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Johnson's Russia List


August 7, 1998   
This Date's Issues: 2301    


Johnson's Russia List
7 August 1998

[Note from David Johnson:
Regrets: Occasionally in my rush to e-mailing I have mislabeled
the Moscow Times as the Moscow News. Several observant recipients
have brought this to my attention and I will endeavor to be better.
1. Fred Weir on opposition protests.
2. AFP/Reuters: Fyodorov Blasts Deputies over Lack of Tax Reform. 
Pipeline access cut to oil majors in an effort to collect tax debts. 

3. Joel Hellman: RE Rustomjee/Foreign Advisers in Privatization.
4. AFP: NGOs Say Russia Home to Incurable Strain of TB. 
5. Anthony D’Agostino: Re Goble on Primakov and Gorchakov.
6. Izvestia: Maxim Yusin, SHOULD RUSSIA PROTECT SERBS? We Have Done 
More Than Received with Regard to Balkan Peoples.


8. Joe Walker: Question re Saratov policeman. 
9. Russia Today: Victor Parfenov and Marina Sergeeva, Sowing Nationalist 
Grapes of Wrath.

10. Moscow Times: Leonid Bershidsky, MEDIA WATCH: Looking for Stealth 

11. Nezavisimaya Gazeta: Tatyana KOSHKAREVA and Rustam NARZIKULOV, 
Presidency Appears in the Political Void Again.

12. Reuters: Yeltsin Faces Busy Diplomatic Schedule in Autumn.
13. Dorothy Rosenberg: In Praise of the Soviet Refrigerator. In re: the
Economy discussion.] 


Date: Fri, 07 Aug 1998
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT) -- Russia's powerful Communist Party and trade
unions are calling for a nationwide general strike this autumn
unless the government uses recently-acquired stacks of foreign
aid money to pay millions of workers who have suffered for months
without their wages.
"The government is receiving huge amounts of money in loans
from abroad, which the Russian people will have to pay back one
day, but it is using that money for purposes that are utterly
incomprehensible to the Russian people," says Vyacheslav
Sinyayev, press spokesman for the Union of Labour, the political
wing of the 50-million member Russian Federation of Independent
Trade Unions.
"They say the money is to stabilize the rouble, and to pay
back investors. But the government owes money to millions of
Russian workers who haven't received their salaries in months. We
demand they be paid."
This week the Union of Labour announced it will call an
open-ended general strike within a month if conditions don't soon
improve for Russian workers. For the first time, Mr. Sinyayev
said, the unions will put forward political rather than strictly
economic demands.
"We believe that both the executive and legislative branches
of government are responsible for the crisis. So we demand that
both the President and parliament resign and submit to early
elections," he said. "That is the only democratic way out of this
Russia has been awarded a $22-billion bailout package by the
International Monetary Fund and other Western lending agencies,

aimed at rescuing the government from financial collapse and
preventing devaluation of the beleaguered rouble.
But union leaders complain none of that aid money has been
targeted to reduce the estimated 70-billion roubles (almost $12-
billion) in back wages owed to millions of workers.
More than half of all Russian workers experienced
disruptions in wages last year, and one-in-four went for 3 months
or more without being paid. Experts say the problem has greatly
worsened with this year's financial crisis.
Mr. Sinyayev says that 30-billion roubles (about $5-billion)
of the total debt is owed directly by the government, as back
wages to public sector workers and unpaid bills for goods and
services provided to the state by companies that consequently
cannot afford to pay their employees.
Labour unrest over the issue has been rising for months, and
strikes have involved much more radical tactics than any seen in
the past, such as railroad blockades, hostage-taking and mass
hunger strikes.
Protests have so far been sporadic and localized, but that
could change if the huge central trade unions become involved,
via the recently established Union of Labour.
"The government has broken all its promises to workers over
the past few years," says Mr. Sinyayev. "Finally there is no
option left but all-out protest."
The Communist Party, the country's largest opposition force,
also appealed to Russians to prepare for mass protests this
autumn. A statement issued by the Party's central committee this
week called for a nationwide strike to force "a change of
political course, the resignation of the President and the
formation of a government of popular trust."
There has been little cooperation in the past between the
Communists and the trade unions. Both accuse the other of
collaborating with the governmet and ignoring the workers'
interests. But Mr. Sinyayev said the Union of Labour will accept
Communist help in coming mass protests as long as they don't try
to lead.
Andrei Phillipov, spokesman for the Communist Party's
parliamentary caucus, said that striking workers are putting
forward legal demands and therefore must be supported.
"It is the government that is behaving illegally, by
withholding wages, by imposing taxes that have not been approved
by parliament," Mr. Phillipov said. "The government's so-called
stabilization campaign has led the country to the brink of
collapse. We cannot take much more of it."
Mr. Sinyayev said Russian trade union leaders were recently
shocked to read the memoradum signed between the Russian
government and the IMF when the international rescue package was
sealed on July 16.
"That memorandum has never been publicly released in Russia,
but we found it on the Internet," he says. "We read there that
the Russian government has pledged to slash all the social
benefits and labour protections it has repeatedly promised us it
will preserve. It is a terrible betrayal."
The concessions Mr. Sinyayev says the Russian government has
made to international financial agencies include sharp reductions
in pensions, removal of subsidies for health and child care, and

introduction of a new labour code that eliminates most provisions
of job security and workers' rights. 


Fyodorov Blasts Deputies over Lack of Tax Reform 
Pipeline access cut to oil majors in an effort to collect tax debts 
August 7, 1998

MOSCOW -- (Agence France Presse, Reuters) Russia's tax chief Boris Fyodorov
attacked parliament on Friday for blocking efforts to boost tax collection
which are vital to government attempts to turn the economy around and
secure vital IMF financial support. 
Fyodorov said that although tax receipts had increased since he took
over as Russia's top taxman in late May, the improvement was not enough and
risked undermining efforts to rescue the country's listing economy. 
The government had raised 12.1 billion rubles ($1.93 billion) in July, a
6 percent increase on June, Fyodorov said, however: "12.1 billion is
probably not enough, though we have an optimistic view of the future." 
"But how successful we are does not just depend on us. In this respect
it is sad that a lot of our proposals ... have not been taken by parliament." 
"The key idea of stimulating tax collection and closing tax loopholes
and the black holes in the Russian economy, all this will remain unchanged,
if radical tax measures, for example on income tax, are not taken," he
"The State Duma (lower house of parliament) is...helping those who are
avoiding taxes, and if this doesn't change it is difficult to pin hopes on
the future," he added. 
Fyodorov added that a massive 75 percent of income tax went unpaid,
accentuating an acute cash shortage that has triggered months of turmoil on
Russia's financial markets and brought the country to the verge of
financial collapse. 
Improved revenue collection and radical reform of Russia's punitive and
outdated tax system are key planks of a tough government austerity package,
devised to restore order to Russia's chaotic finances, ease pressure on the
fragile ruble and soothe the country's battered financial markets. 
The measures are vital if the government is to secure pay outs on a
massive $22.6 billion rescue package for its troubled economy led by the
International Monetary Fund. 
Fyodorov also announced Friday that the government would cut access to
export pipelines to oil companies SIDANKO and Onako for failure to pay all
Asked whether the decision to cut SIDANKO's and Onako's pipeline access
had already been taken, Fyodorov said: "Yes, such a decision has been taken." 
A Fuel and Energy Ministry spokesman told Reuters the decision applied
to August exports only. 
"The Interdepartmental Commission on Oil Pipeline and Terminal Access
decided after the companies failed to pay their debts on Thursday to cut
SIDANKO's exports in August by 223,000 tonnes, and Onako's, by 37,000
tonnes," Sergei Slesarev told Reuters. 
"Further steps will depend on their payments," he added. 
Fyodorov said he believed SIDANKO had good management and could cover
its debts. 
"But with Onako things are really bad. It needs not only cuts from
export pipelines, but a new management," he said. 
The state tax service on Thursday ordered the seizure of assets in
SIDANKO, Onako and Eastern Oil for nonpayment of taxes. 

The service said SIDANKO owed the state 737.8 million rubles and Onako
214.5 million. 


From: (Joel Hellman)
Subject: RE: Rustomjee/Foreign Advisers in Privatization
Date: Fri, 7 Aug 1998

Adil Rustomjee suggested in his contribution to the DJL that the
person qualified to write about the role of Western advisers in the
Russian privatisation program should have "the technical acumen of a
Milton Friedman, the long historical sweep of a Jim Billington, ... the
aloofness of a Padma Desai ... [and] substantial intellectual
integrity." Given that his "humble" suggestion of a research topic
revealed quite clearly that he has already reached his conclusions, Mr.
Rustomjee must assume that he possesses such qualities. I would suggest
that before he undertakes such a task, he adopt a little less aloofness
and a lot more intellectual integrity.

Joel Hellman


NGOs Say Russia Home to Incurable Strain of TB 
August 6, 1998

MOSCOW -- (Agence France Presse) Russia is a breeding ground for a "new
incurable form of tuberculosis," international humanitarian and medical
agencies warned in a letter to President Boris Yeltsin. 
Interfax news agency reported Thursday that three agencies wrote a joint
letter informing Yeltsin that a strain of the fatal disease that is
resistant to medicine had reached dangerous levels in Russia, particularly
in prisons. 
The Belgian branch of Medecins Sans Frontiere (MSF), the British health
body Merlin and the New York-based Public Health Research Institute said
the unprecedented spread of TB was linked to unhealthy treatments and
incorrect use of antibiotics. 
Cases of tuberculosis rose from 7.7 in every 10,000 people in 1990 to
17.7 by 1996. 
Among prisoners, rates are 50 times higher, the letter said. Of the
15,000 to 20,000 Russians who currently have the resistant strain,
two-thirds are in prison. 


Date: Thu, 06 Aug 1998
From: Anthony D’Agostino <>
Subject: Re Goble on Primakov and Gorchakov

Paul Goble’s acute piece on the recent article of Primakov in
International Affairs should be noted well by all. Goble shows how
Primakov consciously patterns his actions on Prince Gorchakov and the
foreign policy of Imperial Russia in the reign of Alexander the second. I
would just like to add a short footnote.
Prince Gorchakov’s policy was called “recueillement” after his famous
post-Crimea remark to the effect that “La Russie ne boude pas, la Russie se
recueille” (Russia is not sulking, she is gathering her strength). Britain
and France, the two great imperial rivals of the Napoleonic era, were
natural antagonists. Russia had been previously committed to a Holy
Alliance with Austria to uphold the status quo. Only Russian ambitions at
the Dardenelles had frightened Britain, France, and Austria into an
unlikely coalition against her. But if Russia retired from Europe, left
Napoleon the Third a free hand, she could complete her work of internal
consolidation and leave the others to their quarrels, in which she could
intervene to effect at a later date.
Gorchakov’s Recueillement has long been a staple of Soviet foreign
policy thought. I tried to trace this in the first chapter of my
Gorbachev’s Revolution, 1985-1991 (Macmillan/NYU), which has just appeared.
Georgii Chicherin, Commissar for Foreign Affairs, 1918-1930, once wrote a
detailed scholarly account of Gorchakov’s foreign policy. Andrei Gromyko
spent many hours reading Gorchakov’s notes and dispatches in the diplomatic
archives. Mikhail Gorbachev, at Foros just prior to his arrest in August
1991, defended his own foreign policy by reference to Gorchakov.

What did Gorchakov actually achieve? Time for the liberation of the
serfs, the beginnings of Russian rail building, absorption of vast tracts
in Central Asia and the Far East, to be sure. But becoming in effect an
accomplice to revisionist schemes in Europe destroyed Austria’s influence,
and contributed to Italian and then German unification, on which Russia
smiled. Gorchakov had said: “I am looking for someone to help me abrogate
the Black Sea Clauses of the Treaty of Paris, and I shall find him.” The
man was Bismarck. Russia thus helped to upset the balance of power for the
next 75 years. 
As for the internal consolidation that Yeltsin’s Russia presently seeks
to achieve by its zollverein strategy, imitating Prussia’s work in forming
a customs union in the German confederation in the 1830s: Goble notes that
these ideas are “anything but reassuring.” They are least reassuring when
we come to consider changes in the power of Russia’s neighbors. We are
reminded that even when Russia sulks, in fact especially when Russia sulks,
she is likely to upset the balance of forces all over Eurasia. 


>From RIA Novosti
August 6, 1998 
We Have Done More Than Received with Regard to Balkan Peoples
By Maxim YUSIN

Now that the Kosovo crisis is at its height Russian
politicians and the public are confronted by an extremely
urgent question whether Moscow should protect Serbs.
To follow the logic of the State Duma deputies who almost
unanimously approve of the resolutions on the unconditional
support for our "Orthodox brothers", the answer is only too
obvious: Russia should, even must, protect the interests of the
Serbs. The same firm opinion permeates the majority of comments
on this subject in the Yugoslav press.
For Serb journalists and analysts it is an axiom that
Russia should help their country. So they ask with indignation
why Moscow is not in a hurry to do so and why it does not
announce its readiness to take up arms and side with its ally
in response to the West's threats. A Yugoslav weekly's
commentator reproachfully reminds "Russian friends" that their
descendants in their time entered the First World War for the
sake of the Serbs.
So, what has happened? Have Russians really changed so
much that, unlike their forefathers, they have forgotten their
sacred duty of an ally?
But let us not hurry with self-torture. If Serb
journalists like historic analogue, we can remind them of some
things that happened in the past.
The attitude of Serbia to Russia was not always
characterised by the degree of selfless loyalty which is
expected from us today. After in 1878 Russia won independence
for Serbs, that Balkan country did not stay very long in the
sphere of St. Petersburg's influence.
The members of the Obrenovic dynasty who ruled in Serbia
for almost a quarter of a century oriented themselves to
Austria-Hungary, one of the main adversaries of the Russian
Empire. The change of priorities happened shortly before the
First World War which Russia entered, as a matter of fact, not
only to defend Serbs but for many other reasons which were no

less serious.
When some people talk of the "traditional friendship"
between Russia and Serbia, one involuntarily wants to ask: When
was this tradition born? The two countries had not been allies
of long standing when the First World War broke out. After the
October 1917 revolution in Russia they were completely isolated
from each other. And I do not think that it is worth
remembering the kind of "strong friendship" which Moscow and
Belgrade established after Josip Broz Tito had quarrelled with
Joseph Stalin.
Not only our inter-state relations were lukewarm. There
was no much warmth at the personal level, either. The majority
of Soviet people did not divide the people of the Socialist
Federal Republic of Yugoslavia into Serbs, Croats or Slovenes.
For us they all--Orthodox Christians, Catholics and
Moslems--were Yugoslavs. Yugoslavs, for their part, who could
tour Europe without a visa and sooner reckoned their own
country as part of the West often looked down on Russians.
Today, when Serbs are experiencing difficulties, when they
have found themselves in complete isolation and set the whole
of Europe against themselves, Belgrade suddenly remembered its
Russian ally. Well, it is a good thing. The bad thing is what
they lay demands on Russia.
The history of Russian-Serb relations irrefutably
testifies to the fact that we owe nothing to the Balkan people.
Russia has done more for the Serbs than it has ever received
from them. That is why in each concrete case our diplomats,
casting all emotions away and not yielding to psychological
pressure, should decide in cool blood how to behave.
During the war in Bosnia and Croatia Moscow did not enter
into conflict with the West for Belgrade's sake and did not
threaten to take "adequate measures" in response to NATO's air
strikes. Russia recognized the independence of Bosnia and
Croatia and voted for sanctions against Yugoslavia in the UN
Security Council. Hardly may anyone reproach us for "betrayal".
It were the Serbs who shelled "the jewel of the Adriatic
Sea"--Dubrovnik, sieged Sarajevo and demolished Srebnitsa. What
is more, they encroached on the fundamental principle of the
inviolability of borders, thereby affecting not only Western
but also Russian interests, because if, for instance, whole
regions were permitted to separate from Croatia today, Chechnya
would refer to this precedent tomorrow. 
Russia is interested in the preservation of the
territorial integrity of the new independent states in the
territory of what used to be the Soviet Union and the Socialist
Federal Republic of Yugoslavia. Otherwise, the Commonwealth of
Independent States, CIS, and the Balkans will be heading to
chaos and sanguine inter-ethnic wars. That is why it was
necessary to stop the Serbs who decided to change borders with
the help of arms.
The Kosovo conflict is a different story. It is for the
first time that the Serbs have found themselves in an unusual
role of fighters for territorial integrity on which Albanians
are encroaching. It is an almost 100% analogue to Chechnya.
Small wonder that the Chechen authorities from the very outset

stated their solidarity with the "Moslem population of Kosovo".
Russia objectively is not interested in Kosovo's
separation from Yugoslavia. That is why the question asked in
the headline to this article can be answered in the
affirmative. Moscow should help Serbs. But the issue at hand is
not that it should fight on Belgrade's side. The idea of Russia
entering into confrontation with the West for the sake of the
Serbs can be born only in inflamed brain. The issue at hand is
diplomatic and political support.
As far as we can judge, this is exactly what our diplomats
have been doing. And not because we owe anything to anyone, but
because it is useful for us in this particular case.



##The State Tax Service has been assigned to achieve
already by November this year the level of tax collection of 15
billion roubles per month, Prime Minister Sergei Kiriyenko has
told today's session of the government. 
The session approved the decision to change the system of
financing the State Tax Service and the respective draft law on
making changes and additions to the federal law on the federal
budget for the current year. Head of the State Tax Service Boris
Fedorov explained that under the draft law the State Tax Service
will get some percentage for its own financing, in case it
provides additional tax revenues for the federal budget. It is
envisaged, that this level will be established at 2.85 per cent
of the total tax collection. 
Prime Minister Sergei Kiriyenko called this decision to be
"absolutely correct." He gave instructions to elaborate a
respective mechanism of encouragement for other federal bodies
responsible for collecting revenues for the budget. 
With a "normal profitability" it is quite possible that
the influx of the population's money into the insurance market
will increase by 5-10 times, said Sergei Kiriyenko. 
The concept of the development of the national insurance
system as a whole has been approved by the government; only
some legal corrections will be made in it.
The Premier believes that it is necessary to include also
the Interior Ministry in this work, because at present the
system of insurance services is used for "illegally paying the
citizens' incomes, in particular, wages." Because of this the
payment of income taxes decreases. This question will be
considered within the framework of the Inter-departmental
Commission for Currency Policy, headed by Vice Premier Viktor
Addressing the session, Interior Minister Sergei Stepashin
said that already this year 533 violations have been registered
in the insurance sphere in the country. The annual amount of
fraud in this sphere makes up 10 percent.
Sergei Kiriyenko also pointed out that it is necessary now
to increase the insurance companies' capitalisation, but "their
number should not be cut, because this may negatively affect 
free rivalry on the market of insurance services."

The Prime Minister said that the general financial
situation in the country has obviously caused a drop in the
influx of capitals into the Russian insurance system. "But this
can be changed," concluded Sergei Kiriyenko. 


From: "Joe Walker" <>
Subject: Question re Saratov policeman
Date: Thu, 6 Aug 1998

Does anyone know how to get a hold of the family of the Saratov
policeman's family who was murdered recently for his efforts to fight


>From Russia Today
August 07, 1998
Sowing Nationalist Grapes of Wrath
by Victor Parfenov and Marina Sergeeva 
Victor Parfenov and Marina Sergeeva are Moscow-based journalists. 

Social conflicts have reached new heights in Russia during the last
several months. The country was swept by a wave of railway blockades,
hunger strikes, and student unrest. The reasons for this eruption were
mostly economic, although describing chronically unpaid salaries as a
purely economic factor would be a gross understatement. Naturally, demands
for money and jobs have swiftly developed into protests against the federal
government and its policies. 
These manifestations of public discontent were promptly hijacked by all
sorts of political extremists who sought to attract the enraged people
under their flags. Vladimir Zhirinovsky's paramilitary "falcons," veterans
of the botched Chechnya campaign led by Gen. Lev Rokhlin, and Victor
Anpilov's neo-Bolsheviks all joined forces to call for a decisive fight
against so-called Jewish and Caucasian plutocrats, post-communist
wheeler-dealers, democrats, and U.S. agents. 
The political agitation is spilling over into street-level violence. In
mid-May, activity in downtown Moscow was brought to a halt by an
Azerbaijani march of protest, triggered by the murder of an Azerbaijani
trader in the Luzhniki flea market. Around the same time, a black U.S.
Embassy employee was beaten up by Moscow skinheads, and a powerful
explosion shattered the walls of the old Moscow synagogue. 
All were symptoms of a resurgent nationalism that spurred concern in
Moscow democratic circles and the mainstream media. Even Vladimir Gusinsky,
the media tycoon and head of the Media-Most company, which owns private
television station NTV as well as numerous popular newspapers and
magazines, warned at a Freedom Forum conference that the next presidential
elections were likely to become a battle with Russian fascism. 
In a joint report on extremist movements in Russia published in 1996,
the Moscow Anti-Fascist Center and the Panorama political research group
compiled a list of some 30 extremist organizations. 
At that time, the Russian National Unity (RNU) movement was named as the
biggest and the best-organized of them, and that is even more true today.
It has called for a reformation of a Russian national state that would
incorporate many of the now-autonomous former republics of the Soviet Union. 
Mixed with fascist ideology, the movement's rhetoric has attracted
around 6,000 hard-core members and some 30,000-50,000 active non-member
supporters. The movement's members carry arms and know how to use them: its
units fought to defend the Supreme Soviet building in Moscow in October 1993. 
Membership in RNU is constantly expanding, as is its influence in
Russia's ruling bodies, most notably in the Interior Ministry and the
police. There has been a visible growth in RNU's presence in Moscow, where
their posters and uniforms -- Italian-style black shirts, a swastika-like
emblem on the left sleeves, and black berets -- are increasingly common. 

According to a high-ranking Kremlin official, up to 10 percent of
Russia's population support RNU implicitly or explicitly, and this
percentage keeps growing. Recent opinion polls revealed widespread
hostility toward non-Russians; some 50 percent of the population identified
themselves as xenophobes, compared with 20 percent in the early 1990s. This
provides a rich wellspring for exploitation by the growing number of
right-wing groups across Russia. 
Other extremist parties and groups (the nationalistic Pamjat, Eduard
Limonov's National-Bolshevik Party, Sergei Baburin's Russian All-Nation
Union) are lagging far behind RNU in both their membership numbers and the
level of their activities. In fact, RNU's membership exceeds that of all
these groups combined. 
As for Zhirinovsky, the enfant terrible of Russian politics is no longer
an immediate threat. Having established firm support among nationalists and
a substantial presence in the Duma, Zhirinovsky is now busy converting his
political capital into cash and using his Liberal Democratic Party (LDPR),
with its 40-strong Duma faction, as a tool. 
The LDPR is widely considered to be among Russia's richest political
parties, and its leaders have been actively involved in selling hardware to
Arab countries, in oil exports, and in arranging domestic and foreign bank
credits. The party has achieved financial self-sufficiency through tens of
millions of dollars of real-estate sales in Moscow and the ownership of
timber mills. 
Zhirinovsky himself was accused of taking bribes in return for throwing
his party's support to Sergei Kiriyenko in his bid to become prime
minister; among the public plums he receiving during the time of Yeltsin's
campaign on Kiriyenko's behalf were a promotion to colonel in the
Russian Army and an honorary doctorate from Moscow University. 
Zhirinovsky has had contacts with Jean-Marie Le Pen dating back to the
early 1990s. In those days, when Zhirinovsky was launching his political
movement, Le Pen's National Front provided logistical support, including
computers and fax machines, in short supply in Moscow at that time. 
Since then, the link has served both leaders by raising the
international profile of their respective organizations. Today, the
financial relationship, at least, seems to have reversed. Zhirinovsky is
now in a position, as one activist of the party put it, "to buy Le Pen and
his movement." 
To remain in the public eye, Zhirinovsky continues his political
escapades, although he and his supporters would have much to lose if the
situation in the country underwent a radical change along the lines that he
publicly proscribes. 
Many deserters from Zhirinovsky's camp claim that his ambition has never
been to become Russia's ruler. Rather, he has considerable interest in
maintaining the status quo and his position within it -- while continuing
to get rich in the process. 
This article was published in cooperation with TRANSITIONS' Article
Reprint Syndicate 


For more articles from The Moscow Times, check out their website at

Moscow Times
August 7, 1998 
MEDIA WATCH: Looking for Stealth Papers 
By Leonid Bershidsky
Special to The Moscow Times

Every week, up to 20 new magazines and newspapers are registered by the
Russian Press Committee. According to various sources, there were between
1,700 and 2,200 magazines in Russia last year, compared to just 765 in
Germany. But where are they all? Not at your local kiosk, and certainly not
at provincial newsstands. 
In Moscow, and especially outside the capital, it is hardly possible to
find a newsstand offering even 100 publications. There are basically the
same old papers and magazines everywhere: the sexy SPID-INFO, the
sensationalist Top Secret, Megapolis Express and Express Gazeta, a bunch of
papers that only publish crossword puzzles or stories about UFOs or black
magic, the cheap weekly magazines published by the German Burda publishing
house, the monthly glossies put out by Independent Media and Hachette
Filippachi. Maybe a couple of dailies here and there, although, even in
Moscow one can say with certainty that only Moskovsky Komsomolets, with its
colorful local coverage, will be at every newsstand. 
There are plenty of highbrow explanations. They say the Moscow press is
too absorbed in the capital's political intrigues and big business deals to
interest local readers. They say only yellow journalism and crosswords have
a chance in a land where entertainment is short and squalor is the norm. 
All of this is true to some extent. 
Yet the main reason for the poverty of the Russian newsstand is more or
less technical -- distribution. 
"As soon as you're 200 or 300 kilometers outside Moscow, in small cities
with a population of 30,000 to 50,000, you will find out that each city
gets about two copies of Megapolis Express and four copies of [Burda's]
Liza, which people pass around till the paper wears out," Dmitry Martynov,
president of the Press Distributors' Association, told a recent conference. 
"You will not find a single copy of [the dailies] Segodnya, Russky
Telegraf, Nezavisimaya Gazeta, Noviye Izvestia." 
Many distributors blame this on publishers. Distribution companies would
like publishers to sell their products to them on the condition that unsold
copies can be returned for a fee. That, the wholesalers say, will allow
them to experiment with new publications and niche products. But publishers
are reluctant to work on these terms, because they are not sure retail
vendors will have enough incentive to sell their publications and because,
by Russian law, they cannot write off unsold copies as a tax-deductible
loss. Some distributors lobby the government so that publishers would get
that right, but they do not have a powerful enough lobby when everyone,
from the military to the hospitals, is clamoring for funds and not getting
Politicians generally dislike the press between elections, and now is a
bad time to ask them for tax concessions. 
In the end, distributors only carry the titles they are sure they can
Since, according to their practical experience (no reliable research
exists), the market is sure to snap up UFOs, crosswords and fashion,
distributors rarely stray from this mix. 
Apart from this, in many cities local post offices charge distributors
huge delivery prices. Since the post office is a monopoly, there is no
fighting its demands. In Arkhangelsk, the local transport monopoly charges
distributors so much for a five-kilometer delivery run from the airport to
the warehouse that the price of every newspaper goes up by 50 kopeks. In
the case of more expensive publications, like glossy magazines, prices can
get so high few people in impoverished provincial cities can afford them. 

Few publishers are wealthy enough to offer distributors the chance to
return unsold copies. Even fewer have the wherewithal to fight the
transport problems and build regional distribution networks. Some do not
even particularly want to distribute their products -- that is the case
with the "inside-the-Beltway" PR "newspapers" financed by major banks and
with the regional dailies published by the local authorities. 
So in practice, out of thousands of titles, the reader gets access to
several dozen, very few of them new ones. Many publishers are devoid of the
chance to compete among themselves in certain niches: niche publications
hardly ever get onto newsstands, unlike in Europe and the States. I mean,
if I made a magazine for the aficionados of, say, old German cars, and
someone else had hit on just such an idea, we would not be able to fight it
out unless we worked out good direct-mailing strategies. 
And what is the use of abundance if the only people who notice it are
registration officials at the Press Committee? 


>From RIA Novosti
Nezavisimaya Gazeta
August 7, 1998
A Strong Contender for the Presidency Appears in the Political Void Again 

On Wednesday Anatoly Chubais went on his regular holiday.
Moscow felt orphaned. Who will rescue the Government and the
President should something happen in the money market or, God
forbid, on Gorbaty Bridge? Who will be to blame for all the
problems and misfortunes caused by the IMF loan, new taxes and
the drought? There is no one to lean on, no one to scold, no
one to fire. 
Little by little Chubais managed to win the minds (it's
too early to speak about the hearts yet) of the Moscow
political and business elite. It's frightening to say this but
in private prominent political leaders and businessmen,
including oligarchs, openly told these correspondents that they
considered Chubais a perfect president for 2000. "If he comes
to the Kremlin, I will probably have to emigrate, but my
children will have a chance to live in a normal Russia," one of
them said.
It is a fact that in a matter of weeks the elite once
again has changed its attitude to Chubais dramatically. The
reason is quite simple. Only an idiot cannot see that Russia
has bogged down in the most profound crisis. And only Chubais
has demonstrated the ability of a political leader specialising
in anti-crisis management. All the rest are absolutely
impotent. Those who have power don't know what to do and even
if they know what to do, they can't achieve their objectives.
Those who claim for power have done nothing to prove that they
can run this vast country efficiently. If next Sunday night
people see on their television screens the popularity rating of
the same old "presidential hopefuls", they will yawn at best or
swear at worst. All these candidates look so lightweight
compared with the gravity of the current political situation.
All managerial experience of Chernomyrdin and Luzhkov is
inextricably linked with the country that no longer exists.
They may admit this or not, but they are people of the gone

era, in which there were no financial crises, stock market
upheavals, capital flight and foreign investor exodus. There
were no businessmen in the old system who do not obey orders
and will not rush to save the economy by a command from above.
It is even more difficult to imagine Alexander Lebed
speaking the same language with stock market brokers or
discussing details of a plan to reform inter-budget relations
with the regions. As for Grigory Yavlinsky, he is fine except
for one thing: he has not a single realistic and successful
large-scale economic project to his credit. To trust him would
mean to trust the elements. But uncertainty and lack of
guarantees is something the elite can no longer tolerate. 
Thus, by using the method of negation, the politicians and
oligarchs seem to have formed the image of a "perfect"
president. Such a president should be a man of great willpower,
a harsh professional in politics and economics. He must know
well the present situation in Russia and the level of
development of the world economy, which this country must go a
long way to achieve. Experience, including bureaucratic
experience, is certainly important, but the most important
thing for a perfect head of state is that he must be utterly
devoid of any falsely understood feelings of social justice,
inherited from Soviet times. He must consider axiomatic the
view that any social policy has a price and that if the country
has meagre budget funds, it must divide them effectively among
all spheres. Otherwise, the government would become prophet who
attempted to feed the entire people with seven loaves of 
Does this portrait remind you anyone? Of course, it is 
Mr. Chubais who has the qualities of this image of an "ideal"
president. No one can question his professionalism as a
politician and economist. He is the only person whom Yeltsin
has invited three times to take charge of the economic sphere
in the Government (the third time, which was just two weeks
ago, Chubais proudly refused to take up the post of first
vice-premier). However, he reappeared in the halls of power
after each humiliating resignation and disgraceful scandal. The
"book scandal" would have ended the political career of any
other politician (in fact, it did so with Alfred Kokh, Maxim
Boiko et al.) but not Chubais'. As for willpower, no Russian
politician can boast victory over the once omnipotent Korzhakov
and his henchmen in an open fight. If you want to know about
Chubais' cruelty, you'd better talk to his staff, who obey
their boss without a murmur. As for social callousness, the
perfect candidate for the presidency has it in excess.
Chubais has taken three and a half years to demonstrate
all these qualities and let them stay in public consciousness.
The Russian elite has come to regard him as a politician of
nationwide calibre rather than a narrow specialist and
technocrat he was in early 1995. His political career started
in March 1995 when his idea of mortgage auctions began to be
translated into practice.
By December 1995 Chubais had allowed the future oligarchs
to divide out very big chunks of state property, ingratiating

himself to them. Afterwards the attitude to Chubais by the
oligarchs, whom he actually created, changed from fondness to
hatred and vice versa. At one time the crust of society knelt
before him, begging him for help, and rose him to power as a
manager of genius, at another time it demanded that this devil
of Russian politics be ground to powder. 
The love of Chubais peaked in July 1996 when he was
literally carried to the President's Office. The acme of hatred
of Chubais was the autumn of 1997, which ended with the "book
scandal". The last time hatred of Chubais turned into love was
last spring when he left the Government and became one of the
Now the elite almost adores the father of Russian
privatisation, twice vice-premier, the world's best finance
minister of 1997 and the IMF's favourite. We should repeat:
that it is the best presidential candidate for 2000 people say
in private so far. "People don't like him," they told us with
ill-concealed regret. "He is unpopular and unelectable. It
would be so good if..."
He is electable, we reply, he is very electable. If the
political and economic situation continues to deteriorate, it
is the coal miners (or maybe nuclear power engineers or
students and pensioners), not the elite, who will carry Chubais
to the Kremlin to the accompaniment of a bravura march. Russia
is yearning for a cruel and strong leader. The weaker and more
helpless the present leaders, the more attractive the image of
Chubais, a vigorous and efficient man who, most importantly,
knows how to achieve real, even though always limited,


Yeltsin Faces Busy Diplomatic Schedule in Autumn 
August 7, 1997

MOSCOW -- (Reuters) President Boris Yeltsin, who is now on holiday in
northwest Russia, has a busy diplomatic schedule this autumn including
meetings with the leaders of the United States, China and Japan, the
Kremlin said on Friday. 
Yeltsin returns to Moscow later this month and is due to host Vietnam's
President Tran Duc Luong on Aug. 25 and Bulgarian President Petar Stoyanov
on Aug. 28 at the Kremlin. 
In early September, the 67-year-old Kremlin chief will hold an informal
"summit without neckties" with China's President Jiang Zemin, intended to
further cement improving ties between the two huge neighbors. 
Other guests to Moscow in September will include U.S. President Bill
Clinton and Italian President Luigi Scalfaro. The dates have not yet been
Yeltsin, who earlier this year visited Italy, Japan and Britain, will
make trips to the former Soviet republics of Ukraine and Kazakhstan in
September, Itar-Tass news agency said. 
In October he plans to visit Uzbekistan and Austria, current holder of
the European Union's rotating presidency, it said. 
Also in the autumn Japan's new Prime Minister Keizo Obuchi will visit
Moscow to help give a boost to efforts to conclude a formal peace treaty
between the two states. Russia and Japan are still at odds over ownership
of four tiny Pacific islands seized by Soviet troops at the end of World
War II. 
On Friday, Yeltsin was continuing his family vacation in the Valdai
lakeland region northwest of Moscow. Earlier this week Yeltsin, a keen
angler, was reported to have had a successful fishing expedition. 

But after several warm, sunny days the weather in Valdai turned gray
and cooler on Friday, Tass said. 
Last week Yeltsin unexpectedly cut short a holiday in the Karelia region
near the Finnish border citing Russia's political and economic problems.
However Russian media said poor weather was also to blame because it had
stopped him from going fishing. 


From: Dorothy Rosenberg (
Date: Fri, 7 Aug 1998 
MIME-Version: 1.0
Content-type: text/plain; charset=US-ASCII
Content-transfer-encoding: 7BIT
Subject: Soviet Refrigerators

In Praise of the Soviet Refrigerator
In re: the Virtual Economy discussion

Now that the list has been made safe for traditional gender
stereotypes, I would like to respond to Ickes, Gaddy and most recently
Kaegi, with a brief empirical observation from the Russian kitchen. 
Kaegi writes that the "classic value-destroying sectors (appliance
makers, tractors, miscellaneous machine-building, etc.) are those that
are at the bottom of capacity utilization, around 8-15%." While Ickes
defines "value destruction" as "production where the value of output
is less than the value of purchased inputs." My Moscow kitchen
contains a couple of these classic "value destroyers." The
refrigerator, for example, is Soviet period production and about 25
years old. I would buy it any day in preference to its
Finnish-produced counterpart in the apartment where I am currently
staying in Helsinki, which although large, hyper-modern and digitally
controlled, freezes the contents of the vegetable drawer while keeping
the beer warm. Ditto the stove, which is elegant and easy to clean,
but unfortunately nearly impossible to cook on. In addition to
managing to keep food cold without freezing the cucumbers, my Soviet
refrigerator has already outlived its planned-obsolescence Western
cousins by more than three generations, is easily and relatively
cheaply repaired (Western parts and labor costs are so high that
replacement is cheaper). The incumbent appears set to chug on into
the next century. I quite agree that Soviet and Eastern European
white goods, or for that matter, Russian tractors, Hungarian buses,
Czech trams, East German railway carriages or Bulgarian fork-lifts,
tended to neglect style. Having used or ridden in or on all of the
above, I failed to observe a radical difference in their function than
that of their run-of-the-mill (let's say Sears equivalent) Western
counterparts. How exactly are we measuring the "value" of outputs and
inputs? And how many times will we have to replace the refrigerator
over 30 years? (Projected refrigerator/freezer life in the US is
currently 7 years -- you might want to read the fine print on your
service contract about what happens after the first 3 years are up).
How this comports with "concealed rising quality" from the
"overestimate of inflation"debate about the CPI, I don't know.
I would also like to draw attention to the much-neglected questions
of demand and market share. All of the Central and Eastern European
economies sustained sharp declines after the disruption of supply and
distribution links following the dissolution of Comecon and all were

flooded with Western consumer goods. Those which have recovered well
(Czech Republic, Slovakia, Hungary and Poland) have done so - at
least according to the December 1997 issue of the World Bank
Transition Newsletter - on the basis of a revival of domestic demand.
Given that at least half of the Russian population is currently
spending virtually its entire income on food and immediate
necessities, there is a significant lack of effective demand for
consumer durables. Where there are the means to pay, the market is
flooded with Western imports (minus Western VAT) and Western
advertising. Finding Russian produced hard goods in Moscow and other
regional centers requires determined searching, making comparative
shopping impossible, and advertising is hardly in the budget of
struggling Russian concerns. These factors should at least be
considered in explaining low capacity utilization before giving over
to the classic cliche.

p.s. This is not a blanket endorsement. Although the blankets are
fine, I'm not planning to buy a Lada. 



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