September 17, 1998   

This Date's Issues: 2378• 2379 •2380•

Johnson's Russia List
#2379
17 September 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: Place for 
Central Planning. 
2. AP: Yeltsin: Forming Cabinet Takes Time.
3. AFP: Musical chairs game leaves Russia same as it ever was.
4. Reuters: Russia's Nemtsov warns hyperinflation likely.
5. Washington Post: Jim Hoagland, Primakov's Task.
6. New York Times: William Safire, Beware Primakov.
7. Reuters: Russia TB threatens epidemic, say groups.
8. Journal of Commerce: Kenneth Kasa, Russia finds few lessons in
China.
9. Karl Ryavec: new government.
10. Albert Weeks: History: Stalin's policies from August '39 to 
June '41.
11. Abe Brumberg: Birobidzhan.
12. Reuters: Yeltsin seeks moves to bar riots in Oct 7 protests.
13. Interfax: Zyuganov--Opposition To Judge New Government by Deeds.
14. Reuters: Yeltsin vows to pay half wage debt to military.]

******

#1
Moscow Times
September 17, 1998 
DEFENSE DOSSIER: Place for Central Planning 
By Pavel Felgenhauer
Special to The Moscow Times

At the last moment Russia's political leaders produced a power-sharing formula
that could allow Communists and nationalists to join a broadly based coalition
government under the new prime minister Yevgeny Primakov. Political tension
was resolved in a democratic, constitutional way and for the time being
Russia's armed forces will stay were they should -- in barracks and out of
politics. 
Of course, this new government will in many respects roll back market reforms.
There will be massive nationalization of unprofitable, bankrupt enterprises in
the defense sector, the coal mining industry and so on. The new Central Bank
chairman, Viktor Gerashchenko, will soon be printing rubles on the double to
pay off arrears to soldiers, teachers, miners and pensioners. This printing of
money will most likely prevent public disturbances that might have transformed
into bloody revolution this fall if the "reformist" government of prime
minister Sergei Kiriyenko had continued in power. But it will also inevitably
cause rampant inflation and a continued devaluation of the ruble in the
months, and maybe even years, to come. 
However, only massive money-printing can now prevent a full nationalization of
Russia's banking sector. Even the Communists do not seem keen to nationalize
banking, having failed to pounce on the opportunity to nationalize the
crippled SBS-Agro bank when the "reformist"-led Central Bank proposed such
legislation to the Duma last month. But even if most banks stay private, the
renationalization of industry will create a huge unprofitable government-owned
economy in Russia and some form of central planing will have to be
reintroduced to control it. Of course, "central planning" is a politically
incorrect option, but is it permissible if it can be introduced without
violence, leaving Russia's democratic institutions intact, and with no
dictator ruling from the Kremlin. 
Russia's free market economic reforms were doomed from the moment former
acting prime minister Yegor Gaidar began them in 1992. The Russian
"reformers", strongly supported by Western free-marketeers, mistakenly
believed that the Soviet system of central economic planning was almost solely
to blame for the decay and fall of the Soviet Union. Central planning is not
good or bad in itself, since it is only a tool, a way of getting things done,
especially effective in time of war and crisis. 
The main flaw of the Soviet economy that Russia inherited in December 1991 was
its total militarization. Russia's industry was geared to produce thousands of
tanks, guns, planes and rockets that could compete with Western armaments on
the battlefield, yet Russia had neither the know-how nor the machinery to
produce any competitive consumer goods except vodka. Nor did the speedy
privatization of Russia's industry do any good, especially when overall
control of many privatized companies was handed over to Soviet-era managers
and arms designers -- the defense industry nomenklatura because there were no
other managers around. 
The "invisible hand" of market forces did not bring investment and structural
reform to defense-oriented industry, giving rise instead to a barter economy
that helped keep insolvent factories partially afloat. But barter means there
is little real money around for investments and real reforms. The inevitable
result of this was only massive graft, since being honest in Russia's decaying
"market" economy did not bring any sizable dividends or investment. 
It would seem that the only way to demilitarize and reform Russia's Soviet-
made war economy is by introducing some sort of central planning, as was the
case in Japan after World War II. These reforms are still possible if the West
does not abandon Russia on the grounds that it is turning away from market
reform. 
Given that today the majority of Russians are unwilling to endure any more
meaningless suffering in the name of the market, basic democratic principles
should now serve as the criteria for Western aid, not market reform. 
The West should help Russia demilitarize and build the foundations of a
competitive, consumer-friendly economy. This requires that it provide
sufficient financial aid to prevent a total Russian default on all foreign
debt, which would effectively destroy all meaningful channels of communication
between Russia and the outside world. Preaching a continuation of market
reform to Russians will only convince them that the Communists and
nationalists were right from the beginning, and that the West has no other aim
than to ruin Russia completely. 
Pavel Felgenhauer is defense and national security affairs editor of Segodnya.

*******

#2
Yeltsin: Forming Cabinet Takes Time
September 17, 1998
By VLADIMIR ISACHENKOV

MOSCOW (AP) -- One month after Russia's crisis hit, the new government's
economic policy remains a mystery and the ruble was again falling fast today.
President Boris Yeltsin said it could take another week to install the full
Cabinet.
Yeltsin, who has made few comments about Russia's burgeoning economic
problems, met today with Defense Minister Igor Sergeyev. The president said
the heads of the government's security ministries, including Sergeyev, would
not change, but more time was needed to fill other posts.
The key job of Finance Minister and other Cabinet positions were still under
discussion, the president said.
``We will need an extra week to fully form the Cabinet,'' Yeltsin told
reporters.
The embattled ruble, meanwhile, plunged further.
The Russian currency was trading at around 15 to the dollar today at the
Moscow currency exchange after recovering to 7.5 to the dollar earlier this
week. The Russian currency stood at around 6 to the dollar before the crisis
began in mid-August.
Yeltsin and new Prime Minister Yevgney Primakov have moved cautiously in
building the Cabinet and have been offering posts to politicians across the
spectrum -- including Communists.
Primakov has yet to detail his economic program, saying only that he will
continue reforms while trying to protect Russian citizens from the painful
effects of the crisis.
The government says its top priority will be paying off debts to millions of
workers and pensioners who haven't been paid in months. However, the
government is broke, and the only way it can quickly get the funds is by
printing money, a move likely to increase inflation.
Prices were rising less than 1 percent a month before the crisis hit. They
have gone up 43 percent in the first half of September, the government said
Wednesday.
Amid the economic and political uncertainty, Primakov has told government
officials not to speak to the media until the new Cabinet is in place.
That has angered Russian journalists, who have spoken about return to the
Soviet-era censorship.
``The introduction of such practices would turn the government into a secret
service and only feed rumors instead of trustworthy information,'' Alexei
Venediktov, the head of the popular Echo Moscow radio station said, according
to the business daily Kommersant.
Primakov defended himself today, saying he stands for freedom of information.

*******

#3
Musical chairs game leaves Russia same as it ever was

MOSCOW, Sept 17 (AFP) - As silence falls on the latest game of government
musical chairs Russia again finds itself run by the group of bureaucrats who
held top posts both five and ten years ago.
And analysts said Thursday it really could not have turned out any other way.
Firstly, Russia's political elite is hostage to an unbending system of
allegiances set up in the five-year premiership of Viktor Chernomyrdin, a
former Soviet minister and champion of the status quo.
Both the liberal and left oppositions that could have provided fodder for new
governments have manwhile not been inclined to share any responsibility for
solving Russia's struggles, analysts say.
And the business elite of so-called oligarchs who stay on cozy terms with the
government -- if not with each other -- are linking arms in a time of
financial turmoil around a clique of tried and tested politicians who are
unlikely to spoil the shrinking financial pie.
"Sure, there is only a small circle of people that all these elites can trust
together. On the other hand, it shows that the government is terribly stable,"
observed Sergei Kolmakov of the Fond Politika research institute.
"The bureaucracy is infiltrated with Chernomyrdin's people. Even if they did
not enter his party they stayed loyal to keep their jobs," Kolmakov said.
"Yevgeny Primakov, meanwhile, is a Soviet apparatchik. Even if he wanted to
change things around, he knows he would face sabotage."
Russian ministers have come and gone in recent years with exhausting
regularity, often prompted by President Boris Yeltsin's personal mistrust of
politicians or his efforts to spread blame for failed policies.
Yeltsin sacked Chernomyrdin in March, brought him back after firing the
technocrat Sergei Kiriyenko last month, then dumped him under parliamentary
pressure in favor of former spymaster Primakov.
But once the dust settles, the country usually finds the same cast of
characters back in place.
Although there is no more Chernomyrdin, three disciples from his Our Home Is
Russia (NDR) party have been installed in top cabinet posts.
Primakov's new economic soldiers Alexander Shokhin and Yury Maslyukov both
served in the mammoth Soviet planning agency Gosplan in the late 1980s.
Shokhin also served under Chernomyrdin in 1992-94 and in the new government
even regains many of his old functions.
Russia new central banker, Viktor Gerashchenko headed the old Soviet Bank, and
the Russian Central Bank from 1992-1994. The woman who succeeded him for a
year, Tatyana Paramonova, returned as his deputy.
Another of Primakov's new deputies, Vladimir Bulgak, served as both Soviet and
Russian communications minister for 15 years before joining the NDR faction
and Chernomyrdin's government.
"There are no real Communists here, it is simply another Chernomyrdin
government as both Maslyukov and Shokhin will follow the same strategy," said
Sergei Markov of the Institute of Political Studies.
"Our government follows its own political inertia and the line is mostly the
same because of a deficit in personnel," Markov said. "These people all know
and trust each other. It is a very tight group, no matter what party they are
from."
Added analyst Andrei Piontkovsky: "The NDR is not a party of power. It is a
party of any power."
In the meantime, despite foiling Chernomyrdin's candidacy, the Communist and
liberal opposition have quickly backpedaled from Primakov, whom they voted
through last Friday.
"The opposition has won, but is not prepared to take responsibility for its
victory," remarked the daily Russky Telegraph.
Meanwhile, hurt by Russia's devastating economic crisis, the oligarchs that
had tried furiously to push their people into earlier cabinets have now linked
arms around the centrist government.
"The oligarchs spent years building a stable system by which money, including
budget money, filters through," Kolmakov said. "In a crisis these people are
thinking of survival. There cannot be a serious change of policy, one which
any other government would not have also followed."

******

#4
Russia's Nemtsov warns hyperinflation likely

MOSCOW, Sept 17 (Reuters) - Former Deputy Prime Minister Boris Nemtsov warned
on Thursday that the new Russian government's ``stupid policy'' of printing
money would lead to hyperinflation, and said the government might not last
long. 
``I am not sure this government will exist more than half a year,'' Nemtsov
told Reuters Television, referring to the cabinet of Prime Minister Yevgeny
Primakov. 
Asked how likely was the chance that the new government's announced intention
to print money would lead to hyperinflation, Nemtsov said: ``Very big.'' 
``I know who are advisers to this goverment. The advisers are Soviet-style
economists who want, I would say, a lot of strange things like to print a lot
of money, that's the first message. To print money, that's the second message,
and to print money, that's the third message, and no more,'' he said. 
``If they do nothing for a few months, I think Russia has a chance to overcome
crisis,'' he said, speaking in English. 
``But unfortunately I think that after appointments of the key persons inside
the government and central bank, first what they want to do is printing
money.'' 
He said Russia's liberals would oppose the new government's policies. ``We are
against this stupid policy.'' 

******

#5
Washington Post
September 17, 1998
[for personal use only]
Primakov's Task
By Jim Hoagland

BONN—The ascent of Yevgeny Primakov to the highest rungs of the Kremlin's
power ladder represents the most damaging failure of Western foreign policy
since Iraq's invasion of Kuwait in 1990. This development shreds all pretense
that President Clinton and his peers can now significantly influence events in
Russia's beleaguered democracy.
Installed as President Boris Yeltsin's latest, and probably last, prime
minister on Sept. 11, Primakov takes over an economic and political wreck of a
nation beset by growing threats of widespread social instability.
The wreckage is mostly a Russian responsibility. But the turn to Primakov also
reflects a final collapse of the reform efforts led by Anatoly Chubais and the
others who repeatedly convinced the U.S. Treasury and the International
Monetary Fund that success was only a few more billion dollars away.
It wasn't. Instead, those sizable U.S. and European rescue efforts have ended
with the scorching and undermining of the credibility of a generation of
Russia's economic "reformers." Also humiliated in this sequence was the
U.S.-friendly Viktor Chernomyrdin, until recently feted by Vice President Gore
as Russia's man of the future.
Russia's financial shambles forced Yeltsin to choose last week between turning
to open repression to save his rule and turning to Primakov, whose survival
instincts make him the modern era's Talleyrand and an invaluable asset for the
senescent Yeltsin's efforts not to be deposed.
The essential problem for U.S. interests lies in the political decimation of
credible market-oriented partners on the Russian side -- not in Primakov's
well-honed suspicions of America's world role or in his negative views of the
market economy shaped in Soviet days.
On display when he was an economic adviser to Mikhail Gorbachev, spymaster and
foreign minister to Yeltsin, or newspaper correspondent in the Middle East 25
years ago where our paths first crossed, Primakov's suspicions and views
remain. But they will not figure significantly in Russian policy choices as
Primakov confronts the task of preventing Russia from disintegrating.
Like Talleyrand, who rose through one collapsing French regime after another,
Primakov is above all a situationalist. It is not in Russia's interest or
ability now to pursue adventures in the Middle East or in remaking the Soviet
empire, however such goals might appeal to Primakov intellectually. He is
unlikely to spend scant resources fiddling with such ideas while Russia burns.
He is a realist. When I saw him in Moscow in May, he pointed out that despite
my suspicions he had not interfered with the stumbling Middle East peace
efforts by his friend Madeleine Albright and by other U.S. officials. "I am
content not to share their failure," he said with a rumbling baritone chuckle.
In a July speech in Geneva, he openly criticized the economic program the
reformist government of Sergei Kiriyenko was pursuing, with generous funding
from the IMF and fatuous praise from a now terminally insincere Clinton
administration. But Russian friends assured me Primakov wasn't positioning
himself to become prime minister. He hoped to stay at the once demoralized
foreign ministry, where he had performed impressively as a manager. Events
overtook that hope.
In August Yeltsin and his family became convinced that Kiriyenko could not
protect them if angry, hungry and hopeless Russians took to the streets en
masse, according to well-informed Russian and diplomatic sources.
When the Duma blocked Yeltsin's attempt last week to bring back the trusted
Chernomyrdin, some in Yeltsin's inner circle urged him to suspend the Duma,
rule by decree and depend on security forces to control the situation.
Instead, Yeltsin turned to Primakov as a compromise caretaker. He is trusted
by the Communists and other opposition forces not to use the office as a
steppingstone to the presidency after Yeltsin goes.
Primakov's immediate priorities are to reschedule Russia's foreign debt
through the so-called London Club of lenders, to get rubles into the hands of
panicky Russian consumers and to restore greater state control over an economy
that has been effectively disindustrialized. Plans to implement some form of
foreign exchange control are in the works.
Such efforts run counter to IMF and U.S. Treasury fiscal orthodoxy. But
America's European partners, accustomed to greater state intervention and
strong safety nets, are counseling Washington "not to dramatize" any
misgivings about Primakov.
Given the abyss on which Russia teeters, the administration probably should
swallow that bitter pill of advice. No significant new financial aid is or
should be forthcoming at this point. But emergency food aid is an appropriate
response to the Russian winter crisis already in the making. Recognizing that
resuming old quarrels with Primakov is a luxury we cannot afford is another
judicious immediate political response.
Russia's fate is now beyond any strictures or empty praise that Clinton, his
aides or allies can offer. The West has failed to make the most of its
opportunities in Russia and helped the politicians it supported discredit
themselves. Primakov's statist efforts now will fail, or perhaps succeed,
without the outside investment and involvement of the past seven years. 

******

#6
New York Times
September 17, 1998
[for personal use only]
William Safire: Beware Primakov 

WASHINGTON -- The man the Russian Parliament forced President Yeltsin to
name Prime Minister is a former K.G.B. agent, a friend of dictators in Iraq
and Serbia, and an enemy of the West. 
Yevgeny Primakov made it to the top because he was every power center's
second choice. They all see this cagey spymaster as a transitional figure
easily replaced after the worst is over. They may all be wrong. 
The Soviet Union had three power centers: the Communist Party, the K.G.B.
and the Red Army. In Russia today, there are still three: (1) the oligarchs
who stole the state's assets through corrupt privatization and socked away
billions outside the country; (2) what's left of the Communist Party,
supported by elderly pensioners, and (3) democratic reformers, many appointed
and then scapegoated by the weakened Yeltsin. 
Last spring the oligarchs directed Yeltsin to fire their own man, Prime
Minister Chernomyrdin, who for five years had condoned their stealing of the
state's assets. In went a reformist unknown, wet behind the ears, to take the
fall for the inescapable devaluation and default. After that victim did his
duty, the oligarchs told Yeltsin to put back Chernomyrdin. 
But the Communists in Parliament would not go along. They threatened Yeltsin
with impeachment and dared him to dissolve the Duma by pressing three times
for the oligarchs' choice. 
At this point, assuming the Communists would do well in parliamentary
elections, the last of those reformers left standing -- Grigory Yavlinsky,
head of the Yabloko party in Parliament and untainted by association with
failed Yeltsin policies -- proposed Primakov as prime minister. 
I reached Yavlinsky by telephone in Moscow to ask: Are you guys out of your
minds? When Russia most needs the West, you put in a lifelong enemy of
freedom? When Russia's economy most needs the price of its oil exports to go
up, you put in the man who wants to get Iraqi production flowing to save
Saddam and bring on an oil glut? When Russia most needs the rule of law and
private property, you bring in a veteran Communist with no understanding of
free enterprise? 
"This was a painful compromise," he explained. "Primakov was the only one
Yeltsin and the Communists could agree on. I have no deal with him." That
turns out to be true; as Primakov surrounded himself with Gorbachev-era
Communists, Yavlinsky turned down the offer of a deputy prime minister's post.
Yavlinsky's rationale is that Primakov has promised (1) not to use force in
Chechnya; (2) to soothe the West with ratification of Start 2, and (3) to
follow the Constitution in organizing elections. Averting civil war, he says,
is not nothing. 
After the years of ripoff by the crony capitalists, the pendulum of Russian
public opinion has swung leftward. Capitalism never had a chance without
courts to enforce contracts and cops to stop corruption, but the criminal
oligarchy has left capitalism in disrepute and reduced most trade to barter. 
In this angry atmosphere, Yavlinsky puts the protection of political freedom
ahead of the adoption of sensible economic policies. "This is temporary," he
insists, "and somebody has to be in office to protect the nukes and see to it
we have free elections." 
That's his case for Primakov, and we'll be hearing more of the same
stabilizing stuff from his Manila dance partner, Secretary Madeleine Albright.
But I wonder. 
Here we see the oligarchs in bed with Marxist economists who promise to
protect bankrupt enterprises and print inflationary money. Remaining
democratic reformers hope that the ensuing disaster will be blamed on the
lefties in the Duma elections next year and elections for the presidency the
year after. 
That's wishful thinking. Primakov will take Russia toward more state
economic control, which is only a step away from central political control.
The old K.G.B. hand knows how to squeeze the oligarchs to make their media
support him. Transition is not his ambition. 
Should we bail out Primakov's ailing Russia? The Czech President, Vaclav
Havel, offered a sage comment to the Clinton claque of applauding bureaucrats
at their joint news conference yesterday: "Better an ill Russia than a healthy
Soviet Union." 

******

#7
Russia TB threatens epidemic, say groups 
By Reuters, 09/17/98 

LONDON - British, American, and French doctors warned yesterday that the spread
of tuberculosis in Russia could become a worldwide epidemic. 
``It is only a matter of time before drug-resistant tuberculosis of Russian
origin becomes a reality in other countries worldwide,'' said Dr. Nicholas
Banatvala, of Medical Emergency Relief International. 
The British charity, in a statement issued with Doctors Without Borders and
the New York Health Research Institute, called for the world community to
provide funds to combat the crisis. All three organizations are piloting
modern TB treatments in Russia. 
``Current levels of drug-resistant tuberculosis in Russia are alarming and the
economic crisis will exacerbate the problem many times over. In our view, this
local humanitarian disaster has reached the proportions of a direct global
public health threat,'' Banatvala added. 
The British charity estimates that the emergency program for Russia would cost
about $100 million. 
Tuberculosis is an airborne infection that kills three million people each
year. New drug-resistant strains are emerging and the disease has reached
epidemic proportions in many poor countries. After nearly being wiped out, it
is also reemerging in some rich countries. 
The British charity said the shortage of anti-TB drugs in Russia will lead to
substandard antibiotic treatment that will increase drug-resistant strains. 

*****

#8
Journal of Commerce
September 17, 1998
[for personal use only]
Russia finds few lessons in China
BY KENNETH KASA
Kenneth Kasa is a senior economist at the Federal Reserve Bank of San
Francisco, which published a longer version of this in its Economic Letter.
His views are not necessarily those of the Federal Reserve Bank of San
Francisco or the Board of Governors of the Federal Reserve System. This
article was distributed by Bridge News. 

Recent events in Russia raise the question of how the country got itself into
this mess. One question that is often asked is whether Russia could have
learned from China.
Despite some valid concerns over the integrity of its banking system, China's
reform program has achieved a record of success that is the envy of the
developing world. Since reforms began in 1978, China's per capita income has
more than quadrupled.
In contrast, since its reforms began in 1992, Russia's per capita income has
declined 20% to 40%, depending on how large you think the black market economy
is.
The reform strategies of Russia and China differed in two fundamental
respects. First, political reform in Russia preceded economic reform, whereas
political reform in China seems to be lagging well behind economic reform.
Second, there was a dramatic difference in the speed of economic reform.
Russia pursued a "big bang" approach, which entailed rapid and comprehensive
privatization and price liberalization.
China has pursued a "gradualist" approach, which introduces market forces in
an incremental manner to an ever-widening array of activities.
Given China's success, many argue that Russian reforms should have been more
gradual. But the comparison is misleading. China's successes offered few
lessons for Russia.
The economic reform process in China began with the Communist Party Plenum of
December 1978. This called for an immediate and comprehensive liberalization
of the agricultural sector.
Agricultural communes were disbanded and replaced by privately run household
farms. This led to an immediate and dramatic improvement in productivity and
rural standards of living.
Before the mid-1980s, capitalism in China was confined to the farms and the
state enterprise zones. However, in 1984, elements of market competition began
to creep into the domestic industrial sector.
Large state-owned enterprises were given greater autonomy, while restrictions
on formation of new firms were relaxed. This produced an explosion in the
growth of private and semiprivate firms.
Most of these new firms, so-called township and village enterprises, took root
in rural districts, and since the mid-1980s they have been the catalyst of
China's growth.
Most experts agree that restoring the economic viability of the large state-
owned enterprises is the last and most challenging item on the Chinese reform
agenda.
Despite their diminished economic significance, they remain vitally important
to the Chinese people. Because of employment guarantees, few urban workers
have left them to work in the more dynamic township and village enterprises.
Employment growth there has come almost entirely from the agricultural sector.
In fact, the employment share of state-owned enterprises has remained
virtually constant. Getting their workers into the riskier private sector
could be difficult, as the Russian experience well attests.
Political reform preceded economic reform in Russia, with Mikhail Gorbachev's
rise to power in March 1985. As in China, economic reforms were initially
undertaken in order to preserve the political system.
What is often overlooked is that Mr. Gorbachev initially tried a gradual
Chinese-style reform strategy but failed. The reason highlights a crucial
difference between Russia and China, one that limits the applicability of the
Chinese experience to Russia.
The tragedies of the Great Leap Forward (1958-62) and the Cultural Revolution
(1966-76) had greatly discredited Chinese communism by the time of Mao's death
in 1976.
Faith in central planning, in particular, had waned. When Deng Xiaoping took
over, the bureaucracy was receptive to change.
In contrast, Marxist ideology was still very much alive in the Soviet Union
during the mid-1980s, and the bureaucracy still had a firm grip on the reins
of power. Moreover, Russian socialism had a longer history and the bureaucracy
had engulfed a much larger share of the economy.
Thus, whereas Deng was able to push through economic reforms over a relatively
limited set of activities, Mr. Gorbachev's reforms were sabotaged by the
bureaucracy.
Massive diversion of state profits caused a collapse in the central
government's tax revenue. This precipitated a fiscal crisis that set the stage
for future macroeconomic instability, further limiting the scope for reforms
while at the same time increasing their necessity and urgency.
In the end, it turned out that Mr. Gorbachev was unable to accomplish any
significant economic reform.
By the time he lost control in 1991, the economy was a shambles. Drastic
action, or "shock therapy," was the only option.
Political differences were undoubtedly a crucial factor in the contrasting
reform experiences of Russia and China. However, the structure of their
economies also differed in ways that favored gradual reform in China and rapid
reform in Russia.
At the outset of its reforms, China was basically an agrarian peasant economy.
In 1978, 71% of the labor force was employed in agriculture.
Much of the reform process involved shifting workers out of agriculture, where
productivity was low, and into more productive pursuits in the township and
village enterprises.
By all accounts, this reallocation has been very successful. By 1994, only 54%
of the labor force was in agriculture. At the same time, because of greater
productivity, agricultural output has increased.
Russia didn't have this option. At the start of its attempted reforms, 85% of
the labor force was employed in nonagricultural state enterprises.
To hire workers, fledgling private firms had to lure them away from state-
owned firms, where employment was secure and wages were generous. Thus, before
the private sector could get going in Russia, subsidies to state-owned
enterprises had to be eliminated.
Politically, this is difficult, as China is currently discovering.
Gradual liberalization gives managers and local bureaucrats time to plunder
state assets, while sudden liberalization causes social unrest. 

******

#9
Date: Wed, 16 Sep 1998 
From: ryavec@polsci.umass.edu 
Subject: McFaul on new government

Dear David:
I agree with everything said by Michael McFaul on the 15th. True, the new
government is not a break with one side of "Yeltsinism." However, since a
lot of water has flowed over the Russian dam since spring 1998 Primakov's
team cannot go back to the ways of the Chernomyrdin government. The context
in which it exists is very different. Accordingly, this government will
have to act somewhat like a communist government. It may even be the last
government prior to one that is very different.

******

#10
Date: Wed, 16 Sep 1998 
From: Albert Weeks <AWeeks1@compuserve.com>
Subject: History: Stalin's policies from August '39 to June '41

For those many JRL readers who have inquired of me e-mail 
about an item of mine posted on JRL this summer 
concerning the current controversy in Russian historical 
and military journals over Stalin's policies from August 
1939 to June 22, 1941, they might profit from reading 
my extended article on this controversy in the current 
(November) issue of the quarterly WORLD WAR II 
magazine. The piece is entitled, "Was Hitler 'Forced' 
into Attacking Russia?" OMRI journal TRANSITIONS 
is running another piece by me on this topic in their 
November issue. In both articles, I canvas 
the positions on this topic held by such writers, historians, or 
academicians as Yuri Afanas'ev, Viktor Suvorov (Rezun),
David Glantz (U.S.), Grabriel Gorodetsky, V. A. Nevezhin, 
Yu. A. Gor'kov, M. I. Mel'tukhov, et al.

******

#11
Date: Fri, 11 Sep 1998
From: abe brumberg <102142.2545@compuserve.com>
Subject: birobidzhan

A Dream Gone Awry
By Abraham Brumberg
Book Review
STALIN'S FORGOTTEN ZION--BIROBIDZHAN AND THE MAKING OF A SOVIET
JEWISH HOMELAND by Robert Weinberg
With an Introduction by Zvi Gitelman
104 pp. Un. of California Press, l998 

Of all the projects launched by the Soviet government, the
attempt at creating a "Jewish Homeland" in the country's Far East
was probably among the strangest and its results among the most
pathetic. It was the brainchild of Jewish Communist ideologues
eager to confer the status of "nation" on the three-million Soviet
Jews, a classification reserved--according to Lenin and his prize
pupil Joseph Stalin--for a linguistically-homogeneous ethnic group
boasting its own territory. The idea was to channel hundreds of
thousands of unskilled laborers and petty bourgeois merchants into
"productive" professions, mainly agriculture. Soviet Yiddishists
welcomed the project in the hope that it would help render Yiddish
the lingua franca of Soviet Jews; others regarded it as a way to
counteract the appeal of Zionism. In the higher reaches of the
Kremlin, the idea of a barrier of settlements to deter potential
Chinese and Japanese territorial appetites struck a particularly
responsive chord.
In l928, the Soviet government proclaimed the Birobidzhan
District available for Jewish agricultural settlement. Soviet
sympathizers abroad hailed the decree, a few of them even departing 
for the Soviet Union to lend a hand in the construction of a
glorious Jewish socialist future. 
Alas, the grand design ran aground from the very beginning. 
The thousands of Jews from Ukraine and Byelorussia who embarked on
the arduous two-week trip to the other end of the USSR found a
land, about the size of Belgium, covered with forests, swamps and
marshes, alive with ravenous mosquitoes, lashed by rains in the
summer and icy winds in the winter. The wretched conditions drove
the colonists into abject poverty, beggary and prostitution. 
Many of them immigrants left, but colonizing efforts
continued, and some improvements were introduced. In l934, the
Birobidzhan District was officially upgraded to Jewish Autonomous
Region. Several Yiddish schools and other Yiddish cultural
institutions opened, and delegations of Yiddish writers and actors
came from Moscow and Kiev, though less for the purpose of settling
there than pour encourager les autres. By l937, the capital city
boasted l0,000 inhabitants, but still lacked a sewage system and
electricity. Two years later Jews constituted only l8,000 out of
the Region's l09,000 residents. Despite a postwar campaign to
bring more Jews from Russia's war-ravaged territories, most of them 
seething with antisemitism, few showed any inclination to eke out
a living in tumbledown kolkhozes or primitively equipped factories
thousands of miles from home.
And so "productivization" turned out to be a delusion, the
whole "experiment" a bust. Only 9000 Jews live in Birobidzhan
today. What continues to thrive is the Potemkin village tradition:
the autonomous region is still nominally "Jewish", the names of the
streets and towns are written in Cyrillic and Yiddish (Hebrew)
lettering, the local radio occasionally broadcasts concerts of
Yiddish folk songs, and the paper Birobidzhanskaya zvezda, features
a Yiddish column.
What explains this doleful denouement? Weinberg, in his
cogent and lively account, rightly points out that the steady
decline of Yiddish all over the Soviet Union was due largely to the
lure of the Russian language and culture. Why should Jewish
children learn algebra or history in Yiddish, if the one sure path
to professional advancement and cultural integration was signposted
in Russian? Weinberg is right, too, in stressing Stalin's furious
attack on Jewish "bourgeois nationalism," part of the Great Terror
of the l930s, which resulted in the wholesale disbanding of Yiddish
schools, journals and other cultural institutions, as well as the
arrest of some leading Jewish personalities.
Stalin decimated other national cultures, too. Yet there was
always something sui generis about the Jewish case. From the l920s
on, Yiddish writers were subjected to humiliating attacks on
grounds of "clericalism", "Zionism" and "nationalism," in fact for
any seeming expression of Jewishness, or sense of commonality with
Jews outside the USSR. For a long time, Jewish religious practice
was combatted by the (Jewish) Association of Militant Atheists
(krigerishe apikorsim, an inane mistranslation, literally 
"quarreling heretics"). Hebrew was banned, Hebrew words in Yiddish
had to be spelled out phonetically rather than retaining their
original form, Yiddish orthography was revised. And so eventually
Jewish culture was denuded and Yiddish became little more than the
instrument for composing flatulent hosannas to Lenin and Stalin and
hymns to socialist tractors tilling socialist soil.
There was also the problem of antisemitism. Weinberg writes
about it, but fails to make the connection between the l930s and
the l940s, when Jews were singled out--quite unlike any other
nationality--for brutal treatment, with all the familiar images of
traditional anti-Jewish hatred. In the l920s and l930s, parents
were reluctant to send their children to Yiddish schools because
they saw no future in Yiddish, but also because they wished to
protect them from antisemitic attacks. By the late l940s,
antisemitism had graduated from the level of communal attitudes to
that of state policies. 
Like many others whom he brought to power after the mammoth
purges of the l930s, Stalin himself was an authentic antisemite.
The demise of secular Jewish culture in the Soviet Union and of the
JAR might have occurred anyway, earlier or more likely later: there
were certainly plenty of "objective" reasons for it. But Stalin
provided the coup de grace. 
Stalin's Forgotten Zion contains splendid photographs edited
by Bradley Berman and an informative historical introduction by
Zvi Gitelman. My minor caveats notwithstanding, the book is to be
heartily recommended to anyone with the slightest interest in the
curiosities of contemporary history. 

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#12
Yeltsin seeks moves to bar riots in Oct 7 protests

MOSCOW, Sept 17 (Reuters) - Russian President Boris Yeltsin told his Interior
Minister to take measures to prevent ``attempts to blow up the situation'' in
Russia during mass protests planned for October 7, Russian news agencies said
on Thursday. 
``The president signed serious orders in connection with the planned protest
actions,'' Interfax news agency quoted Interior Minister Sergei Stepashin as
saying after a meeting with Yeltsin in the Kremlin. 
He said the measures were aimed at preventing riots and ``actions which could
represent a threat for the state,'' such as blockages of major roads and
railways. He also warned against protests in the armed forces. 
``We will be tough in this issue,'' Stepashin said. 
Police and Justice Ministry officials would also meet opposition and trade
union leaders who are organising the protests to solve the issue of
maintaining public order. 
Communist opposition and trade unions will hold strikes and marches across
Russia to protest against the failure to pay pensions and wages as well as the
general impoverishment of the population. They are also demanding a change in
the course of market reforms. 
Stepashin said Yeltsin had ordered a reorganisation in Interior Ministry
troops into mobile units and signed an unspecified order on combatting drug
trafficking in the country. 
The two men also discussed the situation in Russia's Caucasus republic of
Dagestan where cases of violence, mainly on religious grounds, have become
commonplace. 

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#13
Zyuganov--Opposition To Judge New Government by Deeds 

MOSCOW, Sept 14 (Interfax) -- The attitude of the left-wing opposition
toward the new Russian Cabinet will depend on the policy it is going to
pursue, Communist Party of Russia leader Gennadiy Zyuganov told a briefing
in Moscow Monday [14 September].
Leaders of the left-wing opposition People's Patriotic Union bloc
decided at their meeting earlier in the day not to issue any
recommendations on whether leftist organizations should allow their members
to join the new government, he said. Zyuganov is the chairman of the
People's Patriotic Union.
"We will support everyone who is going to pull the country out of the
marsh," he said.
The opposition unanimously supports the plan to hold a nationwide
protest October 7 and insists on dismissal of the president as "the chief
destroyer ofthe country," Zyuganov said.
The left-wing opposition will demand at the protest that "everyone who
has led the country to where it is now" be held accountable, he said. 
Among the alleged culprits Zyuganov named leader of Russia's Democratic
Choice party, economist Yegor Gaydar, former First Deputy Prime Minister
Anatoliy Chubays, former Prime Minister Viktor Chernomyrdin and former
Deputy Prime Minister Boris Nemtsov.
The impeachment proceedings against Russian President Boris Yeltsin in
the Duma will continue, Zyuganov said. "Some officials did not have the
nerve to attend the impeachment commission's Monday meeting at which the
Chechen war was supposed to be discussed," he said.
Zyuganov also said the new prime minister, Yevgeniy Primakov, "has
assessed the problems facing the country correctly." "The question is if he
will find the right people to solve the problems," he said.
Primakov needs support from the majority in the Federation Council and
the State Duma, he said.
Zyuganov also said that acting Deputy Prime Minister Boris Fyodorov is
"an ultra-liberal." He said Fyodorov's view of the economy does not fit
the present situation in the country.
Acting Finance Minister Mikhail Zadornov "is also a liberal, and he
knows the budget procedures," Zyuganov said. "But he has not yet shown
hisbest."
On the refusal of Grigoriy Yavlinskiy, the head of the Yabloko
movement, to become a first deputy prime minister in the new Cabinet, he
said: "Yavlinsky has not yet worked with practical matters. He does not
want to deal with them. He prefers to stand by and watch."
"If those appointed to the new government fail to work well there will
be no freedom of expression in the country, and everything will have to be
distributed under rationing cards," Zyuganov said.
The People's Patriotic Union today signed agreements on cooperation
with two other political organizations: the Union of People's Rule and
Labor led by former Director of the Federal Border Service Andrei Nikolayev
and the Land Movement led by State Duma deputy Yelena Panina of the
People's Rule parliamentary group.

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#14
Yeltsin vows to pay half wage debt to military

MOSCOW, Sept 17 (Reuters) - President Boris Yeltsin told his defence minister
on Thursday he wanted to ensure Russia's cash-strapped armed forces would
receive at least part of their wage arrears this month, Russian news agencies
reported. 
Russia's demoralised and underfunded armed forces -- more than a million men
-- have not been paid since May, and the wage debt is being eroded daily as
the rouble falls. 
``The president expressed his strong intention of resolving the two-month wage
arrears to armed forces personnel in September,'' Itar-Tass news agency quoted
Yeltsin as saying during a meeting with Defence Minister Igor Sergeyev. 
Interfax news agency carried a similar report and said Sergeyev had outlined
proposals on selling military assets to help raise cash to pay off debts. 
The Kremlin could not confirm Yeltsin's remarks, which implied Yeltsin was
prepared to pay half the 16-billion rouble wage debt to the military. Sixteen
billion roubles is about $1 billion at Thursday's rate on the streets. It was
worth nearly $3 billion a month ago. 
Yeltsin's new prime minister, Yevgeny Primakov, has declared clearing wage
arrears, particularly to the armed forces, a priority for his government. 
Sergeyev and Yeltsin, along with Interior Minister Sergei Stepashin, discussed
how reforms in the military were progressing. 
Tass quoted Kremlin spokesman Dmitry Yakushkin as saying the emphasis in the
talks was on the ``social aspects'' of reform. 
Russia is trying to trim the size of its once-vast defence machine and make it
more efficient for the post-Cold War era. Thousands of officers are being made
redundant and some branches of the armed forces are being reorganised or
merged. 

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