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Johnson's Russia List


July 16, 1998  
This Date's Issues: 2268  2269  

 Johnson's Russia List
16 July 1998

[Note from David Johnson:
1. Bloomberg: Russia's Duma Approves Laws Needed for IMF-Led Loans.
3. Matthew Rendall: Save the baby.
4. Neville Booth: suicide statistics.
5. New York Times: Philip Taubman, Editorial Observer: Russia Finds 
No Peace in Burying Its Last Czar.

6. The Guardian (UK) editorial: Tea with Boris. Time for a better alibi.
7. Moscow Times: Bronwyn McLaren, Rumors Fly as Yeltsin Hosts 

8. Komsomolskaya Pravda: Nikolay Lakhvich, "Shadow of Next SCSE
[State Committee for the State of Emergency] Looming Over Kremlin.
Will Government Find Itself at the Ubiquitous Oligarch's Beck and Call?" 

9. Itar-Tass: Seleznev Fears 'Bulgarisation' of Russian Economy.
10. Robert McIntyre: When will this stupidity end? 
11. David Rowell: Did the Tsar's son survive?
12. Anthony Sager: Running in Moscow.
13. Reuters: Gareth Jones, "Yeltsin, hopeful on economy, to attend 
tsar burial."

14. Reuters: Chris Bird, Belarus swims against IMF's tide.]


Russia's Duma Approves Laws Needed for IMF-Led Loans

Moscow, July 16 (Bloomberg) -- Russia's lower house of parliament approved
enough of a government austerity program to secure $22.6 billion in loans
after it rushed passage of laws intended to boost tax collection and cut the
budget deficit. 

In a few hours this morning, the communist-dominated lower house, the Duma,
approved most measures proposed by the government, including a new tax code
and a lower corporate tax rate, intended to encourage companies to pay taxes.
Other parts of the plan, which would boost revenue by as much as 100 billion
rubles ($16.1 billion), can be forced by presidential decree. 

No one could have expected anything better than what they are doing,'' said
Peter Boone, an economist at Brunswick Warburg brokerage in Moscow. ``It's
clear the government is going to be able to go ahead using decrees and
everything else'' to meet International Monetary Fund loan conditions. 

The IMF says it will give the go-ahead at a Monday board meeting to a package
of loans to bolster Russian reserves and support the ruble if the government
program is approved, even if some measures are implemented by decree. 

President Boris Yeltsin and Duma leaders said the majority of measures already
are adopted and they expect to receive IMF approval. 

IMF officials in Moscow couldn't be reached for comment. 

Stocks Fall 

The benchmark RTS stock index fell 1.7 percent to 187.40 after five days of
gains on concern the government will have trouble carrying out the tax changes
and boosting collection. 

There's still a worry they won't be able to improve the tax collection
sufficiently by the end of the year,'' said Tom Brackenbury, a trader at
Rinaco Plus in Moscow. 

The RTS index is up 19.5 percent since July 13, when the IMF announced the
loan package to alleviate Russia's cash shortage and avert a ruble
devaluation. Russian dollar- denominated bonds were little changed. 

Yeltsin's office said the president was optimistic about the Duma's progress
and planned to start his vacation this weekend. 

It is already clear that the Duma has approached the government program with
the highest degree of constructiveness,'' said Vladimir Ryzkhov, deputy
speaker of the Duma. ``The majority of laws are already supported and many
have been passed off for approval by the Federation Council.'' 

The Federation Council, or upper house, must vote on all the measures approved
by the Duma. The Duma, which is scheduled to start a month-long recess
tomorrow, extended today's session to 8 p.m. Moscow time. 

The government already has pledged to the IMF it will reduce the budget
deficit to 2.8 percent of gross domestic product, from the more than 5 percent
expected this year. 

They've effectively agreed with the IMF on tax revenue targets,'' Boone said.
``So these individual measures that don't pass will be compensated with other

Loan Next Week 

If Russia wins approval of the IMF board, it would receive the first $5.6
billion installment of the loan next week, part of $14.8 billion this year. 

Russia's central bank reserves have dwindled by more than $4 billion since the
beginning of the year to $13.7 billion, including gold as the government
struggles to meet more than $1 billion in debt payments a week. Debt payments
total almost $30 billion for the rest of this year. 

The loans are only a temporary fix for Russia's fundamental fiscal and
economic problems, investors said. To avoid lurching from one crisis to the
next, the government must improve tax collection, cut spending and find ways
to pay months of back wages and eliminate or reduce the widespread use of
barter in the economy. 

The government's intention is to shift the tax burden from companies to
consumers to encourage economic growth, and to collect more taxes from
individuals, many of whom evade them. 

Duma Approval 

The Duma approved the general part of the tax code, which is key to government
efforts to clarify tax procedures and lower taxes to lure new taxpayers out of
the shadow economy, analysts said. The government expects simpler tax rules
will help raise budget revenue as more companies are able to plan long-term
investments and non-payers will be more willing to declare their earnings. 

The Duma also approved a law that will reduce the corporate tax rate to a
maximum of 30 percent from 35 percent and distribute two-thirds of the tax
collected to the federal government and one-third to the government of the
region where a company is located. Financial-services companies will pay a
maximum of 35 percent. 

In addition, the Duma approved a single tax for small businesses that's
designed to increase tax collection by cutting down on tax evasion and
simplifying procedures for tax payment. 

This is good because it significantly lowers taxation on small businesses,''
said Katya Malofeeva, an analyst at MFK Renaissance. ``It will bring them out
of the shadow economy.'' 

Under the law, small businesses will be subject to a single 20 percent tax to
be paid in advance on estimated sales rather than to the current multitude of

Other laws approved by the Duma would place a new tax on casinos and
restructure old tax debts in all levels of government. 

Government Problem' 

Duma deputies also heard today from Rem Vyakhirev, chairman of natural gas
monopoly OAO Gazprom, who said non-payment of taxes is ``on the whole a
government problem.'' The government recently cracked down on the largest
companies, including Gazprom, the nation's biggest tax delinquent, to win
promises for regular tax payments. 

Earlier, the Duma passed two bills to redistribute income from land taxes in
favor of the federal government and lower profit tax on companies that sell
gas, oil and electricity below cost -- while delaying debate on most others. 

It also passed in the final reading a law regulating the sale by the regions
of debt securities and adopted in a final reading a draft law on foreign
investment in Russia that guarantees protection of foreign investors' rights
and interests and details terms for their commercial ventures. 

In addition, legislators rejected a proposed 5 percent sales tax in the
regions, a government income-tax law that would have lowered the highest tax
bracket and targeted income earned from second jobs, interest payments and
gifts, and a measure to increase collection of the value-added tax by
collecting it when goods are delivered, not when they're paid for. 


Date: Wed, 15 Jul 1998 
From: yale richmond <> 
Subject: Second Jogger in Moscow

by Yale Richmond

Jogging in Moscow was first introduced in 1962 and, like many things
Russian, it was an import from the West. The first Moscow jogger was Peter
Bridges, a young Foreign Service Officer at the American Embassy who wrote
about pounding the Russian pavements in an article in the Foreign Service
Journal some time ago. And I was the second jogger, in 1967 when I was
posted to Moscow as Counselor for Cultural Affairs. 

But I did not pound the pavements at first. Just behind the embassy in
those years, on the site now occupied by embassy staff housing, there was a
small stadium used by a Moscow sports club, and with a quarter-mile cinder
track. And that's where I jogged every day, weather permitting, much to the
amusement of the Russian young men who were practicing rugby or futbol there.

During the winter months, when the track was snowed in, I took to the
streets and made several circuits around the embassy, even in the coldest
weather with my eyeglasses frosted over, much to the amazement of
streetgoers who would shout "c uma soshli?" (Are you out of your mind?) 

Children did not run after me but drunks sometimes did. Once, coming up
Devyatinskii Bolshoi pereulok, a rather inebriated Russian detached himself
from a group of serious drinkers congregated around the open air vodka
stand there, and began to jog alongside me. As we rounded the corner onto
ulitsa Chaikovskogo we approached the two Russian militsia men standing
guard in front of the embassy. They recognized me but not the surprised
Russian at my side whom they promptly apprehended. I wonder what the charge

The strangest jogging episode, however, involved the embassy marines. To
keep in shape, they would work out in the "community room" in the basement
of the embassy north wing. One morning, with the temperature well below
freezing and with snow on the ground, the marines decided to emerge from
their improvised gymnasium and take a few laps out the embassy gateway,
along the sidewalk and back in the other gateway, clad only in shorts, tee
shirts, and barefoot! The militsia men were aghast, and I always wondered
what their KGB chiefs made of that episode and those "crazy Americans." 
Yale Richmond
3930 Connecticut Ave., NW, #503
Washington, DC 20008-2429


Date: Wed, 15 Jul 1998 
From: Matthew Tobias Rendall <>)
Subject: Save the baby

Recent weeks have brought us two outstanding--if very
different--pieces of reporting and analysis from JRL, first Matt Taibbi's
road to Vorkuta pier, and now the introduction to Anatol Lieven's new
book. Lieven's chapter is not only one of the smartest but also one of
the best-written analyses I have seen in a long time. If more people
wrote this well, Russian studies would be more fun.
That said, in attacking history-based analyses he throws the baby
out with the bathwater. Of course it is absurd to speak of an unchanging
pattern of Russian expansionism. Any examination of Russian policy in the
first half of the 19th century should put paid to such assumptions.
(Though John LeDonne's recent history of Russian foreign policy, which
combines great geographical sophistication with extraordinary indifference
to individuals and ideas, shows it obviously hasn't.) As Hugh Ragsdale's
and Robert Jones' research indicates, even late 18th century Russian
expansionism was largely imposed by Catherine II and her favorite Potemkin
over the wishes of most of the St. Petersburg government and the ruling
But comparisons with the Russian past can tell us a lot if the
variables are well specified, the comparison is systematic, and we avoid
jumping to sweeping conclusions. (Most comparisons violate all three
rules.) Comparisons can reveal not only continuities but changes. Thus
Astrid Tuminez's recent dissertation compares Russian nationalism in the
1870s, before World War I and in the early 1990s to explain why aggressive
nationalism has *not* gained the same influence over Russian policy in the
present era. Single country studies can also capture patterns due to
persisting factors-e.g., to geography or, more controversially, political
culture. While this sort of analysis can easily degenerate, it seems just
as pointless to ignore what most of us feel--that there are certain
patterns that are inescapably "Russian." Indeed, one reason for
single-country comparisons over time is that one can hold many variables
constant (Lijphart 1971). Naturally this is true only up to a point we
are likely to learn more about the politics of contemporary Russia by
examining modern Brazilian politics than by comparisons with Kievan Rus'.
(Comparing the prerevolutionary and contemporary legislatures, on the
other hand, might be quite interesting).
Even broad and impressionistic comparisons can suggest useful
hypotheses. Take Richard Pipes' claim that Russians have never thought of
themselves as a nation distinct from the empire. While there's no reason
to assume that contemporary Russians think about the state the same way
they did in Muscovy or in the 19th century, it does indicate a good topic
for survey research. The problem comes when people treat such
continuities as established facts rather than hypotheses to be explored.
Lieven is also quite right to point out Russia's relative weakness
and to criticize the black and white distinctions between "democrats" and
"totalitarians" so prevalent in the Russian press. But this leads him to
underestimate the importance of which leaders and of the kind of regime
that prevails in Russia. First, all leaders are not the same.
Individuals matter. Peter III, Catherine II, Paul I and Alexander I were
all Romanovs and all representatives of the same "feudal-serfholding" (to
borrow the Soviet term) ruling class. Yet they pursued very different
foreign policies, the variations in which cannot simply be explained by
Russia's international position. Lebed, Luzhkov and Chernomyrdin might as
well--Luzhkov's past record, for instance, suggests he would be much more
likely than Chernomyrdin to touch off a crisis with Ukraine. And in any
case, should we simply assume such a "pragmatist" will come to power? No
doubt the oligarchs would prefer it (cf. McFaul 1997/98), but then the
German elite might have preferred a leader more pragmatic than Hitler.
Second, that "democracies do not go to war with each other" is not
an "ideological belief" but a hypothesis supported by many quantitative
and qualitative studies. It is, to be sure, a still hotly disputed
hypothesis, but that is not the same thing as an ideological shibboleth.
Jack Levy calls it "as close as anything we have to an empirical law in
international relations." Perhaps the more interesting question is
whether Russia is in any case a democracy in the necessary sense. Michael
Doyle (1986) found that "liberal regimes" did not fight each other--i.e.,
regimes with both "markets and private property economies" and
"'republican'...representative government." It seems questionable whether
Russia is fully liberal in this sense. Bruce Russett (1991), on the other
hand, excludes civil and economic liberties from his definition, and still
finds that "it is impossible to identify unambiguously *any* wars between
democratic states in the period since 1815," provided that the elected
government had been in power for at least three years. By his criteria,
Yeltsin's Russia qualifies as a democracy, and his findings suggest it is
less likely to fight other democracies than a dictatorship. True, there
is also a school of thought that holds that *democratizing*--as opposed to
fully democratic--states such as Russia are particularly war prone. Since
relapses into autocracy also seem associated with war (Mansfield & Snyder,
1995) we had better hope Russian democracy survives. 
That doesn't mean pinning our standard to Yeltsin. With friends
like him, Russian democracy hardly needs enemies. What it does mean that
is that it is important that he be kicked out by constitutional means,
whether now or in 2000. One can imagine situations when the regime was so
unstable and bankrupt that it would better to back an essentially
democratic, DeGaulle-like figure who was prepared to play fast and loose
with the constitution rather than see the whole show go off the road. But
I don't think we're to that point yet, and I hope we'll never get there. 

Matthew Rendall
Ph.D. candidate, Columbia University


Date: Wed, 15 Jul 1998 
From: "Neville Booth" <> 
Subject: suicide statistics

As part of my sociology coursework I am investigating suicide rates for 
capitalist Britain and communist Russia in the 1920's. I understand 
from the NCP that you deal with academics that may be able to help me in 
this area.

I also understand that it might not be possible as they were probably 
not documented but I hope you could help me out here. If not, could you 
find all statistics for Russia (or find someone who might know) that 
have been printed.

I hope you can help me in this area.

Neville Booth


New York Times
16 July 1998
[for personal use only]
Editorial Observer: Russia Finds No Peace in Burying Its Last Czar

The Romanovs are making a comeback of sorts in Russia these days. For a
small fee, visitors to Red Square can have their picture taken with a
lookalike of Nicholas II. Across town, a gigantic statue of Peter the Great
towers over the Moscow River. It seems an odd monument for the city Peter
abandoned in favor of a new northern capital on the Baltic. 
Russia has always had trouble managing its history. Epochs have vanished
with the stroke of an airbrush, only to reappear decades later. So it ought
not to come as a surprise that tomorrow, with considerable anguish, Nicholas
II, Russia's last Czar, will be buried alongside his relatives in St.
This long-delayed funeral is rich in bitter irony. For one thing, the bones
of Nicholas are being interred and honored when the corpse of the man who
ordered his execution, Lenin, has overstayed its welcome in Red Square. It
seems only a matter of time before Lenin's body is removed from the mausoleum
that bears his name. The strapping honor guard that long watched over the
marble edifice with goose-step precision has already departed, replaced by
shabbily dressed policemen who stand wearily by the locked entrance. 
Then there is the curious role of Boris Yeltsin in the rehabilitation of the
Romanovs. Long before he became President, when he was the top Communist Party
executive in his hometown of Yekaterinburg, he ordered the destruction of the
building where Nicholas and his family were incarcerated and executed by the
Bolsheviks in 1918. 
Mr. Yeltsin later called the demolition of Ipatiev house a "piece of
barbarism," and argued that he had had no choice but to carry out the decision
of the Politburo in Moscow. Still, it was Mr. Yeltsin who sent the bulldozers
out in the middle of the night. A small shrine to Nicholas now stands on the
vacant lot, and Mr. Yeltsin, eager to make up for the destruction, arranged
for the proper burial of Nicholas this week. 
But he will not be in St. Petersburg to witness the event, perhaps the most
painful irony of this affair. Mr. Yeltsin dropped the occasion from his
calendar when the leaders of the Russian Orthodox Church declined to attend
the burial, ostensibly because they were not certain the remains belong to
There is little dispute about the authenticity of the bones among the
forensic scientists who examined them. The real reason for the church's
absence seems to be division within the church itself. Religious nationalists,
an increasingly virulent force in Russia, do not want anything to do with a
state ceremony honoring Nicholas. They despise Mr. Yeltsin for his
Westernizing influence, and hope to use the symbol of Nicholas and his murder
to rally support for their authoritarian views and misplaced reverence for the
imperial family. In May, religious nationalists in Yekaterinburg staged a
book-burning, an act of intolerance that understandably unnerved many Russians
but provoked little criticism from church leaders. The nationalists hope that
Nicholas will eventually be canonized. 
So Nicholas re-enters St. Petersburg as a source of conflict, much as he
exited eight decades ago after his abdication, when the Provisional Government
of Aleksandr Kerensky packed the royal family and their servants on a train
headed to Siberia and an uncertain future. That he would remain the subject of
contention is partly attributable to the manner in which he died and the
brutal revolution in whose name he was killed. But it also testament to the
political and religious divisions that continue to torment Russia. 


The Guardian (UK)
16 July 1998
Tea with Boris 
Time for a better alibi 

A cup of tea served this week to leaders of the Russian state parliament 
has itself now became a matter for hot debate. Was it an honest gesture 
of good will to the Duma, from a president better known for strong-arm 
tactics than samovar-pouring skills? Or are the communists correct in 
suggesting that this is a disingenuous effort by Boris Yeltsin to dampen 
opposition to the terms of the proposed new IMF loan, by claiming that 
"we are all one (tea-drinking) team"? 

Mr Yeltsin's immediate aim is to secure agreement to changes which will 
tighten government spending, improve tax collection, and thereby convert 
the IMF's conditional offer of $17.1 billion - in addition to $5.5 
billion already pledged - into a firm loan when the Fund's board meets 
next Monday. So desperate is Russia's need for this massive financial 
tranche that Mr Yeltsin has even half-promised not to stand again in the 
presidential elections in two years' time. His aides had been 
threatening that he might take advantage of a constitutional loophole to 
do so. News of the provisional agreement has boosted Russian shares by 
more than 25 per cent, and reduced the huge interest rates of treasury 
bills. But the bankers who have been scuttling ship will not climb back 
in a hurry.

Moscow's chief debt negotiator, Anatoly Chubais, has called the 
negotiations the most difficult in the history of relations between 
Russia and the international financial institutions. And if this rescue 
package does not work, there may not be another one. This has little to 
do with weaknesses in the Russian economy: if that were the decisive 
factor then the current loan would never have been put together. Of 
course there is always the possibility that it will work this time: on 
the Polish model, a successful turn-around of the Russian economy, with 
lower inflation, a stronger currency and increased taxation, could mean 
that the loan need not be used. Russia and the IMF should be so lucky if 
this mirage became reality.

A simpler reason for this being Russia's last chance is that the IMF is 
running out of funds. The current package is already drawing on a backup 
credit line from the Fund's biggest contributors which was last used 20 
years ago. The message for any other countries about to go down the 
financial spout is - "don't!" Those who still maintain that the modern 
world of global finance is fundamentally sound had better prepare a new 
alibi - and it will have to be more than a nice cup of tea.


Moscow Times
July 16, 1998 
Rumors Fly as Yeltsin Hosts Chernomyrdin 
By Bronwyn McLaren
Staff Writer

President Boris Yeltsin had Viktor Chernomyrdin and his wife over for 
dinner, an unusual get-together that had Moscow buzzing with speculation 
Wednesday that the former prime minister could return to the government. 

Interfax quoted a source in Chernomyrdin's entourage as saying that he 
may take up a senior, but informal, position with sweeping powers. 

Chernomyrdin, speaking to reporters in the State Duma on Wednesday, 
downplayed the significance of the "informal meeting" Tuesday evening at 
a presidential residence outside Moscow. He ruled out a return to the 

The encounter came on the heels of a Kremlin meeting Tuesday between 
Yeltsin and party leaders in the opposition-dominated State Duma, 
parliament's lower house. Over tea and cookies, Yeltsin reminded the 
legislators that they "are part of one team." 

He wants Duma deputies' support for a package of austerity measures 
aimed at rescuing Russia from its financial crisis. 

In turning to his long-time prime minister, the president may be hoping 
to exploit Chernomyrdin's intimate relationship with Gazprom, as the 
government battles the Russian natural gas monopoly for unpaid taxes 
desperately needed to fill the state coffers. 

Chernomyrdin was vague about his discussions with Yeltsin, saying only 
that he would actively participate in political life both from within 
and beyond the framework of his Our Home Is Russia Party, Itar-Tass 
reported. He urged its Duma faction to back the government's 
stabilization program. 

Yeltsin called for Chernomyrdin, a loyal deputy until he was fired as 
prime minister March 23, at a time when he is under increasing pressure 
from the so-called oligarchs. 

"Yeltsin is trying to broaden his political base and emerge from 
political isolation," said Sergei Markov of the Center for Political 
Studies. "He urgently needs political allies." 

The president also has been faced with disloyalty in the Kremlin. 

The president fired Sergei Shakhrai, his envoy to the Constitutional 
Court, last week after he pledged to support Moscow Mayor Yury Luzhkov 
in the 2000 presidential elections. 

Only days later, Igor Shabdurasulov, Yeltsin's recently appointed deputy 
chief of staff, angered the Kremlin when he stated in an interview that 
Yeltsin was too tired "both physically and psychologically to continue 
to run the country efficiently." 

Dmitry Ayatskov, the popular governor of the Saratov region, also 
appeared to be severing ties with Yeltsin when he announced recently he 
would run for president. 

Yeltsin is also trying to keep in with big business, which doesn't find 
Prime Minister Sergei Kiriyenko a palatable alternative to Chernomyrdin 
because he is seen as too independent, Markov said. 

His recent crackdown on Gazprom alarmed the oligarchs and gave rise to 
what Markov called "an unprecedented attack on the president in the mass 

Many of the oligarchs have extensive Russian media interests. 

As the former chief of Gazprom, Chernomyrdin could act as a useful 
bridge between the government and the company in the battle over unpaid 

On Wednesday, Gazprom issued its first statement since the government 
launched its campaign against the natural gas giant on July 2. 

"Gazprom welcomes and supports the efforts of President Yeltsin and 
Sergei Kiriyenko to reform and modernize the Russian economy and improve 
the condition of Russian state finances," Reuters cited the statement as 

Chernomyrdin and Ayatskov are the only candidates to publicly announce 
their intentions to run for president. In the absence of a more 
acceptable candidate, it is possible that the wealthy oligarchs may 
choose to back Chernomyrdin, said Yevgeny Volk, director of the Heritage 

"Lebed and Luzhkov are the only other two possibilities at this stage, 
but they are too independent," Volk said. "They are very unlikely to 
cooperate with the oligarchs, and Yeltsin knows this." 

Yury Korgunyuk, an analyst at INDEM think tank, suggested a more 
sinister motive behind Tuesday's meeting. 

"Viktor Stepanovich can't help him, but he certainly could harm him if 
he was so inclined," he said. "He could provide some marvelously 
compromising material -- much more damaging than [former bodyguard 
Alexander] Korzhakov, or [his deputy Valery] Streletsky." 


Yeltsin Aides May See His Days 'Numbered' 

Komsomolskaya Pravda 
14 July 1998
[translation for personal use only]
Article by Nikolay Lakhvich under the "Weather at the Top"
rubric: "Shadow of Next SCSE [State Committee for the State of
Emergency] Looming Over Kremlin. Will Government Find Itself at
the Ubiquitous Oligarch's Beck and Call?"

To begin with, last week the dwarf social-patriotic Derzhava movement,
whose ex-leader was Aleksandr Rutskoy and which had sunk into oblivion,
suddenly made itself heard. The executive committee of Derzhava, springing
Phoenix-like from the ashes, advised the public through Nezavisimaya Gazeta
that a new coup d'etat is allegedly being prepared. And two days later the
same newspaper carried an article on the need to create a State Council,
not envisaged by the Constitution, which should ensure the holding of free
parliamentary and presidential elections and protect the country from
palace conspiracies....
It is believed that on the same day Yeltsin himself spoke, albeit
indirectly, about a threat of the seizure of power in the country by force.
This was during the president's meeting with the top brass of the Ministry
of Internal Affairs and Defense Ministry. The "power officials" were
receiving new ranks and posts. In principle a fairly everyday, scheduled
event. But when Boris Nikolayevich expressed the hope that the "power
departments" would not let their president down and promised to resolve all
of their problems despite the difficult financial situation, those in the
know drew a conclusion: This was not simply a tribute to the Kremlin
meeting's protocol.
The probable ideological inspirer of the latest coup "scenario" has
already been identified, too -- it is, of course, the CIS executive
secretary [Berezovskiy]. One well-informed Moscow newspaper even supplied
the headline "Berezovskiy Reveals His Plans...." Whatever the case might
be, the political atmosphere is obviously thickening and it is certainly
not just a matter of miners hanging around the White House. On the one
hand, we now have a young, fairly competent government that has no close
ties with oligarchs but also enjoys no authority by virtue of its youth. 
On the other hand there is the Presidential Staff, which, it is claimed, is
"under the thumb" of Berezovskiy. And he misses no opportunity to expound
on the topic: The "czar" is old and sick, the government is weak and has
no significant support....
That is why, as Komsomolskaya Pravda's sources assert, Berezovskiy
proposes the creation of something like a State Council that would include
the necessary oligarchs, the premier, and some presidential candidates.... 
But the financial aces have apparently decided that their sanctioned
presence would severely irritate many people. It is better to remain in
the shadows, in the role of "eminences grises." And besides, who knows
whether all Berezovskiy's talk is not a provocation -- just show interest
in the "State Council" and you will immediately be labeled unreliable....
But if the "State Council" idea is no bluff, power will in effect pass
from Yeltsin to Berezovskiy. Meanwhile the government, according to BAB's
[Boris Abramovich Berezovskiy's] plans, is assigned the role of puppet. To
that end, all the more or less significant figures should be removed --
Boris Nemtsov, Mikhail Zadornov, Boris Fedorov, Yakov Urinson.... They
should be replaced by obedient people. From among the governors, for
instance. Kiriyenko can stay: Somebody must, after all, be held
responsible for the crisis. Then it will be not difficult to persuade
Yeltsin to give up the next election.
Even ex-Premier Chernomyrdin stated during a trip to Belgorod Oblast
that it is time to amend the Constitution.... And deputy chief of the
Presidential Staff Igor Shabdurasulov, a very cautious individual, in an
interview a few days ago, advised Yeltsin not to run for president....
Yet a question suggests itself: How about the people closest to
Yeltsin, the Kremlin's key "courtiers" -- Presidential Staff chief Valentin
Yumashev, and daughter and chief adviser Tatyana Dyachenko? Could it be
that Berezovskiy has set them, too, against Yeltsin? There are two
probable answers: First -- a provocation (see above); second.... Perhaps
the most dramatic one: Even the people closest to him can see that the
president's strength and potential is waning and are preparing a "gentle"
retreat. Or, as a well-informed official riskily joked in a private
conversation: "They are all trying to look clever by asserting that the
president's days are numbered. There is just one small trifle: It is not
clear who will break the news to him."
Yeltsin has always been characterized by a "gut" political intuition. 
It is difficult to believe that he has not smelled something cooking in his
political kitchen.... 
[Komsomolskaya Pravda: One of Russia's largest-circulation and most
outspoken dailies, now controlled by Vladimir Potanin's Oneksimbank.]


Seleznev Fears 'Bulgarisation' of Russian Economy 

MOSCOW, July 14 (Itar-Tass) -- State Duma speaker Gennadiy Seleznev is
apprehensive that Russia's continuous borrowing and loans provided to it
will eventually make its national economy fully dependent on the creditors.
"We have one example already -- Bulgaria which has taken out so many
credits that it is unable to pay them back. Its economy and budget are now
directed by external representatives and Bulgaria has actually lost its
sovereignty," Seleznev told a press conference in Itar-Tass headquarters on
Tuesday [14 July].
The State Duma speaker stressed the inadmissibility of "bulgarisation"
of Russia and said that he could not visualise anything of this sort "even
in a nightmare."
He said the government must be made answerable to the parliament for
all credits, and "most importantly, they (credits) must be effective."


From: "Robert McIntyre" <>
Date: Thu, 16 Jul 1998
Subject: When will this stupidity end?

Regarding #7, JRL 2267 (Michael Lelyveld, As Gazprom Goes...")

How can a writer presumably well informed about the Russian economy and 
tax system continue to perpetuate the idiocy about "only 5% 
of citizens pay taxes at all". This is simply outrageous. 
Nothing need be said about the "magical realism" of the remarks by 
A. Aslund, but the over-all implication of the article that the June 
"crack-down" on Gasprom worked is also absurd. Gasprom in fact paid 
less after the "crack-down" than it had agreed to pay before. That 
whole episode made both Kiriyenko and Fyodorov look like incompetent 
fools, not serious "reformers".


Date: Wed, 15 Jul 1998 
From: David M Rowell <> 
Subject: Did the Tsar's son survive?

Reading through the latest St Petersburg Times on the web
( shows a fascinating article on the possible
survival of Tsarevich Alexei when the balance of the family was killed
in Ekaterinburg in 1918.

With the focus on the upcoming burial of the Nicholas II's remains,
issues of succession are very much in the front of people's thoughts in
Russia and elsewhere, and this carefully researched and convincing
chronology of the survival of his son, Alexei, makes for compelling

It can be found at and
is recommended reading. Surely it is time for what seems to have been
"a conspiracy of silence" to be pierced and the truth to be outed!


Date: Wed, 15 Jul 1998 
From: Anthony Sager <>
Subject: Running in Moscow

David: Glad to learn you're a fellow runner. Having regularly run in
various neighborhoods in Moscow, I think that Ian Watson has
overdramatized the risks of running in Moscow. He's right about the
potential problem of dogs, although I've never been chased or bitten,
probably because I give large off-leash dogs a wide berth or slow to a
walk. [The RF Law on Weapons allows unlicensed possession of mace-type
hand-held gas cannisters, including by foreigners, if one is seriously
worried about dogs.] The greater hazard is ice - slipping on it in the
winter and breaking something (and then having to get it treated). In
Moscow, as elsewhere, the best place to run is along the Moscow River,
if you're fortunate to be living or staying near it. The bridges carry
traffic over your head, so street crossings are far apart. And the
sidewalks are pretty well maintained, even in winter. If you get out
early in the morning, the air isn't bad, either. It's not Rock Creek
Park, but running past the Kremlin and the like isn't bad! [Someone has
published a runner's guide to Moscow, in a series covering most world
cities, but I haven't seen it, and prefer to pick my own route anyway.]
Tony Sager
Director, LAWS/Lawmaking for Democracy


Yeltsin, hopeful on economy, to attend tsar burial
By Gareth Jones

MOSCOW, July 16 (Reuters) - President Boris Yeltsin said on Thursday he would
attend Friday's burial ceremony for Russia's last tsar in a move that
underlined a new-found confidence in the country's ability to weather its
economic crisis. 

Yeltsin, who has refused to leave Moscow in recent weeks because of the
crisis, had previously indicated he would not travel to St Petersburg, the
former imperial capital, for the burial of the remains of Tsar Nicholas II and
his family. 

The 67-year-old president has warned of mounting social and political turmoil
in Russia but that prospect seems to have receded somewhat since the
government agreed a rescue package with global lenders on Monday worth $22.6

The international bailout hinges on the government's package of austerity
measures now being debated by the State Duma, Russia's opposition-dominated
lower house of parliament. 

In a further boost for Yeltsin, the Duma on Thursday approved the main part of
a landmark tax code long awaited by investors and the International Monetary
Fund (IMF). 

The Kremlin announced that Yeltsin would begin his summer holiday in the
Karelia region of northwest Russia from next Monday, the day the IMF board is
due to approve the first $6 billion of the loan package. 

The more relaxed mood in Moscow contrasts sharply with Yeltsin's own gloomy
warnings less than a week ago about a possible attempt by ``extremist'' forces
to seize power. 

Explaining his decision to go to St Petersburg, Yeltsin said in a televised
statement: ``This truth has been concealed for 80 years and we have to tell
this truth tomorrow and I should take part. This will be the right thing to do
from the human point of view.'' 

Nicholas, his wife Alexandra and their five children were shot dead in Siberia
by Bolsheviks in July 1918. 

Yeltsin had always intended the burial to be an act of reconciliation with
Russia's bloody past but the Orthodox Church cast doubt over the bones'
authenticity, despite DNA tests. Patriarch Alexiy, the church's head, will not
attend the burial. 

The political storm that has raged over the burial ceremony -- with most
senior politicians saying they will not attend -- has vividly demonstrated the
lack of reconciliation in Russian society 80 years after the killing of the
imperial family. 

As the government scrambles to implement the measures demanded by the IMF,
millions of Russians continue to suffer big delays in the payment of wages and

Miners have been picketing the White House, headquarters of the federal
government in Moscow, for more than a month and are also partially blocking
key railway lines in Siberia. 

``The situation is getting worse. Our negotiations (with the authorities) on
unblocking the railway line have brought no results,'' miners' union spokesman
Sergei Cheremnov told Reuters by telephone from the Kemerevo region. 

He said the miners, who are demanding their wage arrears and Yeltsin's
resignation, were now pinning their hopes on a meeting on July 25 with Deputy
Prime Minister Oleg Sysuyev. 

Prime Minister Sergei Kiriyenko told a cabinet session on Thursday that he
expected parliament to approve the package of anti-crisis measures by Monday. 

``The main task now is to conclude the passing by the Duma and the Federation
Council (upper chamber) of the package of draft laws which would secure
implementation of the government's economic programme,'' Itar-Tass news agency
quoted him as saying. 

The Duma has already passed some of the draft laws, partially or finally. Some
were thrown out and at least nine more draft laws, including a revision of
personal income tax rules, were due to be considered on Thursday. 

Its approval of the general part of the new tax code and of a cut in profit
tax to 30 percent from 35 percent will please investors. The tax code is aimed
at simplifying and reducing Russia's messy and onerous fiscal system, long
targeted by economists as one of the main brakes on economic recovery. 

The Duma also passed on Thursday a flat tax of 20 percent on small businesses
whose turnover is hard to calculate. 

But on a more worrying note deputies have not yet passed any tax hikes, which
are also an important part of the anti-crisis package. 

The rouble was set at 6.2180 to the dollar on Thursday, down from 6.1980 the
day before. Share prices were also slightly weaker on profit-taking after the
big gains triggered by Monday's announcement of the international bailout. 

The Federation Council upper chamber meets on Friday and Saturday to consider
the laws passed by the Duma before they go to Yeltsin for signing. Yeltsin has
the constitutional right to introduce some measures by decree but he cannot
change tax legislation. 


ANALYSIS-Belarus swims against IMF's tide
By Chris Bird

KIEV, Ukraine, July 15 (Reuters) - Former Soviet Belarus is one state not
asking for help from the IMF doctors now circling the globe to tend to shaky
markets in Asia and eastern Europe. 

Under the leadership of Alexander Lukashenko, 43 and once a collective farm
manager, Belarus is a maverick state with a planned economy run along Soviet
lines -- a potential market that resolutely refuses to emerge. 

Lukashenko's faith in state intervention in the economy is held with the same
religious conviction the good doctors of the International Monetary Fund have
in free markets. 

While governments in neighbouring Russia, Ukraine, Moldova and other former
Soviet republics prepare to take the medicine, Belarus's obstinate refusal to
drop state controls saw the fund's exasperated representative quit the
republic this month. 

Lukashenko is easy to make fun of, the moustachioed leader's antics redolent
of Charlie Chaplain's "Great Dictator." 

He once expressed admiration for Adolf Hitler -- a quarter of the population
died in World War Two -- and vowed to patrol the country by helicopter to
ensure plans for grain sowing were fulfilled. He also accused a regional
governor of shampooing his cows before an official visit. 

His authoritarian grip on power saw Belarus isolated diplomatically before the
bizarre row over disputed ambassadors' residences which resulted in envoys
from the European Union, the United States and others being recalled last

In the latest twist this week to the diplomatic soap opera, the EU and the
United States banned Lukashenko and other senior officials from their

Lukashenko apparently does not care. "If it wasn't Drozdy, it would be
something else," he said on Tuesday. 

With governments in Russia, Ukraine and Moldova about to put austerity
packages at the IMF's behest before their parliaments, how has Belarus managed
to swim against the tide? 

"None of these austerity packages are remotely popular and Lukashenko knows
this," said a Western diplomat in the region. 

"What Belarussians see is the world ganging up on him (Lukashenko) when he is
keeping capitalism, red in tooth and claw, at bay," the diplomat said. 

Nearly eight years of independence for the region have brought people only
hardship and an end to the sausage and vodka certainties of the Soviet era. 

In increasingly sophisticated markets, their frustrations are easily
overlooked. But embattled leaders like Ukrainian President Leonid Kuchma and
Moldovan President Petru Lucinschi are reluctant converts to IMF orthodoxy. 

Voters in parliamentary elections in both countries last March voted
overwhelmingly for the left, with the Communist parties in both states winning
most seats. 

But cracks have appeared in Lukashenko's Soviet idyll, where price controls
make for the cheapest MacDonald's hamburgers in Europe. On Tuesday he was
harangued by Belarussians in the south of the country for that most Soviet of
problems, shortages in state shops. 

"Belarus is no longer part of a Soviet Union which can sustain this kind of
economy," the diplomat said, noting Belarus has none of the diamonds, gold,
oil and gas that kept the Soviet industrial behemoth chugging along for 70

The Russian central bank's first deputy chairman, Sergei Aleksashenko, was

"In our assessment, Belarus is on the brink of financial collapse, entailing a
complete loss of confidence in the national currency," Aleksashenko wrote
recently in a Moscow newspaper. 

The central bank last week stopped domestic banks from buying hard currency to
try and stop the Belarussian rouble's steady slide against the dollar. 

When currency dealers on Monday jumped into obscure but relatively stable
Ukrainian hryvnias instead, the central bank suspended trading. 

With Lukashenko pressing for reunification with Russia, it was arguable
whether Western states needed diplomats in Minsk in the first place. 

But even the supportive Kremlin, anxious not to lose another state to NATO, is
losing patience. Russia now wants hard cash for its oil and gas, not outmoded
television sets and tractors. 

"You see the repressed inflation from the queues in the shops," said the
diplomat. "The economy will collapse sooner or later," he said. 


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