September 10, 1998   

This Date's Issues: 2360• 2361 •2362•2363

Johnson's Russia List
#2363
10 September 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Premier? What about the rouble? Russians ask.
2. Reuters: Primakov outlined economic ideas in London speech.
3. Ray Smith: The Least Bad Choice.
4. Fred Weir: Gorbachev on Primakov and Yeltsin.
5. Michael Hammerschlag: NON-WAGE SLAVES.
6. Kennan Institute Announcements.
7. Bruce Bean: Primakov and Democracy.
8. Washington Post: Daniel Williams, Russian Crisis Sapping Health 
Care System.
9. Reuters: Russian PM designate faces bewildering options.
10. Reuters: U.S. and Europe cautiously hopeful over Primakov.
11. Reuters: Russian army, police swing behind Primakov.
12. Reuters: Family tragedy has marked Primakov's life.]

*******

#1
Premier? What about the rouble? Russians ask
By Peter Graff

MOSCOW, Sept 10 (Reuters) - Russians had mostly kind words for President Boris
Yeltsin's new choice of prime minister on Thursday, but on Moscow's streets
the chief concern was not the latest government reshuffle but the fate of the
rouble. 

Yeltsin named veteran Foreign Minister Yevgeny Primakov to replace Viktor
Chernomyrdin as his nominee for the premiership on Thursday, three days after
parliament rejected Chernomyrdin for a second time. 

"It's wonderful. It's the best variant that could have been thought up," said
Vadim Litkov, 43, a medical doctor queuing to buy roubles at an exchange point
near Mayakovsky metro station in central Moscow. 

"At last an intelligent person has come to power, someone respected in the
international community. The main thing is that he is intelligent, with a fine
education," he said. "The rouble will now again be five or six to the dollar,
as it should be." 

The rouble, which fell to about 20 to the dollar on Moscow's streets earlier
this week, had already rebounded somewhat before Primakov was nominated and by
Thursday had climbed back to about 13. 

After weeks of dollar shortages, roubles have now become scarce, and
Muscovites are queuing, sometimes for up to an hour, to get their hands on
their own currency. 

With prices rising, banks withholding deposits, many shops across Moscow
already empty or shut and the price of the rouble swinging by as much as 30
percent a day, people are trying to guess hour by hour which currency -- the
rouble or the dollar -- is their best bet. 

The appointment of Primakov adds yet another mystery to what has become a
daily ritual of sifting through tea leaves for omens of the future. 

An elderly woman behind Litkov who overheard his optimistic forecast was
somewhat less sanguine. 

"You think it is going to stay down this time?" she asked. "It" meant the
rouble-dollar exchange rate. 

"Absolutely. They have named a prime minister. That means that's all. Eight.
Nine, maximum," Litkov said. 

"I don't know. I think as soon as they start paying off the debts it will go
back up again," she said. 

Her gloomier view echoed the response of most Western analysts to an economic
plan presented last week by Chernomyrdin which called for printing more money
to pay off state debts. 

But whether that plan would change under Primakov remains unclear. Primakov, a
long time spymaster and diplomat, has never publicly spelled out any remedies
for clearing up Russia's economic mess. For some, that means still more
uncertainty. 

Ira, a 35-year-old shop assistant busy marking up prices on imported sausage
and fruit juices at her prefabricated kiosk next to Moscow's Kiev railway
station, said: "I can't say I like Primakov much. He's a KGB man. Other than
that, I don't know much about him." 

Ilya Nikiforov, 24, a trader of sweets and chocolates enjoying a rare sunny
Moscow day to play a game of chess with a friend, agreed. 

"What do I know about Primakov? I've never been over to his house. He'll start
to take action, then we'll know." 

"For me personally, it is neither here nor there who will be prime minister.
The economic situation does not depend on specific individuals," he said. 

"I know this. If the situation does not stabilise, there is going to be a
famine here, real hunger this winter, because nobody can import anything." 

"The main thing is that the dollar not rise." 

******

#2
Primakov outlined economic ideas in London speech
By Paul Taylor

LONDON, Sept 10 (Reuters) - Russia's new Prime Minister-designate, Yevgeny
Primakov, outlined his economic philosophy in a speech in London in June,
saying Moscow had concentrated too much on financial stabilisation and not
enough on economic growth. 

His remarks to Britain's Royal Institute of International Affairs on June
25, long before anyone mentioned him as a possible head of government, may
offer some indication of the kind of policies he might pursue. 

In his address, the veteran foreign minister said Russia should take a
lesson from the New Deal programme adopted by the United States during the
Great Depression of the 1930s. 

Primakov, who has a Soviet-era doctorate in economics and headed a liberal
economic research institute, ascribed the Russian financial crisis to
domestic policy errors as well as the knock-on effects of the Asian
financial crisis and a drastic fall in oil and metals prices. 

``We didn't pay enough attention to economic growth because we were focused
on macroeconomic financial stability at the request of the IMF
(International Monetary Fund),'' he said. 

The solution was to strengthen the role of the state, not by a return to
central planning but by framing tax and privatisation policies to promote
economic growth. 

``There is no question of returning to the past,'' he said, stating that 70
percent of Russian gross domestic product was now produced in the private
sector. 

``But we can learn from the United States. During the process of recovery
from the Great Depression, (President Franklin D.) Roosevelt took some state
measures, tax measures that benefited the development of industry,''
Primakov said. ``These are the areas on which we plan to focus.'' 

He said his aim was for an open Russian economy to be a fully fledged
partner in the world economy, not just an exporter of commodities. 

He was speaking before last month's stock market collapse and decision
effectively to devalue the rouble, which led to the Russian currency losing
some 60 percent of its value against the U.S. unit. 

Primakov said in June that Moscow should pay more attention to structural
reforms and make the oil and gas sector the main focus of its privatisation
and taxation policy. 

``Many people believe that stabilisation is the ultimate purpose rather than
the condition for production growth,'' he said, arguing that Russia had
mistakenly attracted short-term portfolio investment in state bonds rather
than real foreign direct investment in manufacturing and services. 

``When the Asian crisis engulfed such strong countries as Japan and South
Korea, many of those who had invested in Russian state bonds started to plug
their own (financial) loopholes by taking money from Russia, not from
Britain or the United States.'' 

The resultant drain in funds had triggered serious instability in the
Russian stock market. 

In the remarks, Primakov expressed understanding for striking miners and
other unpaid workers. 

``There is no sign that these social upheavals are intended to return to
central planning. They are simply demanding that wages be paid on time, they
are condemning the inefficiency of the administration, they are demanding
the replacement of corrupt officials,'' he said. 

*******

#3
Subject: The Least Bad Choice
Date: Thu, 10 Sep 98
From: ray.smith@ndf.org (Ray Smith)

I have been feeling pretty pessimistic about Russia's future in the past 
couple of months, but the nomination of Primakov suggests that, perhaps, 
the least bad scenario has started to play itself out. I assume that 
Yeltsin has been told that he has to go, that he is too ill to continue 
to try to run the country in its current difficulties. That message was 
delivered not just by the Duma, but by the regional leadership (including 
Lebed), Luzhkov, and Chernomyrdin. The military and security apparatus 
agreed. Once it was decided that Yeltsin would step down, the decision 
of who would be Prime Minister when he did so assumed primary importance 
to the presidential contenders. None of them could afford to have a 
significant rival as PM during the period when new elections were being 
organized. Primakov was a choice Lebed, Luzhkov and Chernomyrdin could 
live with, and one the Duma could accept. 

Soon after Primakov is confirmed, Yeltsin will step down, as the 
Constitution provides. Primakov will organize elections, which will be 
won, presumably, by either Luzhkov or Lebed. (Unless Primakov, who is 
pretty wily, can figure a way to parlay his position into a shot at the 
Presidency. But that is doubtful.) The new president will have 
legitimacy, energy and authority. If he uses it to impose some order on 
Russian society, its citizens will breathe a great sigh of relief. 
Hopefully, he will be authoritative, without being authoritarian, and he 
will keep the society open to the rest of the world. 

That is the best, and most optimistic scenario I can come up with. All 
of the others get very ugly. There are no economic or fiscal magic 
bullets to solve Russia's problems. The debate over them, however 
well-intentioned, stems from a fundamental misunderstanding of the 
problem. Russia right now is a society without rules or laws. It is the 
Nigeria of the 90s. There are no economic policies that will produce a 
healthy economy in such a society. 

******

#4
From: fweir@rex.iasnet.ru
Date: Thu, 10 Sep 1998 17:36:34 (MSK)
Subject: Gorbachev on Primakov and Yeltsin

Hi David. Mikhail Gorbachev happened to be at a press
conference today, a joint Russian-Canadian academic project on
capital flight, and he offered his remarks on Primakov. For the
record, here they are, Gorbachev on Primakov and Yeltsin. Best
regards, Fred.

Question: What do you think about Primakov's appointment?
Gorbachev: In the current situation he is the best
candidate. Primakov is a moderate person who has no extreme views
of either liberal or orthodox variety. He's a man of broad
outlook and culture, and he is well-known around the world. The
politicians before him promised a lot to people but delivered
nothing. Now he's been given the job of saving Russia from the
consequences of their adventurism. His predecessors brought
Russia to collapse by trying to make the leap to heaven in one
jump. Primakov's task is very hard, but he can do it because he
has the support of the people. It's not like Yeltsin, who has
less than 10 per cent popularity; it's not like Zyuganov, who has
20 per cent of mainly old and orthodox people. Primakov has
really wide support. He will fight for the interests of Russia
because he is a man of principle. He has been able to solve many
of Russia's foreign policy problems and set the Foreign Ministry
in order; what he did for the Foreign Ministry, he can do for
Russia.
Question: What do you think of Yeltsin's position now?
Gorbachev: Yeltsin is politically, morally and physically
finished. Changes are coming and he should leave. But there are
two ways he can go: he can be pushed, or he can draw the
necessary conclusions himself and take the appropriate steps.
Appointing Primakov was a very good step. The next step would be
to schedule emergency elections for a new president. A president
has reached the end of his rope when he has less than 10 per cent
popular support, as Yeltsin has today. Let the country have a
leader who has the support of the people. 

******

#5
From: "michael hammerschlag" <hammerschlag@hotmail.com>
Subject: non-wage slaves
Date: Wed, 09 Sep 1998 

NON-WAGE SLAVES
by Michael Hammerschlag
caps = italics

The Petersburg shop owner changed my $10 eagerly, greedily*; but as we 
left, my girlfriend started sobbing, "He has rubles to change your 
dollars, but he can't pay me for my paintings" (that had been sold weeks 
ago). I steamed, wanting to go back and shake the money out of him, but 
she pleaded, "No, please don't- I need him". Russia, on the other hand, 
doesn't.
Like the mugs in "Goodfellas", Russians hate to pay anyone, they don't 
kill them (usually)- but they make them wait 3-12 months for moneys owed 
them. 50% of the workers do not receive a regular paycheck and the total 
WAGE ARREARS ARE ESTIMATED AT $12 BILLION. This is a problem across the 
board: from the government and biggest industries, to the banks, to the 
small proprietors; and stems from the Communist ignorance of Capitalism 
(everything was done with mirrors and lies and the Government owned 
everything so it didn't MATTER if they paid), lack of cash, and the 
simple piggish principle that still runs Russia- "EVERYONE WITH POWER 
ABUSES IT". They do it because they can get away with it. Nuclear 
missile submarine commanders aren't paid for 4 months, officers in 
charge of supplies in the Far East simply put the money in a bank while 
their troops starve to death, miners in 19 century Arctic hell-holes 
don't get paid for 6 months, businesses aren't paid for deliveries until 
they hire mobsters to collect their money with machine gun persuasion.
Across the country it's an explosive issue- with the government behind 
4-6 months average on all wages, but if they pay, they destroy their 
budget, fuel inflation and endanger IMF loans of billions (though 
defaulting on debts has taken care of that). Because of this Russian 
penchant, BANKS DON'T LEND MONEY, making small businesses incredibly 
difficult and more dependent on Mafia support and muscle. 
Without money, people have had to rely on barter, which can't be taxed. 
It's a symptom of the raucous illegality and lingering brutality of the 
new Russia and responsible for negligible foreign investment compared to 
China or Eastern Europe. If you can't trust a business to pay, no 
business relationship is possible, and tales are rife of foreign 
investors stiffed, cheated, and forced out by Russian partners (or Mob 
threats). In fact a British group rated Russia, with it's constant 
wanton rule changes, omnipresent Mafia extortion and official 
corruption: "the worst place in the world to do business" (beating out 
last years winner- Nigeria). America had a squandered opportunity to 
help build a DECENT legal and banking system in 1992-3, when Russian's 
were literally begging for help. Then the industries bought from each 
other with no intention, ability, or desire to pay; and eventually, 
repeatedly, the government paid the hundreds of billions of debt, 
totally destroying the ruble in the process.
With the oligarchs amassing stupendous fortunes, the obscenity of the 
non-payment crisis (as it's called) is glaring. The cream of Soviet 
society- the nuclear engineers in the secret cities- are now virtually 
starving, living on $30-80/month. One director of a nuclear research 
institute was so crushed by not being able to pay his people that he 
shot himself (luckily not with nukes). When the power company near 
Vladivostok started to shut off power to the nuclear Pacific fleet (with 
live reactors that needed cooling) for nonpayment, commanders allegedly 
starting rolling tanks on the power plant. Electricity was restored. 
Russians have shown superhuman patience, working for years for 
negligible wages, often getting paid in hard to sell sofas, auto parts, 
bedsheets, or light bulbs. For over a year high tech workers at the 
Progress Aviation factory (making attack helicopters and ship missiles) 
receive ..... bread .. in lieu of money. Western workers would riot 
within a FEW WEEKS, let alone a year, of nonpayment. Russians only still 
show up because it was a major crime to NOT work in the Soviet Union, 
and there's nowhere else to go. With the uprising by the coal miners 
(who had provoked the ouster of Gorbachev) and blocking of the Siberian 
railroad, it seemed things finally had to change. They did: the stock 
market, and the ruble...... collapsed.
With the added misery of the economic collapse, peoples patience with 
not getting paid may finally be at an end, but the strongly Communist 
Duma's idea of a solution is to print billions of rubles, wrenching the 
country back into dizzying inflation- giving the populace $1 with one 
hand and slipping $2 out of their pocket with the other. The rout of the 
reformers, the default on foreign loans, and Yeltsin's proposed power 
sharing with the Communists all bode ill for Russia's future. If Lebed 
were to seize power now, the majority of Russians MIGHT support him, but 
appallingly, he is only half as popular as Gennady Zyuganov- a hack who 
still defends the greatest monster in human history: Joseph Stalin. 
Russia needs and demands a strong leader; after Yeltsin, there are 
realistically (Yavlinsky is attractive, but he's been so disdainful of 
government that he hasn't DONE anything) only 2 alternatives: Lebed and 
Luzhkov- Lebed's more popular, tougher, more unpredictable, and more 
despised by the oligarchs, politicians and fat cats, who're terrified 
what he might do to their privileges. They should be. Once you've seen 
the rapacity and ruthlessness of the Russian rich, the reasons behind 
the 1917 Revolution become clear. One fall day in Detsky Mir (Children's 
World) a stocky woman waved a 2 1/2" stack of 50,000R (~$100) bills 
around as the other women (who were living on maybe $50/month then), 
stared open mouth like beaten dogs. The piggishness and deliberate 
cruelty of the scene was striking. Yeltsin has simply let the social 
safety net disintegrate while a handful of hustlers have become 
spectacularly wealthy, and all across Russia, there are tens of millions 
who're tired of living like beaten dogs. 
*it was a period when rubles had disappeared
Michael Hammerschlag wrote commentary essays for Moscow News, Moscow 
Guardian, Moscow Tribune, and WE/MUI (Hearst/Izvestia); and did radio 
reports for Radio South Africa and KING-AM Seattle when he lived in 
Russia from '91-'94.

*******

#6
Date: Wed, 9 Sep 1998
From: "NANCY POPSON" <POPSONNA@WWIC.SI.EDU>
Subject: two research announcements

ANNOUNCEMENTS
RESEARCH OPPORTUNITIES AT THE KENNAN INSTITUTE 

I. The Kennan Institute announces its Research Scholarship Program for
academic year 1999-2000
About the Kennan Institute: 
The Kennan Institute was established in 1974 as a component program of the
Woodrow Wilson International Center for Scholars, the nation's official
memorial to the twenty-eighth president of the United States. The Kennan
Institute sponsored advanced research on the successor states to the Soviet
Union through residential fellowships, research scholarships, regional
scholarships, and short-term grants.
Like the Woodrow Wilson Center, the Kennan Institute encourages Eurasian
studies with its public lecture and publication programs and maintains
contacts with scholars and similar research centers abroad. The Institute
seeks to function as a forum where the scholarly community can interact with
public policymakers. The Institute's location in the nation's capital
provides convenient access to the Library of Congress, the National
Archives, and other educational and research institutions in the Washington,
D.C. area.

Kennan Institute Research Scholarships (3-9 months' duration):
Research Scholarships are available to academic participants in the early
stages of their career (before tenure) or scholars whose careers have been
interrupted or delayed. For non-academics, an equivalent degree of
professional achievement is expected. Eligibility is limited to the
postdoctoral level for academic participants, although doctoral candidates
in the process of completing a dissertation may apply (the dissertation must
be successfully defended before taking residence at the Institute). Awards
are limited to scholars who are U.S. citizens or permanent residents upon
commencement of their scholarship.
Research proposals examining topics in Eurasian studies are eligible.
Those proposals related to regional Russia, the NIS, and contemporary issues
are particularly welcome. The Research Scholar grant offers a stipend of
$3,000 per month, research facilities, computer support, and some research
assistance. Grant recipients are required to be in residence at the
Institute in Washington, D.C. for the duration of their grant.
One round of competitive Research Scholar selection will be held this year.
The deadline for receipt of applications and supporting materials is October
1, 1998; decisions on appointments will be made in late January 1999;
grantees are able to commence their appointments as early as July 1999. In
past years, the Kennan Institute has awarded Research Scholarships to one in
eight applicants.
The Research Scholarship Program is supported by the Russian, Eurasian, and
East European Research and Training Program of the U.S. Department of State
(Title VIII).

For applications and further information, write or call the address below,
and please note where you heard about the program:
Fellowships and Grants
Kennan Institute
One Woodrow Wilson Plaza

1300 Pennsylvania Avenue, NW
Washington, DC 20523
telephone: 202-691-4100
fax: 202-691-4001
email: popsonna@wwic.si.edu

II. Rural Russia Workshop Series

The Kennan Institute for Advanced Russian Studies is pleased to announce the
second research workshop in its series on rural Russia, "Rural Russia: New
Directions in Research." The workshop will be organized by Professor David
J. O'Brien of the Rural Sociology Department at the University of
Missouri-Columbia and Blair A. Ruble of the Kennan Institute. It will be
held in the early spring of 1999 in Washington, D.C.. 

This workshop follows on a pilot workshop that took place in Columbia,
Missouri in the spring of 1998, which focused on the role of social capital
in rural Russian development. The Washington, D.C. workshop will be broader
in scope, and U.S. scholars at any level and from any discipline with
substantive research interests in rural Russian development may apply. 

Participants in the workshop will be expected to present their current
research pertaining to rural Russia and actively engage in discussion of
themes related to rural development. Junior scholars are especially
encouraged to apply. Per diem costs and some travel support will be
provided by the Kennan Institute. Those interested should submit an
abstract of their current research, a current resume, and two letters of
recommendation to: Rural Russia Workshop, The Kennan Institute for Advanced
Russian Studies, The Woodrow Wilson Center, One Woodrow Wilson Plaza, 1330
Pennsylvania Avenue, NW, Washington DC 20523. Deadline for receipt of
applications is November 1, 1998.
Please contact Nancy Popson at 202-691-4100 or at popsonna@wwic.si.edu with
any further questions.

********

#7
From: BeanMoscow@aol.com (Bruce Bean)
Date: Thu, 10 Sep 1998
Subject: Primakov and Democracy

David:

Mindful of the risk of once again being branded a JRL "mindless enthusiast,"
let me briefly point out one crucial aspect of the Primakov nomination.

This time, unlike last April, President Yeltsin was not able to run roughshod
over the Duma. Having lost twice with Chernomyrdin, Yeltsin then found a
candidate acceptable to the Duma. He accepted that compromise is a part of
the process. Indeed, so did Chernomyrdin.

I take it Primakov's confirmation is a certainty. Whether Primakov can muster
the support needed in the West to rescue the banking system (the Indonesian
banking system has just now completed its overhaul) and whether he can then
get the real economy moving again are open questions with which cynics and
pundits will pummel each other until the job is done, or not as the case may
be.

But yesterday Russia had three crises to resolve and they have to be resolved
in this order: a political crisis, a banking crisis and an economic crisis.
By grudgingly stumbling on to how the democratic political process works (it
is not that far from some of the things that occur on Capitol Hill), Russia
has seemingly resolved the first of these crises.

Bruce W. Bean
Partner, Clifford Chance - Moscow
Chairman, The American Chamber of Commerce in Russia

*******

#8
Washington Post
10 September 1998
[for personal use only]
Russian Crisis Sapping Health Care System
By Daniel Williams

MOSCOW, Sept. 9—Normally at this time of year, the 50 beds in the cardiac care
section of Railway Workers Hospital are filled with patients, and
administrators put newcomers on waiting lists. But in the midst of Russia's
spiraling economic crisis, about a quarter of the beds are empty, and that's
worrying to chief cardiologist Sergei Grilyarevski.

"We usually get a lot of heart patients in September because people are out
harvesting potatoes and whatnot, and suddenly heart problems appear. But this
year, the patients are not coming, and many who do say they cannot pay for
medicines -- not to mention surgery. This is very bad news," Grilyarevski
said.

The three-week-old Russian economic meltdown is already taking its toll on the
country's health and health care -- and the worse is yet to come, doctors say.

A run on medicines is sapping supplies at pharmacies, the decline of the ruble
is making restocking expensive, and patients' salaries -- if they receive them
at all -- are shrinking in buying power. "People are willing to ignore a heart
palpitation now. They say they would rather buy food than pay for treatment --
so long as they're not dying," Grilyarevski said.

For physicians, this is the beginning of a recurrent nightmare. In the early
1990s, during Russia's last economic crash, the health of the nation suffered
a precipitous decline. Between 1990 and 1994, life expectancy for men declined
from about 63 years to 57, and for women from 74 years to 71. Russia's
population shrank by about .10 percent last year, the seventh consecutive
fall. Some of the woeful decline was caused by increased alcoholism and
inadequate nutrition, particularly among men, compounded by the breakup of the
state health system, the collapse of local pharmaceutical manufacturing and
stress.

Although life expectancy has since risen by about a year, Russia has not
returned to anything approaching a level of physical well-being, and now,
doctors fear, the ruble's collapse will destroy any chance for improvement. "I
think we had learned to get by with all our shortcomings," said Almasbek
Eleyob, an emergency room physician at Railway Workers Hospital. "Uncertainty
has returned."

Hospitals are facing specific problems almost immediately; in effect, they are
no different from other Russian institutions or businesses that find that
supplies of needed goods are short or that their customers are not in a
position to pay. Like desperate shoppers across the country, hospital
administrators are scrambling to find food to feed invalid patients.

The problem is far from limited to Moscow; reports from the city of
Novosibirsk say that the main hospital there has only a five-day supply of
food, no milk and enough drugs to handle only 20 severe cases of injury.

For Grilyarevski, probable long-term problems are also disheartening. "We have
discovered over the past few years all about these wonderful drugs and
equipment from the West, and, in a month, we may be unable to buy either. What
good is our new knowledge?" he asked. Twenty percent of the Railway Workers
Hospital's drugs comes from abroad, as does all its new monitoring and
computer systems.

Railway Workers Hospital was founded by the Transportation Ministry. In the
past three years, government funding has declined. Russia's fledgling
insurance industry paid for some care, but destitute patients still sometimes
offer goods in lieu of cash for treatment. "You see this coffee?" Grilyarevski
asked. "It was given in return for a checkup."

Even for those who seek treatment, money is clearly an issue. At Polyclinic
No. 16 in Moscow, a woman argued with her nurse about the terms of selling a
bottle of tetracycline for her daughter's throat infection. The nurse said
that the mother must come back to buy a second bottle after the first is
finished. "But why can't I buy both bottles now? Who knows how many rubles it
will cost when I come back?" the woman complained.

With finality but no satisfactory explanation, the nurse responded that the
clinic only gave out limited doses at a time. "Well, can you give me a
guaranteed price?" pleaded the mother.

The nurse shook her head, and then told a visitor after the woman departed: "I
can't even guarantee her there will be medicine when she comes [back]."

No one is yet prepared with statistical evidence of direct cause and effect
between the immediate crisis and failing health, although the Russian media is
offering alarming anecdotes that amount to damning morality tales about the
crisis. One report told the story of a retiree named Pavel Yulayev who visited
his bank to find out about retrieving his money from a savings account. After
trying in vain to get the attention of bank officers, he collapsed and died of
a heart attack.

Besides physical health, mental health has become a concern for Russia's
physicians. Since the 1991 collapse of the Soviet Union, the percentage of
psychiatric patients who also were unemployed rose from 29 percent to 38
percent, said Isaac Gurovich, deputy director of the Psychiatric Research
Institute. "People who are poor at adapting -- who can't even learn how to buy
things cheaper -- become mental patients," he said. "I think now the problem
could get much worse because for a while, we were standing on our feet, and
suddenly prices are rising by multiples of four or five. For a vulnerable
population, this is very difficult to handle."

Indications of severe mental strain on Russians are coming in the form of
suicides. Near St. Petersburg, an 87-year old woman hanged herself in despair
over not receiving her pension. In a suicide note, she asked creditors to
forgive her debts and not make her family pay. In Volgograd, a 20-year-old
mother of a 3-year-old child hanged herself, saying in her note that she could
not face looking "my hungry daughter in the eye." 

*******

#9
Russian PM designate faces bewildering options
By Karl Emerick Hanuska

MOSCOW, Sept 10 (Reuters) - Yevgeny Primakov, expected to be confirmed as
Russian prime minister on Friday, will have to create a coherent economic plan
from a number of contradictory proposals made by his supporters. 
At least three separate economic programmes have emerged in Russia -- one by a
government team under reformist acting Deputy Prime Minister Boris Fyodorov,
another by Kremlin advisers and a third by Communist leaders. 
Supporters of each programme have backed Primakov as premier. 
Communist proposals would give federal authorities strong controls reminiscent
of the centrally planned Soviet economy, while the government's would demand
fiscal austerity and require every rouble in circulation be backed by foreign
reserves. 
The Kremlin's still-sketchy plan falls somewhere between the two, calling for
a system of state guarantees to businesses and individuals along with some
continuing market reforms. 
At the heart of the Communist plan is suspension of trade on currency
exchanges, a fixed rouble exchange rate of seven to the dollar and a temporary
ban on the sale of hard currency to individuals. 
The Communists also plan to reinvigorate the economy by giving credits to
industry that would require printing new money. 
Government plans, with variations proposed by acting prime minister Viktor
Chernomyrdin and Fyodorov, would tie the rouble to foreign reserves, taking
away the power of the central bank to print money, but could offer some
credits before hammering down the peg. 
The Kremlin plan, drafted in part by the influential Security Council,
recommends giving support to business and indexing wages, which would
substantially tax Russia's already depleted treasury. 
The Kremlin would also allow foreigners to participate in tenders to manage
creaky banks taken under temporary administration by the central bank, one of
the most liberal proposals made in any of the plans. 
The Communists would limit the role of non-residents by tightening controls
governing their activities in the securities market and by protecting Russian
businesses from "ill-willed" foreign competitors. 
Primakov has received support from liberals, Communists and Chernomyrdin, the
acting prime minister he may replace, but he is not likely to have an easy
time meshing their ideas into a united economic policy. 
Analysts -- many of whom have criticised Primakov's lack of a strong economic
background -- say that the economy's course will ultimately be decided not by
Primakov, but by those he taps for posts in his government. 
However, Yevgeny Kozhokin, head of the Russian Institute for Strategic
Studies, said Primakov, a doctor of economics, had an economic philosophy,
even if he had not voiced it. 
"He long headed the country's most liberal economic research institute, the
Institute for Global Economics and International Relations," Kozhokin said. 
Al Breach, an economist for Russian Economic Trends think tank in Moscow, was
less enthusiastic. "It is pretty hard to get excited about Primakov's
nomination. He was a very nationalist foreign secretary and so I think as
prime minister his economic policies will be nationalist as well." 

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#10
U.S. and Europe cautiously hopeful over Primakov

LONDON, Sept 10 (Reuters) - European countries and the United States voiced
cautious optimism on Thursday over the nomination of Yevgeny Primakov to
become prime minister of a Russia mired in acute economic crisis. 
The White House responded positively to President Boris Yeltsin's nomination
of the current acting foreign minister for the premiership after the lower
house of parliament, the State Duma, twice rejected his first choice, Viktor
Chernomyrdin. 
``If ratified by the Duma we would expect to have a good and close working
relationship with Prime Minister Primakov,'' White House spokesman Mike
McCurry told reporters. 
``Obviously the United States knows and respects Foreign Minister Primakov.
We've worked closely with him.'' 
Yeltsin telephoned German Chancellor Helmut Kohl on Thursday to discuss the
nomination. 
``Yeltsin...confirmed emphatically that the new government would continue the
reform policy and do all it can to overcome as quickly as possible the dangers
for the country's economic development,'' a Bonn government spokesman said. 
The German Foreign Ministry said Primakov had called Foreign Minister Klaus
Kinkel and assured him of the same, while adding that Russian foreign policy
would stay on the same course. 
``Kinkel stressed that Germany would continue to support Russia on its
difficult reform path, and that Primakov could rely on Germany as a close
partner,'' it said in statement. 
German Finance Minister Theo Waigel called Primakov ``a politician who knows
what's what and knows Russia is tied to the international community,'' and who
also knew his country benefited from international financial institutions. 
Finnish Prime Minister Paavo Lipponen and visiting French counterpart Lionel
Jospin cautiously welcomed the nomination. 
`It is desirable for Russia to get a government and if this is the first step
in that direction...it is a good thing,'' Jospin told a news conference in
Helsinki. 
``If the Duma confirms his nomination that would be a very significant step in
solving the present political crisis in Russia,'' the European Union's
External Relations Commissioner Hans Van den Broek said in Bucharest. 
Western aid ``depends on whether there will be a good governmental programme
which can be carried out further by a competent government with support from
the Duma,'' he added. 
A delegation of EU diplomats in Moscow held a previously scheduled meeting
with Primakov soon after his nomination. 
Primakov ``again underlined the importance of political and economic reform in
this country,'' said Peter Hohenfeller, political director of the Foreign
Ministry of Austria, which holds the rotating EU presidency. 
Polish President Aleksander Kwasniewski told reporters he knew Primakov, a
stern critic of Poland's entry into NATO, as ``a person with a large sense of
responsibility and a realist.'' 
``No doubt, what is of upmost importance in Russia...is enabling the
structures of the state, the government and administration to implement its
duties and take tough decisions'' Kwasniewski said. 
British Trade Minister Brian Wilson, visiting Moscow, said he welcomed the
nomination if it helped bring stability. 
``Our interest is clearly in seeing political stability restored within Russia
and if that is a step towards that outcome then it will be welcome,'' he told
journalists. 
``But the details of the nomination and how it will be received by the Duma is
clearly an internal Russian matter.'' 
A leading German foreign policy expert said Primakov was not in a position to
offer viable long-term leadership in crisis-stricken Russia. 
``Primakov is a candidate acceptable to all sides -- not just to the
administration but also to the communists,'' Heinz Timmermann of the Federal
Institute for Eastern and International Studies told Reuters. ``He is a
compromise candidate who could win a broad majority in the Duma.'' 
``Primakov is not an economist, so everything will depend on the people he
appoints,'' said Thierry Malleret, chief economist at Alfa Capital investment
bank in Moscow. 
International financial markets, nervous in recent weeks over Russia's
political and economic turmoil, showed little immediate reaction. 
Within Russia, politicians of nearly all political persuasions welcomed the
nomination and predicted parliament would approve it in a vote scheduled for
Friday. 
The only prominent dissenter was extreme nationalist leader Vladimir
Zhirinovsky, who dismissed Primakov as ``pro-American.'' 

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#11
Russian army, police swing behind Primakov
By Alastair Macdonald

MOSCOW, Sept 10 (Reuters) - Russia's security services and armed forces, both
under anxious scrutiny during the present political crisis, voiced support on
Thursday for the appointment of former intelligence chief Yevgeny Primakov as
prime minister. 
Acting Interior Minister Sergei Stepashin noted that Primakov, previously the
foreign minister, had long been a member of the security apparatus himself and
would find the police and other services would work comfortably with him. 
Both the army and the police, on whose loyalties there has been much
speculation amid the confrontation between President Boris Yeltsin and
parliament, can be expected to press Primakov for more resources to stem
discontent in the ranks, however. 
Marshal Igor Sergeyev, the acting defence minister, said of Primakov: ``In the
current situation this is the most correct move, the most correct
nomination.'' 
``This is happening because he has authority inside the country and beyond its
borders,'' he was quoted as saying by Interfax news agency. 
``(The security services) will work in full mutual understanding with Yevgeny
Primakov, as with Viktor Stepanovich (Chernomyrdin),'' Stepashin told
Interfax. 
Chernomyrdin, who was premier for five years until this March, withdrew as
Yeltsin's nominee for prime minister after running into fierce Communist
opposition in parliament. The Communists welcomed Primakov's nomination and he
is likely to be confirmed in office by parliament on Friday. 
``(Primakov) is without a doubt a major political figure and a very strong,
courageous man,'' Stepashin said. ``It's very important there should now be a
very serious economic team.'' 
Primakov was head of Russia's SVR post-Soviet foreign intelligence service for
five years until 1996. 
The prospect of a constitutional deadlock between Yeltsin and parliament if
the Kremlin leader had persisted in proposing a prime minister unacceptable to
the Communists had raised fears in recent weeks of a resort to force to
resolve the dispute. 
With the economy in chaos after the collapse of government finances, Russian
media and politicians have speculated on the role of the police in maintaining
order and on the loyalties of the military if the political row descended into
civil strife. 
Sergeyev dimissed rumours that the army had been preparing to put down any
possible unrest as nonsense. 
Stepashin told Interfax there was no truth in speculation his Interior
Ministry troops, whose weaponry includes armoured vehicles and air support,
had been stationed close to strategic points in case the political crisis
turned to violence. 
``There is no question of this,'' he said, adding that the troops were
``always on high alert.'' ``Why should we move them somewhere else? Everyone's
in place,'' he said. 
Stepashin said the internal security agencies had devoted more resources to
battling ``speculation'' and other commercial abuses caused by the financial
chaos in the country. 
He added, however, that the Interior Ministry had been concerned about
government payment arrears to its forces but that one of Chernomyrdin's last
acts as acting premier, alloting new funds to the ministry, had ``calmed the
situation.'' 
In a reminder of the major long-term problems Primakov will face if confirmed
in office, the head of research for general staff, General Vladimir Potyomkin
wrote in the Defence Ministry newspaper Krasnaya Zvezda (Red Star) on Thursday
that personnel in the armed forces should not be cut again for over 15 years. 
``We must consider the lower limit for the normal personnel of the armed
forces until 2015 to be 1.2 million,'' he wrote. 
Ordered by Yeltsin to save money and cut troop numbers, Sergeyev has already
said numbers should be about 1.2 million by the end of this year, some half a
million less than a year ago. 
Its size and nuclear capability makes the Russian military a formidable force
but analysts play down its ability to play a significant political role,
partly through chronic underfunding and partly due to its own internal
divisions. 

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#12
Family tragedy has marked Primakov's life
By Adam Tanner

MOSCOW, Sept 10 (Reuters) - Yevgeny Primakov, who was named Russia's prime
minister-designate on Thursday, has enjoyed a long prosperous career but
suffered several heart-breaking personal tragedies. 
``He has had to go through a lot in personal life,'' said Pavel Palazchenko,
long-time translator for ex-Soviet president Mikhail Gorbachev who worked with
Primakov in the 1980s. 
``He lost his son at a very young age and then he lost his wife in the late
1980s.'' 
Primakov, 68, who has been Russia's foreign minister since 1996, grew up in
Tbilisi in Georgia. His first wife, who died of heart disease in 1987, was
from Georgia as well. 
As befits a man who once ran Russia's external spying service, Primakov is
famed for his poker face, which he maintained even after personal tragedies,
associates say. 
``He is a reserved person and is able to hide his feelings,'' said Vladimir
Alpatov, deputy director of the Institute of Oriental Studies where Primakov
was director from 1977-85. 
``When he returned to the public after the death of his son for meetings,
nothing was visible.'' 
Friends say his son's death was a terrible blow. 
``His son died from a heart attack in 1981, I think, at a very young age and
that of course was a real heart break for Primakov,'' Palazchenko said. ``He
was...a very good young man.'' 
Vladimir Bolshakov, Western European correspondent for the newspaper Pravda,
where Primakov worked from 1962-70, said his son died during a May Day parade
on Red Square where he was a volunteer helping preserve public order. 
That tragedy remains with him to this day. 
``This man is not very happy personally,'' Bolshakov said. ``He loved his
wife, he loved his son. If someone loses his son, he would be unhappy to the
end of his life.'' 
U.S. diplomats say Primakov can sometimes be a bit overbearing, unleashing a
torrent of words to make his point. But he has also shown a light side,
singing a duet with U.S. Secretary of State Madeleine Albright at a foreign
ministers' meeting in July. 
``In the West, some say he is some kind of severe person,'' said Anatoly
Dobrynin, former long-time ambassador to the United States who has known
Primakov for 25 years. ``Nothing of the kind.'' 
``He is of course serious, as his career shows,'' Dobrynin said on Thursday.
``But I don't know a single person who worked with him in the past who would
not return to work again.'' 
Unlike the more earthy ex-premier Viktor Chernomyrdin whom the Russian
parliament twice rejected for the job this month, Primakov has a subtle, dry
sense of humour. 
``It's not easy to continue to be witty and warm you know with things like
this hapening to you,'' Palazchenko said, referring to the past tragedies.
``Nevertheless he really is an extremely sympathetic and outgoing person.'' 
Primakov has sometimes ruffled feathers with his determination. 
Bad blood developed with then Soviet foreign minister Eduard Shevardnadze
because of his determination as his deputy to continue negotiations with Iraqi
leader Saddam Hussein on the eve of the Gulf War in 1991. But aides say their
relations have improved since Shevardnadze became Georgia's president. 
Primakov also has strong personal ties to the region where he grew up. His
daughter married a Georgian two years ago; he also speaks Georgian well. 
He remarried while head of the SVR foreign intelligence service -- his second
wife Irina is a doctor -- and has grandchildren. 

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