July 29, 1998   
This Date's Issues: 2287 • 2288 • 

Johnson's Russia List
#2287
29 July 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Dmitri Gusev: Re Duma and IMF.
2. Mike Snow: 2280-Bennett/Russian Women.
3. The Weekly Standard: David Aikman, The Men who run Russia.
4. Reuters: Russia tightens control on arms exports.
5. Chicago Tribune: Colin McMahon, ONCE-DREADED COSSACKS SEEK A 
REBIRTH AS CRIME-BUSTERS.
6. Financial Times (UK): Miners' protest puts pressure on Kremlin.
7. Nezavisimaya Gazeta: DOES RUSSIA HAVE A LARGE ELECTION COALITION?
(Statement on Chechnya of four leaders).
8. Interfax: Foreigners Entering Russia To be Given Tax Advisory.
9. Itar-Tass: Russian Official on State of Defense Enterprises.]

*******

#1
Date: Tue, 28 Jul 1998 16:02:48 -0500
From: Dmitri Gusev <dmiguse@cs.indiana.edu>
Subject: Re: Duma and IMF

The Interfax message on the Duma and the IMF bailout [JRL 2286]
mentioned that Prime-Minister Kirienko and some other, unnamed
members of the Russian cabinet argued that
the ratification of the IMF loan agreement by the
Duma was somehow "not mandatory". I wonder what
their arguments are like. In my opinion, the chances that
these arguments are sound are close to zero.

One argument I am aware of attempts to exempt
credits obtained by the Central Bank, and not by the
government itself. However, I am not sure if that
exception could possibly apply here, nor am I sure if such credits
would be legal at all, since the law requires that all external loan
agreements conducted on behalf of Russia are signed
by the government representatives authorized by the government
resolutions. I.e., I seriously doubt that the Central Bank is legally in
a position to conduct external borrowing by itself, automatically
adding the resulting debt to the country's external debt.

What I find to be the most annoying, though, is how little
respect the IMF pays to the Russian laws and the Russian Constitution.
The IMF officials knew very well that the Duma was not going
to adopt the full version of the government austerity package,
and they accepted Yeltsin's promises to implement
the rest of the package by decree, even though some
of the required decisions clearly interfered with
the constitutional separation of powers! It does not
surprise me that the Russian government has no
respect for the law and the Constitution. It does not
surprise me that the Duma itself often shows little
respect for them, too. But why does the IMF have to stoop so low?
Is it because, by supporting the overvalued ruble, the IMF is
helping the foreign importers, hurting the domestic exporters,
and saving a handful of short-term foreign speculators who bought
into the Russian government's pyramid scheme and did not
manage to withdraw fast enough? Essentially, the IMF
encouraged Yeltsin to violate the Constitution. The IMF
encouraged the Russian government to violate the laws.
Did the IMF help Russia by doing that? The hell it did. I am pretty
sure that it would have been better for Russia if the bubble
burst now, not later, when there will be more damage.

The IMF does not give a damn about Russia's interests...
Or does it?

******

#2
From: schlagman@earthling.net (Mike Snow)
Date: Tue, 28 Jul 1998 
Subject: 2280-Bennett/Russian Women

Jenni Bennett's seems to have read something else in her hyperbolic
reaction to my piece on Russian women and international dating ("THE ONE" RL
July 18). Mostly she seems enraged at "the complacency of women who accepted
and promoted the (Russian) gender stereotypes" and the fact "they're not
speaking out against the system in order to broaden their opportunities", a
common reaction among Western women in Russia, whom I watched wilt and
crumple under the outrageously sexist conventions of Russian society. This
was a place where all their convenient assumptions and blanket power
were.... irrelevent. "How could Russian women let men get away with that???"
{I, often, frankly wondered the same.) More to point, how could they not
subscribe or accept the universality of the Western feminist perspective.
(Russian women at one point told some feminist group to, essentially, "leave
us alone; we LIKE our men"). 
I never said or think Russian girls were "golddigging harlots"- just the
opposite, considering the spectacular difference in incomes, they were
amazingly self-possessed and uninterested in our money, something one
wouldn't see anywhere in the world-- let alone an economically devastated
place (superpower self respect had something to do with that). Few wanted to
leave- I found Russians very patriotic. Whereas Western women (particularly
properly indoctrinated young ones) see sex and love as a political power
play and struggle, Russian women see it as a romantic opportunity- they are
incredibly romantic and they really LIKE men and give them the benefit of
the doubt (highly politically incorrect). Admittedly Russian women are the
salt of the earth, do almost all the work of the family, and literally held
the country together- before and after Communism. They have a tremendously
difficult life and greet it with great courage, grace, and fortitude; yet
remain essentially female and appealing in ways one rarely sees in the West.
Russia is the best place on earth for (finding a good) woman, not the best
place on earth for women (to live), something I thought obvious from
context. I never met single women with children, "throwing the alcoholic bum
out or leaving" were simply not the convenient options that they are in the
West- there was no place to go except the streets, where people would
rapidly freeze (as a dozen or 2 do a day now in Moscow); couples lived
together (in misery) even after divorce. People only had 1 or 2 kids because
of no money and no space, and in many cases since + before the breakup- no
hope. 
I didn't go to Russia to "find a woman", but as a tourist who discovered
the Roman Empire's collapse telescoped into 2 years and the biggest story of
my life (actually I was going to do a documentary on German reunification
when I went to Russia for 4 weeks and saw a place that loved Americans, was
100 times cheaper, had the most beautiful women in the world, ... and said
hmmm, I should stay for a while). Gee, that's what I was looking for: "a
nice little lapdog who will adore them, look beautiful, and never leave
their side". Not really- just wanted to get away from the bitterness,
resentment, and immaturity so on display in that comment. I think America
has about as twisted and miserable sexual politics as exists in the West
(we're going to let that prissy twit Starr drag Clinton into open court to
testify about his sex life?????); where do American (Canadian?) women think
they have a right to preach to Russians? In fact, that clinging lack of
independence wasn't very appealing; Russians had very different space
requirements. Russian women were "traditional, dependable, and thought they
needed a man's protection to survive"- actually they thought they needed a
man (and much effort was expended in the search), something that rankles
Western women, who know much better. "Moral" isn't a word I'd use to
describe much in the FSU, I think the very concept was degraded. I don't
think Russian women actually were that promiscuous- more they were trained
to do what men WANTED, no matter who or what, and was a function of societal
indoctrination- but it could be very disquieting, when you'd see girls
mincing and preening for any group of men in the bimboish way my Estonian
artist girlfriend, Olga, so despised. The last Russian Miss Universe nominee
was asked some question and she nervously reverted to that bimboish banter
and was instantly OUT of the running, though she probably could speak 4
languages and was one of the smartest women there. I know how vigilant one
had to be because I met several girls in the minute before THEIR boyfriend
came. 
I hardly thought of myself as a "Western hero come to rescue Russia's
damsel in distress"; in fact considering the fact that Russian womens'
strength, beauty, and eroticism was so linked to the land.. I was very
hesitant to bring a Russian girl to America and all the propaganda rife here
(as I tell my friend Matt in NYC.. don't call Lena "Helen" unless you want
her to BECOME an American girl). Of COURSE, I wanted "to take advantage of
Russian women"-- isn't that what everything is reduced to here: men taking
unfair advantage of poor defenseless women (that's the kind of insidious,
insipid propaganda I mean). Suddenly I'm supposed to give up all the perks
of Western civilization to stay in Russia and "build a life together, if I
really cared about the lives of Russian women"- when did marriage become
missionary work and when did Jenni elect me. I wasn't trolling for sympathy
in writing this piece; it was more for Russians (who found it
fascinating)and a personal account of the astounding differences in romance,
sex, and love between the cultures, which nobody had covered, as well as an
ode to Russian women. I read about the thousands of girls tricked, raped,
and broken into bordellos in Israel and Middle East by Mafia scum, and I'm
crushed. The most beautiful girls in the world, trusting romantic
sweethearts; the fruit of Russian and Ukranian youth and womenhood, who only
want a chance to live like human beings; sold into slavery by those cynical
vicious criminal bastards. That will poison Russia for generations if it's
allowed to continue.
In reality, I fell in love with a tough clever sweetheart who bore a
strong resemblence to Demi Moore. She was talking about going to America
(but ALL Russians were talking about going to America), she had a Russian?
boyfriend in Murmansk, she had an American friend; she was going to Paris
and America soon (my projected itinerary); 2 weeks later she was gone- then
married to an American she met on an earlier trip I never knew about. I call
her (I am, after all, a reporter) for an hour and talk on the phone and talk
to her infant daughter, a daughter who should've been... mine..and then
pound the phone to pieces. We were never trained to move that fast.

Mike Snow

********

#3
From: "Diane Bryhn" <diane@eppc.org>
Subject: David Aikman's article in The Weekly Standard 
Date: Tue, 28 Jul 1998

The Weekly Standard
The Men who run Russia
by David Aikman

Leaving Sheremetyevo Airport for the trip into Moscow, the visitor gains a
first insight into the current Russian scene. The driver--if he was hired
through one of the official airport tourism companies--points out bitterly
the desirable spots close to the airport arrivals area where his unlicensed
competitors illegally park. Their favored position, he snorts, is a result
of their connections with "the mafia." People bribe the police, he
grumbles, so gypsy cab operations go on unimpeded. "Everything here is
'under the roof,"' he says, using the slang for "protected by organized
crime." "It's like a state within a state."

Actually, Russia is in worse shape than that. It's more like a state within
a bank--or several banks. To put it bluntly, since the election of Boris
Yeltsin in 1996, Russia has been run by a seemingly all-powerful oligarchy
of bankers and financiers whose acquiescence in government decisions is
increasingly necessary for the government to operate. When in mid-June the
IMF demanded tough budget cuts as a prerequisite for making available to
Russia another $670 million slice of a $9.2 billion IMF loan package, the
young prime minister Sergei Kiriyenko didn't call in top economists for
advice. Instead, he summoned Russia's financial oligarchs and met with them
twice in three days. What did they suggest to help get the country out of
its dire economic straits? One response to his inquiry: Set up a
semi-permanent Council on Economic Cooperation consisting of themselves-the
oligarchs-to advise the government of what they want it to do.

If such a council ever came into being, it would only institutionalize what
almost all Russians and many foreigners now recognize as the country's
greatest source of weakness-even of potential national calamity-since
Russia broke off the shackles of communism back in 1991. In effect, it
would crown with legal standing the emergence of a small group of
ultra-rich businessmen who pillaged the country during the privatization
process and have used their economic power to manipulate both public
opinion, through the media they own, and the entire political process.
Andrei Piontkovsky, a columnist for the English-language daily Moscow
Times, derided the proposed oligarchs' council as "not even a parallel
shadow government, but a type of Politburo of the Oligarchic Party of the
Russian Federation." The first to apply the word "oligarchy" to the
ultra-rich capitalists who have taken over Russia was Alexander
Solzhenitsyn, in a speech to the Russian parliament in 1994. The Russian
media sometimes speak of semibankirshchina, "rule of the seven bankers," an
unflattering allusion to the semiboyarshchina, the brutal rule of
aristocratic officials and landowners during a period of national weakness
in the 17th century.

These days, such analogies are commonplace. In early June, as the Russian
stock market collapsed and interest rates rose to a stratospheric 150
percent, the IMF's managing director Michel Camdessus warned of the
"dangerous similarities" between the Russian government's relationship to
the oligarchy and the South Korean government's relationship to the
chaebols, largely family-controlled conglomerates whose crony-capitalist
habits helped precipitate the collapse of the South Korean economy last
year. Some Russian analysts actually thought the chaebol reference unfair
to the Koreans. "Where are the industries and technologies created by [the
Russian oligarchs]," asked one, "or the highways and scientific cities
built by them?"

Where indeed? As the IMF prepared to negotiate the stringent conditions
that Russia would have to meet to receive the next installment of its loan,
few Russians or foreigners doing business there had any illusions about
where the government's vanishing funds had gone: Much has been ferreted
away in foreign bank accounts, largely for the benefit of the notorious
semibankirshchina. Literally billions of dollars lent to Russia from abroad
or raised by the government in taxes for various infrastructure purposes
have disappeared without a trace. In one of the most blatant cases of
robbery of the public purse, of some 14 billion rubles ($2.3 billion)
allocated by Moscow for the reconstruction of Chechnya, just over half was
very sloppily accounted for and the rest had disappeared without a trace
when Russia's Chamber of Accounts conducted an audit. Of course, the
oligarchs can hardly be held responsible for every act of thievery from the
state. But the super-rich certainly set the pace. One of the Western
European cities where Russian is most commonly heard these days is Zurich,
headquarters of Swiss banking.

The new oligarchy came into being during the Wild West phase of Russian
capitalism-the dying days of Gorbachev's perestroika in the late 1980s and
the first few years of Yeltsin's privatization of the early 90s. in this
period, when private property had no clear legal standing, business
regulations were in flux, and no one knew how to divide up the ramshackle
Soviet economy, energetic entrepreneurs flourished. Some of them formed
small private companies, then teamed up with large state ventures
undergoing privatization through a carelessly planned voucher scheme, under
which state managers were able to transfer vast state assets into private
hands without oversight or regulation. Other entrepreneurs persuaded
several different companies to lend sums of money to create a new holding
company that was powerful enough to gobble up smaller competitors and
monopolize huge sections of the economy. Some have compared this to the
reign of the robber barons in late 19th-century America-minus a
trust-busting president and the safeguards of an already century-old
democratic system.

Once today's oligarchs had emerged from obscurity and secured vast
fortunes, they quickly co-opted key figures in Russian officialdom,
including elected politicians, and thus could protect their wealth and
power from challenge. Today, there is probably not a senior figure in
Russia's government who does not owe at least part of his financial
standing or electoral success to members of the oligarchy. Late in 1996,
after Yeltsin's surprising victory in that year's presidential race,
possibly the richest and certainly the most prominent and feared of
Russia's oligarchs, Boris Berezovsky, crowed: "We hired Anatoly Chubais
[Russia's former privatization czar]. We paid an enormous amount for Boris
Yeltsin's election. Now we have the right to enjoy the fruits of our
victory."

Berezovsky declared a salary of $43,000 in 1997, but his personal assets
are close to $2 billion. A generous man, he was named "Philanthropist of
the Year" in 1996 for giving away $3 million. His rise was in some respects
atypical. For many years Berezovsky was a respected mathematician attached
to Russia's Academy of Sciences. Then in 1989 he founded a private car
dealership that quickly amassed millions. At the time, organized crime was
notoriously active in Russian auto dealerships; what with the perennial
shortage of vehicles and the requirement that customers hand over the
entire purchase price in cash (Russia still has virtually no consumer
banking) months before delivery, opportunities for corruption were
abundant. By 1996, Forbes magazine could assert that Berezovsky's success
was due to his gangland connections. The magnate promptly sued Forbes. But
he could hardly explain away such highly suggestive facts as the attempt on
his life in a professionally organized car-bomb attack that decapitated his
chauffeur. Like the other oligarchs, he lives surrounded by a retinue of
armed guards.

Eventually, as his empire grew, Berezovsky established the
financial-industrial group LogoVAZ, which acquired huge holdings in the
oil, media, and banking sectors. His political involvement also deepened,
notably in early 1996, when he and the other oligarchs teamed up to pour
money and organizational skills into Boris Yeltsin's lagging presidential
reelection campaign. Berezovsky was well equipped for the role of
kingmaker. Insatiable for power, he had acquired part ownership of the
influential ORT television channel, the respected daily Nezavisimaya
Gazeta, and the satire magazine Ogonyok, a holdover from Soviet days. After
the election, Berezovsky bragged of his role in reelecting Yeltsin and
claimed that he and the other six oligarchs of the semibankirchina now
owned more than half the Russian economy. No one contested the assertion.
"I think that if something is advantageous to capital, it goes without
saying it's advantageous to the nation," gloated Berezovsky,

His reward from Yeltsin was swift: In 1996 he was named deputy chief of the
Kremlin Security Council. Soon he showed almost Rasputin-like skill at
advancing himself at the presidential court. He became financial adviser
and friend to Yeltsin's most politically savvy daughter, Tatyana Dyachenko,
and to the presidential chief of staff, Valentin Yumashev. Inevitably,
though, he overplayed his hand. In 1997, LogoVAZ lost out to a rival in a
bid for 25 percent of Svyazinvest, the national communications
conglomerate. It was the biggest auction of state property to that point,
and Berezovsky's star fell. His public posturing and complaining finally
angered even Yeltsin, and he was pushed out of the Kremlin Security Council
in November 1997. Nevertheless, he stayed afloat. His political connections
included then prime minister Victor Chernomyrdin and, improbably, liberal
economic reformer Yegor Gaidar. To add to Berezovsky's reputation as a
Machiavellian manipulator, he was rumored to have financed the successful
run for governor of Krasnoyarsk of the gruff and tough Gen. Alexander Lebed
in May 1998. Of Berezovsky, an American businessman in Moscow commented
coldly, "He is a very sinister man."

The seven original oligarchs-the others sometimes bitter rivals of
Berezovsky, sometimes close collaborators-have all followed similar paths
from obscurity, through skillful cross-ownership alliances, to control of
enormous financial and industrial assets. In each of the other six cases,
however, the key to success has been banking and the financing of a
cash-strapped Russian government.

Vladimir Potanin, who beat out Berezovsky in the Svyazinvest auction,
controls Russia's largest bank, Oneximbank, through one of the country's
largest petroleum companies, Sidanco, and the Norilsk Nickel company,
largest corporate supplier of nickel in the world. Potanin also controls
the newspapers Izvestiya and Komsomolskaya Pravda. The other five of the
original oligarchs are Mikhail Khodorkovsky, chairman of Bank Menaten:
Vladimir Gusinsky, chairman of Most-Bank; Alexander Smolensky, chairman of
SBS-Agro Bank; Mikhail Fridman, chairman of Alfa-Bank; and Vagit Alekperov,
chairman of LUKoil. Those vying with Berezovsky in the field of media
include Gusinsky, who controls the daily newspaper Segodnya and the slick
newsweekly Itogi, and Alekperov, who shares control of Izvestiya with
Potanin.

Also sometimes named now as full-fledged oligarchs are three other men: Rem
Vyakhirev, chairman of Russia's largest energy conglomerate, Gazprom;
Vitaly Malkin of the Rossiiskii Kredit Bank; and Vladimir Bogdanov,
chairman of the unpronounceable energy corporation Surgutneftegaz. The
newest addition to the oligarchs' club is none other than Anatoly Chubais.
Repeatedly hired and fired from successive Yeltsin governments, Chubais
made the best soft-landing of any former minister, heading up a new Russian
commercial entity called the Unified Energy System.

It was Potanin's Oneximbank that came up with the cash-for-shares scheme
the oligarchs used to grab so much of the national wealth for themselves.
In 1995, the Yeltsin government, desperate to meet its enormous payroll and
cover other expenses, agreed to give huge chunks of state-owned industries
and other assets, in the form of shares, to financial-industrial groups
that would lend it cash. Behind the scenes, in advance of what were
officially public competitions with sealed bids, the oligarchs would agree
among themselves which of them would make the winning bid, allowing the
rest to submit low bids and walk away. That ended with the bitterly
contested Svyazinvest deal. The government, embarrassed by financial
scandals, had come under increasing pressure from inside and outside the
country to conduct a fair bidding process for state assets being
privatized. And Potanin, breaking ranks with the other oligarchs, went
along. His secret tender for Svyazinvest turned out to be the highest
offer. Berezovsky was enraged.

If Russia's banking system were in any sense orderly and regulated, the
domination of the banking industry by a handful of super-powerful entities
might be worrisome, but it wouldn't necessarily be disastrous. Some 50 very
big banks, however, have been authorized to act as financial agents and
payroll conduits for major government departments, as well as for local and
regional authorities of the Russian Federation. Many of them are in the
habit of speculating wildly with the public funds under their control. Data
provided by the FBI to the Center for Strategic and International Studies
in Washington, D.C., and confirmed by Russian law-enforcement sources for a
1997 report showed that half of the country's 256 largest banks were linked
to organized crime through extortion schemes and money laundering. In
effect, under the leadership of the oligarchs, Russian entrepreneurs have
turned into plunderers of the national wealth. Some American business
observers believe that this development is not entirely harmful. Sighed
one, a Moscow resident: "Nobody likes vultures, but they serve a useful
purpose in the food chain. They are inevitable."

Be that as it may, one of the consequences of the oligarchs' activities has
been a decline in freedom of the press. Several Russian reporters eagerly
joined in the boost-Yeltsin effort of Berezovsky and others during the
crucial 1996 election because they feared that press freedom would vanish
altogether if his principal challenger, the Communist Gennady Zyuganov,
won. Now many sense that they made a Faustian bargain.

Though the Russian media are not centrally controlled, as they were under
the Communists, all major media outlets depend on the financial support of
the oligarchs, and this has stifled the once-vigorous reporting of the
post-Communist press. It is possible to find out what is happening in
Russia by reading half a dozen of more papers every day, but no single one
of them can be relied on for consistent, independent coverage of the news.

How long will the oligarchs rule? For that matter, how long will Russia's
infant democracy survive? "Russia," commented financier George Soros last
year, "is like a canoe in which seven men are fighting over a hoard of
gold. They are too absorbed by this to recognize that they are heading
towards a waterfall."

That approaching catastrophe is a total implosion of the Russian economy,
with political consequences that are entirely unforeseeable but almost
certainly unpleasant for the rest of the world. It has been estimated that
the federal government of Russia last year actually took in only half of
the tax payments owed it. As of May 1, the energy giant Gazprom alone owed
the government over $800 million, according to Benyamin Sokolov, chief of
the Russian equivalent of the U.S. General Accounting Office. About
one-third of the national budget goes to paying off a foreign debt that
keeps mounting. As to living standards, some 31 million people live below
the official poverty line of 432 rubles a month (about $72). Many Russians
avoid starvation only by eating the potatoes and cabbages they grow on tiny
private plots.

Since the fall of the Soviet Union, Russia's workers and professionals have
endured years of unpaid wages and seriously declining health standards.
Some economists believe the country's gross domestic product has shrunk by
over 40 percent. If the people have not yet risen up against the Yeltsin
regime, it is partly because they are not yet convinced there is a serious
alternative to it. They may also cling to a vestige of hope that somehow,
underneath all the present hardship and turmoil, Russia is actually inching
its way toward membership in the developed world, where economies are at
least somewhat predictable and living standards tend to rise year after
year.

It is intriguing that, amid the economic gloom in Russia, the man who first
called the post-Communist oligarchy by its name-only to be dismissed by
intellectuals at home and in the West as a pessimist and out of touch-is
once again receiving some attention. In his new book, Russia in the Abyss,
Solzhenitsyn writes: "Criminal is the government that throws the national
patrimony up for grabs and its citizens into the teeth of beasts of prey in
the absence of laws." Four years ago, when the great Nobel laureate
returned to his homeland after two decades' involuntary exile, hoping to
see his long-abused nation resume a normal existence, he was almost alone
in his dark view of things. Today, far more Russians would agree.

*******

#4
Russia tightens control on arms exports
By Adam Tanner

MOSCOW, July 28 (Reuters) - Russia's Defence Ministry said on Tuesday it had
tightened rules for exporting arms and military technology just days after
Iran test-fired a medium-range missile. 

The United States and Israel have expressed concerns about Russian help to
Iran in developing missiles, and they have applied heavy pressure to withhold
sales of rockets, nuclear technology and technical assistance to Tehran, with
mixed results. 

The Russian government has denied giving any official assistance. 

"The Russian Federation's Defence Ministry, together with other government
organs, is planning measures to toughen controls over the exports of military
supplies and technology," the ministry said in a statement. 

The ministry said it would improve coordination between the ministry's export
committee and the Federal Security Service, a successor organ of the Soviet-
era KGB, and other law enforcement bodies. 

The goal is to "facilitiate the prevention and cutting off of attempts to
export forbidden goods of a military nature," the document said. 

The Defence Ministry provided few details on how exactly Russia would toughen
the export controls. 

U.S. Vice President Al Gore discussed the Iran missile development with
Russian Prime Minister Sergei Kiriyenko during a visit last Friday. 

A U.S. official in his delegation, speaking on condition that he not be named,
said Russia needed to create a body of laws and export procedures to improve
oversight of what strategic materials leave the former Communist country. 

But the official hailed a recent Russian announcement that certain firms may
have violated export rules to Iran. 

"That was the first time the Russian government had publicly designated by
name any entities that they thought were in violation of their laws and
regulations," he said. 

Russia would like to continue earning needed funds from arms exports without
upsetting the international community. 

"Russian organisations are scrupulously watched on how they follow the control
regime on rocket technology," the ministry document said. 

"Thus two tasks are being addressed: to bar measures that would reduce the
defence readiness of our country, and second, to prevent violations of agreed
international obligations." 

At the same time, the statement said Russian military cooperation and arms
exports abroad would continue. 

"We do not see any obstacles for the development of military-technical
cooperation with foreign nations, including in conventional arms, and we
intend to continue such cooperation in accordance with existing agreements." 

*******

#5
Chicago Tribune
July 28, 1998
[for personal use only]
ONCE-DREADED COSSACKS SEEK A REBIRTH AS CRIME-BUSTERS 
By Colin McMahon, Tribune Foreign Correspondent. 

ST. PETERSBURG, Russia 
Arkady Kramarev's light blue shirt and smart blue blazer don't tell much
about the man, save that he dresses better than the average Russian
politician. But his cool blue eyes and grizzled hands are another matter. And
his boasts are a dead giveaway of his heritage.
"The criminals fear us," Kramarev said. "Criminals are really afraid of
Cossacks."
Kramarev, 60, a deputy in the St. Petersburg legislature, is an ataman, a
Cossack chieftain. He traces his lineage to the time when Cossacks were feared
and exploited by Russia's czars, when legends were born and nurtured about the
skill and courage and brutality of Cossack warriors, the archetypal "Horsemen
of the Steppes."
Now, Kramarev is leading an effort to expand Cossack anti-crime patrols in
St. Petersburg. Under a plan supported by the city's police chief that could
come to fruition in a few months, Cossack volunteers would cruise the parks
and some streets of Russia's cultural capital.
They would be neither armed nor empowered to arrest people. But they would,
backers say, give much-needed help to a police force struggling with crimes
ranging from the pickpocketing of tourists to contract murders of leading
businessmen.
"There is organized crime," Kramarev said, with more than a hint of
exasperation that this idea has not been put into force, "so why is there not
organized defense?"
A few Cossacks patrol trains and big sporting events in St. Petersburg.
Elsewhere they are entrusted with preventing crimes against the environment.
Though Kramarev might wish that the new patrols could be armed with more than
just a baton and perhaps a whip--no guns or sabers, police say--he promises
his men will be able to handle themselves just fine.
They also will work for free.
"It's difficult to explain, but money is not everything," Kramarev said,
relishing the chance to explain Cossack motivation. "Americans say, `How can a
job be worth doing if the job is unpaid?' More rewarding is the spiritual
work, the work one does for the soul."
The St. Petersburg initiative is part of a limping neo-Cossack revival in
Russia. After the collapse of the Soviet Union, people calling themselves
Cossacks started forming groups with varied interests. Some demanded
autonomous homelands. Some sought to create special units within the Russian
military. Some began patrolling markets, ostensibly to cut down on crime but
actually to extort payoffs.
Perhaps more than anything, the neo-Cossack revival showed how devastated
the people and their traditions had become in areas where Cossack ways once
dominated. Cossack songs had been forgotten. Cossack dress--the sheepskin
hats, black boots, silver-ribbed belts--had been discarded or, worse,
embellished and turned into a showpiece for the tourist trade.
Despite relying on Cossacks to patrol Russia's vast borders and control
internal enemies--Cossack warriors are infamously linked with the anti-Jewish
pogroms-- the czars of Imperial Russia at times saw it necessary to repress
the Cossacks.
But the terror of the czars was nothing compared with that of Vladimir
Lenin and Josef Stalin. The Soviet dictators killed, uprooted or let starve to
death hundreds of thousands of Cossacks. This was partly because many Cossacks
sided with the Whites against the Bolsheviks in Russia's civil war.
Understandably, given the losses, efforts to restore pride and traditions
among the 2 million to 3 million Russians who consider themselves Cossacks
have met with mixed results.
Cossack choirs have made a comeback, and at least one group gets trotted
out to perform any time Moscow throws a party. A Cossack boys school with 200
pupils has reopened in Novocherkassk. Military units have formed in some
areas, particularly Russia's south, though President Boris Yeltsin's promise
to push the process by decree has waned.
There was talk during the war in Chechnya of thousands of Cossacks forming
units to protect ethnic Russians living in the Caucasian republic, but such an
effort never materialized. Splits within the Cossack community were cited,
along with a lack of zeal to face Chechen fighters who had proved themselves
skilled, strong and fearless--all the things that legend holds the Cossacks
once were.
"If the Cossacks are indeed Russia's sword, in Chechnya it proved to be
made not of steel but of wet cardboard," author Anatol Lieven said. He
detailed the failed Cossack initiative in his book "Chechnya: Tombstone of
Russian Power."
Even if St. Petersburg's mayor approves the Cossack plan, details remain in
doubt.
The police chief says no mounted patrols. Kramarev insists on horses, for
what is a Cossack without his stallion? That, however, would take some money
from the city.
"The Cossacks can do this free of charge," Kramarev said. "But as Napoleon
said, the horses are not so devoted. They need something to eat."
For Kramarev, the patrols are more about helping St. Petersburg with its
problems than rebuilding a long-past way of life.
"There were 80 years of constant struggle and repressions," Kramarev said,
the bluster gone from his voice. "We can restore some things. But we can't
return it to the way it was."

*******

#6
Financial Times (UK)
29 July 1998
[for personal use only]
RUSSIA: Miners' protest puts pressure on Kremlin
By Astrid Wendlandt in Chelyabinsk and John Thornhill in Moscow

Russia's coalminers yesterday stepped up pressure on the government to 
pay back wages by threatening to block every branch of the 
Trans-Siberian railway and to sever the European part of Russia from the 
far east.

On Monday, 400 determined miners began a blockade of the southern Urals 
section of the railway near Chelyabinsk, and local officials warned 
yesterday that the protests were spreading to other branches along the 
railway route. The local administration said the protests were causing 
economic disruption to the region and suggested that they could threaten 
the safety of nearby nuclear plants. Pavel Bolshakov, the Chelyabinsk 
region press secretary, said the protests jeopardised the local Mayak 
nuclear facility, the largest of its kind in Russia, which is dependent 
on coal-fired electricity for its cooling systems. "The miners do not 
understand the catastrophe their actions could bring about," he said. 
However, Mayak should be able to find alternative sources of electricity 
in an emergency.

The pressure on the government's finances rose yesterday as yields on 
the domestic debt rose well above the central bank's refinancing rate of 
60 per cent. The government said it would cancel two domestic bond 
auctions scheduled for today but would speed up plans to sell a 5 per 
cent stake in Gazprom, the giant gas monopoly, in August.

Sergei Generalov, energy minister, said the government was examining a 
range of options for the Gazprom sale. "We are choosing between selling 
it through derivatives, through small lots to portfolio investors, or in 
two or three lots to strategic investors," he said.

Coalminers in the Urals region staged sporadic protests earlier this 
summer but were bought off by government promises to eliminate wage 
arrears in the sector. Earlier this month, Boris Nemtsov, deputy prime 
minister, said the government had transferred all the money needed to 
pay off its outstanding wage bill.

Russian law enforcement officials are investigating whether some of the 
federal funds earmarked for the miners have been stolen by local 
industry officials. But local miners blame the Kremlin. "We all know the 
government has our money, sitting in commercial banks and they are 
making profits on our backs," said Valery Kazantsev, 39, who recently 
returned from Moscow, where he was demonstrating outside the government 
headquarters.

"Moscow, Nemtsov, they are all good liars," said Yuri Chudinov, a 
46-year-old miner, who has not received his salary since September.

In sweltering heat, the miners have set up tables and benches on the 
railways and say they will not move until Moscow has paid back its 
debts.

*******

#7
>From RIA Novosti
Nezavisimaya Gazeta
July 28, 1998
DOES RUSSIA HAVE A LARGE ELECTION COALITION?
By Sergei MULIN

On the eve of Sergei Kiriyenko's meeting with Chechen
President Aslan Maskhadov four leading Russian politicians,
each of whom took an active part in the settlement of the
Chechen crisis, sent an appeal addressed to the head of the
Government of the Russian Federation. Ex-Premier Viktor
Chernomyrdin, ex-secretary of the Russian Security Council
Alexander Lebed, Tatarstan's President Mintimer Shaimiyev and
Boris Berezovsky had different roles to play, each in his
time, in the settlement of the armed conflict in the Northern
Caucasus. Today, during the latest deterioration of the
situation in that region, they signed a joint appeal. It is
not every day that the Cabinet, which is used to appeals from
miners, public-sector employees and the servicemen, receives
appeals from such a representative groups of high-profile
persons. The matter is unlikely to be restricted by a banal
message to Kiriyenko. It is more likely than not that we see
the contours of a new political bloc projected to the 2000
presidential elections in Russia.
The following is the full text of this important
document.

APPEAL TO THE GOVERNMENT OF THE RUSSIAN FEDERATION

The chairman of the Government of the Russian Federation
is to meet with the President of the Chechen Republic shortly.
Their meeting will take place against the constantly
deteriorating social, economic and political situation in the
Chechen Republic.
On July 23, there was an attempt on the life of the
legitimately elected Chechen President, Aslan Maskhadov; on
July 24 the military commandant of the Chechen Republic, A.
Ismailov, gave orders to terminate the broadcasting of the
Russian national television channels; the plenipotentiary
envoy of the Russian President in Chechnya, Valentin Vlasov
has been in captivity for 88 days now; feeling their impunity,
Wahhabites are intensifying their activities all across the
Northern Caucasus. What else should happen in order to
understand that the authorities no longer have the right to
keep aloof with regard to developments in the south of the
country.
Alarmed with the situation, we appeal to the Government
of the Russian Federation, which must immediately formulate a
position with regard to the Chechen Republic and the Northern
Caucasus as a whole, which would be clear to the public, and
consistently implement it.
The recent mistakes and attempts to hide the truth have
already cost all of us too much. Russia has no right to repeat
what happened in the mid-1990s.

July 27th, 1998

Signed: Viktor Chernomyrdin, Mintimer Shaimiyev,
Alexander Lebed, Boris Berezovsky.

********

#8
Foreigners Entering Russia To be Given Tax Advisory 

MOSCOW, Jul 25 (Interfax-FIA) -- The Russian Federal Border Service
will insert as of next August an advisory inserted in the passports of
foreigners entering the country on the need to abide by the Russian tax
legislation, Anna Komardina, deputy head of the Income Taxation Department
in the State Taxation Service, has told the Interfax Financial Information
Agency.
Foreigners are to report to the taxation agencies in the areas where
they live of all their incomes in Russia, the incomes and taxes paid abroad
and the hiring of real estate or other assets, she said.
The advisory warns of administrative, financial and criminal liability
for tax dodging, Komardina said.
Administrative liability provides for a fine equal of two to 10
minimal wages while financial liability implies a fine equal to the
concealed income and addition to the tax of the amount to be collected from
the concealed income and a fine equal to 10% of the tax collected.
Concealment of large incomes in Russia may entail a fine ranging from
200 to 700 minimum wages or a prison term of two to five years, Komardina
said.

******

#9
Russian Official on State of Defense Enterprises 
Itar-Tass

Moscow, 24 Jul -- The number of principal enterprises carrying out
state defense orders was almost halved in 1998. Their number dropped from
1,700 in 1997 to 1,000 in 1998. Russian Deputy Economics Minister Vladimir
Salo said at an all- Russian conference on defense industry problems today
that this was due to limited budget resources, Praym-Tass agency reports.
Salo said that military production was also being optimized. Within
the next few years, the Russian Federation defense industry is to be
restructured. The move will involve a 30-40 percent reduction in
production capacity of military enterprises. These enterprises will form
the core of the defense industry, carrying out the main bulk of state
defense orders.
According to Salo, the task is not just to reduce the number of
enterprises and organizations engaged in military production, but also to
streamline the composition and structure of the defense industry. At the
same time, the most valuable elements and technologies must be preserved. 
It is important to stabilize the production of armaments and military
hardware and to ensure the process of development of advanced armaments and
technical equipment which are to form the basis for modernization of the
Russian armed forces. Reduction of the range of weapons and military
hardware produced must be at the core of these processes, Salo said.
Following international experience, the structural reform of the
defense industry complex should be mainly directed at creating large
production associations which would successfully compete both on domestic
and foreign markets, as well as at creating supporting resources in the
form of financial-industrial groups and other integrated structures
employing private and state capital.
Speaking about the complex situation in the Russian defense industry,
the deputy economics minister said that several defense enterprises have
demonstrated their ability to work under difficult economic conditions. 
Among these, he mentioned the Moscow Research Institute for Electronic and
Ion Optics. At present, it has a 20 million dollar proposal to supply
energy-saving glass to Turkey. A joint five-year investment project worth
15 million dollars is planned with Germany. These orders will make it
possible to create up to 2,000 new jobs in Russia.
Salo also mentioned the successful work of the Voronezh Mechanical
Plant, the main enterprise for manufacturing rocket engines using advanced
aerospace technology. This enterprise was the first to set up a serial
production in the United States of fountain equipment for oil and gas
extraction. This equipment is just as advanced as, and in many ways even
more sophisticated, than its European and US equivalents. Voronezh
Mechanical Plant has patents on its products, and its quality complies with
international standards set by the American Petroleum Institute. The plant
has taken a good share of the Russian market from the US firm, (?Cameron
Tool Corporation), which is one of the world leading manufacturers of
equipment for oil and gas producers.

*******