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Johnson's Russia List


October 28, 1998    
This Date's Issues: 2449 2450 

Johnson's Russia List
28 October 1998

[Note from David Johnson:
HELP: I urgently need a copy of the just-released Military Balance 
published by the International Institute for Strategic Studies. Could 
someone in London obtain a copy and airmail it to me? Let me know.
1. Reuters: Main points of Russian govt draft anti-crisis plan.
2. Reuters: Doubts greet Russia govt economy rescue plan.
3. The Globe and Mail (Canada): Geoffrey York, Alexander Lebed.
4. Jerry Hough: what happened.
5. Moscow Times: David McHugh, Yeltsin's Fading Role an Accepted Fact.
6. Reuters: FEATURE-Russian diva says she missed her chance.
(Alla Pugacheva).

7. Reuters: Doctors: Yeltsin Weakness Could Mean Much or Little.
8. Itar-Tass: Russia Center, Left-Center, Socialist Forces Form Coalition.
9. Sovetskaya Rossiya: Vasiliy Safronchuk, "America Lectures, Threatens,
and Insults. Rejoinder to Mrs. Albright's Remarks."

10. Interfax: Moscow Mayor Wants 'Third Way' for Russia; Criticizes West.]


Main points of Russian govt draft anti-crisis plan

MOSCOW, Oct 27 (Reuters) - Following are the main points in a draft anti-
crisis plan worked out by the Russian government and the central bank that was
published in the Kommersant newspaper on Tuesday. 
* A floating rouble will be established with short-term fluctuations
determined by interest rates and the money supply. 
* In the event of a speculative attack on the rouble, the central bank may
introduce temporary compulsory reserve requirements, consisting of up to 80
percent of commercial banks' funds allocated for buying hard currency. 
* Obligatory sales of hard currency by exporters will be raised to 75 percent
of their hard currency receipts and 25 percent must be sold directly to the
central bank. 
* The timeframe for hard currency receipts to be repatriated will be shortened
for many sectors, including to 30 days for oil and gas exports. 
* The commercial banking industry will be restructured with introduction of
strict controls on hard currency operations. 
* The central bank will issue credits to banks that offer either hard currency
as collateral or a controlling interest in their organisations. 
* From January 1, 2001, the central bank will rescind licences of banks with
capital of less than one million ecus and of non-bank credit institutions with
capital below 100,000 ecus. 
* Russia's frozen state securities will be restructured and secondary debt
trading resumed. 
* A unified system to monitor and manage Russia's state debt will be
established and will include the debts of regional administrations,
enterprises and banks. 
* Regions will be allowed to retain 60 percent of all tax revenues collected
above targeted levels. 
* A restructured and simplified tax system will involve: 
eliminating value added tax on purchases by foreign firms when advance payment
is made to exporters 
setting profit tax at 30 percent, with up to 10 percent going to the regions 
eliminating tax on profits reinvested in industry 
property tax of 0.5-1.0 percent of property's market value 
higher penalties for late tax payments and tax evasion 
ban on offshore banks opening accounts in Russian banks and Russian banks
opening accounts in offshore banks. 
* A state bank for development will be created on the basis of commercial
banks and charged with finding funds for short-term and long-term projects in
the real sector. 
* A state agency for insuring and guaranteeing credits to and investments in
the real sector will be created. 
* From October the government will guarantee full payment of current wages and
pensions, continue paying back wages and pensions, and increase demands on
enterprises and individuals responsible for timely payment of wages. 
* Price controls will be enacted and the cost of services of "natural
monopolies" (mostly energy suppliers), utilities and heating will be frozen
until January 1 (variant-until April 1). 
* Hard currency deposits transferred into rouble accounts at state-controlled
Sberbank will be guaranteed up to 60 minimum monthly wages at the official
exchange rate on the day they were transferred. The remaining balance will be
calculated at a rate determined by the central bank. 
* Dollar accounts at other banks will be guaranteed in roubles up to 60
minimum monthly wages at the official exchange rate on the day they are
* Rouble deposits at Sberbank will be guaranteed in full while those at other
banks will be guaranteed up to 100 minimum monthly wages. 
* Shortages of medicines or food will be alleviated by: 
issuing credits for the purchase of essential goods and providing state
support to manufacturers of such goods 
eliminating a previously imposed additional three percent import duty on
essential goods, temporarily reducing import duties on seven groups of such
goods and temporarily cutting rail freight tariffs for them by 50 percent. 


Doubts greet Russia govt economy rescue plan
By Peter Henderson

MOSCOW, Oct 27 (Reuters) - Russia's anti-crisis programme, which leaked out in
draft form on Tuesday, outlines a range of measures aimed at improving the
market economy and saving the country from further economic and social
But the Kommersant business daily, which published the draft, denounced it as
anti-market. "The collapse of the economy has been programmed," read the
paper's front-page headline. 
The draft document warned that unless urgent measures are taken the country
risked a sharp output drop, social tension, hyperinflation, separatism and a
sovereign debt default. 
The plan, much of which has already been announced, called for action to
revive the crippled banking system, support the real sector of the economy,
expand the tax base, boost foreign exchange reserves and reduce capital
Russian agencies quoted First Deputy Prime Minister Yuri Maslyukov, in charge
of the economy, as saying the programme published by Kommersant was not a
final version of the rescue plan and he promised the real programme in a few
The long-awaited plan, which was debated for seven or eight hours at a meeting
of senior ministers on Monday, is due to be discussed again by the full
government on Saturday. 
A visiting International Monetary Fund delegation has been waiting for the
plan. They had been promised it on Tuesday, but Maslyukov said later that they
would have to wait. 
Kommersant, a frequent critic of the economic policies of Prime Minister
Yevgeny Primakov's government, said in a commentary that the measures amounted
to "state suppression of the market." 
It referred in particular to plans to stimulate investment by lowering
interest rates at a time of high inflation and to another clause giving the
central bank greater powers to fend off speculative attacks on the rouble. 
According to the plan, the rouble would be allowed to float, but the central
bank could defend it if necessary by imposing temporary compulsory reserve
requirements, which would limit the funds available to commercial banks for
buying hard currency. 
Stricter controls on sales of foreign currency and foreign activity of
domestic banks would be enacted, though the state also offered the carrot of
credits and tax breaks to banks and export-oriented companies which co-
The draft plan showed state protection for domestic industries would also
increase. Import tariffs of up to 100 percent may be levied "on imports
damaging local producers." 
The government was ready to guarantee support to producers of industrial and
agricultural commodities which could bring in foreign currency revenues or
substitute for imported goods. 
The plan did not outline the costs or gains of the measures, some of which
will be extremely hard on the strapped treasury. 
The central bank was obliged to guarantee at least some household savings in
all banks, many of which were devastated by the effect of rouble devaluation
and the effective default of the government on its rouble treasury bills in
The draft plan aims to keep the rouble stable and hold inflation at between
three and four percent a month until the end of 1998, down from 38.4 percent
in the month of September. 
The plan set maximum monetary emission at 40-60 billion roubles ($2.4-$3.6
billion), beyond which it said there was a danger of inflation. 
It also called for a restructured and simplified tax system, which would
involve tax breaks to help stimulate investment and end a decade-long


Date: Tue, 27 Oct 1998 
From: Geoffrey York <> 
Subject: Alexander Lebed

By Geoffrey York
The Globe and Mail (Canada)
Oct. 27, 1998

KRASNOYARSK, Russia -- Like a religious icon, a portrait of Alexander
Lebed gazes down from the kitchen wall of Semyon Malyshev's shabby
apartment in a frozen Siberian village.
Mr. Malyshev, a maintenance worker, is poor and hungry. His monthly
salary of about $75 hasn't been paid regularly for a year. He hasn't
even bothered to fix his broken refrigerator because he has no food to
keep in it. But he has faith in the retired paratroop general who would
be Russia's president.
~I believe in him," Mr. Malyshev said. ~He's a military man and I think
he'll bring order and discipline."
With the ailing and weakened Boris Yeltsin under mounting pressure to
resign, Mr. Lebed is emerging as one of the strongest candidates to
replace the Russian president. He and his rivals are already raising
funds and testing their strategies for an early election that could take
place within the next few months.
In an interview with The Globe and Mail in his Krasnoyarsk office, Mr.
Lebed revealed his own strategy when he launched a verbal assault on
Moscow's economic domination of the Russian provinces. ~We are sick and
tired of Moscow's control," he rumbled in his familiar gruff baritone,
smoking a cigarette and jotting numbers on a pad.
~Of all banking activities, 84 per cent are in Moscow, and another 10
per cent are in St. Petersburg and Nizhny Novgorod," he said. ~There are
20 million people in those three cities. So that leaves 6 per cent of
capital for the 126 million people in the rest of Russia. This should
answer your question of whether Moscow lives at the expense of the
Cranking up his rhetorical attack, he describes Moscow as the tiny
brainless head of a huge dinosaur-like country. ~This country is sick
with dinosaur syndrome," he said. ~It takes a very long time for signals
to travel from the head and pass through the huge body to the tail. By
that time, the tail has been bitten and swallowed. There is no way back,
no signal from the tail to the head."
In the early opinion polls for the next presidential election,
Communist chief Gennady Zyuganov is the leader. But his electorate is
elderly and dwindling. Most analysts are convinced that the next
president will be one of two men: the charismatic Mr. Lebed or the
shrewdly autocratic Moscow mayor Yuri Luzhkov.
Conventional wisdom now has Mr. Luzhkov as the frontrunner. He is
bolstered by Moscow's financial wealth, his powerful media connections,
and his influential allies in Russia's political elite. He will campaign
as the efficient builder and manager who can guide Russia to the same
affluence that its capital city enjoys.
But most polls still show Mr. Luzhkov trailing slightly behind Mr.
Lebed. The military hero has often been under-estimated and counted out
of races prematurely. He surprised the pundits by finishing a strong
third in the 1996 presidential election, then staged another upset by
winning a key regional election this year.
If the Moscow mayor has the money and the connections, Mr. Lebed has
his own populist strategy. He will run as the anti-Moscow candidate, the
voice of the provincial heartland, the champion of the poor and the
hungry. His supporters are ordinary workers such as Mr. Malyshev --
those who have suffered the worst of Russia's economic decline.
For this strategy to succeed, the tough-talking paratrooper must
exploit the deep resentment of Moscow's wealth that is harboured by
millions of impoverished people in the provinces. He must also prove
that he can govern effectively at the regional level.
This year, for the first time, Mr. Lebed has a regional power base of
his own. Five months ago he was elected governor of Krasnoyarsk, a vast
Siberian territory of heavy industry, forests and minerals. Now he is
using this stronghold to test and refine his anti-Moscow message.
He argues that the provinces are being suffocated by the Kremlin's
incompetence. ~The country is misruled. There are crazy taxes and crazy
tariffs, and they strangle any production. I haven't signed any
agreement with the central government, and I'm not going to sign any."
His own proposal is to strengthen the regions with an ambitious
redistribution of state powers. Under his plan, the regions would take
control of most government functions, along with an ownership stake in
key local industries. The Kremlin would be left with a small handful of
responsibilities, including foreign policy and defence policy.
~All other functions, together with taxes, should be forwarded to the
regions," he said. ~When the regions are strong, the country is strong."
Until now, Mr. Lebed lacked any real experience in the problems of
governing a chaotic country. He gained fame as an Afghan war hero and a
peacekeeper in an obscure Moldovan conflict. His only Kremlin experience
was in 1996, when he spent three months as the national security
adviser. In this brief period he negotiated a peaceful end to the
Chechnya war, earning the gratitude of a war-weary country. But his
economic policies have been vague and contradictory.
During the regional election this spring, Mr. Lebed vowed that he would
not seek the Russian presidency unless he solves the economic problems
of Krasnoyarsk. He has since downplayed this promise. His critics
suggest he is now hoping for an early presidential election because he
has no clue how to solve the region's intractable problems of moribund
factories, unpaid wages, soaring prices, and a lack of budget funds for
health and social programs.
After the collapse of the Russian ruble in August, his headaches have
grown worse. Local industries are crumbling, and many doctors and
teachers are still unpaid. Teachers have launched strikes and protest
marches, shutting down many schools.
A group of 81 village teachers marched about 60 kilometres into
Krasnoyarsk last week, demanding their unpaid wages and insisting on a
meeting with Mr. Lebed. When he sent a vice-governor because he was
feeling unwell, the teachers refused to leave the regional building. He
eventually agreed to meet them, but the meeting deteriorated into an
angry shouting match.
~I've been working on this problem from early morning to late at
night," Mr. Lebed scolded the teachers. ~What else can I do? Don't think
I'm a leprechaun sitting on a pile of money. You may yell as much as you
like at me, but before promising something I should know precisely where
to get it."
He waved a stack of budget documents at the teachers to prove that he
had no money. ~Here, it's zero," he said.
In an effort to control the soaring inflation rate, Mr. Lebed ordered
police to enforce a price freeze on basic food commodities, limiting
shops to a maximum mark-up of 10 per cent. But he abandoned the policy
within a couple of weeks. ~It worked for the first few days," his press
secretary insisted. ~It helped to calm the situation."
In the Russian media, a backlash against Mr. Lebed is gaining momentum.
Newspapers are accusing him of neglecting Krasnoyarsk by hiring advisers
from Moscow and travelling constantly to Moscow or Western capitals. ~He
is very seldom seen in the region," the Russian magazine Itogi
When he approved the arrest of a former vice-governor on corruption
allegations, he was accused of a political vendetta. Critics also
suggest he is forging deals with Moscow bankers and wealthy financiers
such as Boris Berezovsky because he is desperate for campaign funds.
Some analysts in Moscow predict that Mr. Lebed's magnetic political
appeal will begin to fade when it becomes clear that he cannot fix the
problems of a typical Siberian region.
Yet most ordinary people in Krasnoyarsk, in defiance of the pundits,
continue to support their governor. Even the unpaid teachers generally
support him. ~It's very difficult for him to resolve all the problems of
the territory in 200 days," said Tatyana Paramonava, a village teacher
who hasn't been paid regularly for three years.
~It's not his fault," she said. ~He is trying to do something. We
believe in Lebed, but he hasn't had a chance to do anything so far
because of the crisis in the country. I hope that people give him time
to show his talent."
Valentin Malygin, a worker in a massive tire factory that temporarily
shut down for most of October, agreed that the voters should be patient
with the governor. ~He can't solve everything that was ruined by the
previous government," he said. ~Let's wait and see. Give him time."
In the interview, Mr. Lebed brushed off the criticism of his frequent
travels and his Moscow advisers. ~We need fresh ideas and fresh blood,"
he said.
As for the unpaid wages in his region, he talks vaguely of a possible
influx of foreign investment. In the meantime, he hopes to lower the
expectations of the masses. ~They want a miracle, but there are no
miracles," he said.
Mr. Lebed refuses to confirm that he is running for president, saying
only that it will depend on the national situation and his own
But in the next breath, he predicts that Russia will begin falling into
bankruptcy as early as November. This could trigger a political war, he
*said. ~There will be a big fight, and I'd like to take part in it."


Date: Tue, 27 Oct 1998 
From: "Jerry F. Hough" <> 
Subject: what happened

Obviously it is a very sad time for those of who have had hopes 
over the last two decades--and even tried to hold onto hopes when Primakov 
was appointed.
But one can hope that at least a definition of the situation will 
lead young scholars in political science back to scholarship on what 
happened. The dialogue has been dominated by economists who 
have been naive or, I think, in some cases, venal. It is unclear why 
the major American newspapers were so taken in (I personally think the 
influence of the Administration on foreign policy reporting is far more 
crucial than many recognize), but it means that we have an enormous 
amount of digging. The drumbeat is going to be people like Hiatt who 
say that there was a good economic policy before June 1992 when the 
Communists ruined it, that barter is a recent development, etc., etc. I 
was working with some pharmaceutical and agroindustrial companies in the 
first months of 1992. I interviewed in places like Pharmindustria in 
Moscow or the pharmaceutical distribution network in Yaroslavl. The old 
ministries still existed as holding companies, corporations, etc. They 
already were distributing subsidies through "loans." "Inter-enterprise 
loans" were the old Gosplan distribution of goods, often across new 
country boundaries. This was before April. The April Congress only 
affected privatization, and it instituted privatization to the 
collectives to get power out of the hands of the Gorbachevites who controlled
the ministerial holding companies. 
Basically I think we need to see Yeltsin in more Khrushchevian 
terms--the anti-bureaucratic bias, the wild ideological utopianism, the 
emphasis on participation that really didn't matter. Alas, he did not 
have Khrushchev's honesty. The political-economic system of the last six
years has been too unique to have simple analogies, but I think Yeltsin 
has come a lot closer to re-introducing the sovnarkhoz system than the 
image of a privatized market economy that the regime propagated to get money 
from the West. The Ministry of Finance and the banks have been Gosplan 
distributing goods from the start with largely non-monetarized trade. 
The governors have been the prefects controlling banks like Kiriyenko's 
in Nizhnii or the local promstoibanks to try to keep the ship afloat. 
The notion that the oligarchs or the governors have had real 
independent power has been silly. I think scholars must take Mark Ames 
and eXile more seriously. I hope that his paper is in the library or on 
some web so we can use it retrospectively. His reporting has been more 
accurate than inaccurate. But it has been incomplete. The officials and
have skimmed off a certain percentage, but the corruption is not the 
whole story. The bankers and others have been playing an important
administrative role in carrying out the centrally-directed subsidy 
policy of those like Chernomyrdin and Chubais. 
Most of all, we need to get some comparative perspective. Hiatt 
repeats the total nonsense about the Polish model. I favor the Polish 
model: they began agricultural reform in 1956 (not the best one, I 
think), gradually expanded cooperative and private services, allowed some 
private plants (Duke had the daughter of the owner of a Polish tannery in 
the late 1970s), and then in 1980 instituted martial law to have 
administered price reform. When that was finished, they went to the 
next stage in 1989, 30 years later, but, of course, with less privatization 
than in the Russia. Not a bad model, and Russia should have introduced 
it. In fact, maybe it will go back and do it now. 
The ideas that are around are in the Financial Times, and any social 
scientist who doesn't read it is not serious. Take the October 26 issue. 
A whole section on India that reminds us that India is growing 5 percent 
this year because it maintained capital controls. China has been hurt 
by the Asian crisis to the extent that its growth has declined to 7 
percent, but, alas, China did open itself up to short-term loans and as the 
lead article and Lex Column reported on October 26, it may be hurt. This 
would be terrible, as the Lex Column reports, for China's growth is 
expected to grow next year beyond the 7 percent level and serve as a 
locomotive for the rest of Asia. Russia will never be serious so long 
as it whines after Western aid and doesn't not look at the lessons of Asia.
And on Russia, John Thornhill has often been on the money. His long 
report on the decline into chaos needs to be taken very seriously. One hopes
that whatever general ends the nonsense has serious advisers who tell him to
look at Turkey, at most of the Pacific Rim, and help him understand that there
is a reason for the semi-democratic institutions they have. It would be a
real and unnecessary shame if an economic policy not approved by the
population would lead to a further restriction to democracy rather than the 
movement of Russia onto a reasonable political as well as economic path.


Moscow Times
October 28, 1998 
Yeltsin's Fading Role an Accepted Fact 
By David McHugh
Staff Writer

Despite all of Boris Yeltsin's recent woes, it was still a startling admission
when one of his top aides blandly reminded people that the president no longer
has much to do with running the government. 
"The president will not - and, it seems, rightly - substitute himself for the
working of the government, will not control everything, including everyday
economic questions," Oleg Sysuyev, his first deputy chief of staff, said on
NTV's "Hero of the Day" program Monday night, as if discussing a change in the
weather, not a seismic shift in the balance of political power. 
By admitting what has been increasingly obvious for the past month, the
Kremlin administration has hoisted the white flag and put a public seal of
approval on the new arrangement: A detached, ill, mostly ceremonial president
broods at dachas outside Moscow while Prime Minister Yevgeny Primakov runs
things and politicians plan for life after Yeltsin. 
It is a sharp contrast from the Yeltsin who only in March growled at the State
Duma to approve Sergei Kiriyenko, his choice for prime minister, or face
dissolution. But having fired Kiriyenko on Aug. 23 after only five months, by
early September Yeltsin found that he could no longer force his choices on
anyone. Weakened by the Aug. 17 ruble collapse and the government's admission
it couldn't pay some of its debts, he had to abandon his nominee, Viktor
Chernomrydin, and choose Primakov. 
Observers have put forward various names for the new configuration: "Soft
resignation" is the term used by Kremlinologist Andrei Piontkovsky of the
Center for Strategic Studies, implying that Yeltsin will in effect give up
most of his power without giving up his office. Andrei Ryabov of the Moscow
Carnegie Center calls it a "transition from super-presidential to
presidential-parliamentary rule." 
Under these scenarios, Primakov makes Cabinet appointments and decides
economic policy. Yeltsin, while retaining vast constitutional powers on paper,
retains ceremonial functions and an ill-defined role as what Sysuyev calls the
"guarantor" of Russia's territorial integrity and its citizens' basic rights. 
"In case of necessity, of some extremely sharp conflict within Russia, the
president retains the right to intervene as the final arbiter," Ryabov said.
"But this is only in the extreme case. 
"As for other prerogatives, especially the development of domestic policy, all
this is being moved over to the government," he said.Most other political
forces are already on board with the new arrangement. The post-Yeltsin agenda
is based on wide agreement among the political elite on two things: Russia has
had enough of strong presidential rule and should change the 1993
Constitution, which gives the presidency vast power, to reflect that. But ask
how far to go in trimming executive authority, and how to do it, and the
consensus evaporates. 
Sergei Markov, head of the Institute of Political Studies, said industrial and
financial moguls, presidential contenders and political parties were all
agreed that the office of the president should be less powerful. 
The reason is fear of what another strong ruler would do to reverse the
insider privatizations and other sweetheart deals that characterize the post-
Soviet economy. 
"If you or your friend becomes president, that's good," Markov said. "But if
your enemy becomes president then the possible damage is greater than the
possible profit. If your ally becomes president, then what? He gives you
another billion dollars. But if it's your enemy, he can take away the 100
million that you have, plus your freedom and your life." 
After that, Markov said, agreement ends. Moscow Mayor Yury Luzhkov, a
presidential contender, perhaps understandably wants to keep more presidential
powers than others. The Communists, who dominate parliament, prefer an
Italian-style model, where the president is more a ceremonial head of state
and the prime minister runs things. 
And there's no agreement, either on whether to make the changes by two-thirds
votes of the upper and lower houses of parliament plus two thirds of all the
regional legislatures, or by the quicker method of a constitutional assembly. 
There have been suggestions that the office of vice president should be
revived, to provide for a smooth succession should a president die or be
incapacitated. But, Markov noted, the fact that the last two Russian vice
presidents have tried to overthrow the president may discourage the idea. 
Gennady Yanayev headed the ill-fated August 1991 coup against Mikhail
Gorbachev, and Alexander Rutskoi led an armed mutiny against Yeltsin in 1993. 
The amendment process "will likely stretch out until the next presidential
election," Ryabov said, "and it will be the next president who implements the
There's still a chance Yeltsin could be forced from power before his term ends
in 2000 - if the Duma Communists offer to guarantee him suitable living
conditions and protection from prosecution on charges such as breaking up the
Soviet Union or shelling parliament in 1993. But most observers think this
could only happen after a further sharp deterioration of the economic
Or he could be forced out if his health weakens further and prevents even the
limited role he has now. 
Could Yeltsin - whose hallmark is unpredictability - upset this new
understanding and come roaring back from isolation and illness, as he has
several times before? Ryabov doubts it. 
Before, he says, Yeltsin had significant support from the public behind him.
Now, with people's savings lost in collapsed banks and their savings and
salaries devalued, that support is gone for good. 
"Theoretically, I don't exclude this," Ryabov said. But Yeltsin "has lost the
political initiative. I think it would be very hard for him to get it back." 


FEATURE-Russian diva says she missed her chance
By Daniel Bases

ATLANTIC CITY, N.J. (Reuters) - Russian Americans forgot about the raging
economic crisis and struggling relatives back home for one emotional night
recently, listening to the rock 'n' roll of their youthful years in Russia and
the singer who brought it to them, their queen, Alla Pugacheva. 
She drives around Moscow in a white stretch limo, a gift from her husband, and
is said to have sold more than 150 million records, mostly in Russia and the
old Soviet empire. If you have never heard of her, you are in the majority,
but for Russians everywhere there is only one Alla, the reigning -- some say
fading -- diva of Russian pop music for 25 years. 
The East Coast Russian American community descended on the Trump Taj Mahal
Hotel and Casino on a recent Saturday, paying $50 to $250 a ticket for a sold-
out evening performance or a nearly full matinee of her 2-1/2-hour-long show.
Pushing 50, Pugacheva still plays a vixen on stage, belting out the passionate
love songs dripping with melodrama that made her famous in the tense Cold War
days under Brezhnev. 
Adoring, misty-eyed senior citizens clapped vigorously and sophisticated
youth, dressed in designer clothes from Armani, Valentino and Dolce & Gabbana,
looked like they were at a wedding rather than a concert as they walked down
the aisles with traditional gifts of flowers for her. 
``Perhaps I'm too long on this stage but I get older and wiser here. It is
your fault. You won't let me die,'' she said. 
Western critics described her as a dinosaur and savaged her performance at the
1997 Eurovision Song Contest in Dublin, where she placed 15th. But Pugacheva
has never really lived in the hearts of fans outside Russia's borders and now
even she admits her time to reach them is past. 
``I have a wide audience, but to get a wider American audience I should have
started here years ago,'' she told Reuters in her cloistered dressing room
between shows. 


Pugacheva was nothing like her reputation for having a poisoned tongue off-
stage, speaking humbly after her first performance at the 5,292-seat Etess
Arena at the Taj Mahal about Russia's economic crisis and its entertainers. 
Russia's entertainment community has been devastated by the economic
nightmare. In the face of adversity, Pugacheva offered a stoic prediction:
``We are Russians, we'll learn to adapt and we'll survive.'' 
``Concert dates for smaller artists are being canceled because promoters in
Russia can't go to banks to borrow money and regular people can't afford
ticket prices,'' said Michael Gulko, a semi-retired nightclub singer in
Brighton Beach with its large Russian community in New York's Brooklyn
``Alla and Philip are exceptions,'' said Gulko, who keeps up with the
entertainment community in Moscow. Philip is Philip Kirkorov, a rising star
himself and Pugacheva's fourth husband, 18 years her junior. He is producing
the four-concert U.S. tour that wraps up in Los Angeles Oct. 21 after a show
in Chicago. 
They are mega-stars in Russia and with the Russian emigre community. 
``I cannot play stadiums because the average Russian doesn't have money so I
cut back on production for smaller venues, for people who can afford higher
ticket prices,'' Kirkorov said. 
Stadium shows where thousands more could attend do not make as much money for
the artists when the average Russian is not being paid a regular wage, he


``The value of my singing is in the Russian language, my Russian voice. My
force is the Russian soul,'' Pugacheva said. And the Russian soul now is
tormented with winter approaching, a bad harvest, reignition of inflation and
a banking system that teeters on complete collapse. 
``Now is a time of changing generations. While there is a problem with the
crisis, the younger generation wants to change things but doesn't have the
facilities yet, while the older ones say don't change what wasn't necessarily
broken,'' she said. 
``Coming here reminds me of Russia,'' said Natalie Nekrasov, 30, who emigrated
to New York from Kiev six years ago. 
``I think she was funny,'' said her 7-year-old daughter Lisa, who fidgeted in
her seat as mom laughed, cried and sang along. ``But I like the Back Street
Boys the best,'' she added, referring to the heart-throb mega-bands that have
millions in marketing dollars behind them. 
``I want Lisa to know about her culture, even pop culture,'' Natalie said. 
But if Lisa is a sign of things to come, Pugacheva and her husband will have a
tough time breaking through to American audiences to supplement the Russian
Americans who form a base of support outside a collapsing economy. 
She performs a uniquely Russian form of entertainment called Estrada that
mixes different kinds of performance art and music and was likened to rock 'n'
roll in Soviet days. 
Kirkorov says popularity means raising production costs. ''Being a star is a
myth, a persona, a fairy tale to live. I feel like I play a role, lifting the
bar higher each time. The country may go down, but if I reduce the size of
my show, then people think something wrong with me,'' he said. 
Kirkorov, who played to sold-out crowds in New York and Las Vegas in recent
years, says he covers his expenses but is forced to spend more each time to
match his popularity. ``I have very big ambitions. To have all the limits of
Russia is too small,'' he said before his wife's concert. 
``I'm the king of Russian pop. I'm good-looking, I will always have a baby
face. I have no promoter now but I hope he will appear soon. I am waiting for
him to come to me,'' he said confidently, while fans waited with hopes for an


Doctors: Yeltsin Weakness Could Mean Much or Little 

MOSCOW, Oct. 27, 1998 -- (Reuters) The term President Boris Yeltsin's aides
used to describe his medical condition on Monday is a general one that could
encompass many things, medical experts said. 
Yeltsin's spokesman, Dmitry Yakushkin, said the president was forced to cancel
a planned summit with European leaders in Vienna because of "asthenia," which
Black's Medical Dictionary defines as simply "want of strength." 
"I cannot say anything about the president, specifically, but the word in
Russian means exhausted or fatigued," said Mikhail Sagalovich, a doctor at the
European Medical Center in Moscow. 
"It is a general term for saying the patient is not feeling very well." 
Sagalovich said the diagnosis was a fairly common one in Russia, where doctors
usually prescribe rest. Yakushkin said Yeltsin's doctors had urged him to take
a vacation. 
Martin Bennett, a cardiologist at Cambridge University in Britain, said the
term is often accompanied in the West by a prefix saying which of the body's
systems is weakened. These could include the heart, the nervous system or
other systems. 
Used alone, the word "doesn't specify a specific diseased entity or even a
system that is affected. It just says he is tired," he said. "It is a pretty
meaningless phrase." 
"It could embrace anything from severe heart failure and you're completely
bed-bound, to having a bit of a cold." 
Yeltsin, 67, has been recovering from what the Kremlin says is a cold,
accompanied by an inflammation of the bronchial tubes, since cutting short a
trip two weeks ago to Central Asia where he staggered and nearly fell in
He has suffered from heart problems in the past and had a quintuple bypass
operation in 1996. 
But Michael DeBakey, a U.S. heart surgeon who advised the team that performed
that operation, told Reuters he did not believe Yeltsin's present ailment had
anything to do with his heart. 
"I had a message very recently -- in fact I think it was last week -- saying
there was nothing wrong with his heart," he told Reuters by telephone from
"He had a cold accompanied by tracheitis. That is very often, like a flu,
associated with weakness when he is recovering from it," he said. 


Russia Center, Left-Center, Socialist Forces Form Coalition 

MOSCOW, 26 Oct (ITAR-TASS) -- Leaders of the Russian centre,
left-centre and socialist forces issued a joint statement on Monday about
formation of a political coalition, and joint participation in the
forthcoming parliamentary election. The document was signed at the
"Balchug hotel" in Moscow by leaders of the movement "Union of People's
Power and Labour" /UPPL/ Andrei Nikolayev, the Socialist People's Party of
Russia Martin Shakkum, the "Kedr" ecologic party Anatoly Panfilov, the
Party of Working People Self-Government Svyatoslav Fyodorov, the Socialist
party of Working People Aleksandr Maltsev and the Russian Youth Union
Vyacheslav Laschevsky.
The statement carries the programme principles of the participants in
the new coalition, who stand up for a change of the course, and peaceful
and democratic recovery from the recession. Fundamentals proclaimed by the
new bloc are "people's power, triumph of law, justice, humanism, high
morality, diverse forms of property, and socially orientated marketeconomy."
Leader of the UPPL Andrey Nikolayev pointed out that the question of
the candidacy to be coalition-supported in the presidential election of
2000 would depend upon the results of the parliamentary election. The
coalition would go through the elction as a united election association. A
presidential candidate should be nominated by the majority in the new State
Duma /lower house of the Russian parliament/, Nikolayev reasoned. His
personal liking was with incumbent Moscow Mayor Yuriy Luzhkov. At the same
time, Nikolayev said it was premature to ask Luzhkov whether he would take
advantage of support offered by the left-center coalition. "All the
candidates, Luzhkov included, will by no doubt try to avail themselves of
the powerful left-centre coalition potential," he added.
The UPPL leader expressed confidence in that the left coalition would
enlist the necessary votes to secure seats in Parliament. Nikolayev further
noted that in the parliamentary election of 1995, his co-signatories had
together won 10 percent of the votes. He spoke again for early
parliamentary and presidential election to be held in September 1999.
The list of signatories to the document proved to have some gaps, as
some earlier announced to-be participants in the coalition did not turn up
at the ceremony. Among them was leader of the "Labour Union" Andrey
Isayev, leader of the "Congress of Russian Communities" Dmitriy Rogozin,
and the Russian movement "For New Socialism" Yuriy Petrov. Nikolayev
assured the reporters they had been absent due to some "technical reasons"
and would join the coalition in the nearest future.


Paper Comments on Albright 2 Oct 'Advice' on Russia 

Sovetskaya Rossiya
24 October 1998
[translation for personal use only]
Article by Vasiliy Safronchuk: "America Lectures, Threatens,
and Insults. Rejoinder to Mrs. Albright's Remarks"

Secretary of State Madeleine Albright spoke in Chicago on 2
October at a session of the Russian-U.S. Business Cooperation Council. 
This speech might not have been worthy of comment had it not been published
on 16 October by Nezavisimaya Gazeta, which, as you know, is controlled by
B. Berezovskiy. What was it that Boris Abramovich liked about Mrs.
Albright's expatiations? In her fairly lengthy speech, couched in the
tones of a professor and mentor, Albright gave U.S. business circles advice
on how to develop relations with Russia in the light of the new
distribution of political forces that has taken shape with Ye. Primakov's
appointment as government chairman.
With unconcealed concern, she noted that people have come to the helm
in Russia who would like to reverse the development of events, and she made
it absolutely clear that the United States should try to prevent this. The
U.S. secretary of state stated openly that Washington intends to continue
to "manage the consequences of the breakup of the Soviet empire." What
matters to the U.S. Administration, according to her, is not personalities
as such, not specific politicians in Moscow, but the new Russian cabinet's
program. At the same time the United States, according to her, is not
convinced that Russia has a coordinated anticrisis program, and Washington
is very concerned about that. As is known, Ye. Primakov does not have an
anticrisis program to this day, since, as he himself explained, for him it
is concrete measures that matter, not programs. Some of those measures
bring Albright out in a rash. "We have recently heard a lot of talk about
printing money and imposing control on prices and currency and bringing
certain sectors of the economy back under state control," Albright laments.
"We can only speculate that some members of Primakov's team do not know
the first thing about the world economy." In short, she suspects members
of the Russian cabinet of ignorance at best.
Making the granting of economic aid to Russia conditional on a program
that would reflect commitment to a market economy and "democratic values,"
Albright explained that the actual aid will be of a different nature and
need not necessarily be expressed in money. She noted that three-fourths
of the American aid hitherto granted to Russia has gone on Russia's nuclear
disarmament, and that objective has by and large been achieved. There are
no more nuclear weapons in Ukraine, Belarus, or Kazakhstan, and the nuclear
potential of Russia itself has been significantly weakened. The secretary
of state expressed the hope that the Primakov government will be able to
secure Duma ratification of the START II Treaty, which should finally
resolve the problem of the nuclear threat from Russia. At present
Washington is most concerned that Russian military technologies should not
fall into the hands of those countries whose policy, for one reason or
another, the United States does not like.
As for bilateral economic aid as such, the main emphasis, according to
Albright, will be on the regional and the human level. In the past five
years 35,000 Russians have been to the United States, and in the future it
is planned to extend the practice of inviting students, politicians, and
specialists to the United States. Assistance in the destruction of nuclear
ammunition and the military infrastructure will also be increased. Mrs.
Albright also came out in favor of increasing direct investments in the
Russian economy, but on specific terms. According to her, production
sharing agreements and tax laws that are more beneficial to U.S. investors
are needed. You see, she does not like the fact that to this day in the
minds of the Russian people foreign investments are associated with the
"selling off of Russia."
It was noticeable that Albright's speech was timed to coincide with
the arrival in Washington of Russian Finance Minister M. Zadornov and
Central Bank Chairman V. Gerashchenko, who were trying to extract the next
tranche of the promised stabilization loan from the IMF. As is known, they
did not get what they wanted -- at least part of the tranche. Obviously
the U.S. Administration, to whose tune the fund dances, was not convinced
by the arguments of the Russian Government members. Washington and the IMF
are hardly likely to become more obliging after the recent congress of the
Russian Union of Industrialists and Entrepreneurs (RUIE). The most
frequently used word at the congress was "regulation," which is anathema to
Mrs. Albright. However, foreign creditors, including the IMF and the World
Bank, will sooner or later realize that they can count on the repayment of
loans granted to Russia earlier only if it is granted terms that are within
the powers of the present-day Russian economy.


Moscow Mayor Wants 'Third Way' for Russia; Criticizes West 

MOSCOW, Oct 26 (Interfax-Moscow)--Moscow Mayor Yuriy Luzhkov on Monday
[26 October] proposed that Russia choose a "third way," different from
"total socialism and vulgar liberalism," and complained that the West was
treating Russia as a Third World country.
Russia needs a compromise between liberalism and socialism, Luzhkov
told a conference called "Political centrism as the basis for
"Work and consumption must be based on the laws of liberalism while
there must be support in accordance with socialist ideals for those who
need it," Luzhkov said.As basic principles for his theory, the mayor named
opportunities, economic competition, including rivalry between the public
and private sectors, state support for industry, education, science and
cultural activities and social welfare for poorer strata.
"Citizens who have above average incomes should give an appropriate
share to those who are receiving less than that level," Luzhkov argued. He
said reforms carried through in Moscow had been in line with
Liberalism will "collapse" in the industrialized West as well as
Russia, the mayor predicted. He blasted Western nations, which "are
forcing their will on Third World countries and are trying to deprive
developing states of the opportunity to produce high technologies, turning
them into exporters of resources."
The West has managed to "shove Russia into the Third World as well,"
he went on. But "Russia is not a Panama or a Grenada or even an Iraq. The
Russian people will not accept such a role."


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