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Johnson's Russia List


July 21, 1998   
This Date's Issues: 2275  2276  

Johnson's Russia List
21 July 1998

[Note from David Johnson:
1. AP: IMF OKs $11B Loan Package to Russia.
2. Reuters: Yeltsin takes strolls in Russian lakeland.
3. Reuters: Yeltsin's economy moves test constitution.
4. Moscow News: Marshall Goldman, Loans Keep Crisis Alive.
5. Los Angeles Times: Clifford Gaddy and Barry Ickes, This Bailout 
Will Set the Stage for the Next Crisis. Russia: A pretend or 'virtual' 
economy won't react like a market economy. The country needs true 
structural change.

6. RFE/RL: Paul Goble, A Fourth Baltic Republic? (Kaliningrad)
7. Robert Cutler: U.S. Pension Fund Investment in Russian Equities?
8. USA Today: Gore on high-profile Russia trip.
9. Thomas Goltz: Lectures/Readings/Caucasus Video presentations.
10. Reuters: Iran, Russia want consensus on Caspian accord-IRNA.
11. Moscow Times: Jean MacKenzie, CONFESSIONS OF A RUSSOPHILE: 
Russian Pulp Rejects Hope.

12. Rossiyskaya Gazeta: Moscow Hails PACE Report on Russian Rights 

13. Reuters: Russian impeachment body sets meeting, agenda.]


IMF OKs $11B Loan Package to Russia
July 20, 1998

WASHINGTON (AP) - The International Monetary Fund approved an $11.2 billion
support package Monday to help Russia bolster its currency, the ruble, and
ease a financial crisis that was crippling the country's floundering economy. 

The IMF's 24-member Executive Board supported a $4.8 billion payment
immediately and said the balance could be paid later in the year if key
economic measures, including increasing tax revenues, are carried out. 

Originally, the IMF management had pledged $5.6 billion, but board members
scaled back this amount after Russia's parliament, the State Duma, failed last
week to enact laws on these measures and President Boris Yelstin had to issue
decrees to raise taxes. 

The board acted after questioning Russia's chief negotiator with the IMF,
Anatoly Chubais, for more than two hours. 

``If the amount of the reduction is less than $1 billion, then this will not
harm Russia's situation,'' Chubais told reporters before the IMF decision.
``The second (installment) will be paid Sept. 1, which is less than 50 days
away,'' so it will not undermine the program. 

The IMF board decision is expected to clear the way for loans from the World
Bank and other lenders, who have pledged up to $17 billion in additional money
for Russia. 

A White House statement endorsed the IMF decision. 

``The United States commends the important steps Russia has taken to
strengthen its public finances, preserve financial stability and further help
lay the groundwork for economic growth through structural reform,'' it said. 

``We welcome the decision by the IMF executive board to expand its funding for
Russia's reform program. We look forward to full implementation of these
reforms and to additional action to put Russia's finances on a sustainable

The bank's board is expected to decide early next month on a $1.5 billion
economic restructuring loan for Russia. If the loan is approved, Russia will
receive $800 million this year and the rest in 1999. 

Stanley Fischer, the IMF's first deputy managing director, said in a statement
the Russian package ``represents a strong and appropriate response to overcome
Russia's current difficulties.'' 

However, he said, concerns among board members about the parliament's actions
were the main reasons why the amount of the first installment had been

``Unfortunately, parliamentary backing has not been forthcoming for needed
actions related to personal income tax,'' Fischer said. ``Nor have permanent
measures to strengthen the pension fund.'' 

He referred to the government's pledge to hold a special parliamentary session
in August and said the $800 million reduction could be added to the next
installment in September ``assuming that the measures are satisfactorily

Russia pledged earlier Monday to improve its tax collections, which at present
raise only a faction of what the government is owed. 

Russia's parliament recessed last week after failing to approve several
elements of a government economic plan that the IMF has set as a prerequisite
for the loan. The IMF had said it would not approve a new loan unless Russia
raised government revenue through a variety of measures, especially improved
tax enforcement. 

Chubais said earlier the IMF had said in negotiating the loan package that
Russia ``will only be trusted when the government, the State Duma, the
Federation Council and the president have similar positions on the key

In a joint statement sent to the IMF on Monday, Prime Minister Sergei
Kiriyenko and Central Bank Chairman Sergei Dubinin said they had acted to
increase revenue and cap the budget deficit, the Interfax news agency said. 

Kiriyenko and President Boris Yeltsin have said they will pass by decree
measures not approved by the State Duma. Two such decrees were signed over the
weekend. One, a land tax measure, doubles the tax on certain nonagricultural

In a sign of confidence in Russia's financial prospects, investors exchanged
nearly $6 billion in short-term treasury bills for longer-term bonds Monday. 

The exchange, undertaken on IMF advice, was intended to ease Russia's crushing
short-term debt burden. 


Yeltsin takes strolls in Russian lakeland
By Natasha Borisova

MOSCOW, July 20 (Reuters) - President Boris Yeltsin, who began a break away
from Russia's economic crisis at the weekend, is enjoying leisurely walks
through pine-scented forests in the country's northwestern lakeland, officials
said on Monday. 

"He's gone for strolls, though not for very long, because our weather -- which
had been lovely -- turned a bit nasty when he arrived," said a spokeswoman for
the local administration in Karelia, where Yeltsin plans to holiday until
August 4. 

"They are promising better weather tomorrow. He's been dreaming of a bit of
fishing," Tamara Kolesova said by telephone from the regional capital
Petrozavodsk, on Lake Onega. 

Yeltsin left for Karelia on Saturday after a busy week during which he
presided over the burial of Russia's last tsar, Nicholas II, and faced off
with a truculent parliament over plans to push through economic reforms in
return for IMF loans. 

Over the weekend the Kremlin issued a flurry of important presidential decrees
enacting tax measures considered vital for securing international credits,
after the opposition-dominated parliament failed to back the measures in an
emergency session. 

Yeltsin will spend his vacation at the Shuiskaya Chupa country residence with
his wife, Naina. "There is a beautiful pine forest, fine air and a lovely
lake," Kolesova said. 

Itar-Tass news agency said Yeltsin would continue to hold consultations with
government leaders by telephone and to prepare decrees. Prime Minister Sergei
Kiriyenko is expected to join him in Karelia at the end of the week. 

U.S. Vice President Al Gore, who is to visit Russia on Thursday and Friday,
may drop by to see the president, although U.S. officials said on Monday that
plans had not been finalised. 

Before returning to Moscow, Yeltsin is also scheduled to make a one-day stop
in Novgorod, an ancient Russian capital and also has tentative plans to visit
the northern port of Murmansk. 

Since taking office, Yeltsin has alternated between periods of high-profile
activity and lengthy disappearances from public view. His health and strength
have remained an important political question, especially following heart
bypass surgery in 1996 and a bout of pneumonia shortly afterwards. 

Earlier this year he was briefly incapacitated by what the Kremlin referred to
as "a cold." But in his recent public appearances he has seemed to be in
reasonable health. 

The NTV television network said on Sunday that a poll showed Yeltsin's
popularity received a boost from his decision to attend the tsar's burial on


ANALYSIS-Yeltsin's economy moves test constitution
By Gareth Jones

MOSCOW, July 20 (Reuters) - President Boris Yeltsin's efforts to tackle
Russia's financial crisis threaten to put him on a fresh collision course with
parliament, deputies and political analysts said on Monday. 

Faced with parliamentary opposition to a string of painful tax rises, Yeltsin
has started issuing decrees and vetoing laws in a bid to save his government's
economic austerity programme and ensure the flow of foreign loans worth
billions of dollars. 

But Yeltsin's moves risk violating Russia's constitution and in the process
ruining a modest improvement in his often stormy relations with the Communist-
dominated State Duma lower house. 

``We are at a crossroads ... A new round of confrontation would be absolutely
counter-productive but if the government plunges into a grey zone (between the
executive and the legislature) this would kill any good will on the Duma's
side,'' said Boris Makarenko of the Centre for Political Technologies. 

The Duma, like Yeltsin, began its summer holiday at the weekend after
rejecting several key tax laws which deprived the cash-strapped government of
two thirds of targeted revenues. 

To offset this shortfall Yeltsin vetoed a cut in profit tax and a law lowering
oil excise duties. More controversially, he introduced by decree a fourfold
hike in land taxes rejected by the Duma. 

Despite his sweeping powers under Russia's 1993 constitution, Yeltsin has no
right to amend tax legislation without parliamentary approval. It was not
immediately clear whether the weekend decrees would be challenged. 

On Monday, the government also issued a resolution imposing a higher rate of
value-added tax on a wider range of goods and calling for VAT to be paid on
delivery, not at time of payment. 

Alexander Zhukov, head of the Duma's budget committee, said deputies would not
contest the broadening of the list of goods eligible for the higher, 20
percent VAT rate. But asked about the demand for payment on delivery, he said
the change ``raised doubts'' (about its constitutionality). 

Senior Communist Party deputy Viktor Ilyukhin said Yeltsin would add fuel to a
parliamentary campaign to impeach him if it turned out that he had overstepped
his constitutional rights. 

``I think this will be an additional accusation against the president if he
introduces taxes by decree,'' said Ilyukhin, a hardline leftwinger who heads
the Duma's security committee. 

``This is an area of competence reserved for the legislature under the
constitution and he is consciously moving towards a violation of the
constitution,'' he told Reuters. 

The Communists have begun a complex impeachment procedure against Yeltsin over
his role in the breakup of the Soviet Union but under the rules it stands
little chance of success. 

The Duma's speaker Gennady Seleznyov, a moderate communist, took a more
relaxed view than Ilyukhin of Yeltsin's moves. 

``I am sure that the president will not issue a single unconstitutional decree
... The president has room for manoeuvre to adopt his decrees and the
government, too, has an excellent possibility to regulate lots of things by
its decisions,'' he told reporters on Saturday. 

The government's tax changes, along with spending cuts and other austerity
measures, are crucial for securing an international bailout package worth up
to $22.6 billion negotiated with the International Monetary Fund (IMF). 

But Valentin Kuptsov, deputy leader of the Communist Party, said the decrees
could launch a wave of court cases by citizens affected by the tax changes. 

``Of course we understand the government and the president, we understand the
point of their actions ahead of the signing of agreements with the IMF but the
laws still have to be respected,'' he said. 

Yeltsin, who knows an early parliamentary election is unlikely to return a
more pliant Duma, has adopted a conciliatory approach towards deputies in
recent days. 

``We are all one team...There will be no coups, changes in the constitution,
no dissolution of the State Duma, no early elections,'' he told Duma faction
leaders over tea last week. 

Reinforcing Yeltsin's charm offensive, Prime Minister Sergei Kiriyenko told
deputies the government was ready to shoulder full responsibility for its
unpopular measures. 

He has urged parliament to reconvene for an extraordinary session in August to
authorise the government's efforts to raise more revenue and keep the anti-
crisis programme on track. 


Moscow News
July 21, 1998 
Loans Keep Crisis Alive 
By Marshall I. Goldman
Marshall I. Goldman is a professor of economics, Wellesley College and 
associate director of the Davis Center for Russian Studies at Harvard 
University. He contributed this comment to The Moscow Times. 

Although it is tempting to support the current government, we must 
realize that incessant loans will prolong the current crisis. 

Just as in the Perils of Pauline, the International Monetary Fund has 
once more come to the rescue of the Russian economy. By putting together 
a package of almost $23 billion in loans, the IMF has managed to 
immunize Russia from the Asian financial flu, at least temporarily, and 
more importantly, provide some breathing space for the new government of 
Sergei Kiriyenko. 

Prime Minister Kiriyenko, who has been in charge only three months, is 
probably the best prime minister Russia has had since the 1890s. 

It is unfortunate that he and his team find themselves besieged by the 
legacy of the misbegotten reform efforts of his predecessors. If that 
were not enough, the drop in commodity prices due to the crisis in Asia 
has hit Russia's most important export earners -- its oil and gas. Even 
if Russia's domestic economy were not in such disarray, the drop in 
export earnings would have complicated Mr. Kiriyenko's task. 

Right now, it is unclear whether Mr. Kiriyenko, even with the IMF's 
help, will be able to cure his country's maladies or, for that matter, 
even satisfy the conditions that the IMF attached to the loan. 

Russia's difficulties today have been centuries in the making. Even in 
tsarist times, the Russians felt a certain mixed pride in their ability 
to mislead their governments. From the false facades and the waving 
peasants in the Potemkin villages to the use of Dead Souls and 
fraudulent inspector generals, the sense of civic responsibility and 
rule of law has never taken deep root. Seventy years of the Leninist 
party-state, with all power emanating from the top down, has enhanced a 
culture in which thwarting the state is a major indoor sport. 

Given this background, international financial institutions should not 
have been surprised to find that only about 4 million out of the 60 
million or so in the Russian work force submit tax returns. The new 
chief collector of taxes, Boris Fyodorov, has mounted an impressive 
effort to round up some of the most flagrant tax evaders. The richest 
1,000 individuals and the oil and gas companies have become his special 

But already, almost all of the oil companies, as well as the natural-gas 
monopoly Gazprom, have already found one loophole or another that allows 
them to avoid most of their taxes as before. Moreover, Mr. Fyodorov is 
just the latest in a series of tax collectors determined to uproot such 
a deeply held culture. After all, it was just this past December that a 
Fyodorov predecessor, Anatoly Chubais, declared his intention to rein in 
the same tax delinquents. 

To demonstrate how serious he was, he decided to create a new tax 
collection agency: the Extraordinary Tax Commission, which in Russian 
has the same initials as the predecessor of the KGB. 

Consequently, there can be no assurance that, unlike the existing 
situation, this new government will be able to generate an increase in 
tax revenue -- a key condition for the loan from the International Money 
Fund. Nor should we expect a significant drop in government 
expenditures, another IMF condition. 

Not only must Mr. Kiriyenko find the funds to pay the back wages of 
workers and the bills of unpaid contractors, he must also find new money 
to cover the debt service on Russia's new loans. 

If debt service now amounts to 36% of the national government's budget 
expenditures, the $23 billion increase in new loans, which is equal to 5 
percent of gross domestic product, will push up debt service to as much 
as 45 percent to 50 percent. 

Ideally, the conditions imposed by the IMF will facilitate the Russian 
government's efforts to hammer home the structural reforms that so far 
the State Duma and the country as a whole have resisted. 

However, as dire as the underlying situation may be, even if the Duma 
gives its assent to these changes, assent is not the same thing as 
implementation. In fact, a review of past IMF loans and accompanying 
conditions reveals that, even when the IMF insisted on parceling out 
loans step by step in tandem with performance, more often than not, it 
was the IMF that blinked as a succession of Russian leaders begged for 
just one more chance. 

Because they are so intractable, few if any of the country's fundamental 
problems are likely to be resolved, and we can expect that it will not 
be too long before the Russians again find themselves in financial 
difficulty and President Boris Yeltsin finds himself pleading with Bill, 
Helmut, Tony and Jacques to lean on the IMF just this last time. 

But if we are honest, we should recognize that as long as the 
alternative to Kiriyenko seems to be either a far-right or a far-left 
government, we will back off, just as we did several times when Viktor 
Chernomyrdin was prime minister, a much less deserving and committed 

At some point, we have to ask whether we will ever insist on reform 
first and loans later. The longer we avoid facing up to this challenge, 
the more serious the next crisis is likely to be and the more painful 
the ultimate climax. 


Date: Mon, 20 Jul 1998
From: "Barry W. Ickes" <> 
Subject: This Bailout Will Set the Stage for the Next Crisis

You may have missed this article from Friday's LA Times.

This Bailout Will Set the Stage for the Next Crisis
Russia: A pretend or 'virtual' economy won't react like a market
economy. The country needs true structural change.
The Los Angeles Times, July 17, 1998
By Clifford Gaddy, Fellow, Foreign Policy Studies, and Barry Ickes,
Pennsylvania State University 

Once again, Russia has managed to get a multibillion dollar bailout from
the West. Once again, the West has made Russia
promise that it will get serious about economic reform. Led by the
International Monetary Fund, the Western lenders have
posed a series of demands, including reducing the government's budget
deficit, enacting tax reform and combating the massive
theft and corruption that plague the system.

On previous occasions, handing over the money was considered risky because
Russia would just take it and then not follow
through on reform. Today, ironically, the danger is that Russia might
actually do some of the things we ask. The reason for
concern is that in the current economic situation in Russia, standard
economic reform measures are likely to have effects
directly opposite those intended. The outcome could be that today's bailout
would become merely the first installment of a
continuous stream of infusions needed to keep the Russian economy afloat.

To understand why a bailout this time is likely to be not merely
ineffectual but even harmful, it is crucial to recognize that what
has emerged from the past six years of reform in Russia is not a market
economy. Rather, it is a distinct economic system,
neither purely communist nor capitalist, which we call the "virtual
economy." "Virtual" because it is based on illusion or pretense
about almost every important parameter of the economy--prices, sales,
wages, taxes and budgets.

The most essential element of pretense in the virtual economy relates to
the many enterprises inherited from the Soviet era that
still produce goods but destroy value. The truth about these woefully
noncompetitive enterprises is systematically concealed
through an elaborate system of artificial pricing based on barter and other
forms of noncash payments. The enterprises can
procure inputs, hire workers and produce lots of worthless output almost
without the use of cash.

The reason they can operate like this is that value is being transferred to
them from other sectors of the economy that actually
do produce value. These are primarily the resources sector, led by the
giant natural gas producer, Gazprom, and also
households, which supply labor but are frequently not paid. But this means
that the most productive parts of the economy are
being eaten away, leaving a Russia that is poorer, not richer, for every
day the virtual economy continues on its present scale.

Why would value producers participate in a system that taxes them to
support a value-destroying manufacturing sector? One
reason is that the virtual economy sanctions some "leakage" of value out of
the system and into the pockets of the value-adders.

Consider Gazprom. It is Russia's largest earner of export revenue, its
largest taxpayer and also its largest tax delinquent. Less

than 8% of Gazprom's domestic gas deliveries are paid for in cash. The rest
are paid for, if at all, in bartered goods or
promissory notes. But in return for supplying the entire domestic economy
with natural gas nearly free of charge, Gazprom is
allowed to continue to export gas for dollars. Its support of the domestic
economy is the price it must pay in order to remain an
independent private company.

While this leakage of value to Gazprom's owners is sanctioned as a
necessary cost of keeping the virtual economy in operation,
there are other forms of leakage that have directly harmful effects to the
system's ability to survive: theft, corruption and capital

Viewed in the context of leakage, the relationship between fighting
corruption and economic reform takes on greater
complexity. Reducing corruption is typically considered a key element in
accelerating economic reform. In Russia's virtual
economy, the opposite may in fact be the case. If reducing corruption
results in less leakage from the system, more value
remains to support the continued operation of loss-making enterprises.

The same is true of another key element of reform in Russia: stopping tax
evasion. Cracking down on tax evaders is another
way of plugging the leaks. It makes the system more sustainable because it
makes available more value that can be used to
offset value destruction.

There is, of course, one more way to compensate for the virtual economy's
destruction of value. That is an infusion of funds
from the IMF. By injecting value into the system from the outside and by
insisting on policies that reduce the harmful leakage of
value out of the system, Western financial support unintentionally becomes
complicit in the survival of the virtual economy.
Rather than hastening true structural change, a bailout that is predicated
on the standard prescriptions and that ignores the
workings of the virtual economy will only set the stage for the next crisis.


Russia: Analysis From Washington -- A Fourth Baltic Republic?
By Paul Goble

Washington, 20 July 1998 (RFE/RL) -- A proposal by a senior Moscow 
politician to transform Russia's Kaliningrad oblast into an autonomous 
Russian Baltic Republic could reorder the geopolitics of the Baltic 
region. Even more, it could transform the constitutional order of the 
entire Russian Federation itself. 

The proposal came on Friday in "Izvestiya." Vladimir Shumeiko, a former 
Russian deputy prime minister and the chairman of the Russian Federation 
Council, said in the Moscow daily that he favors upgrading the 
Kaliningrad region into an autonomous republic, lest that non-contiguous 
part of the Russian state suffer a social explosion or become "a 
protectorate of a neighboring country or even an area managed by the 
Council of Europe." 

Shumeiko made the suggestion in response to a Russian government plan to 
reduce economic subsidies to this non-contiguous part of the federation. 

If adopted, his proposal almost certainly would power a new movement in 
Kaliningrad for the creation of a fourth Baltic republic, as well as 
demands by other Russian regions for preferential treatment. 

But even if this proposal is not adopted -- and the immediate chances 
for passage seem small -- this suggestion will almost inevitably 
exacerbate tensions both in the Baltic sea region and in Russia as well. 

Around the Baltic region, it will raise questions about Moscow's 
intentions. And around the Russian Federation, it will reopen the 
question about what Moscow will accept as far as relations between the 
regions and the center are concerned. 

Consequently, even if this proposal is not realized, it represents a 
major political watershed. 

According to Shumeiko -- who once ran for governor of Kaliningrad -- 
that region "is paying what it has to." More than that, he said, the 
current arrangements only "provide compensation" for the region's 
remoteness from the center. They do nothing to provide genuine 

And consequently, if these subsidies are ended, Shumeiko argued, some 
"45,000 small entrepreneurs and their families will lose their 
businesses and incomes." Prices for food will double, the number of 
unemployed will rise to 75,000, and trade will collapse. And "investors 
will say good-bye, never to return." 

According to Shumeiko, such a series of developments will create at 
least a social explosion or even more dangerously the collapse of all 
public authority there. And in that environment, some Kaliningraders 
will seek to become an independent protectorate or even an independent 
entity protected by the Council of Europe. 

At one level, of course, such a scenario is part and parcel of a 
political argument to get other Russian politicians to rethink plans to 
drop assistance to this region. 

But at another level, Shumeiko's proposal reflects a fundamental if 
seldom commented upon political reality. Ever since the Soviet 
government seized Koenigsberg from Germany at the end of World War II 
and renamed it Kaliningrad, the region has been a serious potential 
problem for Moscow and the Russian Federation of which it was made a 

Prior to the recovery of independence by Lithuania and the collapse of 
the USSR, Soviet authorities were largely able to manage the situation 
because they could ignore republic boundaries and simply treat this area 
as an outpost of military power on the Baltic sea even as they replaced 
the largely German population with Russians and Ukrainians. 

But after 1991, the situation changed. Kaliningrad was isolated from 
Russia by an independent Lithuania and Poland. The Soviet navy was in 
disarray. And the ecological and economic catastrophes that Soviet 
forces had left behind led many Kaliningraders to think that perhaps 
they should become the fourth Baltic republic. 

Western opposition to any "secession from secession" as well as Russian 
Federation concerns about the need to maintain some military outpost in 
the Baltic region, following troop withdrawal from Estonia, Latvia and 
Lithuania effectively killed that movement. But neither of these 
attitudes ended Moscow's problems there. 

Moscow quickly proved incapable of taking care of the region's 
population. And neighboring countries including Germany, Poland and 
Lithuania all sought to increase their influence and leverage in a 
region each had claimed at some point in history. 

Despite this outside investment and attention, conditions in Kaliningrad 
have continued to deteriorate. 

An end to Russian subsidies will do nothing to slow this process. And 
that decline in turn, particularly given Shumeiko's proposal, will 
reopen the question about the future of Kaliningrad and the status of 
its people. 


From: "Robert M. Cutler" <>
Date: Mon, 20 Jul 1998 
Subject: U.S. Pension Fund Investment in Russian Equities?

Christian Caryl wrote U.S. News and World Report:
> If any country ought to be immune to Russia's economic upheavals, 
> the United States is it.

but proceeded to explain that
> precisely because worldwide markets are interwoven in so many 
> ways nowadays, even the indirect fallout from a Russian meltdown 
> could hit home.

> American companies have made big investments in Poland, Hungary, 
> and the Czech Republic; financial turbulence farther east would hit 
> those countries hard.

> Some experts also worry about Russian investment in U.S. equity 
> markets.

I have heard anecdotally that U.S. government policy over the last
several years has strongly encouraged U.S. pension funds (public?
private?) to invest significantly in Russian equities and/or bonds,
and that such investments are backed by Eximbank. If this is so, it
sheds another light on the IMF-Russia brouhaha: if those investments
turned up worthless, then this would entail a U.S. taxpayer bailout
of their own pension funds.

The media criticism you have published makes it impossible to
assume, that U.S. News and World Report's failure to mention this,
means it is not so. Does anyone have any data or evidence?


USA Today
July 20, 1998
[for personal use only]
Gore on high-profile Russia trip

WASHINGTON - Vice President Gore travels to Ukraine and Russia next week for
an unusually high-profile three days of high-level diplomacy that include a
rare visit to Chernobyl, site of the 1986 nuclear disaster.
Gore has traveled the world during his tenure as vice president and his
role behind the scenes in drafting foreign policy has been called
unprecedented in U.S. history by some of President Clinton's most senior aides.
But this trip, more than most Gore missions, illustrates how the vice
president is often called on to undertake some of the most delicate
diplomatic tasks the White House needs performed.
Gore leaves Washington on Tuesday, spends Wednesday and Thursday in Kiev,
Ukraine, arriving in Moscow Thursday evening. After a full day in Moscow, he
returns home to Washington early Saturday morning.
His agenda:
In Moscow, Gore's will be the first member of the administration to meet
face-to-face with new Russian Prime Minister Sergei Kiriyenko, the
reform-minded 35-year-old who replaced Viktor Chernomyrdin this spring when
President Boris Yeltsin dismissed his cabinet. 
Gore also will help set the stage for Clinton's September summit meeting
in Moscow with Yeltsin, which is expected to be dominated by discussions
about the Russian economy, efforts to prevent the spread of weapons
technology, and arms control.
Senior U.S. officials said Russia's efforts to cope with its financial
crisis and its plans to carry out economic reforms that it has pledged in
exchange for $22.6 billion in new international loans also will be high on
Gore's agenda.
In Kiev, Gore will encourage the reform efforts of Ukranian President
Leonid Kuchma, who is anxious to clinch a $2.5 billion loan from the
International Monetary Fund (IMF), which is sending a mission to Kiev next week.
Then, on Thursday morning, Gore will take a helicopter to Chernobyl,
Ukraine, Thursday to inspect the concrete "sarcophagus" that covers its
fourth reactor, which exploded in 1986, spewing a radioactive cloud over Europe.
Chernobyl is the site of the world's worst civil nuclear accident. In
April 1996 its fourth reactor exploded, spewing a radioactive cloud over
Europe and contaminating large areas of Ukraine, Belarus and Russia.
By Bill Nichols, USA TODAY


Date: Mon, 20 Jul 1998 
From: (Thomas Goltz)
Subject: Lectures/Readings/Caucasus Video presentations ex T GOLTZ Fall '98

David, I managed to erase my email address box a few months ago, and thus am
asking you to post this short announcement concerning up-coming lecture
tour. Thanks. Thomas Goltz

Dear Professors, Administrators, Friends,

After another six month stint spent in and around Azerbaijan, Georgia,
Abkhazia (and Turkey), I am back in country and putting together my annual
lecture tour to universities and think tanks around the USA. My activities
during said period should be of interest to all: I put together a new 10
minute documentary for the BBC on Abkhazia, and focusing on the hellish
problem of UN monitoring of Gali, consulted 60 Minutes thru a special
project on Azerbaijan/Caspian Oil (it should show in September or October)
and even managed to mount what I call the Baku Book Bash, namely, the formal
first presentation and signing of my new book on post-Soviet Azerbaijan
(Azerbaijan Diary, M.E. Sharpe May 1998; it looks like it is taking off via and barnes&; my agent informs me that it is #26 of over
1400 Soviet/post Soviet affairs titles at b&n, although I have no idea what
the basis of this sample is--one day's sales? a week's, a month's?).

What I would like to do would be to offer you a package that would include a
reading from and discussion the Azeri book (with possible sales and
signing), presentation of the Abkhazia video (and possibly Chechnya, too and
even show a third piece dealing with the Ingush/Osetian conflict) to
initiate a discussion on ethnic conflict in the Caucasus and international
efforts to resolve those conflicts. I can make the presentations general or
specific, according to need and audience. 

I am trying to work out a package with the Councils on Foreign Relations/DC
that will supply airfare to a variety of destinations where there exist
chapters of the CFR (this is NOT the NYC CFR) and thus break down travel
expenses to a reasonable level.

If interested, please contact me and suggest some dates. I can then start to
put together a schedule that would be most reasonable and cost-efficient for

Best Regards,
Thomas Goltz
Tel: 406/222 6460
Fax: 406/222 5376
email as above:


Iran, Russia want consensus on Caspian accord-IRNA

TEHRAN, July 20 (Reuters) - Iran and Russia have called for decisions on the
legal status of the Caspian to be based on the consensus of states surrounding
the energy-rich sea, the Iranian news agency IRNA reported on Monday. 

It said visiting Russian Deputy Foreign Minister Boris Pastukhov and his
Iranian counterpart Morteza Sarmadi signed a statement which said ``that the
legal regime of the sea has to be determined through the consensus of all five
littoral states.'' 

``Iran and Russia believe that the 1921 and 1940 agreements signed by Iran and
the former Soviet Union stand as valid until the compilation of the new
regime,'' IRNA quoted the statement as saying. 

The status of the oil and gas-rich Caspian is an obstacle to Russian-Iranian
relations as the two sides disagree on how the sea, and its vast mineral
wealth, should be divided among the states which surround it. 

Russia and Kazakhstan signed an agreement earlier this month dividing the
northern sector between them. 

But Iran and Turkmenistan objected, stressing that all five littoral states
had to agree unanimously on the sea's status. 

The Caspian has been touted as the world's next great oil province, with
reserves estimated at up to 15 billion tonnes of oil equivalent. 

But the legal status of the sea has been a source of disagreement among the
neighbouring states since the break-up of the Soviet Union at the end of 1991.

Until then, only Iran and the Soviet Union bordered the Caspian. But
independence for Azerbaijan, Russia, Turkmenistan and Kazakhstan left them all
hungry for a share of the oil resources, which offered them their best chance
for wealth. 

``The statement specifically ruled out interference by any outside party, as a
mediator or else, in drawing up the Caspian legal regime,'' IRNA reported.
Iran, facing United States sanctions, has been wary of the influence of U.S.
oil companies in the Caspian. 

Foreign analysts have said there could be room for a softening of the Iranian
position. Iran is keen for some of the Caspian's oil to be exported by
pipeline south through Iran, or at least to be moved to refineries in northern
Iran. Crude oil would then be offered in exchange at Gulf export terminals. 

``The two countries attach the greatest of importance to the preservation of
the Caspian environment and strongly oppose transfer of oil and gas via
pipelines through the world's biggest lake,'' the statement added, according
to IRNA. 

This appeared to be a reference to U.S.-backed proposals for a subsea pipeline
bypassing both Iran and Russia. 


Moscow Times
July 21, 1998 
By Jean MacKenzie

For a short course in the differences between Russians and Americans, 
try reading pulp fiction. Or any fiction, for that matter. If a plucky 
heroine meets a dashing swain, overcomes adversity and rides off into 
the sunset, or at least into a three-bedroom Colonial with a two-car 
garage, then the Atlantic Ocean is to the east and the stars and stripes 
are waving from the flagpole. 

But if the female lead is a mousy little thing redeemed by spiritual 
beauty, the hero a violent, misunderstood genius with a taste for vodka, 
and the two end up in Siberia, then start looking around for onion 

It starts early. While kids of my generation were devouring "Little 
Women" and "Tom Sawyer," Soviet children were plowing through "Crime and 
Punishment" or "Anna Karenina." What can you expect when your 
literature's great love story turns the heroine into a dope fiend and 
throws her under a train? 

I've been thinking about this quite a bit lately. A recent bout of flu 
kept me housebound and feverish for the better part of a week, and, 
instead of using the time to catch up on work, I plunged into the world 
of Russian detective fiction. 

For four days I reveled in the trials and tribulations of Anastasia 
Kamenskaya, the heroine of Alexandra Marinina's wildly popular crime 
series. The author has hit the big time lately and has signed lucrative 
contracts to bring her creation to the West, including the United 
States. I can hardly wait for Yankee optimism to crash up against Moscow 

In many ways, Nastya (or Asya, Aska, Nastenka, or Anastasia Pavlovna, 
depending on who is addressing her) is a fairly traditional crime series 
principal: She's an officer of the criminal investigation division of 
the Moscow police, has a razor sharp mind and delights in solving 
complicated mental puzzles. So far so good. From there it all goes 
downhill, from an American point of view. 

The romance novels, detective fiction, and other gems of supermarket 
literature I grew up on all had several obligatory features: The main 
character was intelligent, resourceful, brave, beautiful, open to 
romantic intrigues, and the ending brought closure and satisfaction to 
all involved. Agatha Christie's Miss Marple may not have had much of a 
love life, but there was always a young pair of star-crossed lovers who 
needed her capable hand and shrewd mind to get their lives back on 

Nastya Kamenskaya is, in her own estimation, something of a cold fish, 
and keeps her long-term boyfriend, Lyosha, around because he cooks for 
her, cleans for her, and puts up with her selfishness and tendency 
toward depression. 

She is in her mid-30s, never married and no children, which makes her a 
rather unusual character for modern Russia. She is also a woman in a 
man's world. Not that Nastya's a flaming libber, by any means. She seems 
to accept, more or less, the roles assigned to women, she just considers 
herself a not-very-attractive exception. 

In fact, much of each novel is given over to Nastya's soul-searching. 

Should she marry Lyosha? Should she have opted for a more traditional 
lifestyle? Or is she emotionally stunted, a moral freak? 

We are grateful for the angst, however, since the plots are rather 
anorexic and full of holes the size of Alaska. There is very little 
satisfaction in unmasking the bad guy, because he is apt to be someone 
we haven't met until the last few pages. And motivations range from the 
banal (money, passion) to the fantastic (mysterious machines that induce 
people to violence). 

You learn very quickly not to get attached to any of the positive 
characters in the storyline: Aside from Nastya herself, they are all 
expendable. If two attractive people meet and fall in love, chances are 
one of them will be dead by the end of the book. 

We never quite know "whodunit," and evil more often triumphs than truth 
and justice. Not that the boundaries between good and evil are all that 
clearly drawn, anyway. One of Nastya's close friends is a mafia boss who 
orders contract killings but has a heart of gold. 

Serial murderers are as likely to be sympathetic characters as villains, 
provided they have a good reason for their crimes and are willing to 
accept responsibility for their actions. It's more Fyodor Dostoevsky 
than Dashiell Hammett. 

So why do I love it? It's messy, gritty, disorganized, and fascinating. 

Much like Russia, in fact. And no happy ending in sight. 


Moscow Hails PACE Report on Russian Rights Progress 

Rossiyskaya Gazeta
July 14, 1997
[translation for personal use only]
Report based on materials of Russian Federation Foreign
Ministry Information and Press Department, under the "News From
Smolensk Square" rubric: "Strasbourg Listened to Us"

Moscow has received with satisfaction the results of a constructive
discussion, within the framework of the summer session of the Parliamentary
Assembly of the Council of Europe [PACE] (Strasbourg), of the report on the
Russian Federation's fulfillment of the obligations stemming from
membership of the Council of Europe.
It states that in recent years Russia has made undoubted progress on
the path of democratic development and the building of a rule-of- law
state. Freedom of expression of opinions has been ensured in the country
as a whole. The transition is being made to a market economy. Russia's
ratification of the basic conventions of the Council of Europe -- above
all, the one on human rights -- on 5 May 1998 is rated an historic step. 
The new Civil and Criminal Codes have come into force. The moratorium
imposed on the use of the death penalty in August 1996 is being observed. 
The penitentiary system is being transferred to the Justice Ministry.
At the same time the report emphasizes the existence of problems in a
number of spheres and the need for the Council of Europe to continue
monitoring, particularly such questions as ensuring legality and
maintaining law and order throughout the country's territory and a number
of others.
The theme of many speeches at the PACE session was the need to give
Russia assistance at a difficult time for it. The Council of Europe
thereby showed readiness not just to indicate our "sore points" but also to
help eliminate them. The final part of the report recommends expanding the
program of cooperation with Russia.
[Rossiyskaya Gazeta: Government daily newspaper.]


Russian impeachment body sets meeting, agenda

MOSCOW, July 20 (Reuters) - The Russian parliament's committee on impeaching
the president agreed at a meeting on Monday to hold a hearing on the issue on
July 27. 

The committee's Communist chairman Vadim Filimonov told reporters that next
Monday's hearing would deal with procedural questions and study the first
point on the indictment drawn up last month by opposition members in the State
Duma lower house. 

That first charge relates to the agreement in December 1991 by Russian
President Boris Yeltsin and the leaders of other Soviet republics to dissolve
the Soviet Union. 

Other indictments range from the use of force in 1993 to dissolve the Soviet-
era legislature and launching the military offensive against separatists in
Chechnya to undermining the nation's health, allowing the spread of AIDS. 

Communist leaders acknowledge the impeachment proceedings, the latest of many,
have little chance of success within a 1993 constitution that stacks the odds
heavily Yeltsin's favour. 

The president, who began a holiday in northwestern Russia on Saturday, was
invited to send representatives to the committee meeting on Monday but
Filimonov said none had attended. 



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