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Johnson's Russia List


October 16, 1998   
This Date's Issues: 2433  2434  

Johnson's Russia List
16 October 1998

[Note from David Johnson:
1. Reuters: Ex-republics try to imagine Russia without Yeltsin.
2. Pavel Baev: Russia and Kosovo.
3. Business Week: Carol Matlack, HOMECOMING FOR RUSSIA'S ERSTWHILE 

4. Chicago Tribune: Colin McMahon, FOOD CRISIS IN RUSSIA SWEETENED

5. Moscow Times: Tatyana Matsuk, No Ballot-Box Bonanza.
6. Komsomolskaya Pravda: Interview with Moscow psychiatrist Mikhail 
Vinogradov by Mikhail Rybyanov followed by psychiatrists' comments, 
"Who in Russia Is Sick -- President or Psychiatrist?" 

7. RFE/RL: Robert Lyle, Russia: New System Created To Prevent 
Manipulation Of Ruble Exchange Rate.

8. Business Week letter: RUSSIA'S VALUE AS A TRADE PARTNER IS 

9. Reuters: Foreigners call rouble rise manipulation.
10. Interfax: Yeltsin Favors Radical Changes in Parliament Election 


Ex-republics try to imagine Russia without Yeltsin
By Ron Popeski

KIEV, Oct 15 (Reuters) - Former Soviet republics jolted by crisis in Russia
remain concerned about the health of Kremlin chief leader Boris Yeltsin,
particularly those most dependent on their vast neighbour. 
But many appear reconciled to the prospect of a Russia without Yeltsin before
the end of his term in office. 
States such as Ukraine, their own reforms still uncertain, view Yeltsin as the
symbol of transformation which secured them the independence they actively
sought and fear any change from what has become familiar over seven years.
Others appear less unsettled at the prospect of a new approach in Moscow. 
``There is no provision in Russian legislation for Yeltsin to leave. It would
therefore be some extraordinary situation which would inevitably lead to
destabilisation,'' said Olexander Razumkov, deputy head of Ukraine's National
Security Council. 
``But it is unlikely an anti-Ukrainian leader would come to power. Sooner or
later good relations would be established.'' 
Former Foreign Minister Hennady Udovenko, now head of a human rights body,
said Yeltsin had been behind improved ties, but over time it mattered little
who was leading Russia. 
``If Ukraine resolves its economic problems and becomes prosperous, it no
longer is of importance who is in chrage in Russia,'' he said. 
Neighbouring Belarus is linked to Russia by a ``union treaty'' championed by
hardline President Alexander Lukashenko though largely symbolic in nature.
Relations have periodically been strained over Belarus's go-slow stand on
reforms and officials say they would take Yeltsin's departure in stride. 
``Belarus is hurting from the Russian crisis. Mr Yeltsin's state of health is
therefore of limited concern,'' said Vasily Baranov of the country's own
National Security Council. 
``It's immaterial whether the president is ill when there is a government and
parliament. Our strategy is based on Russia, not on a president or this or
that political party.'' 
Leaders of ex-Soviet Transcaucasian republics say their concern is for any
Kremlin leader to stay committed to reforms. 
Georgian President and former Soviet Foreign Minister Eduard Shevardnadze, the
target of at least two assassination attempts in recent years, often accuses
``negative forces'' in Russia of trying to destabilise his country. But he
still describes Yeltsin as the pillar of reform. 
Armenia, though a traditional strong ally of Moscow, is less open in its
praise of the Kremlin leader and stresses ties with other Russian officials
and institutions. 
Ex-Soviet Central Asian republics maintain close trade and political ties with
Russia, though subject to local nuances. 
Kazkahstan, which relies on Russian pipelines for its short-term economic
well-being, clearly wants Yeltsin to remain healthy to keep trade and other
links trouble-free. 
``We want Russia to prosper. We want Russia to move along the path of
democracy and reform and the guarantor of this has been the president,''
President Nursultan Nazarbayev said this week before Yeltsin cut short his
visit to Kazakhstan. 
In Uzbekistan, President Islam Karimov's more isolationist economic policy
kept relations with Yeltsin more distant. 
Most effusive about Yeltsin was President Oskar Akayev of Kyrgyzstan, on the
border with Afghanistan and China, who on Thursday offered ``unflinching and
firm'' backing for Yeltsin. 


Date: Thu, 15 Oct 1998
From: Pavel Baev <Pavel@PRIO.NO> 
Subject: Russia and Kosovo

The debate on Russia's policy vis-a-vis Kosovo might, perhaps, allow
for a few more lines. In my opinion, it is more to it than
'ill-conceived' and 'plain stupid' pragmatism (Goldgeier & McFaul in JRL
2422) or 'reflexive anti-Westernism' (Chudowsky in JRL 2430).
In fact Western and Russian perceptions of the crisis were strikingly
opposite. Without going into much detail on the former, we can assume
that it comprised two key elements: the need to address humanitarian
disaster and the need to restore NATO's credibility.
The Russian perception, while seemingly quite unsophisticated, was
actually more complex. Obviously, humanitarian considerations had few if
any influence on it. The ambiguous ideas on the 'Slavic-Orthodox
solidarity' might coloured the rhetoric somewhat but had little
political weight. Much more important were the deep-rooted anti-NATO
feelings which translated into political aims to prevent the Alliance
from asserting itself as the central institution of European security.
The ambitions to re-assert own 'Great Power' role - ambitions by no
means diminished, but perhaps even increased by the crisis - further
strengthened the intention to have a big say on the crisis. And finally,
the growing fear of separatism and disintegration, for which Chechnya
was a daily trigger, determined the firm political line against any
precedent of legitimizing secession. The underlying perspective was that
opting for a unilateral air-strike, NATO was establishing a pattern for
possible forceful action against Russia.
It might have seen that the urgent need to secure financial and
humanitarian aid from the West would overrule all these considerations,
but actually much in the previous experience told Russian policy-makers
that ambitious and non-cooperative stance was the best bargaining
position. What was indeed unusual about the Kosovo case, was that
Russia's position did make some sort of sense. NATO's planned action
without any doubt had quite shaky legitimacy and uncertain support
within the Alliance. Moscow was also able to advance a strong
common-sense argument that humanitarian disasters could not be resolved
by air-strikes. Richard Holbrook's last-minute shuttle diplomacy
prevented (or, perhaps, postponed) the ultimate test of political wills,
but Russia was able to escape from the corner even claiming success.
The outcome (uncertain and conditional as it is) leaves at least some
space for cooperation between Russia and NATO in other areas. But even
this impressive show of force did not brought Serbia to accept a
political compromise, that would for instance grant Kosovo an equal
status with Montenegro in the Yugoslav Federation in exchange for an
internationally guaranteed commitment not to secede. The big political
question of European secessions remains open - and Russia's negative
answer to it has apparently stiffened.


Business Week
October 26, 1998
[for personal use only]
Letter From Russia

Prince Yevgeny Meshchersky clambers out of a muddy trench where he is laying a
sewer line. ``Excuse me, I am not prepared to greet guests,'' he says, wiping
his hands on his brown coveralls. He ducks into a dilapidated building,
emerging in clean clothes to offer a handshake and a tour of the Petrovskoye-
Alabino estate.
The place is a shambles. A columned palace that once housed a world-class
art collection is now a roofless ruin. The lawns are choked with weeds, and
the outbuildings are boarded up. Nevertheless, 47-year-old Meshchersky plans
to make this his home. For more than a year, he has squatted in a fire-damaged
gatehouse, fixing it up while he fights for legal ownership of the property
seized from his family after the Bolshevik Revolution. On a ruined wall is a
sign that reads: ``Monument to Soviet Vandalism.''
NOBLE CAUSE. Meshchersky is in the vanguard of a push by descendants of the
Russian aristocracy to reclaim family holdings that were seized in the wake of
the 1917 revolution. Emboldened by property-rights language in Russia's 1993
constitution, they are petitioning the courts and pressuring local authorities
to let them occupy their ancestral homes. They're also seeking legislation
that would return confiscated properties to their precommunist owners.
Although only a handful are pursuing claims, some 14 million Russians could be
eligible for restitution if such a law passed. ``We cannot bring back the
dead,'' says Meshchersky, whose grandfather was shot by the Bolsheviks. ``But
we can show the world that Russia is no longer a place where you can rob,
loot, and destroy.''
Maybe, but the nobles will have a difficult time rallying support in the
midst of Russia's recent economic collapse. Even before the crisis hit,
Parliament had blocked legislation that would have allowed private ownership
of land. President Boris N. Yeltsin's government has returned only those
properties that were confiscated from churches. While local authorities have
allowed the heirs of some aristocratic families to occupy abandoned rural
estates, they are refusing to turn over more valuable urban property. Even
Russia's best-known survivor of the gulags, Alexander Solzhenitsyn, says that
the nobles' quest is misguided. ``You cannot draw up a restitution law on the
principle of returning everything to everyone. In that case, you will be
causing new injustices,'' Solzhenitsyn told the newspaper Izvestia recently.
Many aristocrats' houses were split into apartments decades ago and have been
home to other families for generations.
IDYLL WORSHIP. Still, Russia is heeding some aristocrats' pleas, and it is
doing so for economic, not altruistic, reasons. Local governments are hoping
that prominent families will develop returned property as tourist attractions.
Officials in the Gatchina region south of St. Petersburg recently approached
the family of the late Vladimir Nabokov, author of Lolita, offering to return
part of the family's holdings along the Oredezh River. In return, they want
the family to help build a Nabokov memorial and conference center, which would
include an apartment for the author's son, Dmitry Nabokov, an opera singer who
lives in Switzerland. Dmitry Nabokov wants to recreate the place where his
father spent idyllic boyhood summers. Vladimir Nabokov was 18 when his family
fled Russia. ``His severest sense of loss was not of lost samovars and icons
and kopecks, but the loss of his childhood and the scenery of his childhood,''
the son says.
Yevgeny Filatov, a descendant of a wealthy Moscow merchant clan, has
received little assistance from the government. Filatov has waged a three-
decade-long battle to live in his family's 174-year-old wooden house in a
fashionable Moscow neighborhood. Today, the property is worth some $2 million.
The house had been split into apartments, with Filatov's family retaining one
of the units. In 1965, the city decided to demolish the building, and everyone
moved out--except Filatov. He saved the house by getting it designated an
architectural monument, then staved off eviction efforts after the state
claimed the building was unsafe. Last year, the city agreed to develop a small
museum in the house, with Filatov as live-in director. But the city doesn't
recognize him as the building's legal owner. And the place is badly run-down.
``It's dangerous even to go to the bathroom,'' he says.
GRAND PLANS. At least Filatov has a bathroom. The building where Prince
Meshchersky, his wife, and three children live has no running water, no
heating system, and until a few weeks ago, no electricity. The acrid smell of
a past fire clings to the rough wooden walls and plank floors. ``We have
enough work here for our whole lives,'' sighs Meshchersky's wife, Lyudmila.
She hauls water from a well and tends a large vegetable garden and a rabbit
hutch. Her husband has grand plans for the property, including a hotel and
other amenities to attract tourists, though he plans to leave the ruined
palace as a reminder of communism's folly.
The estate, which dates to 1780, once covered 10 square kilometers
southwest of Moscow. The palace was a cultural center where the nobility
attended concerts and dances and strolled through an art gallery containing
masterpieces by Velazquez and Botticelli. The Communist government sold off
the palace's contents and later turned the property into a concentration camp.
Surviving family members had fled to a rural area outside St. Petersburg,
where they attempted to conceal their aristocratic background. Meshchersky
recalls hearing furtive conversations about the estate, but no one dared visit
He first saw it in 1996, after he had married and moved to Ukraine to work
as an engineer. Meshchersky rushed to the estate after relatives sent word
from Moscow that the government was planning to allow wealthy families to
build summer houses on the property. He cleared away mountains of garbage and
repaired a gutted gatehouse for his living quarters. He and his family spent
the winter huddled around a woodstove. Meanwhile, Meshchersky filed a petition
in the local courts seeking to be declared the property's owner. The court
ruled against him, but he is appealing.
His chances look slim. At least five other families have filed similar
petitions, and none has succeeded, according to Alexei Firsanov, chairman of
the League for Property Rights Protection, a group that seeks restitution for
confiscated holdings.
Time is running out for some petitioners. Ninety-five-year-old Georgi
Shtruk filed a claim two years ago for his ancestral home near Moscow's Garden
Ring road and is still awaiting a final court decision. Shtruk's family moved
out of the building decades ago after the property was broken up into communal
apartments, and he realizes that he will never live there again. But, says his
nephew, Alexander Kochetkov, who is assisting with the court case, ``in his
lifetime, he would like to see justice restored.''
``COURAGE AND RESPECT.'' The courts may be unsympathetic, but many Russians
admire the nobles' determination. Neighbors have welcomed Meshchersky and his
family, bringing food and supplies and addressing him as ``Prince Yevgeny''
with a respectful tip of the hat. ``People are pleased that a man has found
courage and respect for his ancestors,'' says Sergei, a neighbor who stops by
to chat on a recent morning. Sergei says the place is haunted, and neighbors
have seen ghosts on the lawns at night dressed in 19th century costumes.
``I've seen them, too,'' Meshchersky replies. ``Don't worry, they won't hurt
you.'' The nobles may not win their legal battle, but they could help Russia
come to terms with the ghosts of a brutal past.


Chicago Tribune
October 15, 1998
[for personal use only]
By Colin McMahon

The timing for the festive food show in Moscow this week might seem
odd, what with an economic crisis threatening widespread hunger in
Russia as winter rolls in.
But even if there were no fiscal troubles, some of the producers
showing off their canned fish, cured sausages and sweet chocolates
Wednesday at "Russian Food Products '98" would still be struggling for
A few months ago, consumers and the merchants who serve them were
plunking down strong rubles to bring in wave after wave of imported
products. Now, with the ruble's value cut by half, imported goods have
soared in price or stopped coming in.
Anxious to economize, consumers are showing domestic products a new
"As strange as it seems, the Aug. 17 devaluation had a positive effect
for us," said Alexander Pshentsov, director of a fish cannery and
smokehouse in the far northern city of Salekhard. "Very simply, there
is more interest in our products."
While pleased with the prospect of more sales, Pshentsov and his
fellow exhibitors know not to gloat. Years of reliance on imports,
coupled with huge Soviet-era inefficiencies, have crippled much of
Russia's food industry. Raw materials can run scarce, barter
dominates, and a decayed distribution system exacerbates shortages.
With food imports falling more than 400 percent since the devaluation
and snow already piling up in Siberia and other points east, fears are
growing in Moscow that many Russians will run out of food before
Prime Minister Yevgeny Primakov said Wednesday that the government has
set up a $600 million emergency food reserve. International
humanitarian relief also is under discussion, though Russian officials
contend that the West approached them with the idea.
"Russia is passing through one of the most complex and difficult
stages in its development," Primakov told the upper house of
parliament. "I must be frank: Our possibilities are limited. We are
creating the government's emergency reserve for a period of two weeks,
and it only covers one-third of the population. We cannot go beyond
these limits."
Ukraine and Belarus, in exchange for Moscow's forgiving some of their
debts, will send food. The Russian government is cutting duties on
imported food and reducing railway tariffs to ease its transport
within the nation.
A walk around the exhibition hall at the Russian Food Products show
helps explain why: Until the devaluation, Russia imported half of all
it ate. Though high-quality sausages and cuts of meat were on display,
far more booths were dedicated to candies or cookies, ice cream or
Many exhibitors, particularly those from the provinces, came from
joint-stock companies arising from factories sold off by the state.
Their plants have not been restructured or recapitalized. They still
limp along with bloated workforces and outdated technology, relying on
barter to secure their raw materials and sometimes pay their workers.
For them, the economic crisis has delivered both sting and salve.
Ice-cream makers such as Yevgenia Makorova are thrilled to see prices
for Haagen-Dazs and other foreign competitors skyrocket, in some
stores by a wholly inexplicable 300 percent.
Yet Makorova also relies on imported ingredients--some chocolates, for
example--to make her 15 flavors and 33 types of treats. Her
sausage-maker neighbor across the way uses imported casings, so her
products have gone up in price as well.
"The competition is very tough with imports," Makorova said. "Still,
Russians now prefer to buy Russian products. They understand that the
imports are not as genuine, they don't use as good cream and as good
milk as our ice creams."
Behind Makorova, a group of about 20 youngsters dressed somewhat like
elves, except for one with a cowboy hat, danced to recorded pop music
with a country twang. People crowded around, shrinking the tight space
and causing the dancers to keep bumping into one another.
Not a lot of it made sense, but it was another sign that some of
Russia's food producers are determined to shake off their Soviet
habits as they try to market to a demanding public.
Packaging of Russian products has improved greatly in the past couple
of years, addressing a major concern of consumers worried about
spoilage. And manufacturers interviewed at the trade show said they
are searching for any way to keep prices under control, including
looking for more domestic suppliers.
For the Russian government, putting enough food on the nation's tables
this winter is a primary challenge. For the Russian food industry, it
also is best opportunity some have had in years.


Moscow Times
October 16, 1998 
No Ballot-Box Bonanza 
By Tatyana Matsuk
Tatyana Matsuk is senior researcher at the Russian Academy of Sciences'
Institute for Employment Studies. She contributed this comment to The Moscow

Last week, State Duma Deputy Andrei Nikolayev, former commander of the border
troops and current leader of the Union for Popular Rule and Labor, proposed
that President Boris Yeltsin hold early presidential and parliamentary
elections by September 1999. 
No one was taken aback by this suggestion. Having put forward and confirmed
Yevgeny Primakov as head of the government, all political camps understand
that this is a temporary government and that its main task is to ensure there
are no further upheavals before the elections and to ensure that they pass
without excesses. Most people in Russia and abroad now anticipate early
elections. The only question is when they will take place, and what the
balance of political forces in the country will be at that particular time. 
Sources among the communists hint that they are not against there being
presidential elections ahead of parliamentary ones. Having conceivably altered
the Constitution ahead of time in favor of the government and parliament, and
rendering the position of Russian president much less powerful than it is now,
the communists would have a good chance to evaluate their possible gains in
the Duma elections. In the likely event of their defeat in the second round of
the presidential elections, the coalition of left-patriotic forces under
Zyuganov would then have time to maneuver before the parliamentary elections,
possibly forming new alliances to bolster their core electorate. The most
likely ally is Moscow Mayor Yury Luzhkov. 
While the communists will employ all possible means to pressure President
Boris Yeltsin into resigning as soon as possible, Russia's other main
political forces are inclined to take a different tack. Grigory Yavlinsky's
Yabloko party has a definite chance to increase its number of seats in
parliamentary elections, in which even a modest success would boost
Yavlinsky's rating in the struggle for the presidency. Parliamentary elections
will also enable former general and present governor of the Krasnoyarsk
region, Alexander Lebed, to establish a presence in the Duma, and would
finally resolve the question of his participation in the presidential
The "party of power," Our Home Is Russia, finds itself in the worst position
of all, faced with certain crushing defeat in the parliamentary elections and,
given its lack of a viable candidate, in the presidential elections too. Nor
is such a candidate likely to appear in the near future, making it essential
for this party to ally itself with another. This would be best done in
confused circumstances where everyone is desperately looking for extra votes,
such as simultaneous presidential and parliamentary elections. 
Judging from activity currently visible on the political stage, presidential
elections now would entail the clash of candidates from two blocks. The first,
to use their own words, is a left-centrist union of patriotically minded
communists and agrarians, the Popular Front and Nikolayev's movement, most
probably under the leadership of Luzhkov. Essentially this is a block made up
from the former Communist Party of the Soviet Union. 
At the head of the second force capable of attracting the so-called "protest
electorate," is Lebed, with a strong suggestion of Boris Berezovsky's presence
behind the scenes. Berezovsky seems to have played a part in a recent
rapprochement that saw Lebed supporting Viktor Chernomrydin's nomination as
prime minister. 
Both groupings are capable of forcing a redistribution of property in one way
or another. How and to whose advantage they would do this cannot fail to worry
the party of power, and for this reason Alexander Shokhin, the leader of Our
Home Is Russia, is willing to hold talks with Luzhkov, Lebed and Yavlinsky. 
As yet, Yavlinsky has no real chance at winning the presidency single
handedly, and he will not join with either Shokhin or the Communists because
his stable voter constituency would never forgive him. His best chance now
lies in a union with Lebed, but the two seem unable to agree with each other,
apparently because Lebed is unaccustomed to sharing command with anyone, and
because of his lack of a definite program. 
Lebed's economic programs change according to who drafts them. Although very
dependent on his civilian entourage, Lebed is equally reliant on former army
personnel and defense workers, who are hardly capable of generating ideas in
the social and economic sphere. 
For his part, Yavlinsky seems to think that by putting a few dozen wise and
honest people in key positions it will be possible to get hundreds of
thousands of bureaucrats and ineffective managers to change their attitudes.
The economic program that he says his party has been developing for years has
still not been revealed, prompting doubts that it exists at all, and his
party's presence in Russia on a regional level is negligible. 
At this juncture, Russia most of all lacks a broad coalition of people who do
not simply regard power as a source of increased personal wealth, but are
capable of motivating the country's disillusioned and suspicious voters in the
short term f something that unfortunately only extreme right-wing fringe
groups seem capable of doing at the moment. 
The reality now is such that the democratic opposition in Russia does not have
sufficiently strong leaders capable of leading the country out of crisis.
Instead, Russia has a parliament, 300 members of which voted during the
current crisis in favor of a law broadening their own privileges. Under such
an "elite" it becomes abundantly clear that if any significant change is to be
achieved before any future elections, there must be a conscious effort from
some quarter to help potential leaders at the grass-roots level to break
through to the national political scene. 


Psychiatrists Ponder Yeltsin's Condition 

Komsomolskaya Pravda 
14 October 1998
[translation for personal use only]
Interview with Moscow psychiatrist Mikhail Vinogradov by
Mikhail Rybyanov followed by psychiatrists' comments, published
under the general heading: "Who in Russia Is Sick -- President or
Psychiatrist?" -- first paragraph is introduction

Yesterday Komsomolskaya Pravda reprinted a statement by Moscow
psychiatrist Mikhail Vinogradov from the British paper The Daily Telegraph:
Boris Yeltsin is sick, "he is not aware of his actions and is incapable of
controlling them." Your Komsomolskaya Pravda correspondent interviewed the
author of these shocking revelations.
[Rybyanov] Mikhail Viktorovich, you intend to seek a psychiatric
examination of the Russian president....
[Vinogradov] If people are even selected for the Army on the basis of
health, including mental health, why shouldn't selection for top state
posts be conducted on the same basis?
[Rybyanov] How can you presume to express an opinion on this?
[Vinogradov] I have worked as an expert psychiatrist for over 30
years. In the Soviet era I headed the USSR Internal Affairs Ministry
military psychiatric commission and was Central Military Medical Board
consultant to the KGB. Methods of selecting people for various special
services were devised on the basis of my methods or with my participation. 
I was chairman of the medical commission that sent the special contingent
to Afghanistan. Working with Boris Petrovskiy's clinic and the Central
Clinical Hospital, I gave advice to senior Central Committee officials. As
a psychiatrist I would prepare the country's top officials for operations.
On the basis of Yeltsin's outward appearance -- we can all see the
head of state on television -- and on the basis of open media articles I
have reached the conclusion that Boris Nikolayevich is mentally unfit, at
least as an administrator.
[Rybyanov] For how long?
[Vinogradov] Roughly since he became Moscow Party City Committee
secretary. He is a man who in terms of his character traits should not be
an administrator -- from a psychiatrist's viewpoint. In his case
egocentricity and the desire for absolute power take precedence over common
[Rybyanov] But egocentricity and the desire for absolute power are
not pathological.
[Vinogradov] A mentally healthy bully is not the best choice for an
administrator, just as a mentally healthy tyrant is not. But we can say now
that we are faced with a seriously sick man -- sick above all physically. 
In the 1996 elections we elected an invalid as president. But physical
incapacity is followed by mental deterioration -- it is a law of nature. 
Boris Nikolayevich's most serious diseases are the disruptions to the blood
supply to the heart and the brain. This was followed, obviously, by mental
impairment due to cardiovascular disease. Deterioration of memory,
intellect, and the ability to generalize. What psychiatrists call senile
[Rybyanov] How does it manifest itself exactly?
[Vinogradov] For example, in replies that have nothing to do with the
questions. A disparity between facial expression and what he is saying --
Yeltsin can sometimes talk about apparently happy things while looking
gloomy. Generally speaking, it is as if his face had frozen at some point
and it always wears the same expression -- a senile mask of displeasure. 
The pauses, which once were enchanting, now indicate that he cannot collect
his thoughts. Once he came into a meeting with journalists and,
bewildered, started examining his jacket. This is a typical example of
senile dementia -- even on the most important occasions such an old person
will pay more attention to his jacket than to the people around him and to
what is going on.
[Rybyanov] Is Boris Nikolayevich competent or not?
[Vinogradov] I am not prepared to answer that question. A medical
commission can determine his competence. I propose a psychiatric
evaluation for this purpose.
[Rybyanov] Are you sure it would be reliable?
[Vinogradov] Psychiatrists today have objective methods of
evaluation. Medically speaking, it is simple enough to carry out an
independent evaluation to objectively demonstrate the president's mental
state. We have a pretty good system of psychiatric testing in our country,
and I had a hand in developing it.
[Rybyanov] How would a psychiatric examination of the president be
arranged in practice?
[Vinogradov] Under the law the Constitutional Court can decide to
arrange an examination. The State Duma could adopt an appeal to the
Constitutional Court in this connection.
[Rybyanov] Why doesn't Boris Nikolayevich consult psychologists and
psychiatrists himself?
[Vinogradov] People with this kind of illness sometimes no longer
have a critical awareness of the state they are in. Boris Nikolayevich is
clearly incapable of properly assessing whether he is physically and
mentally capable of doing the job.
[Rybyanov] Presumably his entourage supports him in his delusions.
[Vinogradov] That is a political, not psychiatric matter. Of course,
it suits his entourage to keep Boris Nikolayevich in this state for as long
as possible. If he is no longer capable of handling his previous workload,
someone will do the work for him and make decisions on his behalf. So it
is in these people's interests to prevent a psychiatric examination.
[Rybyanov] But our president has doctors "assigned" to him. Maybe
they could open his eyes?
[Vinogradov] In the Soviet era the Central Clinical Hospital had a
special department of "functional neurology," which was in fact a
psychiatric outfit. Certainly there must be psychiatrists among Boris
Nikolayevich's bevy of doctors. The question is, though, whether they are
independent or not.
[Rybyanov] Who could participate in this examination as experts?
[Vinogradov] They must be independent experts from other countries. 
Leading psychiatrists from the "Urgent International Psychiatry"
["Neotlozhnaya mezhdunarodnaya psikhiatriya"] organization, of which I too
am a member, are prepared to participate in such an examination.
As for the participation of Russian specialists, a story comes to
mind. Back in the Soviet era I was instructed by the heads of the Internal
Affairs Ministry and KGB to devise covert methods of diagnosing drug
dependency among the personnel of those departments. We brought in several
consultants, including the director of a major medical institute, an
academician. Apart from anything else, we had a good personal
relationship. But when during the research we noticed that important
Internal Affairs Ministry officials from the Central Asian republics were
personally using drugs and we could trace links between them and staffers
of the party Central Committee apparatus in Moscow our work was immediately
blocked. Our research was confiscated, and the academician I mentioned
before said that he had not even heard of it, although all the relevant
documents bore his signature. [Vinogradov ends]
[Following comments are under the rubric "I Don't Believe It" and are
"transcribed by Sveta Kuzina"]
Aleksandr Goffman, Professor at the Russian Federation Health Ministry
Psychiatric Research Institute: Yeltsin Reacts Appropriately. He Merely
Speaks Slowly [subhead]
You cannot make a definite diagnosis, particularly a psychiatric one,
based merely on outward appearance. Yeltsin's uncertain gait has nothing
to do with dementia. You can have a "defective" gait and still be
extremely capable. Yeltsin reacts appropriately. He merely speaks slowly.
But why is an examination needed for this. Maybe he simply had a
sleepless night. Especially as you often get decompensation after a heart
operation: A person feels worse and often feels weak. But he is holding
He should be in bed, but because of his irrepressible nature he flies
to Tashkent. That is not dementia. And if someone considers a person to
be mentally deficient, he should not say so because it is a private matter.
Yuriy Polishchuk, Professor at the Psychiatric Research Institute: 
Perhaps It is Ischemic Disease of the Brain... [subhead]
Yeltsin has no symptoms of senile dementia and he hasn't got a cold
either. Alzheimer's disease manifests itself in a different way: gross
loss of memory, ridiculous statements, inappropriate behavior,
disorientation. The president does not have that, thank God.
The awkward gait, loss of coordination, slow speech, and dizziness --
after all he almost fell over in Tashkent-- indicate that perhaps Yeltsin
has progressive ischemic disease of the brain, in which the blood supply to
the brain is disrupted and the vessels suffer hypoxia. The vessels in the
brain, unlike the cardiac ones, are extremely difficult to treat. You
can't do anything like a bypass. Only if there has been a stroke can one
operate on the brain. But we do not see any signs of an impending stroke
in the president's case.
[Following comment is under the rubric "Shameful"]
Well-Known Psychologist and Psychiatrist Vladimir Levi: Yeltsin Does
Not Have Senile Dementia [subhead]
I don't want to join the pack of jackals persecuting a declining
president. I insist that such pronouncements are ethically impermissible.
I utterly disagree that Yeltsin has senile dementia. This diagnosis
can be made only of people over 70. Boris Nikolayevich is occasionally
below par and unable to function properly; this was in evidence even before
he became president. Psychologically he is a "borderline" case. I have my
own ideas about a proper diagnosis of the president's condition, but I am
not going to say anything in public on principle. Boris Nikolayevich, like
anyone else, is entitled to be sick.
We must now behave properly as regards the president. If we lose the
president tomorrow, those who still have a conscience will be ashamed of
the persecution that is going on today. We should be grateful to the
president for the good things. And I include among the good things the
very fact that we are now able to talk about these things. I would like to
have seen what would have become of Mr. Vinogradov if he had dared speak
publicly about the condition of the late Brezhnev, which was obvious to
everyone at the time.


Russia: New System Created To Prevent Manipulation Of Ruble Exchange Rate 
By Robert Lyle

Washington, 15 October 1998 (RFE/RL) -- About a week after the Russia
government on August 17th stopped supporting the ruble at six to the dollar
and allowed it to depreciate to as low as 20 to the dollar, there were two
days that the ruble's exchange rate almost mysteriously recovered.
It only recovered, experts say, because several of Russia's largest banks were
able to manipulate the exchange rate so as to reflect a much higher value for
the ruble than was actually occurring on the market. The banks did it, the
experts say, because they had issued specialized financial instruments called
forward options contracts with western banks and investors. Those contracts
were denominated in dollars and the sudden drop in the ruble would have meant
the Russian banks owed hundreds of millions more dollars than they had
By manipulating the rate, they were able to save a fortune.
Of course, on the other side of those contract deals were dozens of western
financial institutions, mostly banks, which had taken the contracts to help
them protect against any sudden, unexpected devaluation of the ruble.
The manipulation meant that instead of collecting the money they should have
because the ruble did indeed depreciate, the western banks were left with
contracts worth no more than when the ruble traded at six to the dollar. 
It was all only an exercise in paperwork because as part of the Russian
government's 90-day moratorium on debt repayment, such forward and futures
contracts have been frozen. The western investors must wait to get even the
original amount owed.
The ruble exchange rate for these special financial instruments was determined
by the Moscow Interbank Currency Exchange. It collapsed a few days later at
the end of August, but it's legacy greatly worried the banks and investors who
still hold those Russian bank contracts.
The rate as determined by the old Moscow exchange was simple to manipulate. At
a predetermined time each day, the exchange telephoned each major commercial
bank in Moscow and asked its exchange rate. It then averaged those and issued
the daily rate. 
Realizing that the best solution to this problem should be market based, two
U.S.-based organizations -- the Chicago Mercantile Exchange (CME) and the
Emerging Markets Traders Association (CMTA) -- decided to jointly create a new
This one is being done by conducting random surveys of commercial banks in
Moscow -- including foreign banks and commercial financial operations -- twice
daily and combining those results to determine the rate. Using normal western
banking practices, the new survey is designed to expose any attempt at
The two organizations actually began testing the new survey within days of the
Moscow exchange's collapse. With announcement of its creation Wednesday, CME
spokesman John Holden says the two groups will carefully weigh reaction of
market traders around the world. They must also receive formal approval of the
U.S. Commodity Futures Trading Commission (CFTC), which regulates futures
trading instruments in the United States.
For the first day, the survey produced a reference rate of 14.43 rubles to the
dollar. That was slightly below a rate of 13 to the dollar that was created
Wednesday morning by the Russian Central Bank when it held two trading
sessions. The 13 rate represented a nearly 16 percent jump in the rubles value
from the day before, reflecting what traders said was the effect of the bank's
adding 800 million dollars to its reserves.
CME spokesman Holden said there was no connection between the Central Bank's
rate and the new survey. The new survey, he said, is designed to provide a
more balanced figure to give the investors who have been frozen out a
reasonably accurate rate for future settlement. 


Business Week
October 19, 1998

You and others have been consistently reporting that Russia is not a very
significant trade partner when it comes to exports ("Can this bank rebuild
in the rubble?'' European Business, Sept. 28). This is not an accurate
perception if you take into consideration indirect third-country exports.
American, Japanese, and European goods finally reach the Russian market
through various routes, with huge volumes utilizing unofficial routes.
Official statistics probably show these as exports to Azerbaijan, Dubai,
Singapore, Finland, Britain, etc. Traders and producers in many countries are
badly affected by the Russian economic collapse, much beyond the official
statistics. It is not merely sentiment that is giving significant parts of the
world pneumonia as the Russian Bear sneezes.
Rahul Kalla


Foreigners call rouble rise manipulation
By Peter Henderson

MOSCOW, Oct 15 (Reuters) - Foreign investors in Russia cried foul for the
second month in a row on Thursday as the rouble showed unbelievable strength
in a session crucial to settling billions of dollars of contracts pegged to
exchange rates. 
The rouble averaged 13.56 to the dollar on Thursday morning in a trading
session usually dominated by the central bank but fell 18 percent by afternoon
to levels seen earlier this week. 
Russian banks stood to gain at foreigners' expense by decreasing nominal
losses on an estimated $1.5-$2.0 billion in forwards, a derivative in which
the writer takes on exchange rate risk and which banks wrote before the rouble
Foreign investors and the government are in talks on restructuring frozen
state rouble debt, which foreign investors may swap for new dollar bonds. Many
may also exchange rouble- dollar forwards contracts written by Russian
commercial banks. 
The fast-appreciating rouble repeated a move made on September 15, the last
time a round of such forwards matured, and bank losses were cut by hundreds of
millions of dollars. 
Forwards payments fall under a moratorium and may be assumed by the central
bank, but the rouble rate will be crucial to determining how many new bonds
investors get. 
MFK Renaissance, a Moscow investment bank, said in a note that rouble trade
showed "the sad spectacle of market manipulation and barefaced lies." 
Arnab Das, emerging markets specialist at J.P. Morgan, the investment bank,
said that Russian official credibility had previously been hurt by
devaluation, default on debt and a moratorium on payments to foreign
"The authorities are no longer virgins," he said. 
Traders said the central bank acted indirectly to support the rouble by
halting a recent spate of large-quantity dollar buying. Only the central bank
and importers are allowed to buy dollars at the morning sessions for export
proceeds sales. 
Some said that commercial banks which wrote the forwards were to blame. "It
seems to me that today there was a battle between the commercial banks," said
Viktor Anisimov, a dealer at Aljba Alliance bank in Moscow after the stormy
morning session. 
Trading was delayed and the rouble was sold at prices from 12.40 to 14.00 to
the dollar, indicating lack of direction. 
But by the end of the second session, in the afternoon, the offer rate for
roubles had fallen 18 percent against the morning session average to 16.49,
and traders expected the currency to stick to that level. 
Some traders said the rouble strength was not important anyway, since the
central bank would take on the commercial bank debt and would not pay more
than it could in any case. 


Yeltsin Favors Radical Changes in Parliament Election Law 

Moscow, Oct 13 (Interfax)--President Yeltsin thinks that the law on
parliamentary elections is in need of cardinal changes, Mikhail Mityukov,
the president's representative to the Constitutional Court, told the press
Tuesday.On Tuesday the Constitutional Court began considering an inquiry from
the Saratov regional legislature on whether individual provisions of the
law on parliamentary elections comply with the constitution.
Mitykov said that the president favors a majority system and is
against the mixed system, whereby some deputies are elected by party lists.
"But in this particular case, the head of state, in accordance with
the constitution, acts as an arbiter. So we are leaving this to local
initiative," he said.
He said that more regions would send similar inquiries to the
Constitutional Court.
However, he said that the nearer the parliamentary elections, the
lower the possibility that the Constitutional Court would consider such
inquiries. "In accordance with the Constitutional Court's rules, during
election campaigns such issues cease to be purely juridical and become
political, and cannot be considered in court," Mityukov said.
Yelena Mizulina, the Duma representative in the Constitutional Court
in charge of this particular case, said that the initiative to send an
inquiry to the Constitutional Court "probably comes from the presidential
administration rather than Saratov region." She said inquiry was probably
written by the presidential administration.



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