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Johnson's Russia List


July 28, 1998   
This Date's Issues: 2285 2286 

Johnson's Russia List
28 July 1998

[Note from David Johnson:
1. Interfax: Russian Poll: Majority Dislike Foreign Investments,

2. Reuters: Russia's Lebed sets conditions for presidency bid.
3. Moscow Times editorial: Missile Quip Could Hurt Lebed's Plans.
4. RFE/RL: Paul Goble, Moscow Turns Eastward.
5. Moscow Times: Yulia Latynina, INSIDE RUSSIA: Crisis Plan Favors 
Banks Over Industry.

6. Toronto Sun: Matthew Fisher, Russia: The new Dark Continent.
7. Obshchaya Gazeta: Yelena Dikun and Anatoliy Kostyukov, "Use of 
Authority." (Kiriyenko Seen in Over Head, Lacking Clout).

8. Interfax: Experts Refute US Concerns Over Strategic Nuclear Force.
9. Itar-TAss: Russian Communists in Confusion Over Maslyukov Appointment.
10. Reuters: Sacking of Russian spy chief is mystery.
11. Reuters: Russian politicians warn of new Chechen turmoil.
12. Kyodo: U.S. to help Russia, others dismantle nuclear arms.
13. Interfax: Russian Left Denies Responsibility for Foreign Loans.]


Russian Poll: Majority Dislike Foreign Investments, Credit 

Moscow, July 23 (Interfax) -- Various polls show that most Russian
citizens have a negative attitude to foreign investments, credits and
Now that talks are being held on the extension of a stabilization loan
to Russia, mass media mention the International Monetary Fund quite often. 
And yet, 51% of Russians do not know what this organization does, according
to the Public Opinion sociological fund which questioned 1,500 Russians on
July 11.
Those who knew about the IMF were asked to say if, in their opinion,
the IMF was good or bad for Russia. Thirty five percent of those polled
said Russia did not benefit from the IMF and 31% that it did.
Most of those with a negative attitude to the IMF were supporters of
Communist Party leader Gennadiy Zyuganov (60%) and most of those with a
positive attitude were supporters of the Yabloko liberal movement's leader
Grigoriy Yavlinskiy. The IMF is mostly trusted by people aged under 30
(39%) i.e. by the generation which will have "to repay Russia's debts," and
by people with higher education (42%). People aged from 45 to 60 (42%) are
cautious about the IMF.
All data referring to individual groups of respondents are represented
in percent of the number of those informed of the IMF' functions.
[Interfax: Non-government information agency known for its aggressive
reporting, extensive economic coverage, and good coverage of Russia's
regions; its director serves in the presidential Administration.]


Russia's Lebed sets conditions for presidency bid

MOSCOW, July 27 (Reuters) - Alexander Lebed, governor of Siberia's vast,
mineral-rich Krasnoyarsk region, said on Monday he might run for the
presidency in 2000 if Russia's economic situation worsened. 

Lebed, an ambitious, tough-talking reserve general who came a strong third in
the 1996 race for the Kremlin, had previously said he wanted to concentrate on
rebuilding the Krasnoyarsk region, where he was elected governor in May. But
the depth of his political ambition is no closely guarded secret. 

``Lebed does not exclude the possibility that he will change his decision not
to take part in the 2000 presidential election in the event of...a worsening
of the political and economic situation,'' Itar-Tass news agency said, quoting
the governor. 

Lebed also told Tass that his 'Honour and Motherland' movement would campaign
actively in the next election for the State Duma lower house of parliament,
due in December 1999. 

The movement currently has no seats in the chamber but Lebed himself sits in
the upper house Federation Council, which groups regional leaders. Lebed's
movement will hold a conference in Krasnoyarsk on July 30-31, Tass said. 

Declared candidates for the 2000 election so far are former prime minister
Viktor Chernomyrdin, liberal politician Grigory Yavlinsky and Kirsan
Ilyumzhinov, the flamboyant president of Russia's southern Kalmykia republic. 

President Boris Yeltsin has said he will not seek another term but could yet
change his mind. 

Lebed's remarks come at a time of acute financial crisis that has forced
Yeltsin and his government to seek a foreign loan bailout worth $22.6 billion
over two years. 

Last week Lebed wrote an open letter to Prime Minister Sergei Kiriyenko saying
he might take over a missile unit in the Krasnoyarsk region if Moscow did not
pay its troops. 

``The officers are hungry, the officers are very angry. After 26 years of army
service I know very well how that feels,'' Lebed said in his letter. 

The threat of sparsely populated Siberia, with its immense reserves of oil,
gas and other minerals as well as its nuclear armoury, splitting away from
Moscow's control is a recurrent nightmare for Russian leaders and policymakers

In a separate development on Monday, Lebed was one of the signatories of an
appeal to the Kremlin over Russian policy towards breakaway Chechnya. 

Serving a brief spell in 1996 as Yeltsin's security adviser, Lebed clinched
the peace deal that ended nearly two years of fighting between federal troops
and Chechen guerrillas. 

The appeal, also signed by former prime minister Viktor Chernomyrdin, business
tycoon Boris Berezovsky and Mintimer Shaimiyev, president of semi-autonomous
Tatarstan, urged Yeltsin to formulate a clearer policy towards Chechnya, which
remains deeply unstable and riven by crime despite the end of fighting. 


Moscow Times
July 28, 1998 
EDITORIAL: Missile Quip Could Hurt Lebed's Plans 

The media reaction to Alexander Lebed's offer to take control over the 
Uzhur rocket base in Krasnoyarsk region was excessive, and in some cases 
bordered on the hysterical. 

The press leapt on the story with alacrity. Newspaper headlines 
announced that Lebed was threatening to seize part of Russia's nuclear 
arsenal, and breathless journalists recounted how the nightmare scenario 
of the violent breakup of a nuclear power was about to become reality. 
They all missed the point. Lebed has absolutely no intention of taking 
over any rocket base. 

The letter to Prime Minister Sergei Kiriyenko that caused the furor was 
a classic piece of Lebed hyperbole, designed to make the government sit 
up and pay attention to the parlous state of Russia's armed forces, but 
at the same time decidedly tongue-in-cheek. It was never meant to be 
taken seriously. 

Lebed no doubt achieved his immediate aim. The issue of the decay of the 
armed forces is back in the public eye, and feeling the pressure, the 
government will before long find enough money to at least pay the 
officers at the Uzhur base. 

But with this headline grabbing prank, Lebed may have done irreparable 
damage to his long-term objective -- becoming president of Russia. 

Politicians in the Nuclear Age have learned that you make light of 
something as deadly serious as intercontinental ballistic missiles at 
your peril. 

Soviet leader Nikita Khrushchev's off-the-cuff comment that he would 
"bury all of you" had officials in the Pentagon reaching for their 
nuclear suitcases. Decades later, U.S. President Ronald Reagan, 
convinced that the microphones at a public function were switched off, 
quipped that he was ready to launch a nuclear attack on the Soviet 
Union, and the State Department had to rush to reassure Moscow that he 
was just kidding. 

The Cold War is now a distant memory, but Russia and the United States 
still have their nuclear arsenals. And for all the words of friendship 
uttered at summits, the tense strategic standoff continues. 

If Lebed should realize his ambition and become president, he will have 
his hand on the nuclear button. His shoot-from-the-hip, flippant 
comments about nuclear bases in Siberia make it difficult to trust him 
with the fate of the planet. 

To give Lebed his due, in the past three years he has transformed 
himself from a rough-hewn soldier with a tendency to make verbal gaffes 
to a savvy politician who knows when and what to say. But his latest 
outburst shows that he still has a lot of learning to do. 


Russia: Analysis From Washington -- Moscow Turns Eastward
By Paul Goble

Washington, 27 July 1998 (RFE/RL) -- At a time when both Russian leaders
and the Russian people are expressing increasing unhappiness with the West
and Western institutions, Moscow is dramatically expanding its links with
China, Japan and India. 

While these developments do not necessarily presage a fundamental shift in
Russian foreign policy, they do suggest that Moscow is doing what it can to
increase its freedom of action relative to Western countries on whom it has
had to rely for assistance. 

Two developments last week suggest that Russians official and otherwise are
increasingly unhappy with the West. On Friday, Russian Prime Minister
Sergei Kiriyenko sharply criticized the United States and other Western
countries for continuing to maintain what he called an "anti-Russian" bias
in their trade policies. 

Speaking during talks with visiting U.S. Vice President Al Gore, Kiriyenko
said that Russia is tired of having to beg for the rights and privileges
that other countries enjoy. 

Kiriyenko's remarks came only a day after Russia's Interfax news agency
released the results of a series of polls showing an increasing number of
Russians to be hostile toward Western investments, credits and loans. 

One poll, for example, found that of Russians who knew about the
International Monetary Fund -- a bare majority -- thirty five percent
believed that Russia had not benefited from it as opposed to 31 percent who
believed that the country had. And this pattern held despite the IMF
agreement to extend massive new credits to the Russian government. 

But far more dramatic than these expressions of discontent with the West
are a series of steps that the Russian government has taken over the last
several weeks with the three Asian powers: China, Japan, and India. 

Two weeks ago, Kiriyenko visited China. Last week, Russian Foreign Minister
Yevgeniy Primakov and the first deputy chief of the Russian general staff
General Valeriy Manilov followed up. 

All three visits were intended to prepare the way for the September 4
summit in Moscow between Chinese leader Ziang Zemin and Russian President
Boris Yeltsin. But all three ended with declarations about joint
commitments to a multi-polar world, a term often interpreted to mean
opposition to American leadership. 

These meetings showcased broad agreement between Russia and China against
the use of economic sanctions against India and Pakistan for their
development of nuclear weapons and also against any use of force against
Belgrade for its policies in Kosova. And they included repeated references
to Russia and China being key strategic partners in the next century. 

A similar pattern of visits and rhetoric now characterizes Russia's
relations with Japan, despite their continuing disagreements concerning the
status of the Kurile islands. 

Not only did Kiriyenko also visit Japan on his trip to Asia last month, but
both sides have made it very clear that they intend to participate in a
Moscow summit this October despite the recent fall of the Japanese

Indeed, outgoing Japanese Prime Minister Ryutaro Hashimoto publicly
expressed regret that he would not be going and working toward conclusion
of a long-delayed peace treaty between his country and the Russian

More immediately, for the first time ever, Japanese and Russian naval
vessels on Friday began a joint naval exercise to test search and rescue

In yet another sign of warming relations between Moscow and Beijing,
Japanese businessmen and politicians have been visiting the Russian Far
East, and on Friday, the Russian authorities allowed a group of Japanese
citizens to visit the island of Moneron, from which their ancestors had
been expelled at the beginning of this century. 

But the most dramatic indication of Moscow's new focus came in India. On
Thursday, the Russian government announced that it planned to sell one of
its larger aircraft carriers to New Delhi. While the deal will bring Moscow
some welcome cash, it will give India the ability to project power much
further than ever before. 

Part of a military-cooperation accord signed in June, this deal follows
Russian sales of advanced fighter aircraft to the new nuclear power. 

India welcomed this latest indication of Russian support. Its ambassador in
Moscow Ranendra Sen noted that "Russia is the only country with which India
is building its relations in the military field on such a long-term basis." 

But in addition to the aircraft carrier, Moscow last week agreed to sell
India spent nuclear fuel from Russian reactors. This fuel will be used in
India's fast breeder program. And despite Indian pledges, such fuel could
under certain conditions be used to increase the Indian nuclear stockpile. 

And finally, in a related development, Russia's first deputy atomic energy
minister Viktor Mikhailov said that Moscow and New Delhi may soon sign a
contract for Russia to construct a new nuclear power plant in India. 

That deal could be concluded in advance of Yeltsin's visit to India
scheduled for December of this year. 


Moscow Times
July 28, 1998 
INSIDE RUSSIA: Crisis Plan Favors Banks Over Industry 
By Yulia Latynina

The most memorable thing about Russia's financial crisis was the utter 
lack of response from industry. Can you imagine what would happen in any 
other country if the refinancing rate shot up like a rocket? Its 
national currency or the economy, or both, would likely come crashing 

But not in Russia. Product delivery volumes in March 1998 were actually 
101.2 percent of March 1997 volumes. The microbiology industry, also 
measured from March to March, saw a 20.6 percent increase over last 
year; the print industry grew by 16.6 percent; medical services 
increased by 15.2 percent and the food industry by 7.5 percent. Even the 
country's doomed machine-building industry managed to see 5.3 percent 

There is a simple reason for industry's failure to take notice of the 
financial crisis: Trade among industrial enterprises is based not on 
money but on mutual debts. So a financial storm on the treasury-bill 
market has about as much effect on transactions among Russia's 
industrial enterprises as a financial crisis in Timbuktu. 

Although the crisis itself did very little direct damage to the Russian 
economy, the measures undertaken by the government to pull out of the 
crisis could prove its undoing. Last week, we witnessed an astonishing 
phenomenon: Six huge oil companies presented the government with an 

Members of the oligarchy tend to avoid publicity like the plague. They 
pursue their interests behind closed doors rather than in front of 
television cameras. Oligarchs are about as likely to go public as a spy. 
And if one ever does find himself compelled to step from his beloved 
government corridors into the merciless glare of television lights, it 
means something unbelievable has happened: An oligarch's interests have 
coincided with the interests of society. 

Two measures in particular snapped oil producers' patience: The 
government's refusal to lower excise taxes on oil, and the levying of 
value-added tax to shipments rather than to actual payments for 

The Russian authorities have gotten it into their heads to solve the 
debt crisis with new debts and the problem of harsh and therefore unpaid 
taxes with new forms of taxation. In the process, they have forgotten a 
simple truth well known to game wardens: If you use dynamite to catch 
fish this year, there'll be nothing to catch next year. 

When making the choice between currency devaluation or new loans, the 
Russian government was choosing between bankrupting the parasitic banks 
that feed on the budget or bankrupting industry, which feeds the budget. 
Industry would not have taken notice of devaluation because it does not 
use the ruble in its transactions -- and exporters would have actually 
gained from it. But there is no way that industry cannot stand up and 
take notice of new taxes. 

Devaluation would have led to leadership changes in the government and 
at the Central Bank -- something those in power were unwilling to 
accept. This would have at least been a calculated catastrophe. Instead, 
the final result of this hellish configuration of oligarchs unhappy with 
taxes, miners unhappy with salary arrears and communists unhappy as a 
matter of principle will be that nothing is left of the ruble, industry 
or the government. 

Yulia Latynina is a staff writer for Expert magazine. 


Toronto Sun
July 27, 1998
[for personal use only]
Russia: The new Dark Continent
Sun's Columnist at Large

  MOSCOW -- There is no reasonable measure by which Russia deserves 
another $20-billion handout. 
 The only evidence which exists proving the western orientation of the 
Russian government is the political, military and business elites' 
ability to ape the lavish lifestyles of the West's most rich and famous. 
 As has been widely noted everywhere but in Russia itself, the sole 
reason that this country has done far better with its begging bowl than 
South Korea or Indonesia is that it has lots of nukes. The sub-text is 
that while it may be bootless to give Russia another penny, there is a 
growing fear abroad that if Boris Yeltsin's allegedly reformist regime 
is deposed it would be followed by an even more incompetent, 
undemocratic administration which might give the West greater trouble 
over Iraq, Iran and Kosovo and might be more overt about nuclear 
 About the only thing that Western leaders, diplomats or bankers cannot 
conceive of is that the next Russian government might be more corrupt. 
 What if Russia didn't have nukes? Okay. That is a big stretch. But it 
is no bigger than the current fashion of pretending that those who 
manage Russia's finances today have a clue what they are doing. 
 How would Russia be treated if it couldn't incinerate the entire planet 
many times over and if there was not a risk that its nukes could be 
stolen or sold because of poor security? Without nukes, Russia would 
surely get as little money as an African backwater. 
 Russians are forever asking foreigners what they think of their 
country. They're usually realistic these days. They don't expect many 
compliments. But any comparison with Africa horrifies them. As any 
African student in Moscow will tell you, a lot of this is racism, but it 
goes beyond that. Many Russians measure their worth by their culture and 
believe that their culture is superior to all others. 
 Drawing parallels between Russia and Africa may be mean, but it is not 
too farfetched. Weather aside, the Dark Country and the Dark Continent 
have a lot in common. 
 Blame foreigners 
 Both Russians and Africans prefer to blame foreign devils for their 
troubles rather than accepting that it is largely domestic thievery that 
keeps them on their knees. No one takes responsibility for anything in 
either place. Nor is the public able or willing to hold their leaders 
 As in Nigeria or what used to be called Zaire, Russians at the top of 
the feeding chain plunder state assets without compunction or hindrance. 
Like their African brothers, they launder their ill-gotten lucre in 
Switzerland, Cyprus, the Channel Islands and the Caymans. They also 
compete with each other for properties in choice districts of London, 
Paris and Geneva and for places for their sons and grandsons in British 
private schools where the idea is to turn little boys into proper 
English gentlemen. 
 As in Africa, there is good, often excellent medical care available to 
the chosen few in Russia. Otherwise, public health standards here are 
becoming African-like. The number of new AIDS cases in Russia is 
ascending to Central African levels. The average lifespan of Russian 
males is descending to sub-Saharan numbers. That scourge of Africa, 
cholera, has been reported again in Moscow this summer and is a regular 
hazard across the Russian south. Tuberculosis and other diseases are on 
a rampage in both places. 
 The water and electricity supply in many Russian cities is as dodgy 
today as it is in Kinshasa or Mogadishu. Because bills aren't paid, some 
places in the Far North and the Far East and much of the African 
interior don't have any electricity at all. Amin, Bokassa and Mobutu 
have their twins in the despots who rule Kalmykia, Chechnya and 
Bashkortostan. Yet another similarity is the penchant of politicians and 
bureaucrats in Moscow and almost every African capital to treat 
themselves to top-of-the-line Mercedes limousines and four wheel drive 
monsters with darkened windows as well as fabulous houses built with 
state funds or labor. 
 The average wage in Russia is still higher than it is in Africa, but 
not by much. And as in Africa, many workers get paid late if they get 
paid at all. 
 There is no proper measure of unemployment in either place. Street 
beggars are a routine part of quotidian life. So are queues outside 
American consulates of those seeking visas to the Promised Land. 
 Russia and Africa share policemen on the take who have little interest 
in solving crimes. Senior army officers strut around in smart costumes 
loaded down with medals, but command armies not capable of much except 
the ham-fisted suppression of dissent at home. 
  Alas, one thing Russia lacks and which Africa has is a leader of 
Nelson Mandela's stature and decency. 

Kiriyenko Seen in Over Head, Lacking Clout 

Obshchaya Gazeta, No. 27
July 9-15, 1998
[translation for personal use only]
Article by Yelena Dikun and Anatoliy Kostyukov: "Use of Authority"

Last week the Sergey Kiriyenko government encountered head-on
for the first time the reality that it is endeavoring to change.
Reality in the person of Rem Vyakhirev, chairman of the board of RAO
Gazprom, proved to be a granite bulwark, thanks to which the contact
with it of the incautious Kiriyenko caused a resounding crash.
Later, having recovered from the blow somewhat, the young premier
attempted to portray matters as an ordinary work accident, but few
people believed this. Moreover, professional soothsayers began to
calculate whether Kiriyenko would now be in the White House for any
length of time.
Eyewitnesses say that even the despairing Chubays, hearing how
Sergey Vladilenovich was threatening Vyakhirev with dismissal, let
out in amazement: "Well, now, good grief!" It very much appears that
Kiriyenko was acting in a state of temporary insanity. According to
his subordinates, the prime minister was shaken by the outcome of
the discussion with Vyakhirev, which had taken place three days
earlier. Starting out with why Gazprom had not paid its tax for
June, the interlocutors, as the conversation progressed, arrived at
the sacramental question: "Who do you think you are?" Kiriyenko
insisted that he was the head of the cabinet, Vyakhirev, on the
other hand, tried to persuade him that he was a little boy and
upstart, accompanying his thought with parenthetical expressions of
an unprintable nature. The previous prime minister, Viktor
Chernomyrdin, also had strained mannish disputes with the director
of the gas monopoly, but at those times the right of decisive
abusive say always belonged to the head of the government. This is
the difference of which Vyakhirev made Kiriyenko aware.
The main paradox of the situation is that it is not Vyakhirev
but Kiriyenko who appears to be the madman, the kamikaze. Despite
the tremendous difference in status between a prime minister and a
business manager, whom the government hired merely to manage the
government's block of shares of one corporation. In any respectable
state, a conflict such as ours would not be resolved in favor of the
manager. In respectable states, civil servants do not usually run
the risk of inquiring of the prime minister who he thinks he is,
such inquisitiveness is punished there, regardless of which side is
in the right. So thanks to Kiriyenko's nervous breakdown, we have
obtained an objective idea of the condition of the state under those
tutelage we are forced to live.
It is obvious that the condition of this state is deplorable.
Time after time, it capitulates before regional princes, then
financial magnates, then the miners, then gangsters--before anyone
who has the effrontery to tell it "phooey." The people's question:
"Is there any authority in the country," has lost any meaning, other
than rhetorical. There is some authority, evidently, but it is
clearly not found in the proper place. Instead of being concentrated
in the institutions of the state, it is dispersed among self-
proclaimed power centers, of which there is a great multitude, and
they are all using it exclusively for their own purposes. It is for
this reason that the ordinary Russian cannot say for certain which
with us is the more important--the cabinet or the board of RAO
Gazprom. And there is, in addition, the LogoVAZ corporation, there
is Kirsan Ilyumzhinov, there is the Union of Muslims of Russia,
there is the Solntsevo fraternity....
Sergey Kiriyenko has yet to do anything to merit the people's
affection. But we have to appreciate the difficulty of his task. The
corridor of possibilities, in which the new government is squeezed
from one side by the financial crisis, and from the other, by
competing pressure groups, has been narrowed down to the dimensions
of a slit trench. The ruble cannot be devalued, he wouldn't dare to
raise taxes, budgetary expenditure cannot be reduced under any
circumstances, it is shameful and disgraceful to borrow money from
the IMF, and bankrupting our own debtors--hands off. What, then, one
wonders, can be done? Does anyone know how to clamber out of the
crisis and please the President, the Duma, the IMF, the miners, the
governors, the natural monopolies, and Berezovskiy simultaneously
here? Opponents are muttering some things about Chernomyrdin: He
somehow knew how to get along with everyone. Yes, but then whence
the crisis? Did it blow in from South Asia, perhaps?
Kiriyenko, to all appearances, understands that Russia's
financial bankruptcy emanates from the national peculiarities of
doing business. Or, in other words, from the incapacity of the state
to impose on the freebooters of free trade the rules of responsible
behavior. Fundamentally, that same crisis of authority, that is.
And, naturally, at the very first attempt to employ authority the
prime minister was asked: "Who do you think you are?"
And, indeed, who is the prime minister in Russia? Vyakhirev,
we concede, is not simply a hired manager but an important
businessman, an oligarch. Potanin has steel and nickel,
Khodorkovskiy, oil, Luzhkov, a grateful Moscow. And what is behind
Kiriyenko? Behind him theoretically is the entire might of the
machinery of state capable of pulverizing anyone who stands in its
way. But this is theoretically. In actual fact, this machinery has
only one helmsman--the President--and its actual potential is
identical to the potential of the helmsman. This rule is applicable
to all absolutist regimes, a presidential regime included. The
withering away of the monarch always and everywhere entails a
weakening of the state, chaos, and anarchy.
In our case the tragedy is not only that Boris Yeltsin is no
longer young and is not entirely healthy. It is a question of the
genetics of the regime. The means by which Yeltsin established
himself as absolute sovereign have proven devastating. He had for
this all too often to enter into dubious deals with the business
elite and regional leaders, with the "power ministers" and
professional intriguers, and just as often to sacrifice the law,
ethics, and capable people. He has acquired formal autocracy at a
price of the virtual loss of control of the country, and the real
limits of presidential might as a result of all the deals and
sacrifices have gradually been confined to a circle of a few
favorites. This was not that strikingly apparent while the massive
figure of Chernomyrdin towered alongside and was revealed
immediately that this figure was removed.
Together with authority, the country is in its death-throes
also. Let the swindlers continue to argue about a "third term"--
normal people have other things to think about, they are now
increasingly worried by the prospects of the coming months. The
financial crisis, the organized impotence of the government, the
incessant picket lines on the roads, and the growing hum of voices
shouting "Out" are symptoms of an approaching denouement. Of what
kind? People with a heightened sense of smell are catching in the
air the rancid whiff of August 1991. Fear always exaggerates? Who
knows. By that August the supreme authority also had lost both power
and will and collapsed within three days, like a rotten tree--
together with the state that it was attempting to govern.


Experts Refute US Concerns Over Strategic Nuclear Force 

Moscow, Jul 23 (Interfax) -- Moscow considers ungrounded the concerns
expressed by U.S. foreign policy experts who assert that Russia's boost to
its strategic nuclear force may pose a security threat. Russia "in no way
violates the agreements reached with Washington on limiting strategic
offensive weapons," Moscow military and diplomatic sources said. Russian
President Boris Yeltsin and the government "actively work to have the START
II Treaty ratified and prepare to work on START III," the source said. 
Russia is ready "to stop building up its nuclear missiles potential,
moreover, it will continue to cut it," they said. "The Topol-M missiles,
the deployment of which gave rise to concern in the United States, are
doubtless more advanced. However, they are installed to replace the
obsolete equipment alone, which does not breach the accords attained with
the United States in the sphere of strategic offensive weapons," a source
said. "The allocations for Russia's defense needs are so small that
undertaking a weapons upgrade, the military can afford a minimum of what
the national military industrial complex has to offer," another source
said. Claims of a Russian threat to U.S. security represent "the latest
attempt to condition American taxpayers to fork out additional defense
funds," he said.
Russia's efforts in the production of ballistic missiles, coupled with
the growing nuclear potential of China poses a potential threat to the
United States, according to American Foreign Policy Commission reports. 
The Russian Strategic Rocket Forces have begun preparations to field
Topol-M (SS-27) systems, deploying 31 systems annually starting in 2002,
according to the report. The Russian military intends to keep 450 to 650
launchers fully deployed, the report said. The experts reported that
Russian strategic rocket forces exceeded 90 percent readiness, in
particular "the strike groups." Furthermore, the details of Russian
military activities seem to suggest that Moscow is already deploying and
maintaining such systems, with the help of former Republics. These facts
contradict statements by U.S. officials who maintain that Russia poses no
threat, the experts said. The experts describe Moscow's actions as odd,
given the recent International Monetary Fund's decision to loan tens of
billions of dollars for stabilizing the financial and economic situation in


Russian Communists in Confusion Over Maslyukov Appointment 

Moscow, July 24 (Itar-Tass) -- The agreement of Yuriy Maslyukov, the
Chairman of the State Duma's Economic Committee and a member of the Russian
Communist Party Central Committee, to become the Russian Minister of
Industry and Trade despite the strongly negative reaction of the Party
Presidium evidently threw into confusion the party leaders and the Duma
Deputy Chairman of the Party Central Committee Valentin Kuptsov, who
supervises the party work in the absence of vacationing Gennadiy Zyuganov,
has been avoiding correspondents for two days and making references to a
resolution of the Party Presidium of Wednesday. The resolution said
Maslyukov's acceptance of the ministerial post was "impossible" bearing in
mind the documents of the fourth and fifth party congresses and the opinion
of party organizations.
The leaders of the Russian Communist Party are in a hard situation. 
On one hand, a member of the Party Central Committee grossly violates the
party discipline and that behavior shall be punished with an expulsion on
decision of a local party organization in accordance with the Party Rules. 
There is also the need for preserving the party image in the eyes of the
party's rank and file, which is dissatisfied with the faction and will view
Maslyukov's acceptance of the post as a symptom of "appeasement" with the
However, the expulsion is a scandal undesirable for the party
leadership, which is likely to do everything to avoid it. Let's recall the
reaction of the party congress to the disobedience of some faction members
to the demand of the Party Central Committee's plenary meeting on a
negative vote in Kiriyenko's approval as the Russian premier. At that time
the local party organizations were instructed to make things out and
Gennadiy Zyuganov criticized the violators in a report without giving
names. Nothing has changed, Gennadiy Seleznev and high-ranking violators
of the party discipline, including Yuriy Maslyukov, remain members of the
party and the communist faction.
On the other, Maslyukov said on Thursday he had been supported by
several members of the faction. It is not hard to guess these are the
persons criticized at the party congress. The new minister unwittingly
confirmed the split in the faction, which is kept silent by the party
Gennadiy Zyuganov will return to Moscow by August 1. If a tricky
wording justifying the move of Yuriy Maslyukov is not found by then, the
party leader is likely to find a way out and keep the party image intact. 
However, that won't be so easy bearing in mind the repeated statements of
the party leader at news conferences that the communists "have not, do not
and will believe this government."


ANALYSIS-Sacking of Russian spy chief is mystery
By Oleg Shchedrov

MOSCOW, July 27 (Reuters) - Prime Minister Sergei Kiriyenko lavished praise on
the sacked head of Russia's domestic intelligence agency on Monday, deepening
the mystery over why President Boris Yeltsin fired Nikolai Kovalyov at the

Kovalyov could have become too independently powerful for his own good, some
speculated. Others believed he had to make way for successor Vladimir Putin,
who in turn may owe his rise to influential economic reformer Anatoly Chubais
and a new campaign to crack down on tax dodgers to stem Russia's financial

"The dismissal does not imply a negative appraisal of the performance of
Kovalyov or of the FSB," Kiriyenko told senior officers of the powerful
Federal Security Service (FSB), internal successor to the Soviet KGB. 

"He did a big and very important job," Kiriyenko said of Kovalyov as he
presented Putin at the agency's once infamous headquarters on Moscow's
Lubyanka Square. 

Interfax news agency quoted Kiriyenko as saying the removal of Kovalyov, who
held cabinet rank, was agreed on Saturday when he met Yeltsin at the
president's holiday home in the northwest. No other ministerial changes had
been discussed, he added. 

Yeltsin's only comments on the dismissal came before the identity of the
victim was known. He told reporters only that he was about to fire someone who
might appear blameless but about whom the Kremlin had "significantly more

Hours later the axe fell on Kovalyov, a 50-year-old career counter-
intelligence officer, named by Yeltsin during his 1996 re-election campaign in
place of the unpopular Mikhail Barsukov, who had stumbled badly during the war
against Chechen rebels. 

There has since been a deafening silence on what prompted Kovalyov's downfall.
The agency handles counter-espionage and domestic security, including
combating sedition and extremism. 

Some said he might be shouldering blame for continuing crime and violence
around Chechnya, others that it was over widespread corruption and tax evasion
and some that it might be linked to rows with friendly powers over spying

There was no obvious single incident to trigger displeasure with the FSB,
although a senior Chechen official said on Monday Kovalyov was paying the
price for the agency's alleged role in an assassination attempt on the
region's leader last week. 

Few Moscow observers found that convincing, although Yeltsin did also stress
his support on Saturday for Aslan Maskhadov, a relative moderate, who survived
a car bomb attack last Thursday. 

Perhaps more significantly, Kovalyov's dismissal coincides with Kiriyenko's
frantic efforts to hammer out taxes from companies and regional governments to
fill gaping holes in the national budget and so stave off a financial crisis. 

The crisis has triggered a new wave of wage arrears, provoking protests across
the country and raising tensions between the president and the Communist-
dominated parliament. 

The FSB is expected to play a strong role in the tax-raising drive and
Kiriyenko hinted that Putin, also a career intelligence officer who once
headed Yeltsin's watchdog body, the General Control Department, was the right
man for that job. 

"He has vast experience in economic and regional policy gained in the
presidential administration," he said on Monday. 

Igor Bunin, head of the Centre of Political Technologies think tank, agreed
Putin had a record of taming unruly regional bosses and said his promotion may
have been linked to his ties to Chubais, who was first deputy prime minister
until March. 

"He is one of the radical bureaucrats who took an extremely tough line against
the regional barons when in the Control Department," Bunin said. 

"But I think his appointment is rather a part of Chubais's new offensive," he
added. There is speculation that Chubais, now head of electricity group UES,
may return to government. 

Putin, 46, spent most of his career in St Petersburg, home base to Chubais and
several of his key allies. He is said to maintain good relations with many in
the so-called "St Petersburg team," which remains a force in Moscow's
corridors of power despite the ousting of Chubais from government. 

Alexander Shokhin, parliamentary chief of the pro-government Our Home is
Russia party, said Yeltsin had other reasons for replacing Kovalyov with a
more dependent figure ahead of what he had described as a "hot political
autumn" of social unrest. 

"In two years in office, Kovalyov had built up his muscle and became an
independent political figure," Shokhin said. "This may have been the real
reason for his sacking." 


Russian politicians warn of new Chechen turmoil
By Peter Graff

MOSCOW, July 27 (Reuters) - Four leading Russian political figures, including
a former prime minister, appealed the the Kremlin on Monday to find what they
called a coherent policy toward the breakaway region of Chechnya to avoid a
new war. 

In an urgently worded statement released through Russian news agencies, the
quartet, including former prime minister Viktor Chernomyrdin and Alexander
Lebed, his potential rival for the presidency, said the government ``must
immediately formulate a position that is clear to the public.'' 

``Recent mistakes and silence have already cost us all much too dearly, and
Russia does not have the right to return once again to the mid-1990s,'' they
said, referring to the bloody 21-month war that ended when Russian troops
withdrew from the rebel Moslem region in August 1996. 

They did not spell out what policy changes they expected from the Kremlin. 

Chernomyrdin, in office for five years until President Boris Yeltsin sacked
him in March, was premier when the army stormed into Chechnya in December 1994
in a bid to halt its secession. Lebed, a former general, negotiated the 1996

The other two signatories were tycoon Boris Berezovsky, who worked on a 1997
peace deal with the Chechens, and Mintimer Shaimiyev, the president of another
semi-autonomous Moslem region, Tatarstan, who took part in negotiations during
the war. 

Chechnya claims independence but Yeltsin refuses to accept that and no other
state has recognised its sovereignty. 

The situation in Chechnya has come to the fore once again in Russian politics
as tension there has increased. Chechen leader Aslan Maskhadov survived a car
bomb attack last week. 

Maskhadov agreed over the weekend to meet new Prime Minister Sergei Kiriyenko
at a time and place yet to be announced. 

On Monday he said he wanted friendly relations with Moscow, but blamed the
Kremlin for driving Chechnya into chaos by withholding reconstruction funds
promised under the 1997 peace. 

``Chechnya is looking to establish the most neighbourly, mutually beneficial
relations with Russia,'' Maskhadov told Interfax news agency. 

He would support a ``single economic, defence, airspace and transport regime
between Russia and Chechnya.'' But Chechnya's sovereignty remained non-
negotiable, he added. 

President Boris Yeltsin said on Saturday he supported ``the Chechen leadership
in general and Maskhadov in particular.'' 

But Maskhadov, seen as a relative moderate, said Moscow was strangling
Chechnya's economy to ``create a situation under which a social explosion
would be inevitable.'' 

Russia pledged money to rebuild parts of Chechnya laid waste during the war
but most of those funds have been held up. 

``The Chechen people are tired of the many promises from Russia that remain
only promises,'' Maskhadov said. 

Chechnya has remained torn by violence since Russian troops withdrew. Heavily
armed gangs routinely seize hostages. 

Maskhadov imposed a state of emergency a month ago but tension has only
increased. On July 15, Islamist paramilitary groups clashed with Maskhadov's
forces, leaving nine dead. 

Some Chechen officials have blamed Russia special forces for last Thursday's
assassination attempt on Maskhadov, although the mainstream Russian leadership
vocally backs Maskhadov as a voice of relative moderation in the rebel region.

A state of emergency in the region formally expired on Monday. 


U.S. to help Russia, others dismantle nuclear arms

WASHINGTON, July 27 (Kyodo) - The United States will furnish additional funds
to Russia and two other former Soviet republics to help them dismantle their
nuclear arsenals, the Defense Department said Monday. 

The U.S. has earmarked an additional 127.9 million dollars for Russia, 76.7
million dollars for Ukraine and 300,000 dollars for Kazakstan as part of
efforts to reduce the threat of nuclear weapons proliferation, the department

Of the aid to Russia, 79.9 million dollars will be used to dispose of a
variety of nuclear weapons delivery systems, including intercontinental
ballistic missiles (ICBMs) and submarine-launched ballistic missiles (SLBMs),
while 41 million dollars will finance the modification of plutonium-producing

The remaining 7 million dollars will be used to procure fissile material
containers, it said. The extra funding will bring the total disbursement to
Russia to 1.1 billion dollars. 

New funds to Ukraine will be used to eliminate SS-19 and SS-24 ICBMs, bringing
the total amount of aid to the country to 520 million dollars. 

The aid to Kazakstan will cover logistics support for communications-related
facilities, the department said. The new funds will bring the total of U.S.
aid to the country to 172 million dollars. 


Russian Left Denies Responsibility for Foreign Loans 

Moscow, July 23 (Interfax) -- The radical left opposition claims that
in the event it comes to power, it will not be liable for the external
loans of the current Russian government.
Working Russia movement leader Viktor Anpilov said "International
Monetary Fund (IMF) allocated the new loans to save Yeltsin's regime from
the people's outrage." Anpilov told Interfax Thursday that "this money
will not help to boost our industry and people will not gain anything,
therefore, they should not pay these debts."
IMF's billions "will be pocketed by those who are used to carrying
around $500,000," Russian Communist Party leader Viktor Tyulkin said.
In deciding whether the foreign funds are to be returned, "first of
all, it should be considered what kind of debts they are, who did the
borrowing and how it was spent," leader of the Communist Parties Union Oleg
Shenin told Interfax.
The multi-billion IMF loan "goes far beyond the state program of
external borrowing adopted by the State Duma," Viktor Ilyukhin, chairman of
the Duma Security Committee and leader of the Army Support movement said
The money "will be considered not as a state debt, but as a personal
loan to a private individual called Chubays [presidential envoy for liaison
with international financial organizations]," Ilyukhin said.



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