Center for Defense Information
Research Topics
Television
CDI Library
Press
What's New
Search
CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

July 11, 1998  
This Date's Issues: 2257  2258

Johnson's Russia List
#2258
11 July 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Los Angeles Times: Carol Williams, Russia Reveals Grim Extent 
of Debt.

2. Reuters: Russia expects IMF loans but no deal yet.
3. Boston Globe editorial: Urgent business in Russia.
4. The Guardian (UK): James Meek, Dogfood diet for Russian soldiers.
5. Krasnaya Zvezda-RIA Novosti: Vladimir Kuzar, NATO--AN INSTRUMENT 
OF US GLOBAL POLICY?

6. Renfrey Clarke: RUSSIAN LABOUR'S RESTLESS SUMMER: THE UNION 
MOVEMENT LOOKS TO POLITICS.

7. Itar-Tass: Spokesman Comments on Speech by Brzezinski in Warsaw.
8. Moscow Times: Igor Zakharov, BOOKWORM: Monthlies Can Yield Literary
Treasure.

9. Washington Post editorial: Back to Moscow.]

*******

#1
Los Angeles Times
July 11, 1998 
[for personal use only]
Russia Reveals Grim Extent of Debt 
Economy: Arrears equal 44% of country's net worth, prime minister says. 
Disclosure helps win support for stabilization program. Meanwhile, 
social tensions rise. 
By CAROL J. WILLIAMS

MOSCOW--Russia's escalating financial crisis is fomenting social unrest, 
and its debts have amassed to a shocking 44% of the country's net worth, 
Prime Minister Sergei V. Kiriyenko warned Friday. 
     His disclosures, in a speech to the upper house of parliament, 
succeeded in winning support from the Federation Council for the 
government's stabilization program. They also are likely to intensify 
pressure on international lending institutions to bail out Russia. 
     But Kiriyenko's sobering observations also shed light on the 
swiftly accelerating nature of Russia's crisis as the country borrows 
more staggering sums at mounting interest rates each week to pay off 
earlier debts. 
     "The financial market has practically ceased to exist," the dour 
prime minister told lawmakers, whose approval in principle of the 
crisis-easing measures means little unless the more contentious lower 
house votes likewise. "Tensions are rising in society, and this is 
naturally not helpful for stabilization." 
     Government debts now amount to 44% of Russia's gross domestic 
product, he noted. That confronts this country with woes analogous to 
what an American family might face if it had a household income of 
$100,000 a year and $44,000 in debts on credit cards with soaring 
interest rates. 
     Only a month ago, the prime minister put the debt at less than 
one-third of the GDP. The percentage of debt has risen sharply in part 
because Russia has had to borrow at higher and higher interest rates to 
retire maturing treasury bills. 
     In visible testimony to Kiriyenko's warnings of brewing unrest, 
striking miners continued to disrupt freight traffic on the vital 
Trans-Siberian Railroad for a seventh day; politicians from both 
government and opposition ranks predict the worst is yet to come. 
     "The peak of social discontent has not been reached yet," warned 
Moscow Mayor Yuri M. Luzhkov, who harbors ambitions of succeeding 
President Boris N. Yeltsin in the next elections. 
     Russia's recurring liquidity problems have been made worse in 
recent months by financial instability throughout emerging markets and 
by the global slump in the price of oil--this country's No. 1 
hard-currency-earning export. 
     The oil glut has already deprived Russia of $7 billion in expected 
revenue this year, and Kiriyenko said he feared that the shortfall will 
swell to $15 billion by the end of the year, forcing the government to 
delay more wages and pensions to state workers or to default on its 
mountain of debt. 
     "We are willing to consider any proposal, but we simply cannot fail 
to repay treasury bills," Kiriyenko told lawmakers who had urged the 
government to divert some of the debt-servicing funds to pay overdue 
wages to restless workers and impoverished retirees. 
     Russia has relied on sales of its abundant oil to fill government 
coffers and make up for its chronic failure to collect taxes. 
     The plunge in oil prices has also delayed a vital cash infusion 
from the planned auction of shares in the state oil giant Rosneft. 
   The Privatization Ministry announced Friday that it is postponing the 
sell-off of 75% of Rosneft shares from this month until late October, in 
hopes that the market will recover enough to entice bidders at what is 
now an unrealistic starting price of $1.6 billion. 
     The economic news has been so overwhelmingly negative in recent 
days that even frail Yeltsin has decided to postpone a vacation that was 
to have started next week. 
     He met with defense and national security officials Friday in a 
television appearance that seemed designed to show a tough and concerned 
leader at the helm. 
     Anatoly B. Chubais, Yeltsin's special representative to 
international financial institutions, has been lobbying officials of the 
International Monetary Fund and the World Bank for an additional $10 
billion to $20 billion in loans to allow Russia to restructure its debt. 
     Chubais has predicted an agreement within days, although the 
lending agencies have suggested that the Kremlin first win parliamentary 
backing of its stabilization plan. 
     Yeltsin's Communist and nationalist opponents in the state Duma, 
the lower house that is in recess until Wednesday, seem little inclined 
to raise taxes to bail out the government. 
     But Yegor S. Stroyev, the Federation Council chairman, told 
Kiriyenko that he is confident the package of new taxes and spending 
cuts will win approval before the parliament's long summer recess begins 
July 22. 
     Tax collection is the main point of friction between Russia and the 
lenders, as the federal government has been lax in pressing even some of 
the richest industrial debtors to pay arrears. It also has so far failed 
to trim spending to accommodate the drop in projected income. 
   Visiting European Union Commissioner Hans van den Broek called on 
Russian leaders to make peace with political opponents for the benefit 
of the country, noting that the leadership will not be able to overcome 
the crisis on its own. 
     Despite the quickening erosion of Russia's economic health, Van den 
Broek said European officials agreed with the Kremlin that a ruble 
devaluation would do much more harm than good. Devaluation would 
undermine the entire banking system and spur a new bout of inflation 
after nearly three years of stable prices, he said. 
     Panicked Russian and foreign investors have been scurrying to pull 
their rubles out of tumbling markets and trade them for more stable 
dollars, which has drained Russia's hard-currency reserves to $11 
billion from $24 billion only two months ago. 
     Unless the IMF and the World Bank come through with a 
debt-restructuring package, three-month treasury bills issued at 100% 
interest over the last few weeks to gather enough money to pay off older 
obligations will mature in the autumn and send the debt level soaring 
even higher. 
     Officials close to the negotiations between Russia and the IMF said 
the parties' talks had stalled, with the lending agency insisting that 
Moscow take firm steps to put in effect some of its planned reforms, and 
Russia contending that its pledges should be enough. 
     Meanwhile, Yeltsin discussed Russia's economic problems with 
President Clinton in a 20-minute phone call Friday. White House Press 
Secretary Mike McCurry said Clinton expressed his support for Yeltsin's 
position and his desire to wrap up the negotiations between Russia and 
the IMF. 
 "They have done a lot of work to satisfy some of the concerns that have 
been raised by IMF officials who are in Moscow," McCurry said. "The 
United States government certainly agrees that Russia needs an IMF 
program that works, one that the Russian government is both capable of 
implementing and that addresses the country's most pressing financial 
and structural problems." 
     Saying there is much Moscow could do by itself--such as improving 
its tax collections--McCurry repeated the administration's willingness 
to provide support to Russia, not unilaterally but as part of a 
multinational effort, "so we don't have to pay for all of it ourselves." 
     The White House decision to nudge the IMF in public is unusual. 
U.S. officials have a major voice in the lender's decisions and 
historically have exercised influence from the inside. 
     But this issue is viewed with great concern in Washington because 
the collapse of the ruble could send the Russian economy into a 
tailspin. That could cause political turmoil that could boost 
hard-liners and nationalists, leading to strained relations between 
Washington and Russia, a longtime adversary and possessor of a huge 
nuclear arsenal. 
     The White House intervention in the Russian-IMF talks also reflects 
fears of top presidential aides that if the negotiations are not 
resolved quickly, uncertainty could spark adverse reaction in global 
financial markets. 
     Russia is not a major financial player there, but its close ties 
with key groups of countries make it a major worry for Washington. 
     Times staff writers Art Pine and Elizabeth E. Shogren in 
Washington, D.C., contributed to this report. 
        Economic Slide 
     The fragile Russian economy has suffered a precipitous decline in 
recent weeks. A look at two key components: 
     Internal debt: Debt as a percentage of gross domestic product has 
soared. 
     Month ago: 30% 
     Today: 44% 
* * *
     Hard currency: Reserves of foreign currency plummeted as Russian 
sought to prop up the ruble. 
     (In billions) 
     Two months ago: $24 
     Today: $11 
      Source: Staff reports; World Bank. 
     Researched by CAROL J. WILLIAMS / Los Angeles Times 

*******

#2
Russia expects IMF loans but no deal yet
By Adam Tanner

MOSCOW, July 11 (Reuters) - Russia was close to securing billions of dollars
in vital new credits after intensive negotiations with international banks,
but ended talks on Saturday without a deal, officials said. 

``There was no agreement today with the IMF, not yet,'' said government
spokesman Alexei Volin. 

``We can say the talks have proceeded rather successfully, but the talks will
continue.'' 

President Boris Yeltsin held an unusual Saturday session with Prime Minister
Sergei Kiriyenko and other top government officials and said he was satisfied
with progress in the loan talks, the Kremlin said. 

``The president on the whole approved the progress of talks and instructed a
completion of the talks in a compressed period,'' it said. 

The Russian government, beset by poor tax revenues, low world oil prices and
financial market turmoil, says it urgently needs $10 to $15 billion in new
loans. 

Andrei Trapeznikov, aide to Russian loan negotiator Anatoly Chubais, had
initially predicted a weekend deal. 

``Talks proceeded successfully and were completed with the achievement of a
series of concrete agreements,'' he said in a statement after the Saturday
night talks. 

IMF delegates would meet Kiriyenko for a ``final stage of talks'' on Sunday,
he said. 

One Western banker said some issues in the package aimed at rescuing the
economy were unresolved. 

``There are still things to be worked out. There have certainly been moments
of tension,'' the banker said. 

John Odling-Smee, head of the International Monetary Fund's department
responsible for the former Soviet Union, arrived in Moscow on Friday afternoon
and held talks with Chubais until after midnight. Some Western bankers stayed
up for hours afterwards to revise documents. 

Chubais saw Odling-Smee again on Saturday evening. 

Yeltsin meanwhile continued a round of telephone diplomacy, ringing Japanese
Prime Minister Ryutaro Hashimoto for support a day after similiar calls to
Western leaders, including U.S. President Bill Clinton and German Chancellor
Helmut Kohl. 

``Japan is ready to deal positively (with the Russian request) within the
framework of the IMF. I expect the government led by the president steadfastly
to undertake domestic reform,'' Hashimoto told reporters later. 

Trapeznikov told Reuters two groups of negotiators had met on Friday night,
one dealing with World Bank credits and the other with IMF loans. 

``The Bank negotiations have been completed successfully, they agreed on a
text for the aid agreement,'' he said. 

``Tonight it goes to Washington for confirmation and at the same time to the
Russian government, in accordance with existing procedures.'' 

``There has also been noticeable progress with the Fund. The IMF mission noted
that the Russian side had moved forward significantly in preparing an economic
stabilisation plan.'' 

Officials declined to give details of the agreement. 

Russia is committed to keeping its rouble currency stable at just over six to
the dollar, a policy it views as vital to preventing the hyper-inflation that
mushroomed after the collapse of the Soviet Union in 1991. 

To keep its currency strong it must spend foreign reserves to buy roubles when
demand sags -- one reason why Russia has relied on billions of dollars of
loans from eurobonds and the IMF and World Bank in recent years. 

Moscow has also dipped heavily into its own coffers, depleting its foreign
currency and gold reserves to $15.1 billion by July 3 from $25 billion in the
middle of last year. 

Deputy Prime Minister Boris Nemtsov this week estimated Russia's total state
debt at $200 billion and said every third rouble of the budget goes towards
servicing debt. 

The dilemma facing Russian fiscal policy is how to move forward with economic
development while both paying back the debt and propping up the rouble. 

******

#3
Boston Globe
10 July 1998
EDITORIAL 
Urgent business in Russia 

The Clinton administration's original reluctance to schedule a summit 
meeting with Boris Yeltsin before the Russian Duma ratified the START II 
treatywas understandable given the importance of getting the arms 
agreement nailed down, but events have intervened. The summit is now 
scheduled for early September and has taken on aspects of a rescue 
mission on the high seas of the global economy. 

Within a decade, Russia has gone from being a superpower that bestowed 
weapons and credit on tinpot dictators to being an incorrigible deadbeat 
borrower. 

Miners, scientists, and defense workers are protesting against unpaid 
wages and pensions across Russia's 11 time zones. Interest rates are 
bouncing above 100 percent. The state cannot find buyers for Rosneft, 
the last government-owned oil company slated to be privatized. And 
Yeltsin's ministers are desperately begging the International Monetary 
Fund for a bailout loan of $10 billion or more to stave off a financial 
collapse. The IMF is not happy with Moscow's fiscal practices and is not 
certain it can spare the money needed to save Russia from a currency 
devaluation like those that have traumatized Thailand, Indonesia, and 
South Korea. 

The cause of the instability threatening Russia has been identified by 
the reform-oriented economist and leader of the Yabloko Party, Grigory 
Yavlinsky, as ''a form of robber baron capitalism.'' A narrow oligarchy 
of financiers fleecing the state of valuable assets, avoiding taxes, and 
buying political power has thwarted the development of an honest free 
market that could benefit all Russians. 

Ronald Reagan once said the Soviets could keep their ''Mickey Mouse 
system.'' Clinton needs to tell Yeltsin that his party of power cannot 
keep its robber baron system and that he must throw his weight behind 
the reformers, who are in danger of being swept away as the Asian 
financial crisis washes over Russia. There are totalitarians waiting to 
take Russia backwards should the reformers fail. 

********

#4
The Guardian (UK)
July 11, 1998
[for personal use only]
Dogfood diet for Russian soldiers 
By James Meek in Moscow

Thousands of Russian soldiers have been fed dogfood in place of stew, a 
team of military investigators has discovered: the latest horror story 
from the barracks of the country's underfunded and corrupt army. 

Staff from the military prosecutors' office checking a warehouse found 
that a company called Moldinterprodukt had been regularly supplying 
dogfood disguised as tins of stew.

Commersant Daily newspaper reported yesterday that the inspectors found 
1,000 tonnes of dogfood, made from processed animal ears, tails and 
offal.

They also found 5 tonnes of fish more than a year past its use-by date.

Although the defence minister, Marshal Igor Sergeyev, has ruthlessly 
pursued cuts and mergers in the country's sprawling armed forces, he is 
far short of the funds needed to build new homes for retired officers 
and re-equip the forces, let alone to feed, pay and supply the troops 
who remain in service.

Few garrisons bother to pay their electricity and heating bills, because 
President Boris Yeltsin has made it illegal for the utilities to cut 
them off.

Conscripts begging on the street have become a common sight in Moscow.

Every month brings a fresh toll of suicides, murders and violent 
desertions. As the air force abandons many of its airfields, surplus 
officers and their families are left in rotting barracks.

In a recent television report from the tense region of Dagestan, 
bordering on Chechenia, troops talked openly of engaging in unspecified 
"commerce" to earn cash to buy fuel.

The demoralised state of the army makes it less rather than more likely 
that it could become the instrument of revolt or repression. It is 
profoundly split between on the one hand conscripts and junior officers, 
many of whom simply want to escape from the army alive, and on the other 
senior officers alienated from their men by their corruption, 
incompetence and irrelevant cold war training.

More worrying is the fear of an Albanian-style breakdown of control 
which would let army equipment and weapons fall into the hands of angry 
unpaid communities.

*******

#5
>From RIA Novosti
Krasnaya Zvezda-RIA Novosti
Date? (c. July 10, 1998)
NATO--AN INSTRUMENT OF US GLOBAL POLICY?
By Vladimir KUZAR

As many observers and experts assumed, the idea of NATO's
eastward expansion, supposedly spontaneously advanced by the
United States and backed by its allies, appears to be only a
component of Washington's well-planned strategy to turn NATO
into an "instrument of American global strategy." No, no, dear
reader, this is not the ideological stamp of Soviet times.
Those who critically follow the discussion of the alliance's
new strategy, unfolding from US presentations, indicate that
this is Washington's ultimate goal in reforming NATO today in
Europe.
As you know, in its almost 50-year history, the North
Atlantic bloc has been led by several strategic conceptions.
The first of these was the American strategy of "massive
retaliation," which was adopted by the alliance soon after its
founding at the insistent recommendation of the US. In 1967
this strategy was exchanged for the strategy of "flexible
response," which the Pentagon had adopted as its official
doctrine six years earlier. The US was forced to give up the
previous strategy because of fear of the inevitability of a
retaliatory strike from the Soviet Union. In 1971 the Pentagon
developed and thrust on its allies the strategy of "realistic
deterrence" which was maintained until 1991.
The events that were then transpiring in Europe, and
primarily the disintegration of the Warsaw Pact and Germany's
unification, forced NATO leaders to reconsider their doctrine.
As a result, a strategic conception was adopted in Rome that
took three principles as its basis: dialogue, cooperation, and
collective defence. But the US quickly became dissatisfied
with this idea, since it gave birth to, according to US
representatives, confusion and vacillation in NATO
countries--while one group of countries announces its
aspirations to command posts in the alliance, another group
conducts negotiations on its own interests in the alliance,
then in general the Europeans raise the question of their
readiness to independently (without the Americans) fulfil a
number of functions to ensure security on the continent. In
1995, only after tremendous effort, Washington succeeded in
convincing its allies to conduct a NATO operation to stabilize
the situation in Bosnia. 
However it was not only these negative, from the US
viewpoint, developments in NATO that urged the Atlantic
strategists towards the process of reviewing the alliance's
doctrine. The determining moment was when America's global
ambitions began to rise all the same after the end of the Cold
War. As Karl-Hanz Kamp, an employee at the Konrad Adenauer
Foundation, writes in the Frankfurter Allgemeine, "the US, as
the lone superpower, is pushing its interests on a global
scale and therefore requires instruments for conducting its
policies of dictate. From Washington's point of view, NATO is
quite useful for this goal, both in terms of its military
might and as a forum for achieving trans-Atlantic consensus."
>From this, it follows that the US also needs NATO in order to
share with its allies in the alliance the financial burden and
the political responsibility for military intervention on a
global scale.
In connection with this, American leaders devised a
complicated combination of moves designed to bring about
NATO's "globalisation." Naturally, they do not make it a point
to parade this idea about. Washington's first step toward this
goal became, as is now being confirmed, the idea of NATO's
eastward expansion. Falling into the specious packaging of
"defending democracy" in Central and Eastern Europe and
answering the determined interests of the leading countries of
the Alliance, this met with the approval of the alliance
members, binding them together with common political
declarations, and mainly, with mutual financial settlements.
The second step was the operation in Bosnia, which was taken
as a testament to NATO's effectiveness, and the ability of the
bloc to resolve tasks beyond the borders of its
responsibility, an example of the possibilities of joint
action in the event that it is needed. 
Only after this did those in the US begin to openly talk
about their true intentions with regard to NATO. For example,
former Secretary of State Warren Christopher and former
Secretary of Defence William Perry almost simultaneously
announced the need to give the alliance possibilities for a
comprehensive defence of American and European interests
worldwide. Well-known Senator Richard Lugar decreed the
"global priorities" of America and demanded in the course of
discussion on NATO's "strategic goals," that crises in the
Persian Gulf and Strait of Taiwan also be taken into account.
The current secretary of defence, William Cohen, believes that
the future strategy of the alliance should in large part be
oriented on "projection of forces," and not on "static
defense."
It is still difficult to say to what extent the Americans
will introduce their goals into NATO's new strategy--its
development is taking place behind closed doors. Although the
basic arguments, which they are using to try to convince the
alliance members to extend the alliance's zone of activity,
are well known in principle. 
Thus, it is asserted that, due to technological progress,
geographical distance is becoming less and less of an
important factor. That by 2010 more than 80% of the current
territory of NATO will end up within range of missiles from
the regions of the Middle East and north-western Africa. And
from the tendency towards the dispersion of systems for
carriers of precise delivery to targets and nuclear,
bacteriological, and chemical weapons, one is given to
conclude that Europe might be faced with a direct threat from
weapons of mass destruction in the foreseeable future.
However, Europe is not just frightened of overseas
military threats. As is often stated, disruptions in the
delivery of fossil fuels in the event of a military conflict
in the region of the Persian Gulf, the blockade of the Suez
Canal, or the Strait of Hormuz can have important impacts on
Europe. A blockade of trade routes from East Asia would have
the same threat to the continent. 
All of these arguments clearly take the form of a "global
adversary," which, they say, can be managed only jointly,
conducting the "globalisation" of NATO. However the Europeans,
on the whole soberly evaluating the possible challenges to
their security, have not yet agreed to this presentation of
the issues. And it is especially not to their liking that it
is relatively unclear exactly who will be determining the
"joint interests" that NATO will have to defend in the future.
According to the opinion of the Frankfurter Allgemeine, the
United States' global interest even today do not always fully
coincide with the interests of its European partners in the
alliance. And even among them there are significant
differences of opinion with regard to their approaches to
regional problems. 
France is especially negative in its treatment of the
American idea of NATO's transition from "collective defence"
to "defence of collective interests." Paris has already
clearly announced that there is "too much America and too
little Europe" in the Alliance, and has also spoken out for
the changing of its strategic conception. In the course of the
April visit to France of NATO General Secretary Javier Solana,
during which the idea of the future conceptions of the bloc
were discussed, Paris again spoke out for the necessity to
re-evaluate the role of NATO on the continent, determining its
spot in the architecture of European security. In turn,
Solana, in conversations with French leaders, repeatedly
stated that NATO is not a "global organisation." While at the
same time he made it understood that, if Europeans insist on
geographic limits on the zone of the alliance's activities,
they would not be able to "fulfil peacekeeping functions, for
example in Africa, with their own forces."
NATO's geographic activity is limited, in accordance with
the Washington Agreement on the founding of the alliance, to
the territory of alliance member states and water bodies,
which adjoin their territory and which include all of the
North Atlantic down to the Tropic of Cancer. The
"globalisation" of NATO would signify the reconsideration of
the agreement, for which Washington has long been ready. And
one cannot say that none of the Europeans want to rewrite the
Washington Treaty, as the Reuters news agency has quoted the
words of one high-placed NATO official. But the US, on the one
hand, apparently will not insist on this, since they believe
that it is not always necessary to receive a specific mandate
from the UN for action "beyond the limits of NATO's zone of
responsibility, that for this it is sufficient to be led by
the Article 51 of the UN Charter. On the other hand, the
roundabout ways have practically been found to avoid the
receipt of a mandate from the world community to conduct
concrete operations.
Observers do not rule out the fact that one of these may
become the NATO program Partnership for Peace, undertaken at
America's urging. In order to confirm this, events around
Kosovo are cited. The moment that tensions mounted, the
Albanian Prime Minister stated a request to introduce
peacekeeping forces into the territory of his country.
However, since this required a corresponding mandate from the
UN Security Council, a resolution of which, by all
appearances, would be blocked by Russia and China, several
NATO leaders recommended that Albanian leaders direct this
request to NATO headquarters. This would have been, in their
opinion, sufficient for the alliance to take a decision on the
introduction into Albania of a certain contingent of troops
under the Partnership for Peace program.
Only a bit of a reduction in the tension around Kosovo
deflected the development of events in this region according
to that scenario. Together with this the fact of its
possibility only strengthened conviction of those that look on
the NATO program, allegedly created for humanitarian aims, as
still one more method for conducting American global policies.
In any case, thanks to the Partnership for Peace program,
units and formations of the armed forces of the US received
the opportunity to occupy those regions of the planet where
they could not otherwise go. Let's say, in Kazakhstan, or in
the Caucasus. And even in the north of NATO's Norway, where
even in the days of the Cold War, exercises were never
conducted with the participation of foreign troops.
NATO officials, according to the Reuters news agency,
announce in connection with this, that it is already
fulfilling many new functions, which need only be established
in documentation. "The task is to introduce a theoretical
basis under work that is already being put into practice," one
of them announced. The time for adopting a new NATO strategy
has been determined--April 1999, when the 50th anniversary
session of the NATO Council will be held in Washington. From
this moment on the US will have, in the form of NATO, its own
"superpolice" for resolving all of the world's problems.
There is no doubt that it will go down like this, as
experience shows that after all the discussion Washington will
at the last moment present a prepared text, which the European
alliance members will only have to sign "without extra words."
However it is unlikely that this will be in the interest of
peace and global security.

********

#6
Date: Sat, 11 Jul 1998 18:56:22 +0400 (WSU DST)
From: austgreen@glas.apc.org (Renfrey Clarke)
Subject: Russian labour's restless summer

#RUSSIAN LABOUR'S RESTLESS SUMMER: THE UNION MOVEMENT LOOKS TO
POLITICS
#By Renfrey Clarke
#MOSCOW - On Russia's labour scene, July traditionally has been a
quiet month. Whatever the turmoil of the spring, workers by mid-
summer have been ready to set off on holiday, or to spend the
warm, twilit evenings relaxing on their garden allotments. True,
a holiday away from home has been unaffordable for many workers
in recent years, and the hours in the garden are now mostly spent
toiling to grow food for the winter and spring, when wages will
very likely not materialise. But the lull in industrial protests
has remained.
#Until 1998, that is. This July, the pace of struggle has failed
to slacken. Where the battles of earlier months have been
indecisive, workers have gone back on the picket line. And as a
steady rise in wage arrears signals that the government has no
answers to the country's economic crisis, many labour activists
have concluded that only a thorough change of personnel in the
organs of power can bring improvements. More and more often,
labour activism has become unabashedly political.
#To set the nerves of state officials still more on edge, there
has been the sound that echoes about Moscow's main federal
government office building - the so-called ``White House'' -
every two hours from 8 a.m. to 8 p.m. A loud rhythmic crunching,
it suggests an army on the march. It is in fact the noise of more
than 200 unpaid miners banging their helmets on the paving-
stones. The miners are from almost all the coal districts of
Russia, but the largest contingent arrived on June 11 from
Vorkuta in the arctic north. They have been camped next to the
White House ever since, and will leave, they assure journalists,
only when Russian President Boris Yeltsin quits office.
#Not even the pro-government press has dared accuse the picketing
miners of being ``extremists'', out of step with the feelings of
their workmates. As July began, 23,000 miners in Chelyabinsk
Province in the Urals staged a one-day strike. And on July 3 the
``railway war'', which in May saw Russia's transport system
largely paralysed as miners blocked vital rail lines, flared up
again. Miners and other workers in the Siberian city of Anzhero-
Sudzhensk, in the north of the Kuzbass heavy industrial region,
moved back onto the tracks. Undertakings which the government had
given in order to end the blockade were not being kept, the
miners contended.
#At the opposite end of Russia from Moscow, in the Maritime
District of the Far East, the failure of wage payments to appear
was bringing society close to breakdown. Workers in the
district's power stations had gone on strike in protest at wage
debts stretching back as far as six months. Electricity users
were enduring blackouts from early morning until after midnight.
Public transport was largely at a standstill, and water supplies
were only sporadic.
#The key responsibility, the strikers argued, lay with the
federal government. Large military bases and other government
facilities in the region were being starved of funds, and were
not paying their electricity bills. At the same time, federal tax
officials were seizing funds of the regional power company
Dalenergo, even though payments owed to the company by state
institutions were reportedly four times Dalenergo's tax debt.
#After receiving three weeks of back wages, the power strikers
returned to work on July 8. But the crisis did not abate, since
the workers refused to increase electricity output from the low
levels maintained during the strike by management staff.
#Meanwhile, the government's problems in the Maritime District
were not at an end; unpaid for even longer than the power
workers, defence workers were taking to the streets. On July 8 as
many as 4000 people rallied in the district capital, Vladivostok.
Many of the participants were submarine repair workers who had
already been picketing government offices in the city for several
weeks. According to the Moscow daily <I>Trud,<D> the latter
workers were threatening not only to block railways, but to seize
control of their enterprise and manage it themselves.
#The same day saw coordinated demonstrations by defence industry
workers across Russia. In Moscow, several thousand people
picketed Defence Ministry offices before moving on to demonstrate
in a square near the Kremlin. A number carried toy guns,
declaring, ``Next time we'll come with real ones!'' The first
point on a resolution adopted by the demonstrators was a demand
for Yeltsin to resign.
#Putting in an appearance at the Moscow demonstration was Mikhail
Shmakov, chairperson of Russia's largest labour organisation, the
Federation of Independent Trade Unions of Russia. Mistrusted by
many unionists as too accommodating to government demands,
Shmakov was booed and hissed as he began to speak. For once,
however, Shmakov was promising action. He had just come, he
explained, from a conference of union leaders at which a decision
had been taken to prepare for an all-Russian strike around
political demands, to be held in early October. In the past,
Shmakov has been quoted as calling for elections for the
president and parliament to be held ahead of schedule.
#The growing politicisation of Russia's labour movement came into
still sharper focus on July 9 when a congress of the country's
main coal union, the Independent Union of Coal Industry Workers,
opened in Moscow. Agreeing to let Deputy Premier Boris Nemtsov
address them on behalf of the government, the 300 delegates gave
him a noisy reception. Later, they were to pass a resolution
demanding that Yeltsin immediately resign.
#The delegates reacted skeptically to Nemtsov's insistence that
the government was handing over money for the coal industry in
the quantities foreseen in agreements over the months. In
telegrams presented to the congress, miners had complained that
wage payments promised in the agreements that ended the May
railway blockades had not come through.
#Technically, Nemtsov's claim may have been correct. At any rate,
the fact that miners have not been paid does not prove that the
government has failed to supply money to pay them. Discussing the
finances of the coal industry, delegates at the congress
described a thicket of suspicious-looking institutions into which
government payments routinely vanished without trace.
#Large amounts of money from coal sales organised by more than
700 coal-trading firms were also failing to make their way back
to the mines. Delegates told journalists that mine managers were
often implicated in the work of these firms. Many of the coal
traders are believed to have links to organised crime.
#To arguments that such problems are not the government's fault,
coal industry workers have been known to reply: since when has
enforcing the law been the job of miners? In any case, coal
unionists are adamant that the responsibility of the government
for their plight goes far beyond the failure of the authorities
to stop industry funds being stolen. Very often, the coal
industry finds itself at the end of chains of non-payments whose
first links are in the federal Finance Ministry. According to the
Independent Union of Miners, one of the smaller coal industry
unions, federal and local government bodies along with state-
owned companies accounted for 2.2 billion rubles out of 3.5
billion rubles in wage arrears owed by the coal industry in early
May.
#Coal miners, along with many other workers, are coming to see
the removal of the present regime in Russia as vital if the
country's working people are simply to survive. The pressures on
the trade union movement to involve itself directly in the
political process, helping to decide the question of who
exercises power, are mounting steadily.
#In the coal industry, the notion of trade unions as non-
political organs limited to seeking the economic well-being of
their members already belongs to the past. The very distinction
between trade unions and political parties is beginning to break
down.
#Reporting the congress of the Independent Union of Coal Industry
Workers, the Moscow daily <I>Nezavisimaya Gazeta<D> on July 10
quoted union chairperson Ivan Mokhnachuk as saying it was ``not
excluded'' that the union might amend its charter, turning itself
into a political movement campaigning for office. This
suggestion, the newspaper commented, ``corresponded precisely to
the mood of the delegates.''
#Meanwhile, the news agency Itar-Tass reported the same day that
the number of picketers blocking the Trans-Siberian Railway in
the Kuzbass had doubled, and that the miners were also
threatening to stop traffic on major highways.
#All this, observers may remind themselves, is happening in July,
when workers in past years have been tending their potatoes and
cabbages. What will things be like in autumn, when labour
struggles have traditionally resumed in earnest?

******

#7
Spokesman Comments on Speech by Brzezinski in Warsaw 

Moscow, July 8 (ITAR-TASS)--The American foreign political
establishment begins gradually to understand the need in multilateral
cooperation when resolving sore international political and global
problems.
This statement was made by Russian Foreign Ministry Spokesman Vladimir
Rakhmanin at a briefing here on Tuesday commenting on a recent speech of
former assistant to the U.S. President for National Security Zbigniew
Brzezinski at an international conference in Warsaw.
The official representative of the Russian Foreign Ministry stressed
that the statement by "one of the prominent ideologists of the American
foreign policy is sufficiently symptomatic."
Zbigniew Brzezinski said that the global leadership could not
guarantee reliable counteraction to dangerous challenges of the modern
times, including the regime of the non-proliferation of mass destruction
weapons, international terrorism, the global character of drug-trafficking
and so on.
"This admission has been made evidently taking into account American
diplomacy of the past years, when it was difficult for it to cope with many
sharpest problems single-handed, such as for example, the overcoming of the
impasse in Israeli-Arab peace negotiations and the restraining of attempts
by India and Pakistan to join the club of possessors of nuclear weapons,"
Vladimir Rakhmanin pointed out.
"The multipolar world is present reality representing a pivotal factor
of the post-confrontation epoch. Russia and a number of other countries
build their policy proceeding from the fact of the formation of such a
system," the official spokesman of the Russian Foreign Ministry said.

********

#8
Moscow Times
July 11, 1998 
BOOKWORM: Monthlies Can Yield Literary Treasure 
By Igor Zakharov
Special to The Moscow Times

Current Russian literature traditionally comes to the general reader 
first through literary monthlies, known as "thick" journals. 

In the late 1980s, at the height of glasnost, magazines like Znamya, 
Oktyabr, Novy Mir or Druzhba Narodov used to have circulations of 1 
million copies every month. Now they are printed in about 10,000 copies, 
and it is enough to satisfy the demand. Russians have lost their status 
as "the most reading nation of the world," and people prefer to spend 
their money elsewhere. 

Literary magazines are not sold at newspaper kiosks any longer; one has 
to subscribe through post offices. To save money -- more than 50 percent 
of the subscription price charged is for home delivery -- many 
Muscovites subscribe directly at the magazines' offices. 

In the editorial office of the most famous Russian literary monthly, 
Novy Mir, one can now get a 1999 subscription for only 156 rubles for 12 
issues. 

When visiting the journal's headquarters on Pushkin Square one can also 
buy practically every back issue of the magazine published during the 
last 10 years. Some of them can be even taken free. 

Except for the October issue of last year; it sold out because it 
contains Anatoly Naiman's novel "B.B. And Others" (B.B. i dr.). 

The 62-year-old poet, translator and essayist -- Anna Akhmatova's 
literary secretary -- is the author of several prose works in which he 
adroitly combines memoirs and fiction. Goethe called such prose "Poetry 
and Truth," while Naiman prefers a more ironic description: "Poetry and 
Untruth" (Poeziya i nepravda). 

To escape accusations that he has falsified facts, he forwards his 
"novels" with a remark: "Alongside real persons, this book has fictional 
characters. If a reader is in doubt as to whether a person is real or 
not, the author asks him to consider such a character as his invention." 


"B.B. And Others" has not been published in book form yet, but two of 
Naiman's previous works have. Vagrius has added the volume with Naiman's 
"Poeziya i nepravda" and "The Glorious End of Inglorious Generations" 
(Slavny Konets Besslavnyh Pokolenii) to its popular "black series" of 
modern Russian literature. 

The second piece is factual. It is written in the first person and is 
more or less a memoir about many famous people intimately known to the 
author: Akhmatova, Joseph Brodsky, Vasily Aksyonov, Bella Akhmadulina 
and Lilya Brik. 

You will certainly enjoy Naiman's prose if you are prepared to live with 
the doubt as to whether it's fact or fiction. It's a very teasing 
experience, but an aesthetically rewarding one. 

********

#9
Washington Post
July 9, 1998
Editorial
Back to Moscow

PRESIDENT Clinton said he wouldn't go to Moscow until Russia's 
parliament ratified the START II treaty, his understandable motive was 
to press for progress in arms control that would benefit both countries. 
But the gambit, if it ever made sense, long ago moved into the realm of 
the counterproductive. It allowed U.S.-Russia relations to be held 
hostage by the Duma, or lower house of parliament, which is dominated by 
deputies who have no great interest in promoting U.S.-Russia relations. 
So Mr. Clinton was right this week to schedule a September trip to 
Moscow to meet with Russian President Boris Yeltsin, even though START 
II won't have been ratified by then.

As it happens, Mr. Clinton's decision comes at another moment of great 
peril for Russia's young experiment in democracy. This time the danger 
is financial. A combination of spillover effects from Asia's financial 
turmoil and -- more salient -- shortcomings in Russia's own fiscal and 
economic policies has put in danger the nation's progress in stabilizing 
the ruble and controlling inflation. A real run on the currency could 
have dire consequences, not only for Russia but for many of its 
neighbors, too. The crisis has once again put Russia in the role of 
supplicant to the International Monetary Fund.

By the time Mr. Clinton actually travels to the Kremlin, there's no 
telling what the situation will be; two months can be several eras in 
Russia's timetable. But certain principles hold true no matter how the 
current crisis turns out. One is that, in the end, only Russia can take 
the decisions necessary to save its economy. Its process of economic 
restructuring is certain to be long and bumpy; the legacy of Soviet 
misrule is simply too heavy to be shrugged off in a few years.

But it holds just as true that the United States has, as always, a great 
interest in assisting and encouraging Russia's transition to democratic 
rule and its integration into the Western economy. Mr. Clinton has long 
understood that interest. But in recent months, focused on China and 
mistakenly postponing a Moscow trip, he has devoted far too little 
attention to the U.S.-Russia relationship, and to explaining its 
importance to Americans.

Even without the immediate cooperation of the Duma, the two nations 
could make progress with regard to arms control. The greatest threat now 
is not a deliberate nuclear war between Russia and the United States but 
the theft or illicit sale of nuclear materials or an accidental launch 
arising from the slow degradation of the Soviet nuclear complex. There 
are measures both sides could take to lessen those dangers. The two 
presidents need to be talking about them. 

******


Return to CDI's Home Page  I  Return to CDI's Library