity) in their birth certificates.
The decision whether to make the insertion would be entirely voluntary,
Krasheninnikov said, but those who so wished could make the addition after
reaching the age of majority (eighteen). There are no plans to reinstate the
entry for nationality in Russian internal passports (identity documents).
The government clearly hopes, however, that allowing ethnic origin to be
inserted in birth certificates will calm the continuing uproar over Russia's
new passports, which were introduced last year. In a departure from Soviet
practice, the new passports provide no space for nationality. This has
provoked enormous resentment in ethnic republics such as Tatarstan and
Bashkortostan, where the authorities have refused to issue the new
documents. Whether Krasheninnikov's proposal will soothe ruffled feathers in
Tatarstan is not clear: the authorities in the republic have also called for
Russia's new passports to be printed in Tatar as well as Russian. (Novye
izvestia, July 4)

********

#14
Moscow Tribune
July 9, 1998
Dovgan Too Young for Vodka
By Igor Zaslonov 

Those who are used to seeing the image of a middle-aged man on the
labels of the popular Dovgan brands of vodka and sparkling wine may be
disappointed to learn that the face symbolizing quality guarantee for
millions of Russians may soon disappear from advertising boards, as well as
from the company's food and drink packaging. 
Itar-Tass news agency reported earlier this week that the State
Anti-Trust Committee (GAK) has started investigating the allegation by a
private individual, claiming that the image of Vladimir Dovgan on the
labels of alcoholic drinks violates Russian advertisement legislation. 
The law rules that no image of a person under 35 years old should be
used in alcohol advertisements. Vladimir Dovgan, whose face decorates all
the goods marketed by his company, has only recently turned 34. 
"At the moment, the Anti-Trust Committee is considering the case and
gathering the necessary information," Olga Melnikova of the committee told
The Moscow Tribune on Tuesday. 
Melnikova claimed that it is the first such violation to be considered
by the Anti-Trust Committee central office. "Our regional departments have
dealt with similar cases, but it is still impossible to predict what
particular decision will be made in this case," Melnikova said. 
The committee spokeswoman said that the committee is not planning to
exercise a purely formal approach. "It's not only a question of actually
being under 35, but also of looking under the age," Melnikova said, adding
that this means conducting a survey among consumers in order to find out
whether Dovgan actually looks 35 or not. 

The Moscow daily Vremya quoted the committee's deputy chairman Yury
Kakovikhin on Tuesday as saying that a decision on the Dovgan case will be
reached in two weeks. 
The ominous news did not discourage the Dovgan company, however, which
was, allegedly, ready to withdraw the portrait of its leader from the
company's labels anyway. 
"The decision to remove the image of Vladimir Dovgan from the company's
labels was made in March," Vladimir Kapelkin, Dovgan's public relations
chief, told The Moscow Tribune. 
According to Kapelkin, an alternative design was suggested by Dovgan
himself, in order to reduce the pressure he has felt lately through being
recognized by people in the street. 

********

#15
TIME Magazine (Intl edition)
JUNE 29, 1998 VOL. 151 NO. 26
[for personal use only]
Is The Caspian An Oil El Dorado?
By ROBIN KNIGHT

Hyperbole has been part of the Caspian oil scene
ever since Robert Nobel travelled to Baku in 1873 to buy
locally grown walnut wood as material for rifle stocks.
When he saw "spouters" uncontrollably gushing thousands of
tons of oil, Robert forgot all about walnut. He summoned
brother Ludwig and bought land and a primitive oil
refinery. The resulting company, Petrole Nobel Freres,
thrived for some 50 years but collapsed as the family fled
from the invading Bolsheviks.

Adolf Hitler also had an eye for the main chance. At a
crucial moment in World War II he split his forces and
sent a key German army south toward the Caspian region to
try to seize the oil fields. The offensive failed, in the
process fatally weakening the Nazi assault on Stalingrad.
Today's dreamers are in the U.S. Department of Energy. In
1996 experts there decided that 178 billion bbl of oil
reserves may exist in the Caspian basin--making the area
second only to Saudi Arabia with 259 billion bbl. of
reserves, twice the size of Kuwait's 94 billion and Iran's
93 billion.

But now a revisionist view is taking hold and some experts
are saying that the estimates are exaggerated. The latest
issue of the International Institute for Strategic Studies
annual Strategic Survey, for instance, pours scorn on the
Energy Department estimates. The figures, it argues,
"imply that the Caspian area contains the equivalent of
400 minimum-size giant fields," defined as being at least
500,000 bbl of recoverable oil.

The IISS notes that only 370 "giant" fields have ever been
discovered worldwide. "All this is based on little more
than pure speculation," it says. "In short, Caspian energy
is much less important than many political analyses have
implied...Instead of the 16% of world reserves the
[estimate] implies, the true figure is likely to be closer

to 3%."

In all probability there is a balance to be struck between
the extremes. As Mehdi Varzi, an oil industry expert at
Dresdner Kleinwort Benson in London, puts it: "The hardest
thing to do at the moment is to keep the Caspian in
perspective. It's an important source of new non-OPEC
supply. And it's open to Western companies. But it's not
an alternative to the Persian Gulf or even to the North
Sea."

But reliable facts about the Caspian are rare as hotel
vacancies in Baku. These are some of the few:
--Proven reserves in the Caspian Sea region--that is, oil
that has actually been found--currently stand at 17
billion bbl, according to the BP Statistical Review of
World Energy.
--Only one modern offshore drilling rig is operating in
the Caspian at present. A second is due to commence
drilling in September.
--Deals worth $40 billion on paper have been signed by the
governments of the two key Caspian states, Azerbaijan and
Kazakhstan, with Western oil companies during the past
three years.

By 2005, if current trends continue, Western oil companies
will be spending about $5 billion a year on exploration
and development in the Caspian region. Much will be in the
Kashagan area in the shallow, ecologically-sensitive
Kazakh waters of the northeast Caspian. Here a consortium
led by Royal Dutch Shell has spent four years and $350
million on seismic surveys over a 100,000-sq-km area,
discovering more than 50 oil-bearing "prospects." A first
well is due to be drilled later this year.

Making sense out of this situation is now an occupation in
itself. But certain clear parameters define the Caspian in
world terms. On the most unemotional forecasts, oil
exports from the region will more than triple to 2.5
million bbl a day in 2005, and rise again to about 3.5
million in 2010.

During this period global demand for oil is forecast to
increase about 30%, or 1.5 million bbl a day every year.
At most, therefore, Caspian exports will account for some
two years increased supply (when rising local demand is
also taken into account) and be equivalent in importance
in 2010 to middle-ranking Norway's production in early
1998.

No one, however, is sure how much oil there is in and
around the Caspian. An informed guess, according to Varzi,
is that the Caspian is comparable to the Gulf of Mexico.
Clearly, there's a potential for major discoveries;
Kazakhstan's giant Tengiz onshore field, with estimated

reserves of six to eight billion bbl, is already rated as
one of the world's biggest. But most of the offshore
Kazakh sector has yet to be drilled. Almost no exploratory
work has been done in the Iranian, Turkmen and Russian
offshore sectors. And Azerbaijan's deepwater offshore
sector is only beginning to be explored.

So why have more than 80 major oil companies from all over
the world felt it worthwhile to gamble on the region?
First, oil companies are risk takers. Nothing excites them
more than a new area, but the Caspian is a new area with a
difference; it has a track record of oil finds going back
to the last century. Second, the Caspian is a beachhead.
Three decades after most Western companies were kicked out
of the Persian Gulf, Iran and Iraq, doors are reopening as
countries scramble for the technology, investment and
expertise they offer. The Caspian region, with its similar
history, culture, language and in some cases religion, is
a natural route back into the Middle East. Then there is
America. "Oil has been a part of geopolitics for a hundred
years," remarks Takin. Today it meshes the Clinton
Administration's desire to lessen Russian influence in the
Caucusus, and US oil companies' increasing need to boost
their reserves base.

But the Caspian may never be the oil bonanza its more
hysterical boosters suggest. And it's unlikely even to
rival the Persian Gulf. But the region does offer a
significant alternative to the Middle East. As older
non-OPEC sources decline, the Caspian will be there to
pick up the slack. It's also friendly to Western
governments and eager to do business with all comers. And
who knows how much oil and gas the region really holds?
Until that becomes clearer, believers in the "wave of
money" about to roll across the Caspian will dream on.

Robin Knight is a contributor to TIME and the editorial
writer for British Petroleum

********