Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


October 26, 1998   
This Date's Issues: 2445 2446 

Johnson's Russia List
26 October 1998

[Note from David Johnson:
1. AP: Pizza Hut Pulling Out of Moscow.
2. Reuters: Timothy Heritage, Russian cabinet set to consider economy 

3. the eXile: Abram Kalashnikov, Press review, THROUGH THE GLASS,

4. The Journal of Commerce: John Helmer, PRESIDENT PRIMAKOV SHOWS 
HIMSELF. (Re Sergei Shakhrai).

5. The Globe and Mail (Canada): Geoffrey York, Blood shortages.
6. CSIS-Washington Briefing on bankruptcy reform in Russia.
7. Masha Gessen: Re 2443-Elena Sokova' "Russian Mass Media and the 
Current Crisis."


9. Reuters: Dmitry Zhdannikov, FEATURE - Russian ``Black Earth'' region 
soldiers on.

10. AP: Starr Report Published in Russia.]


Pizza Hut Pulling Out of Moscow
October 25, 1998

MOSCOW (AP) -- In a sure sign of the times, Pizza Hut has decided to close
its two restaurants in Moscow, according to a published report.
The American chain was among the first fast-food businesses to set up shop in
the Soviet Union 10 years ago, and recent commercials even used former Soviet
President Mikhail Gorbachev as a pitchman.
But Pizza Hut recently moved out of its location on Moscow's Kutuzovsky
Prospekt, and hopes to sell its other outlet on trendy Tverskaya Street by the
end of the year, the Moscow Tribune reported Saturday.
``The expiration of our leases on the Kutuzovsky and Tverskaya properties has
coincided with deepening economic problems in Russia,'' said Jadek Sas-
Uhrnowski, Pizza Hut's franchise manager for Eastern Europe. ``Business has
been affected by the crisis and this has determined our decision to close the
Moscow outlets.''
He said Pizza Hut had no plans to close its restaurants in St. Petersburg.


Russian cabinet set to consider economy plan
By Timothy Heritage
October 25, 1998

MOSCOW (Reuters) - Prime Minister Yevgeny Primakov will get together with his
top ministers Monday to consider a long-awaited program to pull Russia out of
economic crisis. 
Primakov promised in a weekend television interview that he would soon unveil
the plan, which is expected to show how closely his government will stick to
the path of market reforms. 
``We will really look at it now. I have already made a number of notes on it
and I read it last night very carefully,'' Primakov told ORT television in a
Saturday interview. 
``We have our working meeting on Mondays with my deputies and leading
ministers who are responsible for this. We will exchange views on it (the
plan) and it will see the light of day soon,'' he said. 
Primakov, 68, has been criticized by the media for the long delay in producing
a coherent plan to tackle Russia's economic problems since he became prime
minister on Sept. 11. 
He has refused to hurry over what he says must be a well considered plan for
reviving the crumbling banking system, restoring faith in the rouble and
solving huge debt problems. 
But the delay, during which one of his top economic ministers quit after less
than two weeks on the job, has been widely interpreted as a sign of disunity
and lack of vision in a government comprising politicians of various political
Sunday, two reform-minded politicians praised Primakov's success in at least
restoring political stability since taking over the reins but urged him to act
quickly on the economy. 
``Primakov has done well. He has achieved political stability ... but at the
expense of economic stability,'' former Prime Minister Sergei Kiriyenko told
the Zerkalo news program. 
``The longer we put off the program, the harder the reckoning,'' he said.
Kiriyenko added he might run in next year's election for the State Duma lower
house of parliament. 
President Boris Yeltsin fired Kiriyenko after he presided over an effective
devaluation of the rouble and a moratorium on some foreign debt repayments on
Aug. 17. 
Grigory Yavlinsky, leader of the liberal Yabloko party, told NTV commercial
television's Itogi program that Primakov had so far avoided ``any catastrophic
idiocies'' on the economic front while guaranteeing constitutional order and
the rule of law. 
``(But) the economy cannot wait too long,'' he added. 
Communist First Deputy Prime Minister Yuri Maslyukov has had a big role
preparing the cabinet's new plan, but central bank governor Viktor
Gerashchenko and liberal Finance Minister Mikhail Zadornov have also been
``It is not Maslyukov's program. It is a collective work,'' Primakov said,
giving no clear indication of what it involves. 
Primakov has made paying off wages and pensions a priority although he looks
likely to face a budget shortfall and may have to print money to fill the gap.
He said Russia would not go begging for help but made clear it would not
reject offers of humanitarian aid and that Moscow would welcome funds from the
International Monetary Fund (IMF). 
The IMF has made clear new loans depend on Russia implementing tough market
Yeltsin is expected to hear this message when he attends a one-day Russia-
European Union summit in Vienna on Tuesday. 
The 67-year-old president is going ahead with his trip to Austria despite
concern about his health after he cut short a visit to Central Asia this month
because he had bronchitis. 
Primakov rallied behind Yeltsin, telling ORT the president should stay in
office until 2000. 
``I think the president should serve out his term and I think his health will
allow him to do it. I am sure of that,'' he said. ``If we want to get out of
crisis, the last thing we need now is an election campaign, clashes of
interests, compromising material and mud-slinging.'' 


From: "Editor-Mark Ames" <>
Subject: eXile
Date: Sun, 25 Oct 1998 

Visit the eXile website at:

Press review
By Abram Kalashnikov
the eXile

Here's some good news for journalists. Recent data show that the average
American reader is now so completely stupid that he will be surprised to
learn his own name if he sees it in print. These same studies show that in
approximately 7.7 years, the American media will finally produce a front
page headline that reads, "Yesterday Happened!" It all points to one
thing: D-Day is coming for the American mind, which means less work and
easier promotions for the growing contingent of lazy international
The New York Times, always an industry leader, has already broken new
ground in the field of dumbly obvious reporting with its coverage of the
Russian financial crisis. Like many American news outlets, it spent much of
Russia's latest socio-economic collapse quietly renouncing all of its
earlier reporting (an early- October article blasting banker Boris Jordan,
whom it had previously praised for his participation in the
loans-for-shares auctions, is a good example) and cranking out cautious
editorials replete with meaningless moral posturing. 
Take, for instance, this October 11 article by Paul Lewis entitled "World
Bank Emphasizes Role of Free Media in Fighting Graft," a classic of
nose-on-your-face obvious reporting:
"Washington, Oct. 8--After surveying the Asian financial crisis, the World
Bank has concluded that a strong and independent news media could be an
important protection against economic mismanagement and government
malfeasance in developing nations."
Well no shit, Paul. The rest of the civilized world came to the same
conclusion sometime in the early 18th century. That the Times didn't
headline this piece "Two Centuries On, World Bank Reluctantly Joins
Enlightened Society" or, even better, "Duh!" is already prejudicial. When
the World Bank made that announcement, it was essentially admitting that,
until now, it did not consider a free and independent news media necessary
for socio-economic growth and prosperity--which says an awful lot about its
vision for the global economy. 
Lewis, though, passes up the chance to make that point, instead sinking
into unpaid p.r. conduit by letting the Bank get away with one of the
oldest tricks in the business, the so-called Promise to Do Good Works:
"The World Bank is already financing training for journalists from the
developing world. And officials say it will encourage charities and
foundations to do more to strengthen fledgling news media."
This is a textbook case of a reporter being fed a line at a press
conference and putting it straight into print without checking it out. What
kind of training is the World Bank financing? What kind of results are they
getting? Is there any kind of training even going on at all?
Who knows? Lewis sure doesn't. The impression he gives to Times readers is
that the Bank has suddenly taken the initiative to do the right and moral
thing, when in fact it should be being held accountable now for a lot of
what went wrong in Russia and Asia. 
What Lewis fails to remind readers is that the Bank is one of the most
notorious stonewallers in the public arena, routinely refusing interviews
and access to its leaders. At one point during the press conference, the
Bank praised Denmark, Finland and Sweden for having strong Freedom of
Information Laws. Lewis fails to point out that the Bank is exempt from the
American Freedom of Information Law, even though its loans are backed by
public money. 
Earlier, in a piece entitled "How Goldman, Sachs Escaped the Russian
Economic Bloodbath," The New York Times stunned disbelieving readers with
yet another shocking scoop: investment bankers are greedy and like to make
Written by Joseph Kahn and Timothy O'Brien, the piece was an attempt to
show how greedy Western investment banks helped Russian industrialists
raise easy money through bond issues, only to wash their hands of the
country when it fell into ruin and default. The duo quoted a heavyweight
condemning the deal:
"'What the Russian problem reflects is that today's bankers often don't
have long-lasting concerns about customer-client relations,' said Paul
Volcker, the former chairman of the Federal Reserve and an occasional
adviser to Russian government officials. 'You just do the deal and get
out.' [...] 'Greed prevails over prudence,' he said."
This all sounds great, but there aren't many people out there who need
4,000 words to be convinced that investment bankers are greedy. The Times
draws the obvious conclusion from its material, but leaves two other
equally obvious but more controversial conclusions undiscussed. 
The first is that the free and instantaneous flow of capital across borders
may not be a good thing for the global economy, and may in fact be
enormously destructive to emerging markets. The Times obliquely touches on
this when it compares Russia's experience to that of China, yet, afraid of
offending its constituency, leaves the reader to contemplate the issue
between the paper's cautious lines.
The second, more obvious point missing from the Times expose is that U.S.
Treasury Secretary Richard Rubin is the former president of Goldman, Sachs,
a fact that certainly warrants being mentioned, if you're to believe the
Times's own assertion:
"Others say they were lulled into complacence by a presumption of
international backing for the Russian experiment with markets."
Goldman, Sachs certainly had every reason to presume international backing;
one of its own was leading the charge for Russia's international bailouts.
But by far the grossest offense of the Times article was its scene-setting
opening in an opulent palace:
"The House of Unions, like so many buildings in Russia, has served many
different masters. In the 18th century, a Crimean prince commissioned its
construction in Moscow. Russian nobles later converted it to a private
club. Lenin, Stalin and Brezhnev lay in state behind its bright green
"And in June, as Russia lurched toward a financial crisis that set off
global shock waves, the House of Unions was rented for a glittering
celebration of capitalism, with one of the country's most ardent bankers,
Goldman, Sachs & Co., as its host. Goldman flew in former President George
Bush, paying him more than $100,000, and entertained Russia's former prime
minister. But between toasts to U.S.-Russian ties, the talk was about what
really mattered to Goldman and many Wall Street brethren: deals."
So The New York Times, the paper that lands on the desk of every C.E.O. in
the world first thing in the morning, frowns on opulence? Give me a break.
The Times knows very well that the easiest way in the world to score moral
points in public is to show a bunch of rich people acting like themselves,
and then feign shock and disgust. This is the newsprint version of a
soundbite, where anyone can say he represents the common people just by
showing film footage of cornfields and assembly lines. And just as
intelligent voters should look at the candidate's record instead of the
commercial, intelligent readers should look between the lines. Like most
hacks, the Times writers aren't sorry about the Russian financial crisis.
They just don't want to look guilty.


Date: Sun, 25 Oct 1998 
From: (John Helmer)

The Journal of Commerce, October 26, 1998
By John Helmer

Moscow. A few days ago, Russia's Prime Minister Yevgeny Primakov appointed 
as his legal advisor a man who, until June, was the longest surviving 
office-holder in President Boris Yeltsin's entourage. His name is Sergei 
This almost unnoticed appointment reveals something big. It means that Mr.
Primakov wants to be the next president of Russia, and that Mr.Shakhrai 
thinks he can arrange it.
It also poses a big question for the Clinton Administration, which had
been leaning towards former prime minister Viktor Chernomyrdin. So far, the
Administration has been publicly non-committal towards Mr.Primakov, expecting
him to bid for U.S. support with pledges on reform, investment, tax, and trade
policy. Until now, Mr.Clinton hasn't had to think what he should do, if
Mr.Primakov is Mr.Yeltsin's successor.
For years Russia's president has employed legal advisors, several of them.
But the prime minister has not. According to Mr.Primakov's spokesman, Mr.
Shakhrai's appointment is "probably" a new one. 
A lawyer by profession, Mr.Shakhrai served President Yeltsin in many posts 
and with deputy prime ministerial rank, until he lost his job at the end of 
June. At the time, he was the President's advocate at the Constitutional 
Court. In fact, he told me he spent half of his time as Mr.Yeltsin's 
political advisor, claiming he talked to him "every day".
The reason for his sacking was that Mr.Shakhrai publicly told Mr.Yeltsin he
shouldn't run for a third term in the year 2000. Mr.Shakhrai added that he
thought the Mayor of Moscow, Yury Luzhkov, would be a better candidate.
For Mr.Shakhrai to join Mr.Primakov means that Mr.Shakhrai has
changed his mind about Mr.Luzhkov. He now thinks Mr.Primakov can beat him.
A great deal has happened in Russian politics since Mr.Shakhrai leaped from
the battlements of the Kremlin to his new suite at the Prime Ministry. Mr.
Yeltsin's medical condition has deteriorated, and his support among Russia's
economic oligarchs has evaporated. Two potential successors with support
in the banking and energy sectors, Sergei Kirienko and Viktor Chernomyrdin,
have been destroyed by the collapse of the rouble and of the commercial
Mr.Luzhkov and Krasnoyarsk governor, Alexander Lebed, have emerged as the
most likely successors to Mr.Yeltsin, especially if he can be forced out of
office by impeachment or medical incapacity, and an early election called.
But Mr.Luzhkov and Mr.Lebed don't need Mr.Shakhrai, who has no constituency,
no money, and no political machine of his own to speak of.
The Communist leadership is divided between backing Mayor Luzhkov; running 
again with Gennady Zyuganov, the loser in 1996; or finding another figurehead.
Mr. Shakhrai is hated by the Communists, because it was he who counselled
Mr.Yeltsin in 1991 to dissolve the Soviet Union; it was he again who 
counselled Mr.Yeltsin to dissolve parliament and attack the deputies with 
tanks in 1993; and it was Mr.Shakhrai who backed the Yeltsin war plan in 
Chechnya in 1994 and 1995. 
That Mr.Primakov and Mr.Shakhrai have chosen each other means there is a 
mutuality of interest, and that this has nothing whatever to do with legal 
advice. What Mr.Shakhrai can do is to help devise the political tricks for 
which President Yeltsin used him. These will be designed to break apart the 
coalitions now forming around Mr.Luzhkov and Mr.Lebed. He will also act as Mr.
Primakov's bag-man, assembling a coalition of vote-getters, financiers, and 
media controllers to promote Mr.Primakov as president.
Of course, Mr.Primakov has sworn, and will go on swearing that he is not 
running, and that Mr.Yeltsin will sit out his full term in office. These are 
purely tactical positions. Mr.Primakov needs Mr.Yeltsin to stay in power until
mid-2000 to give the prime minister enough time to stabilize the economy, 
and create a national base of support for himself. At the very least, Mr.
Yeltsin continues to take the blame for whatever the Primakov government 
can't or won't do.
Primakov for President also creates a fresh alternative for the
Russian bankers who dominated Mr.Yeltsin and the succession prospects until
their banks collapsed in August. Although they have so far salvaged most of 
their cash and assets, leaving the banks, the depositors and their foreign
lenders in default, their political clout has been diminished. 
Until now, they also appeared to have had no choice except to favor
Mr.Luzhkov, who has opposed many of them for years; or Mr.Lebed, whom noone 
trusts. Already, Mr.Primakov is shaping up as more malleable, and hence a 
better choice.
The evidence of a switch in the bankers' calculations is already visible on
Russian television. According to two of the bank-owned channels, Mr. Primakov
is already able to draw off votes from Mr.Luzhkov, Mr.Lebed, and the 
Communists. For the time being, according to the bankers' media, Mr.Primakov 
also has the lowest negative rating of all the candidates, and co-equally 
with Mr.Luzhkov, the highest positive rating.
The political strategy also suggests what Primakov for President won't
want to do in economic policy. He will aim at stabilization 
without upsetting the existing interests on which Mr.Yeltsin's power has 
rested for the past seven years. The politically influential bankers will be
rehabilitated. What direction this will take Russia's contracting economy
noone knows, and Mr.Primakov isn't likely to answer -- until after he's
moved into the Kremlin.


Date: Sun, 25 Oct 1998
From: Geoffrey York <>
Subject: blood shortages

By Geoffrey York
The Globe and Mail (Canada)
Oct. 24, 1998

KRASNOYARSK, Russia -- When Oksana Fadeyeva entered an impoverished
Siberian hospital for emergency surgery last month, her family had to
pay for her drugs, syringes, food, clothing, and even a portable heater
for her hospital room.
But the hospital still lacked a crucial item for the surgery -- a
proper supply of blood. So doctors asked the patient’s family to round
up enough relatives to donate almost two litres of blood.
Nearby, at the giant Krasnoyarsk aluminum factory, hundreds of workers
give blood or money whenever their colleagues need surgery. ~We have to
help each other, because the government will never help,” said Sergei
Nechayev, a worker at the aluminum plant.
Blood shortages are the latest threat to Russia’s crisis-plagued health
system, jeopardizing operations and delaying treatment for desperate
patients. Blood donations have fallen drastically, equipment is
deteriorating, and the cost of collecting blood is soaring because of
the collapse of the Russian ruble.
The families of patients are often forced to pay for storage bags for
the donated blood. Doctors are pleading with suppliers to provide
equipment on credit, with a promise of future payment.
Russia’s health care system has been crumbling for years. More than
half of its children suffer chronic illnesses, the life expectancy of
Russian men has fallen to Third World levels, doctors and nurses go
unpaid for months, and demographers predict that Russia’s population
could decline by 15 million in the next several decades.
Moscow, the wealthiest city in the country, can avoid a blood shortage
by paying the equivalent of a few dollars to every donor. But in poorer
regions such as Krasnoyarsk, there is little money for health care and
almost none for blood collection. Because of Russia’s heavy dependence
on imported medical supplies, the ruble’s collapse is making it
impossible for hospitals to gather enough supplies.
Doctors in Krasnoyarsk allege that five patients have already died
because of the blood shortage. The claim is disputed, but there is no
doubt that the supply has fallen to dangerous levels. A single emergency
could eliminate the city’s remaining reserves.
~I’m afraid every day,” said Igor Valeyev, head doctor at a blood
donation centre in Krasnoyarsk. ~Costs are rising every week. Sometimes
doctors take the risk of performing an operation without enough blood. I
think it’s an absurd situation. Only a small number of people can afford
to pay for medical treatment.”
Last month, Dr. Valeyev issued a strong warning to the regional
government. ~If an emergency happens, we won’t have enough blood,” he
said in a report. ~Our equipment is exhausted.”
When the ruble crashed in August, he was faced with a dramatic rise in
the cost of special bags that are essential for collecting and storing
blood. The bags, imported from Japan, are three times as expensive as
they were before the crisis began.
This week, Dr. Valeyev warned the government that he had only a single
day’s supply of materials left. The only response was from an official
who advised him to ask for more credit from his suppliers.
The blood shortage is delaying medical operations and delaying the
recovery of patients after their surgery, forcing them to stay longer in
hospital. ~It has a whole chain of consequences,” Dr. Valeyev said.
The centre itself is four months late in paying wages to its own
doctors and nurses. And because of its shortage of equipment and
supplies, the centre can handle only 100 donors a day, less than a third
of what is needed.
Mrs. Fadeyeva’s ordeal began when she gave birth prematurely to an
infant son in mid-September. When she returned home, she began bleeding
heavily. Her surgery required blood donations from her husband, her
mother-in-law, her brother-in-law and a family friend.
Because of the hospital’s poverty, her family had to spend more than
1,000 rubles (about $110 Cdn.) on medicine alone -- much more than her
husband’s entire monthly salary. ~It was a huge amount for us,” said
Anatoly Fadeyev, the husband’s father.
~This is not health care,” he said. ~It’s terrible. We have to pay for
everything ourselves. And it’s getting worse. Even if you pay, you’re
not sure if you’re going to get the right treatment.”
Mrs. Fadeyeva left the hospital after 10 days, but her baby remained in
intensive care. Another blood donation was soon needed, so the family
recruited another relative.
~Our whole family has cried so many tears,” Mr. Fadeyev said. ~We call
the hospital every day, asking for the condition of the baby. The doctor
says, ‘he needs blood.’ If we need more blood, it could become more
difficult for us to find it.”
The donation system, meanwhile, is becoming tainted by financial
interests. Some patients don’t have enough friends or relatives to
donate blood, so they’re forced to purchase certificates from other
donors. The going price is 300 to 600 rubles -- close to a monthly wage
for many workers -- for a certificate of proof of the standard
450-millilitre donation.
Until recently, the Krasnoyarsk government could afford to encourage
blood donations by paying a few dollars to donors. In 1995, more than
73,000 people gave blood, and most were paid about $3 each. But in the
first nine months of this year, barely 10,000 have made donations, and
99 per cent were unpaid.
In the Soviet era, donations were boosted by giving an extra three days
of holidays to each donor. But in today’s capitalist economy, the new
private firms are unwilling to give extra vacation time to blood donors,
and most ordinary Russians are preoccupied with the struggle for basic
economic survival.
~When people are not paid wages and factories have stopped working,
there are no donors,” said Nina Voronina, head of the blood transfusion
department at the Krasnoyarsk donation centre. ~They have to feed their
families. They have no time to donate their blood.”


Date: Sat, 24 Oct 1998 
From: "Jeffrey L. Thomas" <>
Subject: Briefing on bankruptcy reform in Russia

If possible, please post this invitation to Johnson's Russia
List readers for an upcoming event at CSIS. Sorry for the
short notice.

Bankruptcy in Russia
Speaker: Honorable Sidney Brooks, Bankruptcy Judge
Time: Tuesday, October 27, 10:30 am - 12:00 noon
Location: CSIS (1800 K Street, NW, Washington, DC) on
the B-1 Level

The Russian and Eurasian Program at the Center for
Strategic and International Studies (CSIS) will sponsor a
briefing on bankruptcy reform in Russia on Tuesday, October
27 from 10:30 am to 12:00 noon. Judge Brooks will review
the evolution and establishment of market-based commercial
laws and insolvency systems in Russia. He will look at the 
legal and judicial environment into which commercial and
insolvency regimes are being created; the development of
commercial courts assigned to enforce economic laws; and
the nature and quality of the relevant legislation.

Bio for Judge Books: After 16 years of private practice with
emphasis on bankruptcy, reorganizations, and litigation,
Sidney Brooks was appointed as a bankruptcy judge on
January 4, 1998. He has worked with and advised judicial
officials of Russia, Kazakhstan, Kyrgyzstan, China, Poland,
and other transition economies.

Those interested in attending, please call the Russian and
Eurasian Program at CSIS (202-775-3240) to reserve a seat
at the briefing. 


From: "Masha Gessen" <>
Date: Sat, 24 Oct 1998
Subject: Re: 2443-Elena Sokova' "Russian Mass Media and the Current Crisis."

When I read the first unsubstantiated, unsourced piece by Elena Sokova, I
kept quiet. But when she took on the subject of the Russian media, I had to
speak up. This is one of the most vainly irresponsible pieces of "research"
I have seen in a long time. Let's just look at a few things:

>There is no need to prove that most of the Russian mass media is sponsored
>the financial oligarchs in one way or another. 

It's very convenient when you don't have to prove something that can't be
proved. The Russian subscription catalogue lists 10,000 titles, all of
which are real, regularly published periodicals (the procedure is
complicated enough that fly-by-nights simply don't make it in). By the most
generous estimate, of these 10,000 titles, the oligarchs own or sponsor
fewer than 100, or less than 0.1 percent. Nor is local television owned or
sponsored by any oligarch. Oligarchs have a strong presence in the central
print media and national TV, but of these, only the television channels can
be considered an important source of news in the country as a whole--and
even that is counterbalanced by a wholly state-controlled channel that
operates in a holding with a news agency and several federal radio

> Newspapers claim that they lost pre-paid subscriptions and a large part
of their subscribers; >I wouldn't argue with that. But overall circulation
has increased. Even before
>the crisis, a very large proportion of periodicals was sold from the
stands in the
>streets rather than through subscription. 

Phrases like "a very large proportion" hide the author's unwillingness to
find real stats. Surprise: before the crisis, the 19 national newspapers
had a combined press run of about 8.5 million copies, of which 6 million
were distributed through subscription. The looming collapse of the
subscription system threatens to wipe out what remains of the national
newspapers in this country.

>I do not have the statistics for each newspaper or journal, but I buy
newspapers every
>day at the same time and the same place. Sometimes you do not need
>to come to a conclusion. It is enough to compare the number of newspaper
distributors and >the choice of newspapers that they offer to say that
overall circulation of newspapers has
>almost doubled since August 17. During the first week of panic it was
>rather difficult to find newspapers, especially the more popular ones. It
>probably a week or even longer for most of them to realize that they
should use
>this momentum and increase the run. The prices for most newspapers went up
as >well, generally by about 50 percent.

Actually, if you want a shot at a conclusion that has some relation to
reality, you do always need statistics. What really happened with newsstand
sales is as follows. There was indeed a very brief period--no more than a
couple of weeks--when demand for newspapers in Moscow (and only in Moscow)
went up by a small margin. The reasons for the shortages at newsstands were
entirely different. First, as paper prices shot up and assets were frozen,
many publications had to cut press runs drastically. Second, when, a couple
of weeks into the crisis, they started raising prices, the wholesale
distributors panicked and ordered about half of their normal volume,
because they feared people would not pay the higher prices. As a result,
many people couldn't find the usual publications in the usual places. In
another couple of weeks supply and demand balanced out--but on the whole,
publications have cut, not increased press runs.

>On October 14, the Upper Chamber of the Federal Assembly passed a bill on
>state support of the mass media that keeps current tax, customs, and other
>privileges for the mass media until 2001. I do not think that the Russian
>media, which also used to live off the money of their sponsors, needs to
>such privileges. Both these factors, privileges and sponsors, are
>and lead to financial infantilism. In the long run, it will be bad for
them. --

This is both condescending and ill-informed. First of all, the vast
majority of publications that will be affected by this were never supported
by oligarchs (see above). Second, let's take a look at just one aspect of
this. 56 percent of Russian magazines--virtually all full-color
publications--print abroad--for the simple reason that Russia lacks the
facilities for high-volume full-color printing. If the customs breaks are
repealed, as it now looks like they might be, these magazines will face a
simple choice: fold or go gray.

>The National Press Institute…offers some Soviet-style prescriptions, such
as "we'll find you
>the cheapest paper in your region" or "we'll try to convince Interfax and
>news agencies to provide you services for free or at discount rates." The
Institute would >probably do better to provide them with knowledge and
expertise in anti-crisis management >and finding grants to support access
to the Internet and news agencies for regional and
>local media. 

This is an irresponsible attack on a very worthy effort (with which I am
not in any way affiliated). The National Press Institute's mass media
business project is facilitating communication among publishers as they
look into paper prices throughout the country. Prices vary so widely that
it is often cheaper to buy in a different region, even after you've
factored in the price of delivery. It is capitalism at its best for
businesses to cooperate in order to increase cost-efficiency. And there is
nothing "Soviet" about publishers bargaining collectively with news
agencies, which are generally known to overvalue their own services anyway.

>Mass media in Russia used to be considered as a fourth branch of power,
>especially in the late 1980s and the early 1990s. It is still very
>but is trusted much less. It became an outlet for misinformation and
>compromising materials to discredit political and business opponents.

I'm the first to admit that there are many problems with professionalism
and ethics in Russian media. But to say that Soviet media, which continued
to be censored (I mean censored, as in by the state) right up until the
end, was more trusted or more trustworthy than today's media--that is an
insult to anyone who still believes in the power of free speech and free

Masha Gessen
Chief Correspondent


From: "Garner-UNCLASS, Kenn" <>
Subject: Nuclear Forces in One Fist -- my translation
Date: Fri, 23 Oct 1998

"Nezavisimaia Gazeta" 



Sergei Sokut

The Future

It appears that the next step in military reform in Russia could be a change
in the fundamental structure of her Strategic Nuclear Forces (SNF) and their
control systems after Defense Minister Igor Sergeev announced the possible
formation of an SNF Unified Command. Previously, he had been in favor of
preserving the current structure, with strategic components subordinate to
three branches of the Armed Forces: the Strategic Rocket Forces, the Navy,
and the Air Force. 

The Unified Command (to date, Russia has never had a formation with this
name) will be created during the switch from the current 4-branch structure
of the Armed Forces to a 3-branch structure. The time frame for this
restructuring depends, according to Marshall Sergeev, upon the successful
implementation of strategic offensive arms agreements already reached
between Russia and the U.S., and also upon the progress of new negotiations
and the inclusion of all members of the "nuclear club".

Previously, the possibility of creating a SNF Unified Command had been
discussed at the expert level. The main proponent of the new structure
seems to have been the Strategic Rocket Forces. Recently, there had been
signs that this position was also supported by the Navy's leadership. The
Air Force, whose strategic bombers would be removed from its operational
control, would suffer the most from such a decision. The concept of
separating the control over nuclear forces and conventional troops has its
supporters among the General Staff, whose role would increase as a result of
such a restructuring. The most probable candidate to lead the new command
is the Strategic Rocket Forces' commander, 44 year old General-Colonel
Vladimir Yakovlev.

Proponents of the Unified Command hold that such a structure will improve
operational control of nuclear forces and increase interaction and
cooperation between the various components of the SNF. The Air Force
leadership maintains that defensive and offensive air operations must act in
concert and under the central command of the Air Force's commander-in-chief.

This variant of strategic forces restructuring would conserve the idea that
the SNF comprise the country's main military might. It will have both
positive and negative consequences. Chief among the latter is the
significant loss of flexibility in employing aviation assets, which, judging
from the lessons of recent history, are the main means for destroying the
enemy during conflicts of any scale. Armed with future cruise missiles with
conventional warheads, strategic bombers could be the deciding factor in
deterring an aggressor who had decided to carryout limited strikes,
coordinated in time and space, against targets on Russian territory.
However, this would necessitate that the bombers act as part of an aviation
strike force, which could only be commanded by the Air Force.

As of the beginning of the summer of 1998, the SNF consisted of 751 ICBMs
(3610 nuclear warheads), 75 strategic bombers (816 nuclear warheads), and
384 Ballistic Nuclear Submarines (SSBN) (1824 nuclear warheads). The near
future could see a renewal of the fight over the composition of the nuclear

Obviously, its main component - ground-based ICBMs - is stable. The
successful testing and deployment of the "Topol-M" missile system [SS-X-27]
confirm this fact. Suggestions from experts on taking strategic missions
away from the navy are well known. However, construction work on the future
SSBN "Yuri Dolgoruki", albeit slowly, does continue. Recently, the Air
Force leadership came out with its plan for modernizing strategic aviation.
It focuses on increasing the range and accuracy of aviation armaments and,
very importantly, on increasing the flexibility of strategic aviation and
increasing its capabilities for non-nuclear conflict.

In June of this year, at a meeting of the Security Council, the decision was
made to transfer the center of gravity to the naval component of the
strategic forces and to begin developing a universal strategic missile for
sea- and ground-based employment. After the removal of Security Council
Secretary Andrei Kokoshin, a supporter of this idea, there appeared signs of
reanimation among those who think that Russia, for economic reasons, is
unable to build an adequate submarine fleet to replace her aging one, and
therefore must count on the ground and air components of the nuclear triad.

Prime Minister Yevgenii Primakov and his deputy, Yurii Maslyukov, who both
have some experience with such matters, are now exercising considerable
influence on nuclear policy. The former thus far has not made any public
statements on the nuclear problem, but the latter has said that Russia must
build 35-45 missiles per year to keep up with natural losses in the sea and
ground components of the strategic forces. He has not, however, spoken
publicly about strategic aviation.

Obviously, discussions about the composition and structure of Russia's
strategic forces, as well as the relationship between SNF and conventional
forces, will intensify. The next few years could well be a period of
difficult choices in this arena.

Translated by Kenn Garner


FEATURE - Russian ``Black Earth'' region soldiers on
By Dmitry Zhdannikov

KURSK, Russia, Oct 26 (Reuters) - The soil around this city in southern
Russia's ``Black Earth'' belt is famously fertile. It is just as well -- on
incomes of less than $10 a month, many people rely on the vegetables they grow
on plots of land to survive. 
``I don't think of dollars at all,'' said Natalya Ivanovna, a 52-year-old
therapist at a small hospital south of Kursk. ``I don't even think of roubles
because I haven't received my salary since March.'' 
On the surface, the Kursk region 450 km (280 miles) south of Moscow seems to
typify the provincial pain of Russia's economic disaster. 
People beg for 10 roubles (about 60 cents) at the railway station, rural
visitors to the regional capital stare agog at a renovated Western-style bank
and townsfolk give a city centre supermarket an anxiously wide berth. 
Yet, as muted protests in Kursk and elsewhere across the country showed in
early October, the Russians are not close to storming the barricades just yet.
Their capacity to endure hardship seems endless and their fatalism is
evidently deep. 
``It's amazing how the nurses of small rural clinics survive and continue to
work on monthly salaries of just 90 roubles (about $6),'' said Galina
Sorokina, regional head of a medical workers' union. 
Food in the shops, if affordable, is often of poor quality. Often meat and
cheese are simply out of reach. 
Networks of families and friends ensure that many of the region's 1.3 million
people have access to vegetables and fruit from private plots, making the most
of the area's dark, productive soil. But even this leaves people short of
``We can't eat properly,'' said factory worker Valentina Nazareva. 
Russia, with more land than any other country in the world, is in the
humiliating position of asking the West for food aid. 


As in other parts of the country, unpaid wages are the major complaint in
Kursk, where the Soviet Union defeated Nazi Germany in a legendary tank battle
in 1943. 
The fight now is to make ends meet. 
According to Sorokina, medical workers from 15 of the region's 27 districts
have not received wages for six months. 
``People came to me with tears in their eyes asking for just 50 roubles (about
$3.3) to buy textbooks and clothes for their children for September 1 (the
start of the academic year),'' she said. 
Sorokina said her colleagues were despondent not just because they had not
been paid but because they could not treat patients properly. 
Ivanovna said strikes were nonetheless not the answer. 
``We understand well that nobody will show the door to a person asking for
help,'' she said of rural clinics. ``It is likely to be a person you have
known for many years.'' 
A worker at the central hospital in Kursk, Valentina Yegorova, 46, has not
been paid for three months. She thinks rural clinics are in a better position
than city hospitals. 
``When you work in a village you always have your parents or friends who can
help you with goods,'' she said. ``But what can you do in a town like Kursk?''
``Medical workers are sure to be suffering most,'' said Viktor Strelnikov, the
deputy head of the regional trade union. ``But teachers, and workers of the
machine-building and defence industry have not had it exactly easy these past
few years.'' 
Those two industrial sectors and agriculture make up the bulk of the region's
economy, and their problems go far beyond wage arrears and debts between
Yevgeny Maizlakh, general director of a former defence industry plant that is
now a joint stock company called Elektroagregat, said taxes were strangling
his factory. 
``I have not been able to increase my workers' salaries for six months because
I have to pay 49 types of different taxes and my clients, including the
defence ministry, owe me so much,'' he said. 


Thousands demonstrated in Kursk on the all-Russia day of action on October 7.
Like protesters elsewhere, they called on President Boris Yeltsin to resign
but they added a local twist by demanding that governor Alexander Rutskoi go
Rutskoi, a former fighter pilot, became vice president after sharing Yeltsin's
election ticket in 1991. But he soon rebelled and was one of the leaders of a
revolt by hardline parliamentarians which Yeltsin crushed with tanks in 1993. 
``Such resolutions are adopted whenever there are protests organised by trade
unions,'' said factory worker Igor Sergeyevich. 
``But nothing changes. Neither these words nor appeals to resign will restart
the Mayak factory where I work, which was one of the richest in the region and
where I have spent the last 30 years of my life.'' 
He said more than 80 percent of plant personnel had been sent on forced leave
while those still working had not received wages for four months. Some can
scarcely afford the bus fare to reach the factory. 
Kursk residents like Igor and factory director Maizlakh are pessimistic about
the future but soldier on. Others, such as factory worker Viktoria Olegovna,
have all but given up hope. 
She said she hated to see her two sons living in poverty. 
``Personally I'm not afraid of the future at all,'' she said. ``I've already
been dead for a long time.'' 


Starr Report Published in Russia
October 24, 1998

MOSCOW (AP) -- A new book hit the market in Moscow last week: the Starr
report, translated into Russian. So far, it's a flop.
Russians are showing little willingness to shell out hard-earned cash for
special prosecutor Kenneth Starr's report on President Clinton's affair with
Monica Lewinsky, the English-language Moscow Times reported Saturday.
``Why do I need other people's dirty laundry,'' said one non-buyer, Dr.
Tatyana Yermakova, browsing at a book stall. ``Only a sick, sexually
frustrated person would be interested in it.''
A Russian publishing house printed 20,000 copies of the report in a paperback
called ``Clinton Levinski.'' But the publisher conceded that the books, which
retail for $1, haven't exactly been jumping off the shelves.
``I am somewhat disappointed,'' said Alexander Zhitinsky, who runs the Gelikon
Plyus publishing house. ``There is no interest among wholesalers.'' He
speculated that Russians are too preoccupied with the country's economic
crisis to care about the scandal.
The Clinton-Lewinsky affair has received considerable attention in the Russian
news media, but people have been mostly perplexed by it. Russians tend to have
a more relaxed, European attitude about extramarital affairs, and don't expect
to learn intimate details about their leaders.
In the Soviet era, the official media didn't always disclose the names of
leaders' wives, much less mistresses.



Return to CDI's Home Page  I  Return to CDI's Library