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Johnson's Russia List


July 31, 1998   
This Date's Issues: 2291  2292  

Johnson's Russia List
31 July 1998

[Note from David Johnson:
1. AP: Minister: More Russians Pay Taxes.

3. Roberta Manning: Yeltsin's Russia.
4. Obshchaya Gazeta: Anatoliy Kostyukov, "The Bureaucracy and the
Bourgeoisie: End of a Romance." (Growing Split in 'Ruling Class' Seen).

5. Jerry Hough: Re: 2289-Secara/Hough.
6. International Herald Tribune: Konstantin Eggert, From Old Russia to New, 
or Whites Finally Beat Reds.

7. Reuters: Gloves off as Russia central bank defends rouble.
8. Moscow Times: Leonid Bershidsky, MEDIA WATCH: Not All Media Are Whores.
9. Interfax: Berezovskiy: Russia has 'Shortage of Political Culture.'
10. Reuters: Yeltsin fit, Kremlin doctor says.
11. Reuters: Rubin lauds Russia govt,sees problems and progress.]


Minister: More Russians Pay Taxes
July 30, 1998

MOSCOW (AP) - Intent on showing Russia is making progress toward fixing a
fundamental flaw in its economy, the country's finance minister said Thursday
that more Russians are paying their taxes.

Finance Minister Mikhail Zadornov said tax collection improved in July and
predicted the trend would continue.

``In June, the collections were better than in May, and in July they were
better again,'' Zadornov said at a news conference. ``I expect this tendency
to continue in August.''

He refused to give figures, but the Interfax news agency said tax revenues in
July were expected to total $1.9 billion, up 7.1 percent from June.

The government's inability to collect taxes is one of the most fundamental
problems plaguing the Russian economy.

In the past, few Russians had to declare their incomes to authorities,
especially part-time work they did to supplement income from their official,
salaried jobs. Companies likewise have tended to underreport earnings to avoid
high tax payments.

Improved tax collection was a condition set by the International Monetary Fund
for a $22.6 billion bailout package for Russia.

IMF officials are due in Moscow on Friday to review the package, which some
fear may not be big enough to lift Russia out of its financial crisis.

Stanley Fischer, the IMF's first deputy managing director, will discuss the
government's implementation of an agreement to make deep spending cuts and
boost tax collections before the IMF disburses a $4.3 billion loan installment
in September, Interfax said.

The government appointed former Finance Minister Boris Fyodorov as chief tax
collector in May. He has threatened to seize the assets of companies that owe
the government.

The government on Thursday granted the gas monopoly Gazprom, Russia's largest
company, a two-month extension to pay its bill so the two sides can figure out
how much is owed, Energy Minister Sergei Generalov said.

The government says Gazprom owes $1.9 billion in unpaid taxes, while Gazprom
says various government agencies actually owe it $2 billion.

Zadornov also said the government will not borrow on financial markets until
the end of October and said the government will sell its stakes in a number of
large companies before the end of the year.

That includes a 25 percent stake in the telecommunications holding company
Svyazinvest, stakes in Gazprom and the oil holding company, Lukoil. Analysts
say the government could raise as much as $2 billion from the sales.

Despite lingering speculation the government may not be able to avoid
devaluing the ruble, a senior Central Bank official reiterated the bank will
continue to support the currency.

``We don't consider devaluation an instrument of economic policy,'' said
Sergei Alexashenko. ``It would bring about more damage than benefits.''

Both the Russian stock market and ruble closed higher Thursday after Prime
Minister Sergei Kiriyenko met with foreign investors to explain government
efforts to stabilize the economy.



MOSCOW, JULY 30 (from RIA Novosti's Yuri Alexeyev) -
Russians have only snatches of information about their rights
and duties two years after the country joined the Council of
Europe--just as they were twenty or thirty years ago, behind the
Iron Curtain, prominent rights activists said to a news
conference. These were Alexei Simonov, Glasnost Defence
Foundation president, and Iosif Dzialoshinsky, president of the
Commission for Free Access to Information.
The police and security are trampling on the first shoots
of democracy all over the country--suffice it to mention the
long illegal detention of army journalist Grigori Pasko and
other blatant instances of persecution, said Alexei Simonov.
Iosif Dzialoshinsky pointed out "monstrous" relations
between the judiciary and the mass media, in which members of
the legal professions "do not care even to mask their hatred for
newsmen". Big and small civil servants are out to usurp access
to information, he warned.
U.K. ambassadorial officers, who also took part in the news
conference, were optimistic, on the contrary, as they stressed
Russia's "progress toward human rights". In particular, Samuel
Salvadurrey enthusiastically mentioned the Convention on Human
Rights ratified by the Russian parliament, and predicted other
hopeful developments.
Clair Hughes, another diplomat, announced the decision for
a British governmental grant to Russia's National Press
Institute for a project, "Russia in the Council of Europe: What
Do Russians Know About It?". The 25,000 pounds--US$40,000 --will
help the Russian press and rights activists to inform the public
about universally established legal norms for free access to
information, and their implementation. The grant will also
prompt Russian authorities to accept European standards of
public information in their routine, said Ms. Hughes. 


From: Roberta Manning <>
Subject: Yeltsin's Russia
Date: Thu, 30 Jul 1998 

I want to alert you to the Financial Times of London which has had some 
interesting articles on Russia. See the article on July 28, 1998 
"Deputies seek to impeach Yeltsin." Everyone was talking about this 
sort of thing. Evidently the upper house asked Yel'tsin to resign
in May (an event not fit to print here) and everyday some former 
advisor of his came out in the press against him. There are rumors in 
Europe (reported in the staid FT some time around July 9-11) that the 
Yel'tsin on TV and performing the rites of office is an ACTOR hired for 
that purpose and that no one knows where the real Yeltsin is.

My future son-in-law who trades foreign currency for Goldman Sacks in 
London said that the Russian currency is expected to fail, despite the 
IMF bailout and might bring the entire international financial order
down with it. So much for leaving an utter incompetent in charge of a 
major country for so long. Anyway this is axiomatic among currency 
traders now.

As for me, I was appalled by the police atmosphere of Moscow (but 
fortunately not the lesser cities). Yeltsin's Russia is one of the 
worse police states around. The militia was everywhere checking IDs
of males (but leaving females alone-- but then its NKVD predecessor in 
the 30s also went after men more than women). Young guys in their 
twenties especially with dark completions, were constantly being 
stopped and asked for their passports. I saw at least two badly beaten 
young men about 20 in the hands of the militia, being treated in ways 
that made you think that it was the militia that did them in. One kid 
looked like the famous poster of the Big Bust at Columbia in 1968 and 
may have been in a demonstration on Red Square since the Square was 
closed off to everyone at this time; the other kid was beaten worse 
than anything I have ever seen even on US TV which is saying a lot--he 
was floppy all over and wet (whether from blood or urine or both I 
could not tell. The militia dragged him out of the metro car next to 
mine in the Kievskii vogzal . The militia all carried small automatic 
hand machine guns, even the ones in some of the archives (!) The 
guards at GARF/RGAE were particularly obnoxious to academics and 
archive workers and carried these guns in their hands while checking 
IDs. A former US military man told me that these pistols were as 
inaccurate as hell and would get more civilans than crooks, because 
they sprayed wide.

I chanced by accident on the residence of the parliamentarians in the 
old Hotel National, and it was surrounded by nervous militiamen and FSB 
guys in sun glasses and fatigues with celluar phones and really big 
weapons (that looked like artillery guns) inside vans and station 
wagons backed in around the building with their backs open to the 
building. The weapons were pointed towards the parliamentarians, so it 
did not look to me as if these guys were there to defend the 
Parliament. Quite the opposite. It was very scary and I got out of 
there fast. The police were nowhere so obvious in Communist Russia as 
they are in "democratic" Russia. This is what comes of getting rid of 
the entire ancien regime except the crooks and KGB.

Anyway check the Financial Times for stuff we don't get in the US & it 
is as "establishment" and conservative as heck so makes a great source 
to quote in official reports. 
Best wishes,
Roberta Manning


Growing Split in 'Ruling Class' Seen 

Obshchaya Gazeta
27 July 1998
[translation for personal use only]
Article by Anatoliy Kostyukov: "The Bureaucracy and the
Bourgeoisie: End of a Romance"

The government of Sergey Kiriyenko has already fully convinced
the nation's business leaders that the "young technocrats" are no
better than the "young reformers." That is, they are just as
obsessed with the idea of restoring the leading role of the state in
the economy, and their minds can be changed only by removal from
government easy chairs. The oligarchy is openly bringing pressure
on an aged president, demanding that he hasten to correct his
glaring personnel error. If Yeltsin had let the stable Chernomyrdin
alone, the oligarchs believe, the era of untroubled coexistence of
the bureaucracy and the business elite would go on and on like an
endless African summer. But Kiriyenko has driven power and capital
into an acute confrontation, and no one knows how it will
The conflict inside the ruling class has reached this kind of
frenzy for the first time. In any case, the newspapers published by
the oligarchs have never before suggested that the President
disappear together with his prime minister. But this is exactly why
it is so difficult to agree with the idea that allegedly everything
occurred because of one personnel error. Opponents in an obvious
way flatter the novice premier by attributing to him an ability to
incite such a profound conflict. He is not equal to this
The crisis in the relations being observed today between the
authorities and business cannot be reduced to a struggle of persons
and private ambitions. The scale of events is significantly larger.
Russia is going through a process of decay of the ruling class and
disintegration of the transitional, reformist elite that was formed
for temporary tasks and is historically doomed to a split. As
usual, the reaction of the decay is proceeding with the emission of
energy that is not always used only for peaceful purposes. The
threat of tax repression, blackmail of the President, the hysteria
of bought social and political journalism, supercharging
catastrophism, and the like are emissions of that same energy. They
indicate the intensity of the process, but it is not they that
determine its nature.

Renegades Are Not Born

Market reforms occurred in Russia as a joint enterprise of the
post-Communist bureaucracy and the new rich Russian bourgeoisie.
The other strata and groups of the population were either caught up
in or participated in the general process in the capacity of
historical victims. Inasmuch as the main reform action was the
division of state property, the alliance of state officials and
entrepreneurs was a necessary condition for success. They could not
succeed without each other. Indeed, they did not want to, for both
got almost equal material profits from this partnership. In the
years 1991-1996, when the massive privatization of financial
resources of the state and profitable industries was going on, the
differences in the social functions of the state bureaucracy and the
emerging bourgeoisie were almost imperceptible. Figuratively
speaking, a bourgeois bureaucracy and a state bourgeoisie were
formed in the country that also constituted the ruling class of
contemporary Russia and its highest estate.
Both the official for whom a hard currency account appeared in
the bank, and the entrepreneur who opened this bank account for him,
were equally afraid of the "recoil of reform." Neither the one nor
the other desired to take on the representative authorities as
partners (especially as controllers over themselves), and they did
not at all want there to be "too much" democracy. Therefore, in
1991, 1993, and 1996 they were on the same side of the barricades,
sincerely fighting for Yeltsin and his Constitution. The overall
political interest gave their mercantile marriage the noble features
of an ideal union. Consciousness of the culpability of the jointly
accomplished privatization was offset by the pride of belonging to
the highest caste, and this gave the alliance a moral unity. 
It seemed that there was no knot tighter than this. The
alliance of power and capital was strong, it solidified into a
monolith, and it was already believed that this block could not be
taken with anything less than dynamite. But suddenly, an indistinct
crackling came from inside the huge block, something began to spark,
started to break through to the outside, and the block shuddered and
began to crumble.
In the chronicle of ideological seeking and striving, this
time was marked by a massive transformation of liberalizing
bureaucrats into fierce advocates of a strong state. People who
quite recently treated the state as nothing other than an enemy of
market freedoms and genuine democracy have suddenly begun to praise
it no worse than Zyuganov and Prokhanov. When Chubays and Nemtsov
began to be added to this, one could have thought that the cunning
liberals had decided to disarm the opposition by privatizing its
favorite playthings. But then Chubays's initiative was supported by
Boris Fedorov and Sergey Kiriyenko, deeds followed the slogans, and
it became clear: The ideological apostasy of yesterday's followers
of "liberalism without borders" was capitulation in the face of
harsh reality. In this sense it is especially interesting that the
young Moscow renegades were simultaneously supported by the
prestigious overseas liberals Messrs. Soros, Camdessus, Fischer,
Friedman, and the like. This means that it was also realized across
the ocean that our liberals became renegades not of their own

Necessity Is More Than Desire

Naturally, the love boat crashed against
everyday life. One
day the desire for emancipation and the acquisition of independent
social status was awakened in a bourgeoisie that stood on its own
two feet. To put it crudely, when yesterday's cooperator, after
privatizing "a little of the state budget" (or oil), became a banker
(or an oil industrialist), and began to make money without the help
of an official, he no longer wanted to divide the spoils with him.
Moreover, he began to despise the official, order him about, and
demand that he run the government according to his
The root of evil is not that money overshadows friendship. It
is simply that the free lunch has ended--that is the whole secret.
To this day everything that represented a commercial interest has
been divided up, and that which remains cannot be given away even
for free--no one will take it (see the story of the auctioning of
Rosneft). Accordingly, the alliance of bureaucrats and the
bourgeoisie, which was established on the basis of sharing, lost its
meaning. The recent partners no longer have a Common Cause, and
there is no uniting task. But at the same time, the General Fear of
Communist revenge has passed, and the moral emotional experience of
General Culpability has weakened. The romance is over.
And here the bureaucracy suddenly realized that it had been
"abandoned." The scoundrel of a roommate left the room cleaned out,
without even a crumb of bread, with a cold radiator, a burned-out
light bulb, with miners, doctors, and defense industry workers
shouting under the windows, and with debt bills for $200 billion.
How is one to live now?
In despair the state appeals to the disloyal partner,
attempting to involve him in the General Responsibility for the
results of the joint vital activity. Frowning with annoyance, he
turns his pockets inside out: He says that he is also broke. "But
what did you do with what I gave you?" the official asks, growing
furious, and dispatches a landing force of tax collectors to the
offices and lairs of the former comrades-in-arms. But what is left
for him?
No matter how culpable and irresponsible a being the Russian
bureaucrat is, he cannot be completely unconcerned about the fate of
his enterprise, that is, the state. The affairs of this enterprise
are already such that it might as well declare bankruptcy and bring
in outside management. In July, for example, the government expects
to receive R21-22 billion into the federal budget, but to service
the state debt it will be necessary shell out R30 billion.
Moreover, it is necessary somehow to appease the miners, feed the
soldiers and orphans, pay pensions... In the event that it is not
possible to collect money from those who still have it, the
authorities have prepared a plan to shift the economy into a
"mobilization model of development"; in other words, they are
threatening to introduce an emergency economic situation regime,
which not one normal businessman can like in principle.
It did not reach this point under Chernomyrdin, it did so
under Kiriyenko. And it is now understandable why. The civic peace
that reigned in the upper echelons of the Russian elite just a year
ago was maintained by the general expectation that an economic
recovery would start by the end of the Great Division.
Statisticians, it will be recalled, calculated a 0.3 percent annual
growth in the GDP, the illusion appeared of a recovery starting, and
there was hope that tomorrow and the day after tomorrow there would
still be something to share. Incidentally, sociologists noted at
that time: People fear change, people are for stability.
Chernomyrdin and Berezovskiy were also for stability, that is,
together with the people.
When Yeltsin changed the government, people already wanted
change, not stability. Since October the country has been dragged
into the crater of a financial crisis, and the illusion of economic
recovery changed to a foreboding of inevitable catastrophe. The
crisis shook not only the financial markets of the country--its
tremors jarred the entire edifice of our corrupt capitalism, and the
first thing to happen was that the political foundation of this
wretched structure--that very AO [joint-stock company] for the
division of the national wealth--itself started to collapse.
All the same, it would have collapsed sooner or later, just as
similar political-economic systems in Latin America and Southeast
Asia are collapsing. This does not depend on the subjective will of
one figure or another, but on how many freebies there are. When
they come to an end, the state and business will be compelled to
build their relations on different foundations, and now they have to
create an AO for the accumulation of national wealth. One can
imagine that titanic efforts of Boris Berezovskiy to overthrow the
government of Kiriyenko are crowned with success and that he is
appointed to head the Cabinet of Ministers. So, if Mr. Berezovskiy
proves to be a responsible bureaucrat, he will start doing the very
same thing his humbled predecessor did. One can escape from prison
in Russia, but from poverty and fate--alas. 


Date: Thu, 30 Jul 1998
From: "Jerry F. Hough" <>
Subject: Re: 2289-Secara/Hough

I am not sure that I fully understand Claudiu Secara's comment on 
my comment. I begin with the position that there is a major distinction 
between democracy and constitutional democracy--and that only the latter 
is worth anything. I basically agree with the conventional scholarly 
literature that constitutional democracy rests on a kind of negotiated 
pact (the old literature said social contract) within a pluralist 
elite. I disagree with the New Left wisdom that it rests on some 
small-scale civil society, although the latter is a consequence of it. 
I disagree with the thrust of much of the conventional literature that a 
negotiated pact is something that can occur at almost any time. I think 
that there must be solid elite groups to negotiate and enforce their 
pacts and that in a country like Russia the problem is to create solid 
elites and institutions--not to attack the industrial class, push parties 
to be extreme, ignore trade unions, and play around with meaningless 
civil society groups. That is, I think the American democratization 
program in Russia has been misguided in the extreme.
I am fully conventional in thinking that dictators can be 
philosopher kings, but usually are something else. The obvious 
argument for constitutional democracy is that it is the most reliable 
restraint on a dictator and most likely to get a policy that 
corresponds to public needs. The tragedy of Russia is that the much 
maligned Russian people have had it right on economic reform and real 
democracy would have achieved a good reform. It is hard to 
characterize Yeltsin, but he confirms the conventional wisdom. On the one hand, 
he has created a Zaire or a Nigeria of the late dictator, but without the 
killing of opponents. On the other hand, he has been responsible for 
far more deaths than they. At the policy level, the 1990s and 1930s are 
almost identical in that economic policy was based on the extreme 
ideology of fashionable Westerners and that the resulting number of 
deaths in collectivization and the famine was very similar to the excess 
deaths produced by Yeltsin with the rise in mortality rates. I find it 
morally repulsive that my government and a leader of my party who has put
public health as one of his priorities is the chief cause of that policy and 
doubly offensive that it is using my tax money to bribe the Russians to
institute something as deadly and misguided as collectivization.
Since the early 1980s I have been writing about how I think 
constitutional democracy and a mixed economy should be introduced in 
Russia. I can be justly accused of sometimes playing the familiar game of 
predicting something as a rational-actor scenario as a form of advocacy 
of what should be done, but I think I have been basically consistent.
The problem in 1998 is that this is not 1986 or 1992. The 
leading Western media are all signalling the West's abandonment of Yeltsin, 
and they are implicitly--and not always implicitly--calling for a change 
in leader. I think that they are right and I think one is likely to 
occur before 2000. The question now is what will and should come--and 
in circumstances in which conditions are terrible and an even worse 
outcome is possible although not certain. We are not talking about what 
is ideal or what might have been ideal in Russia, but about what is the 
least of evils, the least dangerous in specific circumstances today.
I have written op-eds for 20 years, and I understand full well 
that the Western press has its rules of the game and its way of speaking 
between the lines that are as complex as those of the Brezhnev press. 
As I read the Western press today, I see the top commentators and 
editorialists taking a position that I take to reflect that of Treasury 
and that I think is misguided. The position, as Kaplan said in the 
Times, is that the trouble with Russian reform is that it has multi-party 
democracy. The Duma and a sick tsar are thwarting a good economic 
reform, and if only we can get a strong tsar and no Duma, all will be all 
right in imposing this good policy. I think that this is profoundly wrong 
both for the interests of the Russian people and of American foreign policy.
If we are going to get Lebed, and that seems to me likely, anyone 
who has read my stuff the last three years knows that I am not 
enthralled. He strikes me as quite unpredictable and possibly quite 
dangerous. He may not be, but he really is unpredictable. I think 
that Yeltsin adopted our economic reform because he and his got money and 
because we legitimated his consolidation of dictatorial rule if he would 
do it. (I have the 1993 quotes in the last chapter of the book Tim Colton 
and I edited on the 1993 election, and it was not a time of glory for 
the Clinton Administration support of democracy.) Whatever criticisms
may be made of our policy, however, we at least correctly read that 
Yeltsin's foreign policy would not be dangerous. It seems to me profoundly 
wrong if we now legitimate Lebed in a consolidation of extreme dicatorial 
power (he even has spoken in April 1996 of the president appointing the Duma) 
and bribe him to do it. Leaving aside the effects in Russia, it is by 
no means certain that we will like a Lebed without any restraints.
My recent comments have had two purposes. First, I have been saying 
that the economic reform we are imposing is as ideological, ineffective, and
deadly as collectivization. Treasury may have an institutional interest in
saying no mistake was made, and all the more so Larry Summers, who wants to 
replace Rubin as he leaves. But Gore apparently retains the old view he held
of Summers when he blocked him as chair of the Council of Advisers in 1993 (see 
Bernstein on this). If Summers does not become Treasury Secretary, 
America has the option of advocating that Russia adopt the American 
experience of 19th and 20th century, not the utopia of Milton Friedman. 
Second, when we deal with Lebed, we should be making our 
conditionality dependent on him trying to move towards constitutionalism, 
not imposing an economic reform that forces him to 
become a Pinochet. This need not be American suburban democracy. The 
Turkish military has one role, and the Indonesian military may move this way. 
The current proposals of the Nigerian military for non-ethnic parties 
is better than what Nigeria had under the last general, and probably 
better than pure democracy. Maintenance of the American democracy of 
the early 1820s for decades would, in my opinion, have been better than 
the full democratization of the 1830s. But I make these points, with 
which others may disagree, simply to make the point that we can 
accommodate Lebed's clear desire for an authoritarian regime by trying to 
push him towards a kind of authoritarian regime that can produce
economic growth and transition to constitutional democracy. Lebed has 
the age and the apparent health that may leave him in power for a long 
time. We should present him with the image of a Solon who institutes a 
transition to democracy (perhaps over decades), not because 
philosopher kings are the best and safest answer, but because if we are 
going to have a king, it is better that he be a Solon than many other 
alternatives. The failure of the French Revolution led to Napoleon, the 
failure of the German democratic revolution to Hitler.
Lebed has seen a dictator in Brezhnev with his own eyes, 
he has seen a dictator in Yeltsin, he has seen the authoritarianism 
within the military and he himself in August 1991 was very obsessed with 
chain of command, he has seen a democrat in Gorbachev who thought democracy
was not a state, but a withering away of the state. He has no model in his
own experience to guide him on how to act as president of Russia in a 
proper way. He is getting all the wrong advice from the West, and at a
minimum the West and the Russian intellectuals should show him alternatives
and their advantages for a man for whom honor (chest) for himself and his
country seem genuinely important.

P.S. One of my research techniques is to spend a couple of hours a day 
going through day after day of the press of the period on which I am 
writing not only for information, but for the background of what was 
going on. I naturally started with Financial Times, which clearly is 
the best on economic reform in Russia, but currently I have been going 
through Wall Street Journal to see what is there. The IMF position that 
the US had to raise interest rates in 1995 to strengthen the dollar and 
keep inflation down is covered better in Financial Times, but the Wall Street 
Journal has it on April 19, 1995. A good article on the IMF head, 
Michel Camdessus, is found in the Wall Street Journal of June 9, 1995.


International Herald Tribune
July 31, 1998
[for personal use only]
>From Old Russia to New, or Whites Finally Beat Reds
By Konstantin Eggert 
The writer, chief foreign correspondent for Izvestia, contributed this 
comment to the International Herald Tribune.

MOSCOW - Watching the televised coverage of the burial of Russia's 
imperial family and its retinue in St. Petersburg's Peter and Paul 
Cathedral, I felt like an imperial subject, not a citizen, for the first 
time in my life. It was a very special feeling.
The same day I met up with a group of colleagues who were drinking a 
spontaneous toast to ''their majesties.'' I am sure many people across 
Russia had similar feelings.

I would venture to sum them up: After 80 years, the decisive battle of 
the country's devastating civil war was finally won by the Whites.

The post-Communist world has seen quite a few reburials since the late 
1980s, when the leader of Hungary's failed 1956 uprising, Imre Nagy, was 
given a state funeral in Budapest. But no event has unleashed such fiery 
passions, highlighted so many mystical coincidences and created so much 
controversy as what has been called the story of the ''Yekaterinburg 

Fierce debates about Czar Nicholas II and his reign have testified to 
the fact that the civil war in Russia is still being fought in the 
hearts and minds of a country trying to come to grips with its past.

The battle lines of today, as opposed to those in 1918-1922, are drawn 
between those who strive to pronounce a moral judgment on 74 years of 
Communist rule and those who advocate the so-called indivisibility of 
history - who object to attempts to separate the sheep from the wolves.

The former, a modern equivalent of the Whites, are prepared to say all 
sorts of unpleasant truths to the Russians about their complacency and 
acquiescence to the Communist regime, and call for national repentance.

The latter fume about the need to stop painting Soviet history only in 
black, and claim that the people are tired of revelations and tragedies.

In making that argument, these modern Reds defend their own life 
stories. Most of Russia's elite today has its roots - and the 
foundations of its wealth and power - firmly in Communist times. These 
people do not easily accept the idea of repentance.

Despite the talk about the funeral's symbolizing national 
reconciliation, it in fact had nothing to do with it. There is no 
reconciliation in sight. The Orthodox Church has refused to recognize 
the remains of the czar and his family as genuine. The Communists are 
still bragging about eliminating Nicholas the Bloody.

But even if a miracle had happened and Gennadi Zyuganov and the entire 
Communist faction in the Duma had joined the funeral procession, it 
would have testified only to one thing - the ultimate defeat of those 
who murdered the emperor in the dirty cellar 80 years ago. Only a few 
courageous people are ready to admit it.

Among them is President Boris Yeltsin. Whether he made the decision to 
attend purely from political considerations or on moral grounds is, in 
the end, not important. The important thing is that the world was 
watching a former nonvoting Politburo member paying final tribute to 
those who were the ultimate enemies of the Communist regime.

By so doing, not only did Mr. Yeltsin bravely face his own past, but - 
whether he intended it or not - he made a final judgment on the Soviet 

New Russia aspires to succeed not the Soviet Union but the pre-1917 
country. This is the message that the president sent to his fellow 
citizens and to the world. The absence of Mikhail Gorbachev, the last 
head of the state that in fact murdered the Romanovs, only highlighted 
this point.

The Whites have won not only a moral but a political victory. Nothing 
could have been a more appropriate postscript to Czar Nicholas's tragic 


Gloves off as Russia central bank defends rouble

MOSCOW, July 30 (Reuters) - Sergei Dubinin, the central bank chief who
recently urged Russians to ``spit in the eye'' of anyone calling for
devaluation, mounted another no-holds-barred defence of his stable rouble
policy on Thursday. 

``Pure lies,'' he told a news conference when asked about comments by
economist Andrei Illarionov, a former government adviser, that the government
was technically bankrupt and would have to abandon the rouble's current peg to
the dollar. 

Warming to his theme, Dubinin, a bulky former academic who sports a thick
professorial beard, went on to say the widely respected Illarionov either did
``not understand how the market works or is deliberately misleading people.'' 

The government is deeply attached to the relatively stable rouble, one of its
few concrete economic successes from the painful years of post-communist
reform. The currency has been under pressure recently as investors have cut
holdings in Russia, fearing a deepening of the present financial crisis. 

Dubinin's very public outburst, illustrating the strength of feeling about the
rouble, ended with a highly personal attack on Illarionov's motives, for which
he drew on what Dubinin himself acknowledged were merely ``rumours'' of
dubious veracity. 

Illarionov, a leading adviser to the reform cabinets of the early 1990s, was
not immediately available for comment. 


Moscow Times
July 31, 1998 
MEDIA WATCH: Not All Media Are Whores 
By Leonid Bershidsky
Special to The Moscow Times

Re-reading former New York Times Moscow correspondent Hedrick Smith's 
remarkable 1976 book, "The Russians," I ran into a stunningly relevant 
passage from Smith's interview with Valentin Turchin, a dissident 
scientist and close friend of Andrei Sakharov. "Homo Sovieticus is like 
the prostitute who believes that all women are whores because she is," 
Turchin told the American reporter at the height of the Soviet 
authorities' anti-Sakharov campaign, which was rather effective in 
turning many intellectuals against Russia's most famous dissident. 
"Soviet man believes that the whole world is divided into parties and 
that every man is a member of one party or another, and there is no real 
honesty: People can travel to the West and hear Western radio broadcasts 
and it makes no difference, as long as there is this pervasive cynicism 
that it is just the other side speaking." 

The reason I find this highly relevant is that the cynicism has been 
revived in the way an intellectual, or merely an informed person, reads 
today's press and watches television broadcasts. The question an 
informed reader asks first is not whether a certain story is true, but 
whom it benefits to have it printed. 

You do feel smart and informed when you analyze the news in this way. 
I've resorted to this kind of analysis quite often myself, and I'm 
willing to stand by my views on how Boris Berezovsky, Vladimir Gusinsky 
or Gazprom determine the editorial policies of the publications in which 
they own interests. In specific situations, like Berezovsky's war 
against Anatoly Chubais or Gazprom's counterattack on Sergei Kiriyenko's 
government, these media have been used as PR tools rather than news 

But you could go too far judging the Russian media as a whole and 
individual journalists on the basis of what Turchin describes as Homo 
Sovieticus' cynical outlook. In the media journal Sreda, financed by 
TACIS, I saw an article claiming Independent Media, the publishers of 
The Moscow Times and my newspaper, Kapital, "had its own skeletons in 
the closet" because of the company's relationship with its "large 
shareholder," Bank Menatep. Sreda could give no examples of stories 
suppressed to please Menatep or campaigns waged by Independent Media 
publications to help Menatep's causes. The assumption about the 
"skeletons" was based solely on some "apocryphal stories" told by an 
unidentified source "close to The Moscow Times." You don't need facts 
when you think everyone around you is a whore. I don't buy this 

Similarly, I could never buy the line about Kommersant Daily being the 
mouthpiece of SBS-AGRO Bank. Many media analysts -- including Western 
ones -- have assumed this from the newspaper's "special relationship" 
with the bank, which gave Kommersant cheap loans. Indeed, Kommersant has 
at times avoided publishing unfavorable stories about banks that have 
loaned it money. In one instance, Kommersant mentioned "one large Moscow 
bank" in an unpleasant context because it was apparently bound by a 
promise not to say the bank's name in connection with any scandals. But 
the hint was broad enough to be understood by an informed reader. 
Kommersant has never been anyone's PR tool -- it has just tried to stay 
afloat in today's marketplace by compromising on some nonessential 

I am even willing, to some extent, to go along with what journalists at 
Uneximbank-owned daily Russky Telegraf say about their toeing that 
bank's line. Unexim, closely allied to Chubais and other pro-Western 
figures in the Russian establishment, uses the paper to propagate 
liberal economic views and close ties with the West. The journalists say 
they don't need to prostitute themselves to do this: They agree with the 
owners' views. That may be the case with some of the Telegraf 
journalists -- namely, Maxim Sokolov, who has not changed the tone or 
direction of his acerbic comments since he wrote them for Kommersant. He 
accepts Unexim's line because he agrees with it, not because it pays. 

Investigative journalist Alexander Minkin is right when he says it does 
not really matter who gives him material for his exposés of corrupt 
officials as long as his stories are true. One can accuse Minkin of 
being a tool of his hidden sources, but I would disagree with anyone who 
called Minkin someone's shill. 

Not everyone in the Russian news business is a whore, though the 
Berezovskys of this world would love it if they were. I have a problem 
with people calling journalism "the second most ancient profession" 
simply because they feel like it. This has to be judged on a 
case-by-case basis. That, I guess, is the message from old dissident 
Valentin Turchin to modern newspaper readers. 


Berezovskiy: Russia has 'Shortage of Political Culture' 

Moscow, July 29 (Interfax) -- There is no need for reading
between-the-lines as far as the recent statement on Chechnya by four
Russian politicians is concerned, CIS Executive Secretary Boris Berezovskiy
told Interfax by telephone Wednesday [29 July].
The statement "contains only what is written in it," he said.
He said all speculation concerning this statement, signed by
Berezovskiy himself, former Prime Minister Viktor Chernomyrdin, Tatar
President Mintimer Shaimiyev and Krasnoyarsk region Governor Aleksandr
Lebed, is explained by "a shortage of political culture."
"The shortage of political culture has been our country's problem
since the Soviet era, when people had to read between the lines,"
Berezovskiy said. In this case they are trying to find in the statement
not what is actually said there but what they would like to see," he added.
"The letter expresses specific serious concern over developments in
southern Russia and nothing else," Berezovskiy said. The statement was
signed by people who were directly involved in developments regarding
Chechnya, he said. "But they did not foment the war. They extinguished
it," Berezovskiy said.
"All political conditions were created to settle this conflict at the
time. But these political agreements were not fixed because of neglect
shown by the previous government," he said.
"Chernomyrdin is also partially to blame for this fact, and his
signature on this letter may be seen as a sort of political repentance,"
Berezovskiy said.
He said he hopes the Cabinet led by Sergey Kiriyenko will be a
success. "However, this government does not have the necessary resources
for implementing its decisions," Berezovskiy said.
Asked about the Russian peacekeeping forces in the zone of the
Georgian-Abkhazian conflict, he said the four men's statement concerns not
only the North Caucasus but the Caucasus as a whole.
"Russia should come up with a clear-cut position on the Caucasus.
There is no such position at present. That is why the issue of the Russian
peacekeepers' presence in Georgia is being raised all the time. If we
think that what is happening in Georgia is not important for Russia, let's
just stand by and watch. I personally believe that developments in Georgia
are important for Russia," Berezovskiy said.


Yeltsin fit, Kremlin doctor says

MOSCOW, July 30 (Reuters) - Boris Yeltsin's doctor said the 67-year-old
Russian president, who returned early from holiday on Wednesday to tackle an
economic crisis, is in fine shape. 

``Believe your own eyes,'' Sergei Mironov, head of the presidential medical
centre, told the weekly newspaper Vek in an interview to be published on

``The President of Russia, Boris Nikolayevich Yeltsin, does not hide from the
television cameras and demonstrates his political and administrative activity,
clarity of thought and quickness of intellectual activity,'' Mironov said. 

``If you ask me, can he lift a 200 kg (440-lb) barbell or run a brisk 10 km
(six miles), I would say no, he can't. But if you ask me if his physical
condition permits him to cope with the duties of a president of a great power,
I would say without a doubt, yes it does,'' he said. 

Yeltsin cut short a vacation in Russia's northern lakeland on Wednesday to
return to Moscow. He did not make clear why, though the Kremlin cited poor
weather and the president said he had work to do, sorting out the government's
financial crisis. 

The president's health has often been a political issue. Since being elected
in 1991 he has been known to alternate between periods of high-profile
activity and long disappearances from public view. 

Yeltsin survived heart bypass surgery in 1996 and a bout of pneumonia shortly
afterwards. This year he was briefly incapacitated by what the Kremlin
referred to as ``a cold.'' 

In his recent public appearances, he has seemed to be in reasonable health. 


Rubin lauds Russia govt,sees problems and progress

WASHINGTON, July 30 (Reuters) - U.S. Treasury Secretary Robert Rubin praised
Russia's new reformist government on Thursday and said Russia had made
progress, although problems lie ahead. 

"The government of Russia today is by all measures the best government they
have had since the Soviet Union collapsed in terms of focusing on reforms,"
Rubin told a National Public Radio program. 

"Their government is very much directed toward the kinds of market-oriented
reforms that we think make sense. They do have a lot of problems in their
legislature, in their Duma, which is controlled by people who are not
sympathetic to the reform effort." 

But Rubin also said Russia had made considerable progress since the collapse
of the Soviet Union, privatizing much of the economy and introducing a free

"While it is true that there are enormous problems which need to be dealt
with, it is also true how far they've come," he said. 

Rubin said the United States was committed to working with the international
community and with the International Monetary Fund to help the Russian
government work toward reform and stability. "This is not going to be a quick
and easy process," he said. 

Russia received $4.8 billion last week from a new $11.2 billion loan from the
International Monetary Fund. IMF First Deputy Managing Director Stanley
Fischer is traveling to Moscow this week, seeking reassurance on the
government's ability to carry out its promises. 



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