October 20, 1998   
This Date's Issues: 2439 •2440• 

Johnson's Russia List
#2440
20 October 1998
davidjohnson@erols.com

[Note from David Johnson:
1. The Moscow Tribune: John Helmer, KIRIENKO HITS JACKPOT.
2. Reuters: Spy trial of Russian environmentalist begins.
3. Reuters: Yeltsin briefed on economy, PM vows tax cuts.
4. Jamestown Foundation Monitor: THE INDUSTRIALISTS RISE AGAIN.
5. Moscow Times: Yulia Latynina, INSIDE RUSSIA: Little Choice, Cheer,
Filling Yeltsin's Shoes.
6. The Independent (UK): Rupert Cornwell, The most dangerous place on 
the planet. (Murmansk).
7. Reuters: Small is beautiful in Russian bank crisis.
8. Moscow Tribune: Catherine Belton, Headlines. (Re CBS cutbacks in
Moscow).
9. Russia Today satire: The Heart of the Matter. (Re Yavlinsky).
10. Washington Post: Daniel Williams, The End of Innocence Abroad.
In Russia, Jobless Young Americans Face Economic Reality.
11. Reuters: Yeltsin sets limits on protests in Moscow.
12. Reuters: Russia rouble printing to be minimal-PM.
13. Reuters: Chubais sees lower Russian imports, no food crisis.]

*******

#1
Date: Tue, 20 Oct 1998
From: helmer@glas.apc.org (John Helmer)

David:
The debate with Ickes-Gaddy over Russian steel has been reported extensively
in Pravda, 16 October.
Here's my latest column.

>From The Moscow Tribune, October 16, 1998
KIRIENKO HITS JACKPOT
>From John Helmer in Moscow

The jackpot question for today, ladies and gentlemen, stands to win you
the total life savings of every Russian with a bank account in Sberbank.
Here it is: What qualifications does ex-Prime Minister Sergei Kirienko have 
to deserve an appointment as head of Sberbank, Russia's national savings bank,
an appointment he says he has been offered, and is now mulling over.

1. Kirienko knows how to run a lottery. Not too many years ago, Kirienko and
his friends invented and patented a scratch-card lottery game. Whether there 
were any other winners but the inventors of that game, isn't known. 

And what, if not a scratch-card, is the deposit book of Russian depositors
whose money has been embezzled by the managements of Russia's leading 
commercial banks? By ordering the depositors to sign their money in Inkombank,
SBS-Agro, and other bankrupt institutions over to Sberbank, the government 
has in effect given Sberbank the right to decide how little to pay out,
while making the head of Sberbank the protector of all savings bank bosses
in Russia. 

2. Kirienko knows how to launder pension funds. Before he was promoted
to Moscow from Nizhny Novgorod, the local bank which Kirienko headed -- after 
his lottery venture -- served as a depository for all sorts of regional
funds supplied on the order of then Governor Boris Nemtsov, including
pension obligations. 

Making a profit out of holding pension payments, due to Russia's vast
class of aging, ailing, and poor people, but issuing them after
a delay, is going to be more difficult, now that the high-yielding
short-term bond pyramid has collapsed. But in Nizhny Novgorod, Kirienko
showed he has the inventiveness to surmount whatever legal obligations
the new government will devise to protect its citizens, or its securities.

3. Kirienko knows how to default without telling his superiors. Prime 
Minister Yevgeny Primakov says that Kirienko didn't get President Boris
Yeltsin's approval, before he ordered the August defaults on commercial bank 
obligations abroad, and the Russian government's bonds. So Primakov must want 
to put that insubordinate in charge of the nation's savings. Why? Could it be 
that the prime minister, knowing how close to insolvency Sberbank is, needs 
another scapegoat for another default? If Kirienko achieved nothing else in 
four months, he proved how well he plays the goat.

4. Kirienko knows how to violate Russia's Constitution and Civil Code. As
the head of the former government, Kirienko defends the decisions he took
which parliament, prosecutors, and western lawyers know were illegal. 
Sberbank has also been the willing tool of the government's illegal financing 
policies, since they began. Along with the Central Bank, it has been the 
chief buyer of government securities, including the now discredited GKO's. 
Sberbank has operated in the same secretive and conspiratorial fashion as 
the Central Bank. Its spending practices for its own management, office 
buildings, and perquisites should be a target of Accounting Chamber and 
Procurator-General investigation, just as the Central Bank is right now. If 
there is to be a reshuffle at the top of Sberbank, who better to protect the 
bank's secrets than a man who is a co-conspirator?

5. Kirienko knows how to steal from the poor and give to the rich. This
has been the real function of the Russian commercial banking system from
the start. Depositors were simply saps too poor to keep their money
offshore, or too insecure to keep it in dollars under their pillows.
Kirienko's tax policies were attempts to strip what little was left of the 
pensions and the consumer purchases of those on the bread line. Putting
him in charge of their meagre savings is a signal that Sberbank 
is to be little more than a burial benefit fund -- for that's all the cash 
Kirienko can be trusted to pay out, at least to people who aren't his friends.

6. He recently took a holiday to Australia and New Zealand. Administering
Russian poverty is hard work, and compared with the likes of Victor
Chernomyrdin, Anatoly Chubais, and Boris Nemtsov, Kirienko went further 
away, and for longer, after his sacking. If refreshment is in 
proportion to distance from Russia, Kirienko must be more revitalized than 
any other candidate for high-level work right now in Moscow.

To make sure there can be no disputing the jackpot prize, I have asked
a trustworthy government official to write the number of the correct
answer in a sealed envelope, place it in a cardboard box, and 
hand it to the Duma Deputy for Tula, Alexander Korzhakov, at the entrance to
the White House. 

And the winning answer is.... No.6!

If you picked the right answer, submit your claim, along with this column,
to the Sberbank cashier nearest to your place of residence. Australian
and New Zealand passport holders don't qualify, because the answer was
too obvious for them.

******

#2
Spy trial of Russian environmentalist begins
By Konstantin Trifonov

ST PETERSBURG, Russia, Oct 20 (Reuters) - The trial of a naval officer accused
of spying after he wrote about pollution began on Tuesday in Russia's second
city, St Petersburg. 

Alexander Nikitin, 46, co-authored a document by the Norwegian
environmentalist group Bellona criticising Russia's nuclear Arctic fleet for
causing environmental damage. 

He was arrested in February 1996 by Russia's Federal Security Service (FSB),
the main successor to the Soviet-era KGB secret police, and charged with
treason for spying and disclosing state secrets. The case has been closely
watched by international human rights and environmentalist groups. 

Protesters hung signs at the courthouse reading: ``The Nikitin trial is a
disgrace for Russia.'' 

Nikitin said he was satisfied with the professional atmosphere at the
courthouse. 

``It is an entirely normal working environment. I think the judge is
determined to maintain an exclusively working environment and that pleases
me,'' he told reporters during a break in the trial. 

Judge Sergei Golets, who has ruled that many of the proceedings should be open
to the public, seemed to go out of his way to show courtesy towards the
accused. 

``Are you comfortable over there? Perhaps you would prefer to sit closer, or
on the other side,'' he said to Nikitin as the trial opened. 

``This case is interesting. Several aspects are contested and must be
explained to the court,'' Golets said. 

The first day of hearings took place under unusually liberal conditions in a
country where spying allegations have traditionally been tried in secret.
Journalists were allowed to come and go freely. 

Immediately after the opening of the trial, Nikitin said he had no criticism
of the court staff, but added he was concerned the FSB might try to rig the
trial's outcome. 

``We have no legal basis to dismiss the court staff, but at the same time we
express concern that the FSB has the ability to influence the selection of the
people's jurors,'' he said. 

Nikitin has attracted support from abroad. Nearly a year ago, Canadian Prime
Minister Jean Chretien said he was ready to offer Nikitin a visa. 

Former Norwegian prime minister Thorbjoern Jagland quizzed President Boris
Yeltsin over the case at a Council of Europe human rights summit last year,
asking publicly for fair treatment for Nikitin. 

A similar trial in Russia's Pacific port of Vladivostok was postponed last
week. In that case the authorities accused a naval officer of spying after he
alleged in Japanese media that Russia's navy had dumped nuclear material in
the Sea of Japan. 

*******

#3
Yeltsin briefed on economy, PM vows tax cuts
By Gareth Jones

MOSCOW, Oct 20 (Reuters) - President Boris Yeltsin returned to the Kremlin on
Tuesday after spending several days at country residences recovering from
bronchitis and Prime Minister Yevgeny Primakov briefed him on Russia's
economic woes. 

Their talks, also attended by Finance Minister Mikhail Zadornov and central
bank governor Viktor Gerashchenko, focused on plans to stabilise Russia's
shaky banking system and pay off wage arrears to millions of state sector
workers. 

Yeltsin, under heavy pressure from opponents to quit because of Russia's deep
economic crisis, repeated that he had no plans to seek re-election when his
term expires in 2000. 

``I will not run. Why do you torment me?'' he said in televised remarks,
speaking in a clear, resolute voice. 

Speculation is rife over who might eventually try to succeed Yeltsin. The
president has appeared confused and distant on some recent public appearances
and last week bronchitis forced him to cut short a trip to Central Asia, where
he almost fell over. 

On Tuesday Primakov ruled himself out of the race, saying running the
government was a big enough challenge for him. 

``I would not be head of the government if I was dreaming about the
presidency,'' said Primakov, a former spymaster and foreign minister who at 68
is a year older than Yeltsin. 

Before meeting Yeltsin, Primakov told Russian business leaders his government
planned tax cuts to help revive industry, which has been in recession for most
of this decade. 

``Within days we will send (to parliament) a proposal to trim taxes, including
a cut in VAT and profit tax,'' he told a meeting of the Russian Union of
Industrialists and Enterpreneurs. 

He said the state had a key role to play in regulating the economy and added
the market was no panacea for Russia's ills. 

``This theory of throwing everything to the market...that the market will
decide everything -- it has absolutely failed to prove itself,'' he said to
strong applause. 

Moscow Mayor Yuri Luzhkov, speaking at the same forum, praised Primakov and
attacked previous liberal cabinets for peddling ``simple recipes'' for
Russia's problems. 

Luzhkov, a likely candidate in the next presidential election, called for an
aggressive use of selective tariffs and cheaper credits to help domestic
industry. 

Later on Tuesday a delegation from the International Monetary Fund (IMF) was
due to arrive in Moscow for new talks on the Primakov government's plans for
the economy. 

But the fund is unlikely to release its next $4.3 billion tranche to Russia,
part of an overall $22 billion funding package, without clear proof that the
new government is trying to cut spending and raise revenues to balance its
books. 

Primakov said the government would not resort to unchecked printing of money
to meet its obligations. The IMF strongly opposes such a move, saying it would
spark runaway inflation. 

``If there is a (monetary) emission, then it will be very minimal,'' he said
after his talks with Yeltsin. 

Primakov, who has been accused of acting too slowly to tackle Russia's crisis,
needs to find cash to pay billions of roubles in wage arrears to state sector
workers including teachers, doctors and army officers. He acknowledged on
Tuesday the backlog would not be completely cleared this year. 

The arrears problem helped bring more than one million people on to the
streets on October 7 in a nationwide day of protests against Yeltsin's seven-
year rule. 

Yeltsin, who on Tuesday also held talks with Interior Minister Sergei
Stepashin and other security officials, signed a decree which news agencies
said limits the duration of protests in Moscow to a maximum of five days and
bars protests between 10 p.m. and seven a.m. 

*****

#4
Jamestown Foundation Monitor
20 October 1998

THE INDUSTRIALISTS RISE AGAIN. The Russian Union of 
Industrialists and Entrepreneurs (RSPP), which has 
opened its ninth congress in Moscow, is getting a lot of 
attention from the powers-that-be. President Boris 
Yeltsin had a telephone conversation on October 19 with 
Arkady Volsky, the union's president. According to 
Kremlin spokesman Dmitri Yakushkin, the two men 
discussed an "anticrisis program" which will be 
presented and debated during the congress, and which 
includes proposals from all of Russia's regions. Yeltsin 
asked Volsky to give him the documents to be considered 
during the congress, Yakushkin reported. Yeltsin also 
asked Prime Minister Yevgeny Primakov to address the 
gathering.

Volsky, meanwhile, noted with satisfaction that 
Primakov's government is listening to the opinion of 
"industrialists and entrepreneurs." He said that the 
bulk of the suggestions made by RSPP members a month ago 
during a meeting with Primakov have been adopted by the 
government (Russian agencies, October 19).

The RSPP, politically a "centrist" organization, is 
widely viewed as representing the interests of the "red 
directors"--the Soviet-era industrial managers who, 
after the fall of the Soviet Union and the central 
planning system, simply "privatized" their enterprises. 
Back in 1993, Volsky created a political bloc, "Civic 
Union," to contest the parliamentary elections which 
took place in December of that year. Derided by critics 
as the "director's party," Civic Union won no seats in 
the vote, but nonetheless remained influential thanks to 
the RSPP's ties to Prime Minister Viktor Chernomyrdin, a 
fellow Soviet-era industrial manager.

Another likely ally of Volsky and industrialists is 
First Deputy Prime Minister Yuri Maslyukov, who once 
headed the Soviet Union's economic planning agency. 
During a meeting Monday with industrial heads in the 
northwestern region of Udmutria, Maslyukov said that 
Russia's "natural monopolies"--a term referring to such 
entities as Gazprom, the natural gas monopoly, and 
United Energy Systems, the electricity monopoly, along 
with the railroads--are the "locomotives" which can lead 
Russia out of its current economic crisis. Maslyukov 
called for greater coordination between the various 
"sectors" of the economy, particularly between the oil-
gas complex and military-industrial enterprises. He held 
up as a model Germany's machine-building "union," which, 
he said, determines production quotas, export targets 
and negotiates with the government for "privileges." 
Maslyukov singled out the development of military 
technology as one of the Russian economy's "reserves," 
and said that Central Bank crediting of industrial 
sectors could be used for building domestic 
infrastructure like housing and roads (Russian agencies, 
October 19).

Maslyukov's stock inside the government has apparently 
risen, despite the controversy earlier this month over a 
retrograde anticrisis program which, according to the 
Russian press, he drafted. Prime Minister Primakov has 
appointed Maslyukov to chair a government commission on 
protective measures in foreign trade and customs-tariff 
policy. By one account, this means that Maslyukov has 
been given control over "customs-tariff policy and 
practically all foreign trade, including the export of 
armaments and military technology--more precisely, the 
company 'Rosvooruzheniye'" ("Profil" magazine, October 
19).

******

#5
Moscow Times
October 20, 1998 
INSIDE RUSSIA: Little Choice, Cheer, Filling Yeltsin's Shoes 
By Yulia Latynina
Special to The Moscow Times

The process of impeaching President Boris Yeltsin has been set in motion. Just
as Soviet television at the end of the 1970s was under instruction from KGB
chief Yury Andropov to highlight Leonid Brezhnev's senility at every
opportunity, television companies owned by Russia's oligarchs now
systematically ridicule the president. 

But it is not the oligarchs' own self-interested calculations that are calling
the tune f elections during the current crisis would after all be extremely
expensive and dangerous and would bring great dividends for the Communists f
but rather strict medical considerations. How can you be ruled by a president
who after meeting with the head of the border guard service blankly spends
half an hour instructing his next visitor, the deputy chief of the Kremlin
staff, how to defend Russia's borders? 

Three forces are now poised to take Yeltsin's place, starting with the
parliament. That the State Duma may be regarded as being collectively insane
does not come into question, unfortunately. The problem is not so much the
left-wing views of the majority of deputies, but the sort of recklessness and
venality that led them to block attempts to lift immunity from prosecution
from Sergei Skorochkin, a deputy who police say executed two people in front
of witnesses (and who himself was executed by bandits soon after taking
office). 

And if it is a tragedy when decisions of state are taken by ministers who for
a few million surrender their loyalties to the oligarchs, it is an utter farce
when our lawmakers openly sell Duma assistant identification documents. 

Because Communist leader Gennady Zyuganov is certain to be knocked out of the
running in the second round of voting, the two main contenders for the
presidency are Moscow Mayor Yury Luzhkov and Krasnoyarsk region Governor
Alexander Lebed. All other candidates comprise an army of mercenaries that
treacherously move from camp to camp, skillfully exacting political and
financial capital in the process. 

Using his city's unique situation in our feudal-oligarchical state, Luzhkov is
famous for grandiose construction projects like the Christ the Savior
Cathedral that transform Moscow's budget into one big cash flow. Luzhkov as
president would be a tragedy for Russia, since he would preserve the existing
form of capitalism that parasitically feeds off the budget, and would
precipitate a bloody redistribution of property across the country to favor
AFK Sistema and other structures close to him. 

And while Lebed may be regarded as the protege of the most odious of the
oligarchs, Boris Berezovsky, he nevertheless remains a master of political
aikido, always turning thanklessly on his backers. Before the 1996 elections
the former general had two economic programs, one drawn up by a liberal,
Vitaly Naishul, the other by Sergei Glazyev, an advocate of state economic
intervention. When asked what the two programs could have in common, Lebed
replied in puzzlement, "You can't be serious. They were both written by
economists!" 

But the ex-general is not known for questionable construction projects or for
trading identification papers, and the image of Russia undoubtedly takes
second place in his heart, after his own. In short, only if you don't count
all the others is Lebed the worst possible presidential variant. 

Yulia Latynina is a staff writer for Expert magazine. 

******

#6
The Independent (UK)
October 20, 1998
[for pesonal use only]
The most dangerous place on the planet
By Rupert Cornwell in Murmansk 

For a few hours last May, the long-prophesied day of nuclear judgement seemed
to have arrived on the Kola Peninsula. Rumours swept Severomorsk, base of the
Russian Northern Fleet, that a Delta-class submarine, carrying a dozen
missiles, had suffered a major accident in the Barents Sea. 

The story soon reached Murmansk, 15 miles south, where policemen were told to
take iodine tablets and schools were closed. Calm was restored only after the
regional governor and naval officers held a press conference to say no one was
in danger and that what had happened was a scheduled exercise, testing
reaction to a nuclear incident aboard a submarine. But was it? "We are
confident there was an explosion or some other incident in one of the
submarine's rocket shafts," says Thomas Nilsen, a researcher for Bellona, the
Norwegian environmental pressure group monitoring nuclear goings-on in the
area. 

"The 'exercise' was a cover-up for the incident." First, he argues, such
exercises are flagged well in advance, to avoid such rumours. Of this one,
however, there had not been a word. Second, the Norwegian military two days
later did confirm that a Russian submarine had surfaced hurriedly on 5 May
before heading to a nearby base. Third, not a single Northern Fleet submarine
went on patrol for three months thereafter. 

But the biggest reason for suspicion is the most obvious of all. The Kola
Peninsula is a nuclear accident waiting to happen; in environmental terms
probably the most dangerous place on Earth. Between them the Northern Fleet,
nuclear cargo vessels and icebreakers based at Murmansk and the Kola nuclear
station account for 18 per cent of all nuclear reactors on Earth, and a fair
proportion of their spent fuel. 

In Murmansk, near the heart of a city of 500,000, is the Lepse cargo ship,
carrying hundreds of damaged nuclear fuel elements, on which, after years of
negotiation, Norway, France and the European Union are to start a clean-up
with the Russians. But nothing comes close to Andreyeva Bay, in a fiord 30
miles from the border with Norway. 

There, 21,000 spent fuel rods - equivalent to 90 reactor cores - and 13,000
cubic metres of solid and liquid radioactive waste are housed in concrete
tanks and rusting containers open to the elements. Like little Chernobyls in
slow motion, their contents are leaking into the river and sea. 

Between them the Soviet Union and Russia built 250 nuclear submarines. Now, as
a result of arms agreements, the end of the Cold War and Russia's economic
collapse, only 70 or 80 are in any kind of service. Some of the others were
destroyed. More, however, are rotting at Andreyeva Bay and other sites around
the Kola Peninsula. And, secretive as ever, the Russians do not want anyone to
see. 

British Nuclear Fuels, with French and Norwegian companies, has signed a
preliminary deal on a clean-up plan at Andreyeva Bay. 

But all requests for on-site inspections have been turned down: the most the
Russians will offer is a video. No Westerner has been allowed to Andreyeva
Bay. Unfortunately for the environmental movement, a mile away across the
fiord lies Nerpichya, base for six 30,000-ton Typhoon-class submarines, pride
of the Northern Fleet, each carrying 200 strategic nuclear warheads - and
emphatically not for foreign eyes to behold. 

Their presence is why Russia probably will not accept an invitation from Nato
to join a Partnership for Peace exercise in the Barents Sea next summer - and
why nothing looks likely to happen very quickly at Andreyeva Bay. 

Norway has freed 300m kroner (£25m) to tackle a pollution problem that scares
it stiff but "obviously, the less we get a chance to have a look for
ourselves, the less money will be spent", says Ommund Heggheim, State
Secretary at the Defence Ministry in Oslo. If anything, Russia's stance is
likely to harden now that Yevgeny Primakov, a foreign-policy hawk from Soviet
times and sympathetic to the military, is Prime Minister in Moscow. 

But a more immediate pointer will come today, when Alexander Nikitin, a former
Soviet submarine captain-turned-sleuth for Bellona, goes on trial for
espionage and treason in St Petersburg. He was co-author of Bellona's 1996
study of the Northern Fleet. If Mr Nikitin is harshly sentenced, Russia's and
the world's environmentalists should fear the worst. Overshadowing everything,
however, is the crisis of money and morale gripping the armed services. 

The Defence Ministry has more pressing matters than decaying nuclear
facilities. Wages are hopelessly in arrears. The conscript who ran amok on an
(unarmed) submarine at Murmansk last month, killing eight colleagues, was
merely proof of how deprivation and brutality breed only despair. As Mr Nilsen
puts it: "If you're a naval officer in charge of the safety of your ship, and
you haven't been paid for five months and your children are sitting at home
half-starving, you're not going to care very much." 

******

#7
ANALYSIS-Small is beautiful in Russian bank crisis
By Julie Tolkacheva

MOSCOW, Oct 19 (Reuters) - Russia's banking system is drowning in a sea of
debt and only the biggest banks have access to a state lifeline, but analysts
say many medium- and small-sized operators don't really need one. 

These smaller banks, little known but generally sound, were never allowed to
venture too deeply into the markets which eventually sank many of their bigger
Russian counterparts. 

"Many small and medium-sized banks proved they are more stable than big
banks," Vyacheslav Zakharov, executive vice-president of the Association of
Russian Banks, told Reuters. 

A year ago, the big-name banks, including primary dealers in the once-
lucrative state securities market, had huge financial resources. But then came
wave after wave of crisis linked to Asian contagion and Russia's inability to
plug budget gaps. 

The August decision of the government to effectively devalue the rouble and
freeze its domestic securities drained the liquidity of the big banks above
all, because most of them held significant chunks of their assets in
government paper. 

A 90-day moratorium on some foreign debt repayments, announced at the same
time as the devaluation, spared them from the costly settlement of billions of
dollars worth of rouble/dollar forward contracts. 

But the moratorium expires in mid-November and the forward obligations, if
they are not restructured into new paper, could spell doom for many banks
holding the paper. 

Zakharov quoted central bank data showing between 10 and 15 of the biggest
banks were experiencing serious difficulties. 

But smaller banks, mainly regional ones, never had enough funds or opportunity
to buy government securities, or speculate on the derivatives market, or take
significant foreign credits, analysts said. This turned out to be a blessing
in disguise. 

"This crisis has severely affected the Moscow banks -- a lot more than
regional banks," said Richard Hainsworth, an analyst at Thomson BankWatch,
adding that even among smaller banks not everyone would survive. 

According to the Association of Russian Banks' data, medium banks held five to
10 percent of their assets in t-bills, while big banks held between 70 and 80
percent. 

Small and medium banks only wrote forward contracts with Russian banks, and
the deals are subject to local law which makes it impossible to demand failed
payments. 

Big banks struck deals with foreign banks under the International Swaps and
Derivatives Association rules, and will eventually have to pay according to
foreign laws. 

Another strong point of smaller banks is their low involvement in the retail
business which saved them from a run most biggest banks experienced during the
crisis. 

Analysts also said small and medium banks, many of which are pocket banks of
regional administrations, would profit from support of their main clients. 

"Those banks have different strengths, but in reality I think it is because
the major clients of the banks are strong enough to sustain the bank, whereas
individual clients are not strong enough to sustain a big bank," Hainsworth
said. 

"They are of a size to provide good services, but not too big to save." 

Steven Dashevsky, a banking analyst at Aton brokerage, said the main saviours
were likely to be regional administrations, which, although poor, would try to
repay credits to their banks. 

"Given that there are 89 regions in Russia, the number of such banks is quite
few and such banks have pretty good chances of surviving," he said. 

But analysts said the scope for medium and small banks capturing the market
and expanding nationwide was limited. 

"They are well off at their regional level but they have no chance of going
further," Dashevsky said. "Those big banks which manage to survive will remain
the giants of the Russian banking business." 

*******

#8
Moscow Tribune 
Oct. 16, 1998
Headlines
By Catherine Belton 

The U.S. television news network CBS is to lay off and transfer 12 staff
from its Moscow bureau as part of a worldwide cost-reduction program. 

The Moscow bureau will slash employment costs, halving the number of staff
and leaving only one crew covering Russian events. 

According to CBS News Moscow bureau chief David Hawkins, the plan to
downsize the network does not come as a result of Russia's financial
crisis, but as a direct consequence of technological advances in the
television industry. 

"The network is reevaluating the way it works. New technology has allowed
us to look at different, more flexible methods of coverage," he told The
Moscow Tribune. 

"Even though our Moscow office is to be downsized, we will continue to
cover Russia as before. Our commitment to the country is still as strong,"
he said. 

The remaining crew will be supported by staff based in other countries who
will be flown in the event of political crisis. 

The move is part of a process that will see the CBS network lay off over
100 staff worldwide. The main bureaus to be targeted are in Miami, Dallas,
Tel Aviv and Moscow. 

So far, CBS is the first major network to announce plans to cut the number
of staff in their Moscow bureau. According to CNN producer Maxim Tkachenko,
CNN will continue to man their Moscow office at previous levels and there
are no plans afoot to downsize the network. 

Other reporters from the CNN network expressed their regret at the CBS
cutbacks. 

"Whenever a competitor downsizes its very sad for all of us. Not only
because our bosses might get the same idea, but also because we have the
highest admiration for the work that CBS does," one CNN reporter, who
wished to remain anonymous, told The Moscow Tribune. 

ABC News, NBC News and CNN maintain far larger Moscow bureaus than CBS. 

******

#9
Russia Today satire
http://www.russiatoday.com
The Heart of the Matter 
By Mary Campbell

Grigory Yavlinsky, founder and leader of Russia's center-left opposition
Yabloko party, has had treatment in Germany after a heart attack last
month, a doctor said on Thursday. Yavlinsky spent three days at a Frankfurt
hospital where a catheter was inserted to clear clogged arteries…" –
Reuters, Oct. 16 

(Grigory Yavlinsky is in a hospital bed, his doctor is checking his vital
signs and making notes on his chart) 
Yavlinsky: So, Doctor, will I be able to do the twist? 

Doctor: (startled)
What? 

Yavlinsky: The twist – the dance, Chubby Checker. Will I be able to do the
twist now that I've had my arteries unclogged? 

Doctor: I'm not falling for that old gag – could you do the twist before
the operation? 

Yavlinsky: Of course I could – everybody can do the twist! It's not like
classical ballet. You don't have to devote your life to it. 

Doctor: Then why do you ask? 

Yavlinsky: I just wonder if it would be too hard on my heart. I figure I
may have to do it to prove that I'm in good health. 

Doctor: Why's that? 

Yavlinsky: Because that's what Yeltsin did – don't you remember? During the
'96 campaign, just after his heart attack? A precedent has been set. To
prove you've recovered from your heart attack you must do the twist. 

Doctor: That's very interesting. And what do you have to do if you've
recovered from a respiratory disorder – the mamba? 

Yavlinsky: (considering)
No, apparently you don't have to do anything to prove you've recovered from
a respiratory disorder except reappear. 

Doctor: Fascinating. What else will you have to do to prove you're in
fighting trim? 

Yavlinsky: Well, a number of things. Lie about my condition, first and
foremost. That's very important. Cancel important trips abroad. Appear
"stiff and wooden" in public. Spend long, unexplained periods of time at my
country residence. It's not going to be easy. 

Doctor: That's a pretty demanding schedule. 

Yavlinsky: Yes, but if Boris Nickolayevich can do it, so can I! Oh, and I
have to release lots of heavily edited video footage of myself. 

Doctor: Doing what? 

Yavlinsky: (airily)
Oh, doing anything, it doesn't really matter – riding a snowmobile, firing
a minister. Just something to prove I'm still out there… 

Doctor: (preparing to leave)
Well, you've clearly got your work cut out for you. I'll leave you to it. 

Yavlinsky: Thank you doctor, and listen – if anyone asks how I am, tell them… 

Doctor: I'll tell them that when last I saw you, you were doing the twist
on a snowmobile. And you'd just fired your nurse. 

Yavlinsky: (rubbing his hands together)
Excellent! 

******

#10
Washington Post
October 20, 1998
[for personal use only]
The End of Innocence Abroad
In Russia, Jobless Young Americans Face Economic Reality
By Daniel Williams

MOSCOW—They no longer sit at computer terminals watching gleefully as stocks
skyrocket or woefully as they crash. Their cellular phones have fallen silent.
They rarely take wild nights out anymore at dance havens called Bells or the
Hungry Duck, or swig beer at Rosie O'Grady's. They're scanning the globe for
new opportunities.

London, maybe, or New York, now that their Moscow world has died.

They are the scores of young foreign professionals, many of them Americans,
who abruptly lost their jobs during Russia's economic collapse. Their despair,
of course, pales beside the gloom of Moscow's fledgling middle class, which
saw a dream of stability and prosperity vanish. But the demise of the
Generation-X go-getter is nonetheless a landmark that has laid bare the
thinness of Moscow's entry into global capitalism.

For a time, ambitious foreign businesspeople could come to Moscow, land a job
in international business, win a good salary, perhaps live in a luxurious
apartment and ride in a chauffeur-driven car. Their youthful swagger and
bacchanalian zest for nightlife added a dash of color to the Moscow landscape.

It was all a mirage, some veterans concluded. "I have to consider that my life
for the last three years was unreal," said Kristen Burton Steiner, director of
equity research at Epic Russia, an investment banking firm that folded last
month. "The growth here was not based on fundamental soundness but infectious
sentiment."

Steiner's Moscow career was typical of the experience of many Americans who
came during Russia's stock market boom. She arrived in 1994, part of the
second wave of foreigners to hit Moscow. It was a more experienced and better
educated group than the first wave, which consisted in part of the "expat
loser," who, as the joke had it, could hang out a sign that said "Will Speak
English for Food" and find work.

Steiner, 35, had worked in the United States, studied business in France and
saw opportunity in Russia. After three years of economic chaos, the ruble had
begun to stabilize and investments flowed into the country. Corporate
headhunters sought her out. She held four jobs in three years. "The more
experience you got, the more job offers came," she said.

The first tremors of disaster emanated from last fall's East Asian financial
crisis, although the brokerage industry in Moscow seemed to be in a state of
denial. "The party line was, if you didn't have exposure in Asia, you were
fine," recalled Rebecca Baldridge, a colleague of Steiner who joined and got
fired by Epic -- only a few weeks after being laid off by Rinaco Plus, an
investment firm.

As this spring's steady decline turned into summer's free fall, gloom struck
the foreigners along with layoffs and sudden company closures. "Everybody was
cutting back by 20 percent or reducing salaries by 40 percent," Baldridge
said.

Of 101 companies surveyed by the American Chamber of Commerce, more than a
quarter have laid off workers -- mostly in retail and investment businesses.
"In some ways, the business community feels it has been hit by a neutron bomb
and we have all been irradiated," said Scott Blacklin, president of the
chamber. "We all live day to day, but in 30 days, 60 days, 90 days, some are
going to die."

Corporate headhunters say demand has plummeted in just about every business:
investment banking, pharmaceuticals, telecommunications, chemicals. Some
executive search companies have started to offer retraining programs to
replace their shipwrecked primary business.

"We're snowed under with resumes from job applicants. Many are well qualified.
But right now, for instance, I have only two clients looking for personnel. I
used to have hundreds of requests," said Natalia Toumashkova, who owns the
Acapella agency. She is offering a new consulting service -- not on how to
hire but how to lay off employees.

Foreigners, like their Russian counterparts, faced the problems of having lost
money in Russia's banks, which have refused to pay off depositors despite
frequent promises and steps by the government to pump rubles into the
accounts. Several foreign charities report having their accounts frozen in
Russian banks. Stanford University closed its five-year-old Moscow campus
because, with banks closed, it was unable to find a way to pay for supplies,
rent and services.

The Depression-like atmosphere has even begun to infect a nightlife that
earned the city a reputation as a hedonistic expatriate heaven. The Starlite
Diner, an all-night hamburger place once full of foreigners with their
briefcases and Russian models with their long legs, now offers a "crisis menu"
to keep customers coming.

Some bars and discos have closed. The Hungry Duck, home to marathon happy
hours and sweaty amateur strip performances, cut prices; Chesterfield Cafe,
heavy on tequila and billiards, reduced its hours. You can get into Papa
John's bar and disco free by saying the password, "I'm a friend of Papa."

The turnabout seemed unimaginable a year ago, when Russia's stock market was
the world's fastest-appreciating, and Russian officials barnstormed the United
States promising investors guaranteed returns.

"This is the end of the world as we knew it," said Steiner. "There were lots
of nights spent at home with brownies and drink. Lots of my friends have
disappeared."

Steiner said she is committed to staying in Russia and believes she can hold
out while looking for a job at least until January. Baldridge has heard there
might be something in London, but worries that because investors are pulling
out of Third World countries from Asia to Brazil, her services might be
unmarketable. "It's discouraging. I feel all I worked for has crumbled,"
Baldridge said. "Does anyone really want an expert in emerging markets?"

******

#11
Yeltsin sets limits on protests in Moscow

MOSCOW, Oct 20 (Reuters) - Russian President Boris Yeltsin signed a decree on
Tuesday limiting the duration of protests in Moscow following rallies calling
for his resignation and a long picket of the government's headquarters by
miners. 

A Kremlin spokesman confirmed Yeltsin had signed the decree but gave no
details. 

RIA and Interfax news agencies said ``mass protests'' were now barred in the
capital between 10 p.m. and seven a.m. The agencies said they could also not
last more than five days and must be interrupted at night during those five
days. 

The agency reports said the decree covered rallies, demonstrations and pickets
but gave no other details. 

People took to the streets in largely peaceful protests across Russia on
October 7 to demand the government pay huge wage arrears and to urge Yeltsin
to resign. Tens of thousands gathered close to the Kremlin to voice their
demands. 

Unpaid coalminers protested outside the Russian government's White House
headquarters in Moscow from June until earlier this month, often banging their
helmets on the ground to make their presence felt. 

The Communist Party has threatened to call people onto the streets again on
November 7, the anniversary of the Bolshevik Revolution of 1917 which ushered
in more than seven decades of Communist rule. 

*******

#12
Russia rouble printing to be minimal-PM

MOSCOW, Oct 20 (Reuters) - Russia will keep the printing of roubles this year
to a minimum, Russian news agencies quoted Prime Minister Yevgeny Primakov as
saying on Tuesday. 

"If there is a (monetary) emission, then it will be very minimal," Itar-Tass
news agency quoted Primakov as telling reporters after talks with President
Boris Yeltsin, central bank chief Viktor Gerashchenko and Finance Minister
Mikhail Zadornov. 

"An emission -- that happens when the monetary mass is not backed by anything.
But when there is a backed increase of the monetary mass in circulation, then
it is not dangerous," Primakov said. 

Primakov has promised to pay billions of roubles of government debts and must
grapple with low revenues, although he has not identified any major sources of
certain cash revenues. This has led to fears Russia will turn on the printing
presses. 

Russia's monetary base, cash in circulation and required commercial bank
reserves held at the central bank increased by five percent, or nine billion
roubles, to 183.9 billion roubles in the week to October 12. 

Central bank foreign exchange reserves in roughly the same period increased by
$500 million to $13.3 billion. 

Interfax news agency quoted Gerashchenko as telling reporters it was a
question "not of an emission but of a widening of the monetary base"
primarily backed by an increase in central bank gold and foreign exchange
reserves. 

"There is gold in the country," RIA news agency quoted Gerashchenko as saying.

******

#13
Chubais sees lower Russian imports, no food crisis

VIENNA, Oct 19 (Reuters) - Anatoly Chubais, a former architect of Russia's
post-communist reforms, said on Monday he did not expect a food crisis in
Russia but did see the country reducing food imports. 

"As far as agricultural production is concerned, the harvest this year is much
lower than last year," he told reporters in Vienna. "Nevertheless, I don't
think there is any need to talk about the danger of a total famine catastrophe
in Russia." 

Deputy Prime Minister Gennady Kulik said last week that Russia was considering
measures, including accepting foreign food aid, to avoid potentially
catastrophic food shortages as economic chaos puts imports at risk. 

Chubais, who now heads Russia's national electricity grid, said the present
problem with food was not shortages but prices. 

Russia had high grain reserves from last year's harvest and given the absence
of domestic demand from sources able to pay for food, there were unlikely to
be "fantastic" increases in prices, he said. 

"Something else will happen -- a substantial reduction in imports into Russia,
especially in the big cities such as Moscow, St Petersburg and Yekaterinburg
which import 65 percent of their food supplies," Chubais said. 

"This demand in the cities will be reorientated towards foodstuffs from
Russia. I predict no food catastrophe in Russia and certainly no comparison
with what we experienced in 1991/92." 

******