September 15, 1998   

This Date's Issues: 2373• 2374 •2375•

Johnson's Russia List
#2374
15 September 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Fred Weir in Moscow on latest developments.
2. Leonid Bershidsky: Re your editorial comment in JRL2373.
3. The Electronic Telegraph (UK): Marcus Warren, Russia's richest men face
a premier who owes them nothing.
4. Christian Science Monitor: Lucian Kim, Russia Sets Rampart Against Islam
in Case It Runs Rampant.
5. NTV: Yeltsin Addresses Nation on Crisis, Primakov Nomination.
6. Komsomolskaya Pravda: 'Power' Agencies 'Unprepared for Rerun of October
1993.' 
7. Radiostantsiya Ekho Moskvy: Russian Intelligence Official Praises
Primakov. 
8. Moscow Times: Yulia Latynina, INSIDE RUSSIA: Parasites Look To Primakov 
For Fresh Feed.
9. Interfax: Luzhkov Calls for Russian Solutions to Crisis.
10. Reuters: Russian PM says Yeltsin backs economic plans.
11. Reuters: Adviser to Primakov slams previous Russian govts. (Abalkin)]

*******

#1
From: fweir@rex.iasnet.ru
Date: Tue, 15 Sep 1998 12:23:01 (MSK)
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT Sept 15) -- Russian Prime Minister Yevgeny
Primakov has said he will launch a new economic course to
"correct the mistakes of the past" but will not scuttle reforms
or return the Communists to power as his critics are charging.
Responding to claims by liberals that his soon-to-be-formed
government will be a Trojan Horse filled with hard-line
Communists, Mr. Primakov said he intends to choose only solid
professionals and will not tolerate any political partisanship.
"This is a national government, a government of all the
country, which must take care of the interests of Russia, the
interests of all our people," the official ITAR-Tass quoted Mr.
Primakov as saying Monday.
But the 68-year old former oriental scholar also argued that
the country is fed up with 6 years of market reforms that brought
Russia only de-industrialization, mass poverty and financial
crash.
"We cannot conduct reforms that affect the people
adversely," Mr. Primakov said at a meeting with President Boris
Yeltsin Tuesday. "If therapy drags out for decades, and no gleam
of light is seen, it is certainly not in the interests of the
country, not in the interests of the people."
Mr. Primakov was overwhelmingly approved as prime minister
by Russia's opposition-led State Duma on Friday, ending weeks of
political deadlock and drift amid the country's worst post-Soviet
economic crisis.
President Yeltsin had strongly backed former prime minister
Viktor Chernomyrdin for the job, but the Duma's refusal to
endorse him threatened to plunge Russia into a lengthy political
struggle.
A compromise candidate, Mr. Primakov, was warmly welcomed by
most of the Duma's squabbling factions, including the powerful
Communists and the liberal Yabloko party. Only a tiny minority of
parliamentarians, including Vladimir Zhirinovsky's ultra-
nationalist party and a few independent liberals, voted against
him.
"Primakov is the best of all available alternatives for
Russia at this moment," says Viktor Kuvaldin, an analyst with the
Gorbachev Foundation in Moscow. "He will establish a government
of pragmatists and try to find ways to put out all the fires that
are raging in the country. If his cabinet includes a few
Communists, that's nothing to be frightened of."
Under Russia's Constitution Mr. Primakov is obliged to form
his government within a week of being appointed prime minister.
He has already appointed a leading Communist, economist Yury
Maslyukov, as first deputy prime minister in charge of the
economy.
He has also tapped Viktor Geraschenko, who was the nation's
Central Bank chief until 1994, to take back his old job. Market
reformers claim that Mr. Geraschenko is too willing to start
printing money to pay state debts -- a move they say will inflict
hyperinflation on Russia. 
"The Communist Party is the governing party now," former
deputy prime minister Boris Nemtsov charged on Russian TV at the
weekend. 
Other liberals have made similar claims. At a Moscow street
demonstration Sunday Yegor Gaidar, Russia's first post-Soviet
prime minister and the man who introduced liberal reforms,
slammed Mr. Primakov for creating "a government of communists"
that would try to "destroy elements of a free market economy in
Russia."
They contend that Mr. Primakov, a former journalist,
scholar, spymaster and Russia's foreign minister since
1996, is a man of the old Soviet school who wants to bring back
statist economic methods.
"People ought to realize that Russia is in a very tight
place right now, with very few economic options," says
Vladimir Petukhov, an analyst at the Institute of Social and
National Problems in Moscow. "This situation is the outcome of
six years of destructive so-called reforms implemented by
politicians like Gaidar and Nemtsov. The Russian people have
borne the brunt of these disasters over the years, so is it any
surprise they now want a more responsible and interventionist
state?"
The most burning social problem is the huge backlog of wage
arrears, now totalling some 80-billion roubles (about $12-billion
before the rouble crashed last month). Millions of workers have
gone for months without any income, and trade union leaders say
the issue has reached a new boiling point in many Russian
regions.
Mr. Primakov has not yet disclosed the details of his
economic program, but has hinted he will print money to pay
government debts to public sector workers, pensioners and the
army. He has also suggested that he might move to protect
Russia's domestic industries from foreign competition -- using
tariff barriers or import quotas -- and employ state credits to
revive flagging factories and agricultural production.
"There will definitely be more emphasis on the productive
sphere," says Mr. Petukhov. "But what choice is there? The
country has been living on borrowed money for years, while our
industries crumbled. Now there will be no more foreign credits,
and we can't afford imports. And if there is no private
investment to stimulate industry and put people to work, then it
must come from the state."
Analysts say Mr. Primakov has been looking closely at a
paper by left-wing economist Sergei Glazyev that urges Russia
move to a "mobilization economy". That program involves
renationalizing raw materials and strategic industries, tough
capital and exchange rate controls, protection of domestic
manufacturing and agriculture, and deficit financing -- by
printing money -- to meet social needs, rebuild infrastructure
and stimulate productive employment.
Mr. Glazyev's plan may be draconian, but it is not Soviet
Communist-style economics as many critics have been charging. In
fact, all its elements have been torn from the pages of Western
economics textbooks and Mr. Glazyev himself has likened it to
U.S. President Franklin Roosevelt's depression-era New Deal.
"Russia is in a desperate position, and it needs new
policies to get something moving again," says Mr. Kuvaldin. 
"Under these circumstances it's ridiculous to say Primakov
is bringing back Communism. Primakov is a very tough person, and
any government he appoints will do what he tells it to." 

*******

#2
Date: Tue, 15 Sep 1998
From: bear@imedia.ru (Leonid Bershidsky)
Subject: Re: 2373-DJ

Dear David,
Re your editorial comment in JRL2373:
Honk honk.

My sincere conviction is that the West should not apologize to Russians for
what happened to this country in recent months/weeks.

What is there to apologize for? Is it the fact that Western aid went to
reformers in the Yegor Gaidar/Anatoly Chubais mold? Well, though the money
may not have been used wisely, at least it helped create a decent life not
just for Chubais and his chums, but also for a few million Russians who
formed the so-called middle class. OK, that decent life is now at an end,
but hey, all things must pass. It is Chubais and friends who should
apologize to Western taxpayers, but, on second thought, maybe not even that
is in order: taxpayers' money ALWAYS goes to the wrong people for the wrong
purposes (witness the $4.4 million Lewinsky investigation).

One might argue that the West pushed the wrong economic doctrine on Russia.
But then, Russia didn't have to accept it and it never did so in full.
Geoffrey Sachs, one of the most high-profile Western advisers to the
Chubais clique, recently told my newspaper that he had "never ecountered so
much lying by public officials" as he did during his work in Russia. Note
that the guy had worked in places like Bolivia, where officials are not
world-renowned for absolute honesty. Sachs says his advice was never
followed after the 1992 price liberalization, and I believe him: nothing in
Russia was ever done in line with the theory Sachs outlined in his fat
macroeconomics textbook (one of my colleagues has sat on this textbook at
the office for the last three years to ease his hemorrhoidal pain; the
government has never done more than that with the book).

All this time, Russia has followed its own inimitable path. Allowed to have
a free press, it quickly got itself a corrupt, sold-out fourth estate.
Plugged into world financial markets, it invited the world to join a
pyramid game. Faced with electoral democracy, it promptly elected
Zhirinovsky and then the Communists to parliament and re-elected Yeltsin to
the presidency just as he was having a heart attack.

Victims, us? You've got to be kidding.

It's even a bit humiliating to Russians to suggest they are owed an apology
by the West. As Russian historian and sentimental poet Nikolai Karamzin
wrote (in a different context), "he is himself to blame for all his woes
and misfortunes." The "he" in the quote, unfortunately, has got to be
attributed to your average Russian. This is a very smart person, able to
adapt quickly to any surroundings and any system. Of course he pays the
price with his life expectancy and living standard. But he does not rebel
because he adapts. He suffers, but he survives.

Of course this average Russian does deserve an apology. It should come from
your not-so-average Russian -- the city government official, the factory
manager, the cabinet minister, the presidential aide, the "oligarch." It is
these guys' activities that Karamzin once described sweepingly: "They
steal." They also mismanage, lie and still get re-elected or bailed out.

What has the West got to do with it? Of course the West has set lots of
good and bad examples for Russia. But we could take our pick, and it is the
bad examples our elite chose to follow. Now this elite is going to try and
build a system that relies partly on the Communist experience and partly on
Western economic models. We can be sure the worst in both systems will be
faithfully emulated. No one will apologize. Yeltsin hasn't and never will.

And the ordinary Russian? Oh, he'll survive somehow. Who needs an apology,
anyway? You can't eat it or buy clothes with it.

Best regards,

Leonid Bershidsky
editor
Kapital weekly

******

#3
The Electronic Telegraph (UK
15 September 1998
[for personal use only]
Russia's richest men face a premier who owes them nothing
By Marcus Warren in Moscow 
RUSSIA'S richest men must now confront a new kind of politician in the shape
of Yevgeny Primakov, a prime minister who shuns cronyism and owes them nothing.

Primakov: owes nothing 
Mr Primakov and the businessmen were due to meet for what was bound to be
a difficult getting-to-know-you session in government headquarters last night.
In the past, the country's tycoons, often called "oligarchs" for their
belief that power should be exercised by the few for the few, expected to
have a major say in who was running the country - and how. In fact, many
Russians were convinced that the "semibank- irshchina", or seven bankers, a
pun on the word for the seven boyars who briefly ruled Russia in the 17th
Century, were running the country themselves. Now its financial crisis is
reducing their empires to ruins, stripping them of the wealth and influence
they amassed by cultivating friends in high places.
Worse, Mr Primakov became prime minister last week without their even
being consulted. And he has lost no time in showing that he is his own man.
If Mr Primakov has any power base of his own, it is the military and
intelligence services. They make no secret of their contempt for Russia's
nouveaux riches.
In his first television interview as prime minister over the weekend he
was harshly critical of "the awful discrepancy under which the majority live
under the poverty line", an implicit rebuke for the tycoons and their lavish
lifestyles. They bankrolled President Yeltsin's re-election in 1996.
Viktor Chernomyrdin, prime minister for most of the last six years,
helped them acquire huge chunks of the economy at knock-down prices. The
evening Mr Chernomyrdin was recalled as prime minister by a desperate Mr
Yeltsin three weeks ago, he returned to his old office with one of the
tycoons, Boris Berezovsky, at his side.
Today, many of them are broken men, a mere shadow of their former selves.
The fall in world oil prices has hit some. Others are having to merge their
banks with those of former enemies to survive the chaos in the banking sector.
Three years ago, Alexander Smolensky, founder of SBS-Agro Bank, donated
more than 100 lbs of gold ingots to gild the domes of Moscow's Christ the
Saviour Cathedral. This summer, he is fighting off his bank's
nationalisation as its customers try en masse to withdraw their savings from
their accounts. He spent a press conference last week nervously folding a
piece of paper over and over again. On it was scribbled the telephone number
of a close associate of Mr Chernomyrdin.
The most notorious of the "oligarchs" is Mr Berezovsky, a businessman who
founded an empire in car sales and used to boast of being able to make or
break governments at will. He is now believed to have fled abroad, possibly
to London, after trying unsuccessfully to persuade Mr Yeltsin to stick to Mr
Chernomyrdin as his candidate for prime minister.
In recent weeks he was a frequent sight in the Duma as its deputies
haggled over who would support whom for prime minister in return for what.
In his attempt to broker a deal he was also spotted emerging from the office
of Gennady Zyuganov, the Communist leader. But all his efforts appear to
have come to nothing.
Mr Berezovsky still wields influence over Mr Yeltsin and his family
through his close links to the president's daughter, Tatyana Dyachenko.
However, like the rouble, such influence is a much-devalued currency now
that Mr Yeltsin is in physical and mental decline and appears to be
surrendering many of his powers to Mr Primakov.
Tycoons such as Mr Berezovsky control much of Russia's mass media. But
even here their power is not what it used to be. Journalists at one of Mr
Berezovsky's newspapers, Nezavisimya Gazeta, have been told that their next
salary will be "delayed".
Mr Chernomyrdin reaffirmed his intention yesterday to run for president
in elections due in June, 2000. He said he would take up a leadership post
in the political movement, Our Home Is Russia.

*******

#4
Christian Science Monitor
Tuesday September 15, 1998 
{for personal use only]
Russia Sets Rampart Against Islam in Case It Runs Rampant 
Lucian Kim, Special To The Christian Science Monitor 

NIZHNY PYANJ, TAJIKISTAN -- Abdulhamid Gurukov is happy to be back home,
even if it means living just six miles from the Afghan border. Six years ago
the cotton farmer and his extended family of 17 fled Tajikistan's civil war,
crossing the Pyanj River to Afghanistan with a tractor balanced on a rickety
pontoon bridge. They made a living plowing crops for others.
Mr. Gurukov, along with 10,000 other Tajik refugees, was repatriated last
year in the framework of the fragile 1997 peace agreement ending a five-year
civil war between the government of President Imomali Rakhmonov and the
Islamic-leaning opposition. Now, as Islamist Taliban forces in Afghanistan
push back their last foes to the Tajik frontier, they threaten to send
streams of refugees and possibly their fundamentalist ideology across a
border already known for drug- and arms-smuggling.
Despite the general expectation that Taliban forces will not violate the
border, their recent victories in Afghanistan provide Moscow with a rare
opportunity to reassert its influence in Central Asia. 
While Uzbekistan and Turkmenistan, the two other former Soviet republics
bordering Afghanistan, are busily constructing defiant national identities,
war-ravaged Tajikistan is split into factions and depends in large part on
Russia as a guarantor of its uneasy peace.
Five years ago Russian President Boris Yeltsin declared, "Everyone must
realize that [the Afghan frontier] is effectively Russia's border, not
Tajikistan's." 
"They were here before, they're here now, and they will be here in the
future," says Gurukov, referring to the Russian border troops posted a few
miles down a desolate road. "To us it makes no difference who stands there,
Tajiks or Russians."
Moscow has stationed some 25,000 troops along the 800-mile Tajik-Afghan
border under an agreement of the Commonwealth of Independent States, the
loose alliance of 12 former Soviet republics. Earlier this month, a
high-ranking Russian delegation arrived in the capital, Dushanbe, to discuss
border security with President Rakhmonov, and a large scale Russian-Tajik
military exercise began in southern Tajikistan Sept. 3. 
The Russian military in Tajikistan is hostile to reporters in part, a
press spokesman suggests, because of poor conditions and low morale among
the rank and file. In contrast, Tajik soldiers in the border region are
relatively open. At a barracks overlooking the Pyanj River, barefoot Tajik
border troops can be seen hoeing the hard, cracked earth.
One young soldier, wearing fatigues and a cap with Soviet insignia, says
he volunteered to be stationed at the lonely outpost four years ago. "If we
were afraid, we wouldn't be working here," he says. "I'm not bored, I'm
already used to life here." 
With the rise of the Taliban in Afghanistan, the Kremlin fears that
radical Islam will infiltrate Central Asia and spill over to Russia's Muslim
population. 
"There is no natural wellspring for fundamentalism here," says a Western
diplomat in Dushanbe. "Orthodox Christians in Russia are searching for their
roots, but so are people here. They are often forced into a corner [by the
authorities], pushed toward fundamentalism."
For people living along the border, however, the desire for a life in
peace appears stronger than any one political or religious preference. 
"I'd rather go hungry in my own country than be a refugee again," says
Atokhodzha Khodzhiev, who fled to Afghanistan during the Tajik civil war.
"If I had the money, I'd move far from the border. The fear remains anyway." 

******

#5
Yeltsin Addresses Nation on Crisis, Primakov Nomination

NTV
11 September 1998
[translation for personal use only]
Address by Russian President Boris Yeltsin, from an office in
the Kremlin -- recorded

Esteemed Russian citizens!
We have had no government for almost three weeks. For almost three
weeks political tempers raged, while the shop shelves were getting empty
and the words queuing and shortages have returned. The firm ruble, of which
we were so proud, had plunged. We came close to the danger line. Russia
was poised on the brink of a serious political crisis.
But we succeeded in avoiding it. At this decisive moment, the
country's political leaders proved that they are capable of reaching a
compromise. I have no doubts that Yevgeniy Maksimovich Primakov will
become the chairman of the Russian government, because his candidacy
signifies accord. Statements made yesterday by the leaders of the largest
parties and regions confirmed this.
I am grateful to Viktor Stepanovich Chernomyrdin. It was not without
hesitation that he agreed to return to the government but, when he realized
he would not win the support of parliament, he withdrew his candidacy. I
think the people of Russia will have appreciated the merit of this
courageous act. No doubt Viktor Stepanovich's experience and knowledge
will still be in demand.
Very complex tasks are now facing the Russian government. They have
to achieve a rapid reduction in prices, get goods back on the shop shelves,
restore the banking system, and guarantee the safety of deposits. This is
no easy task but I am convinced it will be done because the government,
headed by Yevgeniy Maksimovich Primakov, will be able to rely on the
support of the President and on the support of the Federal Assembly, which
it did not have before.
Esteemed citizens of Russia, I am aware that things are difficult for
everyone right now but we must not give way to our feelings and lose heart.
There are still lessons to be learned from the current crisis but right
now we must work to overcome it, we must work all together.

******

#6
'Power' Agencies 'Unprepared for Rerun of October 1993' 

Komsomolskaya Pravda 
12 September 1998
[translation for personal use only]
Report by Komsomolskaya Pravda Military Correspondent Viktor
Baranets: "President's Spetsnaz Protects Yeltsin. Peaceful
Resolution of Political Crisis in Russia Helped by Fact that
'Power Ministries' Were Unprepared for Rerun of October 1993"

The Army

The recently prevailing tension in the power structures is quietly
easing. Even before Primakov's appointment, control over the personnel's
moral-psychological state was tightened. Officers were dispatched for a
"series of explanatory conversations" with subordinates.
In tandem with this, opinion polls were conducted in a number of units
to find out -- what is the mood in the Army? The results of the study were
sent to the Presidential Staff. They made depressing reading for the
Kremlin: Almost 97 percent of officers and men admitted that they would
not open fire on their fellow countrymen even if ordered to do so.

The MVD [Ministry of Internal Affairs]

This is now the fourth week of a heightened combat readiness regime
here. All strategic installations in the capital have been placed under
reinforced protection. Operational plans are being worked out and training
exercises in the localization of mass disorders are being conducted. It is
envisaged that if the MVD and the police do not have sufficient forces (and
they have over 20,000 men in Moscow) subunits from neighboring oblasts
could be transferred to the capital.The Federal Security Service [subhead]
Federal Security Service operational staff throughout the country are
continuing to collect and send to the center information on flashpoints
where acts of provocation and disorders could occur. Agents are monitoring
the headquarters of opposition parties and movements.

The Federal Protection Service

Since the beginning of the crisis the protection of dachas and the
"government route" (Rublevka) has been substantially reinforced. At the
same time Sergey Devyatkov, Federal Protection Service official spokesman,
rebutted reports that modernized armored personnel carriers are on
permanent duty near all the president's Moscow residences. The so-called
"president's spetsnaz," numbering around 1,000 men, has been in a regime of
heightened combat readiness since the start of the crisis and are
personally accountable for the security of the "no. 1 man."

******

#7
Russian Intelligence Official Praises Primakov 

Radiostantsiya Ekho Moskvy 
10 September 1998
[translation for personal use only]
Interview with Yuriy Kobaladze, Foreign Intelligence Service
press spokesman, by correspondent Aleksey Venediktov in Moscow--live
[Venediktov] Good evening. This is Aleksey Venediktov in the studio.
Today, of course, the main event of the day is President Yeltsin's
nomination of Yevgeniy Primakov for the post of chairman of the Russian
Government.
Our guest is Yuriy Kobaladze, head of the press service of the Foreign
Intelligence Service. Naturally, we have invited Yuriy Georgiyevich today
because, as is well known, Yevgeniy Primakov, before becoming Foreign
Minister in January 1996, was head of the Foreign Intelligence Service for
about five years.
Yuriy Georgiyevich, what is your reaction, the reaction of the Foreign
Intelligence Service to the nomination of Yevgeniy Primakov for the post of
chairman of the government.
[Kobaladze] You know, I experienced the old Soviet feeling of deep
satisfaction since I consider that this is the ideal candidacy, and I, like
all of the intelligence service, wish Yevgeniy Maksimovich success.
[Venediktov] Does this mean that the intelligence service has put
forward its own man for the government chairman post?
[Kobaladze] As you know, the intelligence service does not interfere
in internal affairs and does not get involved in politics, but all the
same, I will not hide the fact that we are happy that our former head has
become prime minister of the country or at least that his candidacy has
been put forward.
[Venediktov] Then I will simply ask you to tell us your opinion as
someone who served alongside Yevgeniy Primakov. What are the special
characteristics of Primakov as a leader. I understand that to lead an
organization and to lead a country are different things. However, what can
you say about Primakov as a leader?
[Kobaladze] His experience of managing the Foreign Intelligence
Service, the Foreign Ministry and, prior to that, academic institutes,
indicate that he is a fine manager.
But let me speak about the Foreign Intelligence Service. He came to
us at a very difficult time. It was a time of crisis in the country and,
in particular, for the foreign intelligence service. You may recall that
the State Security Committee [KGB] was split up, and we became an
independent structure. And at that time, the intelligence service was
being attacked by all and sundry. And it needed political wisdom and
lobbying ability to save it from attack, to preserve us intact, to preserve
our personnel and, simply, to ensure that we survived in that situation.
But we not only survived, we really began to operate in a stable and
normal manner serving the interests of the state. And this is undoubtedly
to the very great credit of Yevgeniy Maksimovich. The main thing is that
he was able to unite the old professional cadres around himself and to
attract new people and to create a synthesis of experience and policy in
order to do a good job with our organization. The people at the foreign
office can probably say the same thing, as well as all the people who have
worked alongside him. [passage omitted on Venediktov noting that when
Primakov became Foreign Minister, he was criticized for not being a
professional, and the same criticisms are being made now. Kobaladze said
that Primakov would have a professional team, and he had already proved his
management abilities]
[Venediktov] Yuriy Georgiyevich, please tell us how Primakov got
started in an area that was not familiar to him. Please share your
recollections. What methods did he use?
[Kobaladze] I have already said that Primakov is a creative person. 
He did not destroy anything. He did not drive anyone out for political or
any other reasons. He was able to create a cohesive workforce. The
intelligence veterans, the intelligence professionals felt that this man,
unlike [Vadim] Bakatin, who came in to rid the country of the KGB, Primakov
came in to preserve this structure. And his ability to listen to the
opinion of professionals and his political experience, all of this taken
together made it possible for him to achieve the result he wanted. I think
that, at least for the intelligence service, he was the ideal leader for
that period. [passage omitted stating that the current head of the
intelligence service is a professional and is doing well]
[Venediktov] Primakov creates the impression of a man who is on the
surface very affable but is really a very private person. Of course, his
work in the intelligence service did not increase his openness. The Prime
Minister of Russia is a public figure. I would say that it is the
antithesis of the leader of the intelligence service in general, both in
the existence and in the essence of the work and as regards external
appearance. Do you not think that there is a contradiction here?
[Kobaladze] There is no contradiction. I think that talk of
Primakov's being a private person and unsociable is just a legend. Yes,
indeed, the director of the Foreign Intelligence Service should not keep
appearing on the screen and give interviews every day. But as Foreign
Minister, I think that Primakov showed his openness and availability to the
public. I think that he will maintain this style in his dealings with the
press when he is prime minister.
Apart from this, I simply know that he is a very sociable and witty
man who loves a joke, a man who is able to get on with people, including
journalists. I witnessed this many times, myself. I do not think that the
corps of journalists will have any complaints about the new prime minister.
[passage ommited on question to Primakov asking why he changed his mind
about accepting the nomination; Kobaladze said he did not know but it was
probably his sense of duty]
[Venediktov] When he was working in the intelligence service, who was
able to influence him?
[Kobaladze] He could be influenced by well considered arguments and
logic. I can only go by my own experience. We had disputes, but we were
in completely different weight categories. He was my boss, but this did
not mean that you could not argue with Primakov or that you could not put
your point of view. And I can simply state categorically that he listens
to opinions if they are backed up by arguments and well considered. He is
a man with whom you can hold a discussion. [passage omitted on Kobaladze
citing examples of occasions when he was able to persuade Primakov to
change his mind]
Primakov has common sense, something which is in short supply in this
country. I think all his personnel and other decisions will be based first
and foremost on common sense and it is of great importance because I know
that he is a man who in a crisis situation is capable of taking sensible,
even-handed and calm decisions, even when there is some sort of pressure
and the situation requires an instantaneous reaction, so he will listen to
any authoritative opinion, but this does not mean that others can push
their own viewpoint on him.
[Venediktov] Yuriy Georgiyevich, you have not named a single person
whose views Primakov heeds with respect. Naturally, he can listen to
anyone with respect, but there are those whose opinions he values more and
those whose opinions he values less.
[Kobaladze] As for the intelligence service, he used to listen to the
views of his first deputy Vyacheslav Trubnikov. I know other intelligence
people, heads of specific sections, whose views he valued highly. But
generally, it is difficult to say, it is not as if I met him on a daily
basis. I know that in the Foreign Ministry he trusted and listened to the
views of his deputies, some of whom I know. He has very many friends,
people with whom he maintains very close relations, he listens to them.
[Venediktov] Is he a sociable man?
[Kobaladze] Very much so. [Passage omitted expanding on this]
[Venediktov] Yuriy Georgiyevich, it is said that when Yevgeniy
Primakov worked as a Pravda correspondent in the Near East as a young man,
he was already working for what was then known as the first intelligence
directorate, that is to say he served in the intelligence from very early
on. Have any reports from the young Yevgeniy Primakov been preserved in
your archives?[Kobaladze] Well, in the first place, in order to carry out
intelligence assignments...
[Venediktov, interrupting] The question is did he, or did he not?
[Kobaladze] No he did not, for the simple reason that when Primakov
worked in the Near East as a Pravda correspondent, and let me recall that
Pravda belonged to the CPSU Central Committee, well, the intelligence
service worked for the CPSU Central Committee and not the other way round,
so it would have been fraught with major problems to make use of a CPSU
Central Committee organ for intelligence-gathering purposes. It is an old
story, but it is still being fed to us, though I do not much care for this
word, but it is being fed to us from the West, by the Americans. It was
being peddled with special vigor when he was appointed Foreign Minister. I
am convinced that it will now creep back to the surface again. However,
before joining the intelligence service, Yevgeniy Maksimovich never worked
for it covertly or overtly. [passage omitted on Primakov's linguistic
aptitudes and Oriental interests]
Primakov's contacts in any European country or in America are as wide
as his contacts in the Near East and here again we come up against the
American thesis that he is Saddam's close friend, how can we trust a man
who is Saddam's friend?
[Venediktov] But it is no secret that under Mikhail Sergeyevich
Gorbachev and literally six months ago it was precisely Primakov who acted
as an intermediary between the West and Saddam, representing Russia. I
think it would have been more difficult for [Primakov's predecessor] Andrey
Vladimirovich Kozyrev to act as an intermediary with Saddam.
[Kobaladze] Well, obviously you can only be an intermediary if you
are personally acquainted with those involved in the conflict or a
negotiating process. However, it does not mean that Yevgeniy Maksimovich
would not have been able to act as an intermediary in talks devoted to some
other issues. Let me just recall the NATO problem. We can say that he was
an intermediary in the talks with Javier Solana, whom he surely did not
know before and in talks involving other problems.
It is no coincidence that he has developed normal relations with the
representatives of those countries that are not the easiest of partners for
us, the Americans, for instance. He is a man who can find a common
language with others, but who never sacrifices his principles or his
country's policy or interests. [passage omitted, emphasizing previous
sentences and on Kobaladze denying Primakov was behind the transfer of
former Stasi archives to Germany]
[Venediktov] What is the strongest characteristic, or qualities, of
Yevgeniy Maksimovich Primakov, your former boss?
[Kobaladze] He knows how to manage. He knows how to establish a
normal, effective team. He knows how to listen to people. He knows how to
make sure that his decision prevails, if necessary. He has his principles
and can at times be ruthless in the implementation of his policy. He knows
how to get on with people. He knows how to acquire supporters of his
policy. [passage omitted on Kobaladze recalling poor public rating of KGB
and its successors]
[Venediktov] Is Primakov more inclined toward compromise or is he
more a man of principle?
[Kobaladze] It is a synthesis and a sensible balance of compromise
and principles. [passage omitted stating that Kobaladze cannot think of
Primakov's weak points][Venediktov] What are his shortcomings?
[Kobaladze] He has none. [passage omitted on closing pleasantries]

*****

#8
Moscow Times 
September 15, 1998 
INSIDE RUSSIA: Parasites Look To Primakov For Fresh Feed 
By Yulia Latynina
Yulia Latynina is a staff writer for Expert magazine.
Special to The Moscow Times

Over the last few weeks, the Russian executive branch has consistently
followed a course that could be defined as "Save the lice instead of the
sheep." All measures taken against the oligarchs, who have been hastily
converting their banks' assets into hard currency and then siphoning that to
offshore accounts (their combined activities being termed "the financial
crisis"), were stamped out in the bud. The oligarchs themselves successfully
orchestrated their own actions to increase the government's panic and speed up
the syphoning process. The economic crisis instantly became a political one,
taking the country from the verge of default to the verge of revolution. 
Revolution is itself a type of political default, caused by a government's
failure to make good its obligation to support the social infrastructure. This
failure is inevitable once the benefits enjoyed by the privileged class begin
to exceed the benefits produced by the remaining players in the economic game.
Russia's infestation with economic lice has produced just such a result, with
the number of privileges granted to the parasitic oligarchy exceeding the
quantity of blood in the sheep they feed on. 
The appointment of Yevgeny Primakov as prime minister has engendered wide-
scale euphoria, and well it might; Russia has managed to avoid a potential
revolution. Meanwhile, it has become obvious that former Gosplan chief Yury
Maslyukov and former Central Bank chairman Viktor Gerashchenko will now
determine economic policy. Napoleon said it best: "They haven't learned
anything and they've forgotten nothing." Gerashchenko has already promised the
country a "controlled emission," of newly printed money and Maslyukov has
promised tight government control over how it will be distributed. 
This emission is to be carried out under the pretext of printing money to pay
salaries, but instead most of it will go toward providing credits for
unscrupulous banks. Gerashchenko has plenty of experience in this area: during
his tenure as Central Bank chairman from 1992 to 1994, Russian banks and
businesses grew fat on credits printed from thin air. This time, in the midst
of heavy inflation, banks will presumably return to the practiced business of
speculating against their own currency. 
With the ruble on a roller coaster ride, Maslyukov's Gosplan experience will
pay off. Price regulation will follow immediately after new money is printed,
and will be undertaken "in the interests of the workers." And by strange
coincidence it will also pay big dividends to the financial groupsc lose to
the authorities that manage to deregulate prices in their favor. The formation
of the financial pyramid of treasury bills has clearly brought our reforms to
an end. Primakov's ascendancy is an attempt to build yet another pyramid, this
time a political one. By postponing definitive measures regarding the
opposition, the economy and the oligarchy, the government is driving the
crisis inward. However, the government's reasoning is understandable, since it
is in no condition to contend with any opposition. 
However, there should be no doubt that sooner or later this pyramid too will
collapse. The unfolding political system will not be able to correct the
monstrous disparity between those who feed the economy -- from shuttle traders
to general directors -- and those who feed off it. 

******

#9
Luzhkov Calls for Russian Solutions to Crisis 

MOSCOW, Sept 10 (Interfax-Moscow) -- It is absolutely impermissible to
speak of an economic dictatorship in Russia, the implementation of the
so-called Argentine model or pegging the ruble to gold and currency
reserves, Moscow Mayor Yuriy Luzhkov told a Thursday news conference.
"We should give up Argentine tangos and Washington fox-trots. Russia's
problems should be resolved with an eye on Russia's specific features,"
hesaid.
"There are many reasonable people in the Russian land who can develop
a professional economic program. Unfortunately, this potential has not
been used and the best experts were substituted by (former acting Prime
Minister Yegor) Gaydar, (former economics minister Yevgeniy) Yasin, (former
economics minister Yakov) Urinson and the like," Luzhkov said.
He said stabilizing banking is one of the pressing tasks to stop the
crisis. "The government and the Central Bank should discipline banking
institutions which are now operating arbitrarily. Big sums arrive on bank
accounts, but transfers are delayed by several weeks," he said.
After that, Luzhkov suggested taking steps to index pensions, salaries
of government employees and "all the spending which the government should
carry out so that the population will not be impoverished altogether."

******

#10
Russian PM says Yeltsin backs economic plans
By Timothy Heritage

MOSCOW, Sept 15 (Reuters) - Prime Minister Yevgeny Primakov said on Tuesday
President Boris Yeltsin had backed his plans to pull Russia out of economic
crisis and he promised to complete his new government lineup in two days. 
The former spymaster and foreign minister said he would make settling wage and
pension arrears to millions of Russians a priority but, despite speculation he
will need to print money to do so, vowed not to allow the return of
hyperinflation. 
``The president basically approved what the government is doing now,''
Primakov, 68, told reporters after his first meeting with Yeltsin since
parliament confirmed him on Friday. 
Primakov gave few details of his economic plans, anxiously awaited by foreign
investors who fear Russia will turn away from the path of market reforms to
try to cushion the impact of the crisis on the population and reduce the risk
of social unrest in a vast country that still has nuclear weapons. 
But he said he would present a carefully prepared package of measures to
parliament and vowed not to make any one-off or drastic new moves just for
effect. 
``The measures for getting out of the crisis will not be completely new,'' he
said. ``Solutions will be found aimed at avoiding hyperinflation and any
worsening of the situation.'' 
Primakov is under pressure from the Communist-led opposition and prominent
economists to ease the plight of ordinary people hit by soaring prices and the
weak rouble, which started sliding against the dollar again after gains in the
previous few days. 
The crisis has been so severe that Interior Minister Sergei Stepashin told a
news conference police had at one stage worried about possible unrest. But he
ruled out protests on the scale seen in Albania and Indonesia over economic
and political problems. 
``As you may have noticed, there were no Albanian-style events, still less
Indonesian, in any town in the Russian Federation...and there will not be any
in future,'' he said. 
Yeltsin, 67, smiled and looked relaxed as he met Primakov, although his only
words in the presence of reporters was a brief exchange with his old ally at
the start of talks. 
He also did not speak to reporters after talks with Foreign Minister Igor
Ivanov and central bank chief Viktor Gerashchenko. 
Yeltsin has not commented on the crisis in public since Primakov was confirmed
on Friday by the State Duma, the lower house of parliament, although he made a
brief television address just before the confirmation vote. 
The president has been weakened by a crisis which has forced him to make
unprecedented concessions to the Communists, including withdrawing the
candidacy of his first choice as premier, former prime minister Viktor
Chernomyrdin. 
Primakov is trying to put together a broad-based government of
``professionals'' capable of winning regular support in voting in the Duma,
whose approval is needed for reform laws. 
He said government structures would not change much from last administration,
which was sacked on August 23, and promised to complete his team on Wednesday
or Thursday. 
Alexander Shokhin, parliamentary leader of the centrist Our Home is Russia
bloc, said on Tuesday he had agreed to be a deputy prime minister. He is
likely to work on economic policy under First Deputy Prime Minister Yuri
Maalyukov, a Communist. 
Primakov now has six cabinet members, including the defence and emergencies
ministers named last week, but several important political forces have said
they do not want to join his team. 
The Communists are keeping their distance, although Primakov has signalled a
shift of policy towards social welfare. 
Such a change in policy is unlikely to please Western creditors who say more
assistance depends on continued reforms. 
John Odling-Smee, the head of the International Monetary Fund department
dealing with Russia, was due to arrive in Moscow later on Tuesday for
``exploratory talks.'' 
He will meet members of the government to discuss policies for dealing with
the economic crisis and prospects for future loan payments from a $22.6
billion aid package agreed in July. 
The IMF has disbursed $4.8 billion of its share of the aid package and a
further $4.3 billion was due in mid-September. 
President Bill Clinton promised U.S. support on Monday if the new government
committed itself to market reforms. The Group of Seven (G7) leading industrial
nations sent a similar message after a meeting in London on Monday. 
Ministers from Britain, Austria and Germany are due in Moscow on Thursday for
talks on behalf of the European Union. 
Ordinary Russians have been hoarding for fear of shortages and are looking for
some respite, but faith in the authorities has been severely dented by the
crisis. 
The central bank's official rouble rate for Tuesday was 8.6707 to the dollar,
up from Monday's level of 11.4281 and much stronger than the rate of about 20
early last week. 
But the rouble was sliding on the electronic SELT system of the Moscow
Interbank Currency Exchange (MICEX). It fell to a bid/offer rate of
10.00/10.50 to the dollar for today settlement after hitting 7.95/8.30 earlier
on Tuesday. 
The rouble had firmed as banks prepared to pay debts due on Tuesday but
started falling when the contracts were settled. 

******

#11
Adviser to Primakov slams previous Russian govts

MOSCOW, Sept 15 (Reuters) - A Russian economist who has been asked to advise
the new cabinet on the economy said on Tuesday the governments in office since
the collapse of the Soviet Union had lost sight of national interests. 
"We did not have sufficient will, or consciousness of our state interests, or
the ability to see strategy," Leonid Abalkin, a former economic policy-maker
under Soviet leader Mikhail Gorbachev, told Interfax news agency. 
Abalkin met newly appointed Prime Minister Yevgeny Primakov on Monday and was
asked to advise the new government on economic policy. 
"We are living under a firefighters' regime which puts out fires as they
appear," he said of the previous governments. 
"For six years, not one government has explained to people what they are
trying to build, to what end we should all suffer." 
Interfax said Abalkin had criticised the previous governments for following
too closely the advice of the International Monetary Fund, but the agency did
not elaborate. 
The IMF's senior Russia specialist, John Odling-Smee, was due to arrive in
Moscow on Tuesday for talks with officials. 
Abalkin praised Primakov's choices of Communist First Deputy Prime Minister
Yuri Maslyukov as economics supremo and Viktor Gerashchenko as central bank
chief. Both men were involved in the slower paced reforms of the Gorbachev
era. 
Primakov replaced young reformer Sergei Kiriyenko, who was appointed after
veteran Prime Minister Viktor Chernomyrdin was sacked last March. Chernomyrdin
had taken over from acting Prime Minister Yegor Gaidar in Decemebr 1992. 

******