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Johnson's Russia List


October 7, 1998    
This Date's Issues: 24162417

Johnson's Russia List
7 October 1998

[Note from David Johnson:
1. Financial Times (UK): Arkady Ostrovsky, ARMS: Russia can't 'afford
nuclear arsenal.'

2. Sovetskaya Rossiya: Zyuganov Appeals To Working People for 7 October.
3. NTV: Zyuganov Tops Poll of Presidential Favorites.
4. Robert Brown: Russian Science.
5. Barry Ickes: Re John Helmer on metallurgy.
6. Los Angeles Times letter on Russia and Japan.
7. Washington Post: Lally Weymouth, What Ivanov Wants.
8. Moscow Times EDITORIAL: U.S. Sermon On Markets Is Hypocrisy.
9. Moscow Times: Katy Daigle, Bleak Economic Figures Released by 

10. Moskovskiy Komsomolets: Luzhkov Backpedals on Presidential Race.
11. Elena Sokova: THE THRONE IS EMPTY. WHO'S NEXT IN LINE? (Report
from Moscow).

12. Adrian Helleman: Janine Wedel's testimony.
13. Reuters: Russia may import food and medicine - Primakov.]


Financial Times (UK)
7 October 1998
[for personal use only]
ARMS: Russia can't 'afford nuclear arsenal'
By Arkady Ostrovsky in Moscow

Yuri Maslyukov, the communist deputy prime minister recently given charge of
Russia's economy, said yesterday that Russia was no longer able to afford its
vast nuclear arsenal and should reduce it to a few hundred warheads by 2010.
Mr Maslyukov, who spent 20 years building up the Soviet Union's vast military/
industrial complex, declared: "The state in its present condition does not
have the means to maintain the present quantitative level of several thousand
"The maximum we can hope for is a level of several hundred nuclear warheads by
around 2007 to 2010."
Mr Maslyukov's comments are among the first coherent statements to have
emerged from Russia's top leadership on what to do about the vast nuclear
arsenal Russia inherited from the former Soviet Union.
He seemed to be proposing a slimmer, more modern strategic deterrent for
Russia. The government and the Duma (the lower house of parliament), should
jointly agree a programme that from 2000 would add at least 35-45 modern
Topol-M missiles each year to Russia's armoury and bring into service several
new Yuri Dolgoruky-class nuclear submarines, he added.
Mr Maslyukov also stepped up pressure on the Duma to ratify arms limitation
treaties with the US. Under the 1993 Start-2 accord between the US and Russia,
both countries agreed to cut the number of nuclear warheads in their arsenals
from 6,000 to 3,500.
The Duma has previously refused to ratify the Start-2 treaty. But analysts
said Mr Primakov's government, widely supported by the communist-dominated
Duma, had a better chance of reaching agreement with the deputies.
Oksana Antonenko, military analyst at the International Institute of Strategic
Studies, said: "This is the first time in post-Soviet history the Russian
government has consolidated its effort to ratify Start-2 and modernise
strategic forces. Previous governments had little interest in military
The government's emphasis on nuclear missiles meant Russia would not be able
to deal with more urgent needs of modernising conventional weapons, important
for responding to local conflicts, she added.
Mr Maslyukov's comments come as tension grows between Moscow and Washington
over Nato's possible military intervention against Yugoslav forces in Kosovo.
The daily Izvestiya yesterday quoted Igor Sergeev, defence minister, as saying
any Nato operation in Kosovo would end hopes of ratifying Start-2. Genady
Seleznyov, Duma speaker, said military action against Yugoslavia would force
Russia to break its treaty with the alliance.


Zyuganov Appeals To Working People for 7 October 

Sovetskaya Rossiya
Octobret 6, 2998
[translation for personal use only]
Undated appeal by Gennadiy Zyuganov, chairman of the People's
Patriotic Union of Russia, "To the Working People!" -- words
between slantlines are published in bold and in larger scriptComrade!

Gaydar stole your savings; Chubays stole your property; Chernomyrdin
stole your pay. But for seven years you have been patient. First you
believed Yeltsin's promises and the lying television. Then you hoped to
survive on your own, to sit out the crisis in your vegetable garden. As a
reward for your submissiveness, since 17 August they have been stealing
from you all that you have left. And no end to this process is in sight.
If you continue to be patient, tomorrow they will drive you out of house
and home. They will put your mother and father in the graveyard, turn your
wife and sister into prostitutes, and leave your children to beg at the
church door. And you will be able to "freely" choose: Either to hang
yourself or to take up a cudgel and embark on a life of crime.
Is there another choice? There is!
You no longer believe in the authorities or in the promises of all the
would-be "saviors of the Fatherland," and rightly so. But it is necessary
to believe in the power of the solidarity of the working people. It is
necessary to believe in your comrades who have already risen up to fight
for a dignified existence. And there can be no decent life as long as the
"guarantor" of the destructive course remains in the presidential office. 
Yeltsin is a an obstacle in everyone's way, and won't allow either you, or
the government, or parliament to work.
Demanding the president's resignation, miners and power workers and
teachers and doctors are striking, going on hunger strike, and blocking the
roads. But their efforts so far remain in vain, because up till now they
have acted separately. Unified, coordinated, and simultaneous actions by
all the working people are needed. Your comrades decided to begin them 7
October -- the day of the All-Russia protest action. Millions of people
will attend rallies and demonstrations and form pickets outside government
buildings. Hundreds and thousands of enterprises will stop work.
This time you do not have the right to remain on the sidelines -- your
comrades need your help. Without you there will be a yawning gap in their
ranks, through which the robbers of your family and the corrupters of your
children will climb./Take up your place in the people's ranks!
/Everyone attend the protest action!/
October 7 is only the beginning. The protest will continue and
escalate. The regime must be granted no rest or respite. We will not
allow ourselves to be bought with sops; we will not retreat until our
demands are fulfilled:Yeltsin must resign!
An immediate and resolute change of course!
All power to the working people!


Zyuganov Tops Poll of Presidential Favorites 

October 4, 1998
[translation for personal use only]
>From the "Itogi" newscast

The leader of the Communist Party of the Russian Federation, Gennadiy
Zyuganov, tops the latest Russian opinion poll, with 18 percent of those
questioned saying that they would vote for him in presidential elections. 
Governor of Krasnoyarsk Territory Aleksandr Lebed came second in the poll
with 13 percent, and Moscow mayor Yuriy Luzhkov had 12 percent. The leader
of Yabloko, Grigoriy Yavlinskiy, came fourth with 11 percent.
The opinion poll was conducted by the public opinion foundation on 26
and 27 September. A total of 1,500 people in 29 regions were asked: Who
would you vote for if presidential elections were held this Sunday.


Date: Tue, 06 Oct 1998 
From: Robert M. Brown <> 
Subject: Russian Science

A recent quote of Clifford Gaddy concerning Russian industry reminds me of 
Russian science and technology, "A few enterprises are competitive, but on 
the whole, this is not the case. In the long run, operating these
enterprises is a dead end." Replace "enterprises" with "research 
institutions" and the statement remains true.
I present two publications that speak to this issue.
The first is from NSF/Europe Report No. 88, written in 1997, based on a 
conference and visits to research facilities around St. Petersburg. The 
graying Russian scientists and the chronic shortage of funding are emphasized 
in this report. Russian science has not been adequately funded since Soviet 
times, and therefore has suffered in its ability to maintain a competitative 
status in the world. At the time of the report, as now, Russian science,
Russian industry, must choose the areas in which to concentrate very limited 
resources. And, because of the current status of science, it is difficult to 
attract young Russians into scientific research careers. The author gives an 
appropriate approach to addressing these problems, "NSF might, therefore, 
choose to direct its limited resorces primarily toward collaborative research 
with the most promising young researchers in the selected areas and 
A recent article in Expert (September 21, 1998, No. 35, Page 65) , 'Something 
in honor of Physics' by Vladimir Azhal speaks to this problem with science in 
Russia. The strengths of Russian science tend to be concentrated in the 
physical sciences that are important to the defense industries - general 
physics, nuclear physics, chemistry and technical chemistry and not the
areas that are making advances in Europe and the US. Pointing out these 
differences between Russian areas of study and those of the West, His 
conclusion is, "....After the difference between ours and Western priorities 
was clarified so well, I could not decide, even for myself, what to do about 
this difference. There are two extreme paths. The first, strictly adhere to 
what we already have, not even paying attention to developing the areas where 
we have been traditionally strong. And the second path, to sink our teeth in 
and catch up to the West. In the first case, we could lose, having become an 
outsider of the world scientific community, and in the second case, we set
for a long repeat of what passed, nonetheless always taking up the tail. In 
the biological sciences, we have dropped behind the West substantially, and 
today these are very expensive sciences. In order to become even close to 
leaders, our scientific budgets are in no way sufficient. .... "
My experience has shown that experimental research in Russia suffers greatly 
from the lack of funding, evidenced from absence of equipment, modern or 
otherwise, poor facilities in which to work, limited communications with the 
outside world, due to lack of travel money, and at times, unwillingness to 
listen when the opportunites arise. And yet, inspite of the evidence, many 
Russians seem to believe that there is very much world class science
happening in Russia and that there are productive industries in Russia. 
Productive industries, if they existed would be surviving in the current 
economic climate in Russia, yet few, if any are. Pertainent scientific 
research in Russia has been sought by many Western commercial companies 
(Boeing, AT&T/Bell Labs,ICM, 
Johnson & Johnson, and others) with some successes, but far fewer than one 
would expect from a country with such intellectual potential. As President 
Yeltsin's representative said at the 1997 meeting of SPASS (the source of the 
NSF information), one of the results of the changes since the Soviet Union 
collapsed is ".. the opening to the international community, which is
exposing Russia to much greater competition than ever before and revealing
its weakness in high technologies." As Western companies search for the 
wealth of Russian science, they find it lacking.

Robert M. Brown, Jr. PhD


Date: Tue, 06 Oct 1998 
From: "Barry W. Ickes" <>
Subject: Re: John Helmer on metallurgy

I don't know where John Helmer gets the idea that Cliff Gaddy considers
Magnitogorsk to be value destroying. I am sure that such an assertion never
appears in anything we have written together. But I wonder what is the
relevance of the data in the article Helmer provides. 
Suppose that Severstal exports steel and records profits. What we would
want to know is the share of its costs that it actually pays for, and at
what prices it actually pays. Officials of the enterprise have explained
how they pay for almost none of their energy in cash. They export about 60%
of their output and they barter domestically most of the rest. In
particular, they barter for energy and gas at inflated prices (see Yuliya
Latynina, "Treshchina v brilliante. Drama vyzhivaniya sytogo zavoda."
Izvestiya, 16 October 1997, p. 4.). If the enterprise is not paying the
full cost for its inputs how do we know whether it is actually covering its
input costs or not? If it gets energy for half of the market price then
what information is there in the price they are willing to sell steel for?
If they do not pay wages on time, how do you know that their prices cover
their costs?
The whole point about the virtual economy is that if goods are not
exchanged at their true opportunity costs we simply do not know which firms
are profitable and which are not, and which are value creating and which
are not. I would suspect that Severstal is not a value destroyer. But in
the virtual economy this is just a suspicion. Demonetization makes ruble
values too opaque to make such judgements with. 


Los Angeles Times
October 6, 1998 

A partial solution to the economic crisis in Russia may be an
opportunity to resolve a 40-year-old geopolitical dispute. 
At the end of WWII, the Soviets seized the Kurile Islands, northeast
of the Japanese island of Hokkaido. This impasse over the Northern
Territories has in part restricted the economic ties between the two
nations, one the world's largest land possessor and the other the
second-largest economy in the world. 
The islands are less important strategically now than when the Cold
War ended. A simple transfer of flags could be key to obtaining vital
loans, currency guarantees and perhaps frank transfer payments that would
flow from the established generosity of one of the world's wealthiest
The fledging government of Japanese Prime Minister Keizo Obuchi could
be rejuvenated with a national issue that would provide and encourage
popular home support. Despite all of its wealth, quality of life in Japan
suffers from land shortages. Trading land for cash may be the foundation
for Russia's economic salvation. 
Los Angeles 


Washington Post
October 6, 1998
[for personal use only]
What Ivanov Wants
By Lally Weymouth

Although much has changed in Russia in the past few weeks, the country's
foreign policy will remain essentially unchanged, according to the person
primarily responsible for carrying it out. Russia's new foreign minister,
Igor Ivanov, on his first visit to the United States last week, said, "I
believe that the current foreign policy [represents] Russia's national
interests and enjoys the support of the majority of the political forces in
the country."
Ivanov, 52, has long been a close associate of Russia's new prime minister,
Yevgeny Primakov, and is thus as knowledgeable as anyone on what turns his
country's policies are likely to take.
Clinton administration officials have stated that the resolution on Kosovo
passed last week at the United Nations marks an evolution in Russian
policy, a recognition that Yugoslav President Slobodan Milosevic has not
been meeting his commitments. But Ivanov insists that "Russia is not
changing its position" on this question.
Thus, while high-ranking officials in Washington contend that the U.N.
resolution is sufficient to give NATO authorization to use force without
further U.N. action, Ivanov argues that the resolution does not "provide a
legal basis for the use of force."
Nevertheless, by voting for the resolution -- which contains a reference to
Chapter VII of the U.N. Charter, allowing use of military force "to
maintain peace and security" -- Russia did harden its line and criticize
its Serb allies. Now the question is whether Great Britain, France and
Germany will deem this resolution adequate -- without further U.N. action
-- to justify the use of force by NATO.
Ivanov argues that the answer to the Kosovo crisis lies in a political
settlement achieved through negotiations. "Airstrikes cannot ensure human
rights," he said. "A peace brought about through the use of force will not
be durable."
I asked Ivanov whether Americans can hope to see any change in his
country's position on Iraq. Russia, together with France, has been leading
the campaign to remove U.N.-mandated sanctions from Iraq. In response, the
Russian foreign minister talked about Saddam Hussein not as an evil
dictator but as someone with whom one could do business. "Some may and some
may not like him," said Ivanov. "Some people trust and some mistrust
Hussein. But this is all emotions. We must build our policy on facts."
Ivanov called for a comprehensive review of Iraq's compliance in the
disarmament area -- chemical, biological, nuclear and missiles. The United
States has agreed to such a review, but only if Iraq first comes back into
cooperation with UNSCOM and the International Atomic Energy Agency -- which
they cut off Aug. 5. Moreover, the United States wants to see Baghdad
comply with all the U.N. resolutions on Iraq.
Moscow, however, is clearly pushing for sanctions to be removed from Iraq.
Ivanov argued that if the upcoming report shows Iraq to be free of weapons
of mass destruction, then the present system of inspections can be
abandoned and a looser monitoring system imposed. After that, said Ivanov
hopefully, the oil embargo can be repealed. 
As for Iraq's immediate neighbor Iran, Ivanov wants good neighborly
relations. Moscow is developing better trade relations with Tehran as well
as a political dialogue. The Russian foreign minister implicitly criticized
the United States for pursuing what he described as an "isolationist policy
[that] plays into the hands of extremist forces."
The Russian foreign minister strongly denied U.S. intelligence reports that
Russia has been selling Iran intermediate-range missiles and other advanced
military equipment.
Ivanov attended a meeting of the G-7 while he was here and made a
presentation on the economic crisis in his country. He acknowledged that in
the seven years since Russia began moving from a socialist system to a
market economy "quite a few mistakes" have been made. The government, he
said, "lost sight of the social aspects of the reform process," with the
result that much of the population currently lives below the subsistence
level. The sad outcome, according to the foreign minister, is "a very high
degree of social tension in the country."
The foreign minister was somewhat vague about what could be done to deal
with the situation, though. He said that the new government's first
priority is to remove the tensions "through extraordinary measures," but
did not spell out what they might be. Although the new government is loaded
with Communists, Ivanov insisted that Russia is not abandoning market
reforms. He said that Moscow actually plans to expand economic reform
"through filling out the social component." 
Ivanov made it clear that Russia is expecting economic assistance from the
outside world. He argued that Russia is now an integral part of the world
economy and therefore "we count on close cooperation with the international
financial community and economic institutions." It won't be easy. There
will be conditions attached by the G-7 as Ivanov admitted: the G-7 members
want to know exactly what economic plan the Russian government is going to
pursue -- "they are not giving us carte blanche." 
And Washington policymakers will have to decide why the international
community should come to Russia's aid when Russia continues to side with
Saddam Hussein and Milosevic. 


Moscow Times
October 7, 1998 
EDITORIAL: U.S. Sermon On Markets Is Hypocrisy 

The U.S. government has spent millions of dollars urging Russians to place
their faith in the market. Don't let the government set prices, America has
argued f leave it to the market. Don't let the government arbitrarily set
currency exchange rates, which only fosters a street trade in dollars f leave
it to the market. Don't protect inefficient industries with subsidies f throw
them to the mercies of the market. 
Russia has more or less complied. It has been a wrenching and painful
One small achievement of recent years, however, is that giant Soviet-built
steel plants f Magnitogorsk, Novolipetsk, and Cherepovets, which together
employ about 130,000 f have started to sell more steel. U.S. and European
companies buy it up by the ton. 
As Russian producers have gained, U.S. steel companies have lost, however, and
thousands have been laid off. 
Now, as the ruble devaluation further cheapens Russian steel, U.S. steel
manufacturers have had enough, and the U.S. government is on the verge of
invoking "anti-dumping" laws. 
These dubious laws have already been brought to bear against other competitive
Russian exports, such as fertilizers and textiles. If not for these laws,
Russia would have sold more of its manufactured goods. U.S. buyers would have
gained, and today Russia would be a richer country. 
To invoke anti-dumping laws, the United States will have to decide that Russia
is not charging "a fair price" for its steel. A fair price in theory means
that the Russian state is not somehow subsidizing the cost of the steel; in
practice, it means whatever the U.S. government wants it to mean. 
The desire to protect American jobs is understandable. And there is a case to
be made that the U.S. government f tender of the world's largest economy f
ought to penalize countries where cheap goods are produced in slave-like
conditions, or at great environmental cost. These are compelling arguments f
unless Americans and Europeans like the idea of, for example, competing
against goods made by foreign workers who go unpaid for months at a time. Why
should being callous be a competitive advantage? 
But that's not what the United States is contemplating now. Instead of forcing
the world to raise its environmental and labor standards, the United States is
just demanding they raise ž their prices. 
So as it arrogantly preaches the market in its rawest form, it quietly
practices a cowardly brand of government price-fixing and industry coddling. 
For all of those Americans wringing their hands over Bill Clinton's morals,
here indeed is an issue of national character worth contemplating. 


Moscow Times
October 7, 1998 
Bleak Economic Figures Released by Government 
By Katy Daigle
Staff Writer

As the Russian government continues to drag its feet on adopting an anti-
crisis economic plan, statistics reflect a dismal economic performance and
economists paint a grim picture for the rest of the year. 
Prime Minister Yevgeny Primakov said in a television address to the nation
Tuesday that his Cabinet was working on an anti-crisis program, but its
"financial side" would depend on the outcome of talks with international
lenders, which have so far refused to come up with more money for Russia. 
Meanwhile, the State Statistics Committee said Tuesday that inflation during
August and September was 43.5 percent, and that consumer prices had risen 49.6
percent since the beginning of the year. 
August will most likely see an 8.2 percent drop in Russia's gross domestic
product and an 11.5 percent fall in industrial production, Deputy Economic
Minister Nikolai Shamrayev said Tuesday. According to Shamrayev, annual
inflation could hit 230 percent by the end of the year unless the government
can obtain funding from the International Monetary Fund and the World Bank. 
But experts at the Russian-European Center for Economic Policy said at a news
conference Tuesday that, with or without foreign aid, Russia was doomed to
inflation possibly as high as 400 percent for all of 1998. 
Even the full second tranche from the IMF f which comes to 67 billion rubles
at Tuesday's exchange rate f would fall short of the deficit of 98 billion
rubles included in the government's draft emergency budget for the fourth
quarter of the year, said Vladimir Kosmarsky, managing director of RECEP. 
"It seems to me that hyperinflation awaits us," Kosmarsky said. "Considering
our entire national industry ž and the situation with the population's
incomes, hyperinflation is a very serious thing. I cannot predict the possible
social consequences of this process." 
RECEP also reported that GDP for the first nine months of this year was just
80 percent of the 1995 level, and that real personal income had sunk to 1992
Economists base their inflation predictions on their conviction that Russia
has already started adding rubles to its money supply. According to RECEP, in
September the Central Bank injected 12.5 billion new rubles into the economy,
though it is unclear where. Economists suspect the money went toward
facilitating payments, providing liquidity to state-controlled Sberbank, and
covering some government spending. 


Luzhkov Backpedals on Presidential Race 

Moskovskiy Komsomolets 
October 5, 1998
[translation for personal use only]
Alla Komarova report: "Luzhkov Moves Left"

Yuriy Luzhkov is looking more and more like the Russian president. In
any case, it has recently been more difficult that previously to understand
Moscow's municipal leader. Witness the mayor&rsquo;s recent visit to
London. For instance, the ITAR-TASS agency took the trouble to transmit
several versions of his statements on his possible participation in the
presidential election. During his traditional Saturday walkabout the mayor
had to explain at length to slow-witted journalists, at two different
places already, about his statement in London:
"I have made no statements about any intention to run for
president! I was speaking not about the presidency, but about forming a
left-center political bloc. For the most part, parties of the so-called
'left' and 'left-cente' will join it -- those who
support market transformations and the development of the real sector of
the economy, but who are prepared to spend the state's entire profit
for the good of the people -- in the social sphere.
"I am prepared to head this bloc. Are there any further
questions?" Luzhkov confided to the journalists... In general, a week
ago all Muscovites knew only one thing for sure: We would be lost without
our mayor. So enthusiastically Yuriy Luzhkov builds new neighborhoods in
the capital, and gets after janitors over every candy-bar wrapper on the
sidewalk.... But now the whole city is upset. The mayor has decided to
trade in his cap for the staff of the Prophet Moses. One can only hope that
he will arrange for Russians&rsquo; emergence into a bright future, just as
he did with the Moscow Ring Road, in as short a time as possible.


Date: Tue, 06 Oct 1998
From: (CRES)
Subject: The Throne is Empty. Who's Next in Line?


Elena Sokova, Senior Research Associate and former librarian of the Center
for Russian and Eurasian Studies at the Monterey Institute, recently returned
to her native Russia. She prepared these notes on the current situation there 
on October 1, 1998.

My daughter goes to a private Moscow school. We chose this school because
of the
reasonable tuition and the classical Russian educational standards. Another
factor, which was very important to us, was the social status of students’
parents. Most of them belong to the new Russian middle class: professors and
teachers at the best Moscow colleges and universities, Russian managers at
foreign firms based in Moscow, mid-level government employees, owners of
small-to medium-size businesses. In
general, they are part of the most hard-working, well-educated professional
class in Moscow, and are concerned about the quality of their kids' education.
Every day, when parents wait for the end of classes, they chat. Of course,
their children's progress at school, the most important topics are politics
and the current crisis. During the peak of the crisis, everybody was concerned
about the fall of the ruble and possible scenarios of conflict between the
and the Duma. When Primakov was appointed prime minister, they began guessing
which way his government will go. After several weeks, such speculation is
still popular and remains just that, speculation, since no one knows what the
economic program of Primakov’s cabinet is.
It seems that the crisis hasn't seriously changed the financial and social
status of these parents. Most of them still have their jobs and a stable
It is also clear that the stability of the country is indispensable for their
own stability and prosperity. But recent events have made stability almost an
obsession. You might be surprised to hear nostalgic reminiscences from this
What do you think these representatives of the new middle class pick as their
favorite period of the past? You won’t believe it—the Brezhnev era. They do
not like everything that happened during that time, of course, but they miss the
predictability of the government and the existence of ways to solve their
daily problems. Not all these ways were completely legitimate, but at least the
rules were clear, as were the occasionally necessary routes around these rules.
One parent recalled how an old lady sent a letter to Brezhnev complaining that
she, a World War II veteran, lived with her kids and grandchildren in a small
apartment. After that letter, her family's housing problem was solved.
Another parent told a story about her neighbor who had seven kids and was
enough to complain to the Central Committee that her family could not live
without hot water for months. (It was and still is a common practice in Russia
to shut off the hot water for at least a month and usually more during the
summer for some sort of routine maintenance). From that moment until 1991, the
whole apartment complex enjoyed the privilege of a special one-week shutdown
instead of a month or longer. 
There were other stories with the same focus: despite the lack of democracy
and political rights, there was a government that controlled the country. An
effective government is precisely what is lacking today and what the vast
majority of Russians now miss. It is very Russian to blame the government for
difficulties and failures, on one hand, and at the same time believe that the
masses are unable to move forward without leadership from a "strong
There are always hopes that some day we will get a "good" government (or a
"good" czar), who will solve all our problems. One of the parents exclaimed, 
"Why are Russians so unlucky with their governments?" Why, indeed? After all, 
they are the very people who chose Yeltsin
over Gorbachev eight years ago. Smart people—including smart proponents of
reforms—could see Yeltsin's worth even then.
I have my own ideas on this topic, which I’ll save for another essay. What I
want to note at this point is that the latest crisis has shown that the
government, including the President, the Duma, and the Cabinet, control
political nor economic developments in the country. All three of them lack the
support of the population. The President is in the worst shape of all of them.
His approval rating is close to zero. This is not because he stubbornly kept
nominating Chernomyrdin for prime minister,
but because he avoided any communication with the people of the country. No
public or pre-recorded speeches, nor any attempts to ease the situation. This
led to the wide-spread belief that he is no longer in charge.
The Duma and the deck of ministers that has been reshuffled who knows how many
times since 1991 do not enjoy popular trust either. Stories about personal
businesses and bribes of Duma deputies and government officials do not shock
anybody anymore. After all, newspapers periodically publish accounts of how
much a vote in the Duma costs; the opposition, including the Communist
opposition, is certainly no exception. Corrupt government is a reality in 
Russia, and only the government itself might try to argue otherwise.
Primakov’s appointment got a positive response because he doesn’t have any
ties with the Russian oligarchs or any easily identifiable personal financial
interest in the business of government. People would rather see a Communist
or a Soviet-era apparatchik in the government than individuals like Chubais and
members of his group, who are thought to be the most corrupt and dishonest
politicians among the current political elite. Nostalgia for the past
social and political stability helps bring Soviet-era politicians back.
It is important to avoid oversimplification here. Russia has lived with
governments for centuries, and people do not necessarily resent that too much;
they can tolerate it if the government is efficient. It is the combination of
corruption and inefficiency that makes people mad. In the late 1980s, as the
Soviet-type economy was crumbling but the elite was perceived to be living
well and getting all kinds of perks, the gap between efficiency and corruption
brought the Soviet regime down. Now
the gap has broadened. The same middle class that complains about corruption
today was rather permissive just half a year ago when it lived well; the current
crisis simply caused them to join the rest of the population, which has not
seen anything good come from reforms.
A curious coalition is emerging. The new middle class, which does not
resent the
wealth of the rich as long as it has a piece of the pie (less, but enough to
live comfortably) aligns itself with those who demand that everyone be equal,
whether equally rich or equally poor. This is a dangerous type of coalition.
Worse still, people like Gaidar and Chubais have managed to discredit not just
themselves, but the very notion of reforms. Ordinary people do not go into the
finer details of what was wrong with the reforms and what was right about
them. They probably do not know what monetarism is. But they know that the
authors of the reforms and the small group that benefited from privatization, 
foreign financial aid, and access to the country's resources live in luxury 
while the majority of the population
lives in poverty and has fewer rights than before the reforms. And they know
that these things were called reforms. People would probably support the
principle "live and let live," but they greatly resent the situation in which
the new rich live, but do not create conditions for others to live. From
1996 to early 1998, the proceeds of reforms had begun to trickle down to what
became the new middle class, but now that trickle has virtually dried up.
In the civilized world, people make money first and turn to politics second. 
In Russia, the opposite was, and unfortunately still is, true—a government
position gives you the key to the treasure chest. Only a few have been able to
resist the temptation. I do not think I need to spend time to prove this.
who followed Russian periodicals for the last month can find ample proof in 
almost any issue of any newspaper or magazine, regardless of its financial 
The Russian mass media is a separate topic for analysis, but I can’t avoid a
brief mention of its role in accelerating the last financial crisis. It was
the newspapers and television programs that were behind the panic. Of course,
it was not completely their fault: there was no official information on what was
going on. They used the information vacuum to exaggerate the problems and quite
often they created, or at least aggravated, some of these problems. If you hear
on the TV that we are all
facing hunger because the country has only a one-month supply of food and that
everybody should buy salt, flour, and matches to live through the winter, you
would probably follow that advice, even if you are not generally a panicky
person. If a news commentator says that he has just gotten a call that someone
noticed suspicious military activity close to Moscow, you would most likely
believe it and prepare for a coup, especially if you already lived through
1991 and 1993.
Primakov’s cabinet is following the unfortunate tradition of avoiding
communication with the mass media. The absence of information about the real
situation in the country and the planned economic measures causes
newspapers to guess and speculate. Different papers list different amounts of 
rubles that the government has released into circulation, although there has 
been no word from the government itself about whether or not they have already 
printed rubles. Primakov was known for keeping the press outside the tightly 
shut doors of the Foreign Ministry; the same practice might be an even worse 
liability now that he is the prime minister of a country deep in crisis.
Primakov and his cabinet have a unique chance to take the control over the
political and economic situation in the country. All they need is to take
responsibility, to show determination and willingness to overcome the
crisis. If
they act slowly and inconsistently, they are doomed. The country yearns for a
strong government that can provide tight discipline and the rule of law, along
with reasonable political and economic freedoms. The longer the country waits
for such a government, the greater
the chances we will get a dictatorship instead of simply a strong government
oriented toward the market and democracy.
Yesterday, Moscow Mayor Yuri Luzhkov announced officially for the first time
that he might run for president. I personally would like to see him in charge
right now. But he is not the only candidate for presidency at this point,
although he was gotten broad support from the central and left wings of the
political spectrum, including the Communist party. Nor are any elections
expected next month.
It is clear that the current power vacuum should be filled as soon as
The question is who will fill it and when? And what price will the country pay
for it?


Date: Tue, 06 Oct 1998 
From: Adrian Helleman <> 
Subject: Janine Wedel's testimony

Janine Wedel in her testimony (#2414) presents some timely ideas about
what the U.S. government should be doing in Russia. It truly has other no
option than to reverse its current policies and practices. Permit me to
comment on each of her points and then to make a few concluding remarks. I
do not want to sound arrogant. I realize that government policies are the
products of compromise, and that they are often dictated by factors that are
inimicable to those who must formulate those policies. I am not critical of
individuals but only of the policies themselves.
1.a. On the need for the U.S. to express greater humility and to
acknowledge the fact that it does not have all of the answers. Amen! It's
about time.
b. The U.S. must also accept that the future shape of Russian society
will and must be determined by the Russian people. Thus the U.S. should
stop pretending that this is a unipolar world and playing cop in order to
protect its own geopolitical interests. This attitude is not only
patronizing but it is stupid. No wonder Russians are becoming increasingly
c. The U.S. must stop its policy of support-at-all-costs for Yeltsin
and the
Chubais Clan. Madelaine Albright has made some moves in this direction,
but some of us who live and work in Russia have said this for a long time
already. One doesn't need a lot of brains to realize the futility of that
policy of support.
2. The U.S. should recognize that a healthy banking and financial system
cannot arise without a revival of production and distribution in the "real"
economy. The policies of the UMF have been misguided, to put it mildly.
Russia needs a productive industrial base. The promotion of a financial
sector, which is speculative at best and criminal at worst, by both the
Russian and U.S. governments wastes money that can be better spent on other
sectors of the economy, especially industry. These policies are criminal,
to the extent that they have contributed to corruption. Already before the
IMF approved its $22.6 billion loan in July, I argued that Russia, if it is
ever to break this "criminal" addiction, must be forced to go "cold turkey."
Only then will the much needed reforms ever transpire and the
criminalization of society reversed. 
3. The U.S. should launch a high-level drive to try to recover the money
from aid organizations that has ended up in private bank accounts outside of
Russia. It's about time! How this can be done, of course, is the question.
The suggestion by John Helmer to use the mafia is a bit far-fetched.
Wedel's suggestion of a "high level drive" is probably no more practical, if
the efforts to repatriate the funds that Marcos stashed in foreign banks are
any indication. Much greater efforts are needed at high levels, if this
will ever succeed. But she is right that this is necessary if the U.S.
truly wants to demonstrate its commitment to the rule of law. 
4. The U. S. should embark on a broad-based policy to encourage the rule
of law by discontinuing its support of non-inclusive organizations and the
bypassing of democratic process through decree. The U.S. has been backing
the wrong people, but then some of us knew that a long time ago. When will
offical Washington wake up?
5. U.S. officials and advisers need to establish contact and ties with a
wide cross-section of the Russian leadership and not only Yeltsin and his
allies. Why was this not done in the past? Too many people were blind to
to the undemocratic nature of Yeltsin and many of the so-called reformers,
so they supported them. If people did see through what Yeltsin and others
were doing, they pretended not to. But it is not too late to change this
policy and to support the groups that Wedel advocates. Even in my limited
experience in Russia, since I have been here only three years and am kept
busy by my teaching at MGU, I can identify some individuals and groups that
deserve more attention than they have received thus far.
My general concluding comments relate to to a final question: why did
those of us who live here see the folly of these U.S. government policies
long ago? Where were the "Russian experts" in the State Department? Again,
I don't want to come across as someone who knows better than anyone else.
It is too easy to suggest policies from the safe vantage point of the
academy. But I ask this question, nonetheless. I am not a specialist in
those areas that attract the interest of many JRL readers. I am only a
philosopher who is concerned about the country where I am living and its
people who are suffering so much, in part because of the present policies of
the U.S. government. This is not to absolve the Russian government of all
blame. There is more than enough to go around, imo. Ultimately, however,
we should stop assigning blame and get on with the business of formulating
better policies. Thus I want to thank Janine Wedel for sharing her
thoughts, which have prompted me to do the same. Please accept my comments
in the spirit that they are intended, even if the may come across otherwise.


Russia may import food and medicine - Primakov

MOSCOW, Oct 6 (Reuters) - Russia may buy food and medicine abroad to help it
through the winter but the government is counting mainly on domestic supplies,
Prime Minister Yevgeny Primakov said Tuesday. 
In his first televised address to the nation, Primakov said the sharp drop in
the value of the rouble since an effective devaluation in mid-August had
slashed imports which in recent years accounted for almost half of domestic
food supplies. 
"We in the government are sure that in the present conditions Russian farmers
can take on their shoulders the burden of ensuring food supplies for the
population," he said. 
He added that measures needed to be taken, but there would be adequate
supplies of vegetables and potatoes. 
He said rail tariffs for transporting vegetables and potatoes between regions
had been cut by 50 percent. 
Regional leaders had also agreed to lift restrictions on food transport within
Russia, while Ukraine and Belarus had agreed to pay off some of their debts to
Russia with food. 
"All the same, we do not intend to refrain from buying food abroad," Primakov
"In today's difficult conditions, the government has drawn up a list of
agricultural products and medicines which need to be sent to Russia most of
all. This will be carried out, including through lowering of customs tariffs,"
he added. 
Primakov gave no details of the commodities which might be involved. 
The U.S. Department of Agriculture and the European Union have been
considering donating food from over-supplied markets in the West to help
Russia through the difficult winter. 


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