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Johnson's Russia List


October 29, 1998    
This Date's Issues: 2451 2452 

Johnson's Russia List
29 October 1998

[Note from David Johnson:
1. Bloomberg: Yeltsin Impeachment Supported by 75% of Russians, Poll Shows.
2. Blomberg: Yeltsin's Disapproval Rating Reaches 93% in Opinion Poll.
3. AP: Russia Wants More Control of Economy.
4. The Crux of the matter?
5. Alfiya Kulsharipova: In respons to Mr Kagarlitsky/No 2450.
6. NewsBase's weekly "FSU Oil & Gas Monitor": David Flanagan, Whatever 
happened to merger mania?

7. Jerry Hough: Re 2451-Kaufman/Hough.
8. Moscow Times: Andrei Piontkovsky, SEASON OF DISCONTENT: Leaders Lulled 
By Gold Fever, Magic Words.

9. Moscow Times: David McHugh, Government Riled By Graft Accusation.
10. Chicago Tribune: Colin McMahon, ST. PETERSBURG CEMETERY IS A LIVING 

11. RFE/RL: Paul Goble, When Moscow Looks Beyond The CIS.
12. Sovetskaya Rossiya: Patriotic Coalition Lauded, 'Nervy' Comrades Chided.
13. Itar-Tass: Spokesman Disowns Published Version of Government Program.
14. Reuters: Russian Ag minister sees poor grain harvest.
15. Bloomberg: Yeltsin Concentrates on Power Transfer in 2000, Official Says.]


Yeltsin Impeachment Supported by 75% of Russians, Poll Shows

Moscow, Oct. 29 (Bloomberg) -- Three quarters of Russian citizens support
impeachment of President Boris Yeltsin and only 16 percent are against,
according to an opinion poll conducted by the Public Opinion Foundation,
reported Russian news agency Interfax. Support for impeachment is greatest in
rural areas and among communists, the poll found. Yeltsin faces impeachment
for dissolving the Soviet Union, for bombing the parliament in 1993 and for
starting the Chechen war, the agency said. 
Yeltsin's health has been scrutinized since major heart surgery in the autumn
of 1996 and calls for his resignation have mounted since Russia's financial
crisis deepened in mid-August. 


Yeltsin's Disapproval Rating Reaches 93% in Opinion Poll

Moscow, Oct. 29 (Bloomberg) -- Russian President Boris Yeltsin's disapproval
rating rose to 93 percent in October from 90 percent in September, with just 5
percent of Russians approving of the president's work this month compared with
7 percent last month, reported Russian news agency Interfax, citing a poll
carried out by the All-Russian Public Opinion Research Center. Half the
Russian citizens surveyed said the new government of Yevgeny Primakov has been
doing no better than the previous one, compared with 43 percent in September.
A total of 1,608 people were polled, the agency said. 
The government vowed to pay back wages to state workers by Jan. 1 to fulfill a
pledge to workers who have gone as long as a year or more without a paycheck. 


Russia Wants More Control of Economy
October 29, 1998

MOSCOW (AP) -- The Russian government has ``resolutely opted'' to take more
control over the economy to pull it out of its worst crisis since the Soviet
collapse, Prime Minister Yevgeny Primakov said Thursday.
Primakov was commenting on the government's long-awaited plan for coping with
the crisis, which was presented to the International Monetary Fund on
The government hoped the plan would persuade the IMF to release another
installment of a $22.6 billion loan frozen after the Russian economy fell
apart in mid-August.
The IMF said it wanted to study the plan, Russian media reported. Visiting IMF
officials were scheduled to leave Moscow on Thursday, the Interfax news agency
``They realized that the situation in Russia is very difficult, but not
hopeless,'' Deputy Finance Minister Oleg Vyugin told the Interfax news agency.
The plan calls for tighter currency controls, price controls on medicines and
some basic foods, a food reserve to help the country through the winter and
indexing wages and pensions to compensate Russians for rising inflation.
It tackles the tax system, lowering some income, property and profit tax rates
but tightening the rules in hopes of making more people pay. The government's
chronic inability to collect taxes has left it consistently short on cash and
helped contribute to the current crisis.
Primakov said Thursday the government also wanted to restore ``order and
discipline'' in contracts, an apparent reference to loopholes in export-import
regulations that allow money to be illegally sent abroad. Russian companies
are believed to have stashed billions of dollars overseas.
``The state must (also) determine the parameters and trends in industrial
restructuring,'' Primakov said in the southern Russian city of Vladikavkaz,
where he was holding talks with leaders of restive regions in the Caucasus
He did not elaborate, but was presumably referring to a renewed emphasis on
Russia's manufacturing sector, particularly the huge military-industrial
complex. Western analysts have long urged many of those companies be closed or
converted to other uses because, while they employ many people, there is no
market for their goods and they are unprofitable.
Meanwhile, Agriculture and Food Minister Viktor Semyonov rejected speculation
that Russia may face food shortages this winter, but warned that in food
prices may become too high in some regions for the low-income people.
He also called for greater state control over agricultural markets to ensure
deliveries of inexpensive food to troubled regions.
Vyugin, the deputy finance minister, said the main emphasis of the talks with
the IMF was on the budget for the last three months of this year and for 1999.
``The IMF insists that the budget for the fourth quarter be made very
rigorous,'' he said.
Meanwhile, Central Bank chairman Viktor Gerashchenko reiterated his opposition
to any limits on the circulation of U.S. dollars and other foreign currencies
in Russia. Russian media had previously reported that was to have been part of
the plan to cope with the crisis, on the grounds that it would strengthen the
``The dollar must not be banned,'' Gerashchenko said. ``It's impossible.''
The Central Bank announced Thursday it had revoked the license of Inkombank,
which had been one of the country's biggest retail banks, because it was
practically insolvent.
The Central Bank also said that its gold and foreign currency reserves rose by
$200 million in the fourth week of October to $13.3 billion.


Date: Thu, 29 Oct 1998
Subject: The Crux of the matter?

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."
Fitting that Madeleine Albright would engagae in this discourse of future
Russian participation in global Free Enterprise!
For the Russians to "buy into" the preferred course of action requires an
overcoming of the centuries-old stigma and ingrained policy of Slavophobic
Perhaps Madeleine Albright is destined ( Slavic roots inherent) to bridge a
significant understanding that has consumed centuries of wasted effort - it
would seem - for what is an expected global perspective!!


From: "Alfiya Kulsharipova (Moscow)" <kulshalf@MLE.CO.UK>
Subject: In respons to Mr Kagarlitsky/No 2450
Date: Thu, 29 Oct 1998

It is a common knowledge that the right of free speech gives people the
possibility to openly express their views on whatever subject they feel like
doing so. However, if they do chose to speak up in public, in my opinion,
it is most desirable that the arguments they present were substantiated by
correct factual or statistical data or at least by speakers'/authors'
familiarity with the facts they refer to. I regret to say, that I found Mr
Kagarlitsky's essay to be full of empty arguments. Let me consider only
those passages which I found most arguable.
1. "The people we imported from America were exactly those arrogant IMF
advisors who knew nothing about Russia..."
Well, to put it mildly, that's not entirely correct. Indeed, prior to 1994
Russia was primarily "explored" by "business cowboys" who were considered
failures in their own countries or by representatives of international
non-governmental and non-profit organizations. However, the situation on the
Russian labour market has drastically changed in 1994. Moscow and St.
Petersburg saw the first big wave of young Russian professionals returning
to the country after completing their post-graduate studies in US and
Western European Universities (they too in a way can be called "imported").
Suffice it to say, that they had no trouble finding jobs with leading
Russian and foreign companies based in Moscow. At the same time, Russia
started to be viewed as fast growing market with huge potential for foreign
investments. That's when a lot of really experienced, high flying expatriate
professionals started to move to Russia. Most of them did so not because
they wanted to help our country, but because they recognised Russia as a
tremendous possibility for advancing their own careers. This was also
quickly grasped by foreign companies themselves. For instance, those
expatriates who came to Moscow in 1998 were often offered "local packages",
i.e. they did not get the usual expatriate "sweeteners" such as corporate
cars, housing allowances and "adjustment of living" fees. Something unheard
of only a couple of years ago. It was precisely those people who brought to
Russia highly valuable knowledge and expertise in various areas of business
and finance and I find nothing humiliating in the fact that a lot of
Russians benefited from closely working with these people. And so did
Speaking about IMF, the author fails to mention other international
organisations which aimed to help Russia and its economy. For instance,
"Regional Venture Funds Program" which was launched by EBRD and which helped
to bring foreign investments to Western Siberia, Smolensk region, Black
Earth region, etc. I personally advised on Smolensk projects and met with
expatriates who were based there and who did a lot of travelling to Vyazma,
Bryansk, Tver and other places in order to identify local companies with
viable products which EBRD could financially support. They did fantastic
job. Only one completed project relating to porcelain factory helped to
create dozen of jobs in Smolensk for which local people queued in big
numbers. Not to mention companies like Pepsi, Mars, McDonalds, Coca-Cola and
others which opened their factories outside Moscow, thus creating jobs,
increasing Russian people's standards of living and nourishing local budgets
(I don't think that anyone can argue with the fact that most of foreign
companies never attempted to evade Russia taxes no matter how outrages such
taxes are).
2 "The educational level of Russian population is now lower than 10 years
I was around 10 years ago and I remember far too well how a lot of young
people entered high education just to get any degree, to spend 5 years of
their lives doing something no matter what. It was not at all rare when
applicants were choosing between medical college, engineering institute and
linguistic faculty. Why? Because they did not care where to study. Because
after graduation they faced prospects of boring, low paid jobs for years to
come. Indeed high education was sponsored by the state. However, in exchange
the state considered it to be its inalienable right to decided which
region/city/village to send young student after graduation and where the
latter had to spent compulsory 3 years paying back the state "in kind" for
their education. At one point I worked in a factory (I mean real USSR style
heavy industry factory) and I was stunned by number of engineers holding
ordinary workers jobs. The did so for the simple reason that even low
qualified workers were paid much better than most talented, highly educated
engineers. Not to mention huge number of monstrous "Research Institutes" set
up in 70s which were full of specialists going nuts of doing absolutely
nothing (to do them justice, they were also paid next to nothing). It's only
several years ago when people started to view education as a crucial step in
their lives and careers. By the way, it was Americans and Europeans who made
it possible for young Russian graduates to study in overseas universities
for free via various educational and training programs sponsored by Western
governments or private funds.
3 "Belarus had 10% growth in 1997..."
I guess the above information comes directly from Mr Lukashenko and only he
knows how on earth he managed to come to such figure. By comparison, "Asian
tigers" had on average only 8% growth in their best years. I leave it to
others to make the conclusion.
4 "Belarus is a police state... but its police and bureaucracy are less
I would very much like to know what methodology Mr Kagarlitsky used in order
to evaluate the level of corruption in Belarus. Personally, I doubt that
police state is capable of successfully battling corruption. 
5 "Please leave us along and let us resolve our problems ourselves".
There I've got very good news for Mr Kagarlitsky and alike: we've already
been left along. The fact is: most of foreign companies are either pulling
out of Russia or considerably downsizing their presence here (making Russian
professionals redundant on the way). This is not only due to "August 17"
disaster. It is a direct consequence of global recession expected to hit
industrial countries. 
Here I want to address the "receipt" for keeping foreign investors happy
cautiously suggested by some government officials and favoured by Russian
mass media: that is to exchange Russian debts for shares in battered Russian
banks and companies. Somehow, everyone agrees that foreign creditors will be
only too happy to struck such deal instead of never seeing their money at
all. I think that foreign creditors are not interested. Moreover, they are
concerned not to have Russian exposure at all so that such exposure has no
negative impact on their own share price. Foreign companies and financial
institutions are currently implementing cost cutting measures and
discharging employees all around the world. Therefore, under the
circumstances it would be at least unreasonable and at most immoral to
invest any funds into such unstable market as Russia. So, for good couple of
years Russia will probably see very little presence of foreign investors.
Will it survive without Western know-how, investments and expertise? That
remains to be seen.


From: Ian Gardiner <>
Subject: Submission
Date: Thu, 29 Oct 1998 

Dear David

NewsBase is an information service providing news and analysis from the
former Soviet Union. Based in Edinburgh, Scotland, it is one of the top five
information services used by the EBRD, and is read by thousands of
subscribers round the world.
More information can be found at:

This article comes from the most recent edition of NewsBase's weekly "FSU
Oil & Gas Monitor".

Whatever happened to merger mania?
by David Flanagan

A cursory look at Russia's oil business might suggest that it is, after
the US, probably the world's most competitive oil sector. With its myriad of
integrated producers and traders, the sector has the makings of a vastly
efficient and dynamic industry. Pressure of competition ought to deliver
pioneering and innovative strategies among its players, or force the merger
or of many of the key players, or their takeover by acquisitive neighbours. 
The pioneering strategies have unfortunately been derailed by economic
uncertainty. Any major business entity cannot make long term business plans
if its financial system and domestic trading scene are in disarray. Banking
problems, barter transactions and weak domestic conditions prevent these
companies from upgrading facilities and techniques in the manner that they
would choose.
Hence, the advent of large-scale mergers looked likely. And the Yukos /
Sibneft deal considered at the start of this year seemed like just the first
of many. Under the name of 'Yuksi', the two would have become potentially
the largest exporter to European markets. Both have significant volumes
being traded into Hungary, a market in which Yukos has been the key
coordinator for some years, achieving the distinction of principal supplier
to the key local entity there, MOL. But the deal has not gone through as
The privatisation process, always an important one, has since assumed vast
importance, and has replaced almost everything on the oil agenda since the
Summer. Merger and acquisition activity will perhaps intensify again once
the Government kick-starts the privatisation process. 
On the subject of privatisation, it has been confirmed that the
long-awaited sale of a stake in Gazprom, the world's most significant gas
producer, is to take place in the first week of November. Gazprom, along
with the giant oil producer, Rosneft, together represent the summit of
Russia's energy privatisation plans, and would, ideally, constitute a highly
desirable and attractive investment for overseas fund managers. 
Notwithstanding the importance of these sales as a source of hard currency
for the Russian state, should an overseas investor buy into Gazprom or
Rosneft, a sale of such a strategic asset as a stake in either of these
companies would give a great lift to the overall mood of the Russian
business sector. On the issue of price, Gazprom stock is low, and from this
perspective, the timing could be better. However, the Government is likely
to look for a premium on the sale on the prevailing share price. 
The short notice announcement, barely a week ahead of the proposed
auction, would appear to imply that the Government is confident of a
successful outcome, suggesting strong interest from somewhere. Front-runner
seems to be the German entity, Ruhrgas. Both this company and other German
gas entities such as Wintershall, have had long trading links with the
Russian gas system, and a bid by Ruhrgas would seem logical. Another
potential candidate could be US giant, Enron. However, the sale of Rosneft
still remains undetermined. The company has uncertainties with its key
subsidiary Purneftegas, which would probably deter investors. 
Other candidates for privatisation if the Gazprom sale injects some vigour
into the sector, include state interests in ONAKO (Orenburg Oil), Tyumen Oil
(TNK), Vostochnoi or Eastern Oil (VNK), and transnational operator Slavneft
(which unites Russian producer Megionneftegas with the Belarus refinery Mozyr). 
Overall sentiment until the sale of the Gazprom stake is successfully
completed is probably one of baited breath, both among local players and
overseas investors. The sector needs some high profile good news, if
possible involving an overseas investor.


Date: Thu, 29 Oct 1998 
From: "Jerry F. Hough" <>
Subject: Re: 2451-Kaufman/Hough

I think Wallace Kaufman's comment is quite useful. It is silly 
just to rail against corruption as too many writing about Russia do. All 
early capitalist systems have a lot of corruption, and the controversies
about campaign finance laws shows it doesn't disappear in the US today. The 
point is to create incentives so that the most profitable use of 
one's assets, legally or illegally acquired, is investment in socially 
useful business, not Swiss banks or scrap metal. Mafias in the US and 
elsewhere arise to protect business and contracts (e.g., in drug trade) that
are not protected by the legal system. If business is protected legally,
then Mafia does not serve a function, and severe punishment can limit it. 
As people like Joseph Berliner, David Granick, and Alec Nove showed, the 
old Soviet system was a beautifully contructed set of incentives that fit 
together nicely and to which Soviet managers responded well as economic 
men. Granick called the managers "entrepreneurs." The integration of 
the incentives was why reform was so hard and why so much thought should 
have been given to sequencing in change of incentives. Today nothing is 
more important than for Soviet economists to forget monetarism and learn 
what their predecessors knew about incentives and the entrepreneurial 
character of the maligned "nomenklatura."


Moscow Times
October 29, 1998 
SEASON OF DISCONTENT: Leaders Lulled By Gold Fever, Magic Words 
By Andrei Piontkovsky
Special to The Moscow Times

Most Russian governments in the past have excelled in their shameless
deception of the people, to their own advantage, needless to say. Yevgeny
Primakov's government, however, is behaving far more delicately, preferring
instead to deceive itself. 
The government's reluctance to be hurried, or to adopt any kind of anti-crisis
program or even decide upon some figures for the fourth quarter's budget tells
of a subconscious hope on the part of these "professionals" and "heavyweights"
that the crisis will somehow resolve itself. For now, Primakov and his
ministers are least of all inclined to take any painful decisions, but rather
to keep all their options open and enjoy all the pleasures. To preside at
meetings where the "anti-national course of the last government, implemented
at the bidding of the IMF" is exposed to tumultuous applause, and then to
demand new credits from that same organization. To growl menacingly at
"overgreedy" creditors and to hold talks about restructuring Russia's debts.
And to distribute wage and pension arrears and liquidate all the non-payments
of the banks and enterprises, while at the same time not allowing inflation. 
It is amusing to watch how academicians and professors of world economics
earnestly convince each other that if they move some golden trinkets from one
jewelry box (the state repository Gokhran) to another (the Central Bank), or
better still, move the whole of Gokhran right into the Central Bank, the ruble
will miraculously become more stable, making it possible to carry out a large
money emission without the risk of inflation. 
Gold fever generally seems to have affected the members of the government and
the regional governors. One after the other they come up with madcap
proposals, from minting gold coins to issuing gold certificates, apparently
unaware that such projects have been pointless since 1971, when U.S. President
Richard Nixon rejected the gold standard and the Bretton-Woods system
collapsed. It would be just as productive to simply transfer necklaces made of
shells from one jewelry box to another and say that this strengthens the
Besides gold fetishism, another primordial form of self-deception is the magic
of the spoken word, often employed by politicians in critical times. 
Just as U.S. President Bill Clinton sincerely impressed upon himself and
Hillary "I had no sexual relationship with Ms. Lewinsky. I had only an
inappropriate relationship," Primakov and Central Bank Chairman Viktor
Gerashchenko chant "There will be no emission. There will be only optimal
management of the monetary base." 
The apotheosis of the magic of words was last week's Congress of
Industrialists and Entrepreneurs. Most magical of all were the actual words
"industrialists and entrepreneurs." Ninety percent of those present were
former directors of Soviet enterprises who by the late Gorbachev period had
already turned them into joint-stock companies, placing the controlling blocks
of shares in their own hands or with proxies. 
The unique feature of Russia's path to capitalism is that the burden of these
enterprises' production costs, including wages, still rests on the budget.
Hence the ovation that greeted Primakov's propositions at the congress for
"supporting Russian manufacturers," which if translated to the language of
reality, means the continued existence of greedy and ineffective owners at the
taxpayers' expense. 


Moscow Times
October 29, 1998 
Government Riled By Graft Accusation 
By David McHugh
Staff Writer

Liberal politician Grigory Yavlinsky set off a flurry of indignation Wednesday
from government officials by saying in an interview that corruption already
had its tentacles in the new Cabinet of Prime Minister Yevgeny Primakov. 
"We are not going to keep silent about what is going on inside the Cabinet,"
Yavlinsky was quoted as saying by Britain's Daily Telegraph. "Corruption can
determine who gets what position. My people inside the government tell me you
can buy offices for money." 
Yavlinsky did not name names, but said the problem concerned the leftist
members of the new government. 
In response, Primakov, on a visit to Saransk in the central Volga River
republic of Mordovia said that "Mr. Yavlinsky must name these people. If not
publicly, then let him write to the prosecutor. Otherwise, he is either
slandering or covering up." 
Justice Minister Pavel Krasheninnikov said Yavlinsky could face criminal or
civil proceedings for slander. 
First Deputy Prime Minister Yury Maslyukov - a Communist - joined in the
attack, saying he was "disappointed that a person trying to present himself as
a serious politician decided to engage in insinuation. ... It is upsetting." 
Communist Party leader Gennady Zyuganov said Yavlinsky must name the
individuals concerned. "I do not think Yavlinsky can say such silly things but
if he has facts, let him specify," Zyuganov was quoted as saying by Interfax. 
The controversy had an aura of unreality about it. Yavlinsky had been
completely ignored after saying essentially the same thing on NTV's "Itogi" on
Sunday. It was not until his remarks appeared on the inside pages of The Daily
Telegraph that there was any response. 
Corruption is commonplace in Russia, with state-owned natural resources and
capital vanishing offshore and government enterprises sold to the politically
connected for a fraction of their market value. 
The most prominent graft cases - though in each case there has been no
conviction - have included the theft of $183 million in state-owned diamonds
and gold, and the receipt of a $450,000 advance for a book about privatization
by five now ex-government officials. The publisher had ties to a bank that won
lucrative privatization auctions. 
Yavlinsky's remarks come at a time when the government is trying to win loans
from international financial institutions, which have put new emphasis on
fighting graft. Maslyukov met with IMF negotiators in Moscow on Wednesday. 
Political analyst Nikolai Petrov of the Moscow Carnegie Center said that might
have been a factor in the angry reaction to Yavlinsky's comments. The remarks
were somewhat out of character for Yavlinsky, who is usually a fairly cautious
politician, Petrov added. 
Yavlinsky said he would continue to support Primakov but could not keep quiet
about wrongdoing. He repeated his accusations at a news conference Wednesday
and expressed surprise at the controversy. "This just repeats what I said on
Russian television," he said. 
The pro-democracy, market-oriented Yavlinsky was the first politician to
publicly put forward Primakov's name as a compromise candidate to break a
political deadlock between President Boris Yeltsin and parliament. 


Chicago Tribune
October 28, 1998
[for personal use only]
By Colin McMahon

ST. PETERSBURG, Russia -- The world in which Dmitry Filipov lived fit a man
of stature. He had a nice apartment in a good building on a pleasant
street, counting among his neighbors the regional governor and other
members of St. Petersburg's economic and political elite.
But a bomb that shook his building like an earthquake and blasted Filipov
into the next world has brought the oil tycoon even greater status. Since
his death Oct. 14, Filipov has moved to the most exclusive of neighborhoods.
In so doing, he has followed a path traveled by many of Russia's tycoons:
Use political connections to get control of a private-sector business. Hire
bodyguards. And if something goes wrong, well, make plans for a suitable
place of repose.
In this, Dmitry Filipov did well. Very well.
The 54-year-old former Communist Party bureaucrat was laid to rest behind
the same monastery walls that house such departed Russian luminaries as
Fyodor Dostoyevsky and Peter Tchaikovsky.
The honor of being buried in Alexander Nevsky Lavra tells more about the
influence wielded by the businessman than any of his political or economic
dealings ever could.
"For us in Russia, where a person is buried means a lot," said Anna
Sharogradskaya, a political analyst in St. Petersburg. "That Filipov is in
Nevsky Lavra shows he has a very strong status."
"It's exceptional," she said. "Not even Manevich was buried there."
Mikhail Manevich is one of the most well-known, and some would say most
tragic, victims of St. Petersburg's notoriously bloody fight for power and
A vice governor entrusted with cleaning up the process of selling off state
properties to private businesses, Manevich was killed by a sniper in August
1997 as he was going to work on Nevsky Prospect.
Filipov took over Rosko financial group in 1996 after the previous director
was shot outside his home. The ascension capped an impressive but not
atypical climb from the world of Communist Party politics to high-stakes
After rising through the ranks of the Leningrad Region's government,
Filipov became St. Petersburg's tax chief just as the Soviet Union was
disintegrating. He was fired in 1993, local media reported, but not before
working out a deal to take over the St. Petersburg Fuel Co.
His business gobbled up smaller companies, growing to become one of the
largest in an industry plagued by organized crime.
Filipov branched out, becoming chairman of the board at Bank Menatep in St.
Petersburg and maintaining his political ties. A longtime friend of Gennady
Seleznyov, the speaker of Russia's lower house of parliament, Filipov
reportedly was preparing to bankroll Seleznyov's bid for re-election next
Filipov knew the risks of working in Russia's oil and banking industries,
particularly in St. Petersburg, a city riddled by contract killings. For
the past two years a couple of bodyguards were Filipov's shadow and
according to local media reports, he had answered recent threats on his
life with a vow that any attack would be paid back in kind. None of that
The bomb that killed Filipov was planted in a light fixture in the main
entrance of his apartment building. It blew in the doors of an elevator 15
feet away, sank the cement floor more than 6 inches and shattered windows
around the building's courtyard. Remarkably, no one else was injured.
"We can see now with our own eyes what's happening in our city, that it's
not just on television," said Mariana, a 32-year-old typist who lives on
the second floor and whose windows were shattered by the bomb. "To live in
such a situation, it's difficult, especially for the children."
Mariana remains thankful that neither she, her husband nor her daughter was
out walking the dog at the time of the blast. She also has learned a lesson.
"I've come to the conclusion that if you see a person with bodyguards,
never enter the building with him," she said. "Just wait. Let him go first."
At Filipov's gravesite, a yellow church with an onion dome cast a long
shadow in the low sun over hundreds of flowers. The wreaths were as big as
gasoline pumps.
"The flowers alone will tell you that this was no ordinary funeral," said
Alexander Gorshkov, a local newspaper reporter who investigates organized
A woman named Lyudmilla approached, crossed herself and mumbled a prayer.
She said that Filipov helped a lot of disabled people and pensioners;
surely that was the reason he was honored with burial at Alexander Nevsky.
Gorshkov chuckled.
"All these guys give money to charity," he said.
"That's not the reason. This is something else. This is comparable to being
buried in the walls of the Kremlin."


Analysis From Washington: When Moscow Looks Beyond The CIS
By Paul Goble

Washington, 28 October 1998 (RFE/RL) -- Moscow's projection of military forces
in the countries of the Commonwealth of Independent States may have less to do
with the member states of that organization than with larger Russian policies
toward countries and alliances further afield.
That possibility, seldom considered in the West, was raised last weekend by
Azerbaijani President Heidar Aliev during his meeting with representatives of
the North Atlantic Parliamentary Committee's Committee on NATO Expansion and
Assistance to the Newly Independent States who were visiting Baku. 
Speaking to this group on Saturday, Aliyev said that various Russians had told
him that Moscow was providing large-scale military assistance to Armenia both
to help Yerevan in its conflict with Baku over Nagorno-Karabakh and to put
pressure on Turkey and NATO's southern flank. 
On the one hand, Aliev's remarks were most immediately intended to try to
involve more West European countries in achieving a resolution of the Nagorno-
Karabakh conflict. 
By suggesting that Russia's de facto military alliance with Armenia meant that
Moscow could no longer play the role of a neutral arbiter as co-chairman of
the OSCE Minsk Group charged with resolving the Karabakh dispute, Aliev
clearly hoped to convince the West Europeans to play a new and larger role in
securing peace in the region.
Aliev said that his government was prepared to "grant a high degree of self-
rule to Nagorno-Karabakh within Azerbaijan" but suggested that "we can give
nothing more than that." And he appealed to the West Europeans to "indicate
strongly to Armenia that its additional demands are unfounded and will never
be accepted." 
And the Azerbaijani leader responded to European concerns about human rights
by noting that some international organizations that had focused on the
violation of an individual's human rights in Baku had done little or nothing
about what he called the "mass violation" of the rights of more than one
million Azerbaijanis who have been forced from their homes as the result of
the Nagorno-Karabakh conflict. 
But on the other, Aliev's comments inevitably call attention to a broader
issue that so far has received relatively little attention either in the
countries of the region or in the West: the possibility that Russian actions
in what many in Moscow still call the "near abroad" in fact are directed at
countries in the "far abroad."
With the exception of discussions of so-called flank modifications in the
Conventional Forces in Europe Treaty, most analysts in Russia's neighbors and
the West have considered Russia's military involvement in former Soviet
republics almost exclusively in terms of Moscow's interest in maintaining its
influence there.
Thus, Russian military assistance to Armenia and its establishment of bases
there have generally been considered only in terms of Moscow's desire to play
a major role in the Caucasus. And Russian involvementin the Transdniester
region of Moldova or in Tajikistan has been discussed only in terms of Russian
interests in these countries or in their respective regions more broadly.
While such attention to Russian actions is entirely understandable both in
these countries and in the West, it has three consequences that may prove more
important for international security.
First, such attention distracts analysts from considering whether Russian
moves in this area do in fact have a broader impact. Sometimes they will.
Sometimes they won't. But Aliev's observation may help to sensitize people to
this possibility. 
Second, such attention inevitably increases the concerns many non-Russians
feel about Moscow's intentions. To the extent they see themselves as the
target, they may draw one set of conclusions. To the extent they see Moscow's
aims as broader, they may draw another very different one, something that
could lead them to seek different solutions.
And third, such attention inevitably decreases Western attention to Russian
moves in this region. To the extent that what Moscow does is seen only through
the prism of the CIS or the concept of "newly independent states," many
Western governments may be inclined to play down the implications of what
Russia intends.
To the extent that they view Moscow's goals more broadly as Aliev suggests
they should, Western governments may conclude that they have a greater stake
in dealing with Russia's involvement in the former Soviet republics than they
had assumed.
Clearly, Aliev hopes that Western countries will reach that conclusion about
Russian involvement in Armenia and the Nagorno-Karabakh conflict. But his
analytic point equally clearly applies across the board in this all too
unstable region. 


Patriotic Coalition Lauded, 'Nervy' Comrades Chided 

Sovetskaya Rossiya
October 27, 1998
[translation for personal use only]
Statement by the "Patriotic Information Bureau": "Don't Be in
a Hurry To Play Your Trump Cards"; signed by V. Chikin, chief
editor of Sovetskaya Rossiya, and A. Prokhanov, chief editor of

The coalition of patriotic forces is one of the fruitful areas of our
policy. In the tragic year of 1991, when the Communist Party was banned
and the "democrats" branded Russian traditionalists fascists, the first
unique coalition of "Reds" and "Whites," "Communists" and "monarchists,"
arose. That alliance was blessed by the hierarch, Ioann. It provided the
basis for the National Salvation Front. It fought at the 1993 barricades
under the red and imperial flags. It has prevailed in the
opposition-dominated State Duma.
The People's Patriotic Union of Russia is a complex combination of
parties, movements, ideologies, and methods and forms of struggle. It
unites mature politicians and fervent neophytes, daring radicals and
cautious "evolutionists." Everyone finds his own niche in it and acquires
his own role. Because the enemy which has attacked Russia is exceedingly
strong. His aircraft carriers are in the Mediterranean and the Persian
Gulf. His banks are on Wall Street and in Zurich. His intelligence
services are in Tel Aviv and Washington. We who are waging the national
liberation struggle need every bayonet, every ballot paper, and every
honest and brave soul.
The Luzhkov-Zyuganov alliance about which so much has already been
said is hypothetical. But it is an effective hypothesis and it has thrown
Chernomyrdin, Berezovskiy, and Lebed into a panic. The Presidential Staff
is trembling and ill at ease. This alliance remains to be formed in such a
way that, having put aside differences and deep-seated resentment, having
put aside antagonisms of class and rank, we may together seek to drive the
enemy from the Kremlin, as the people's militia, headed by a Russian prince
and a Russian commoner, drove the Poles thence [in 1612, toward the end of
the Time of Troubles].
The formation of the alliance requires much patience, tact, and
inspiration. It will have to face justified and unjustified attacks. It
may be broken and forced back. All the more regrettable are the instances
of neurotic and inappropriate statements by some prominent oppositionists
who, in criticizing this alliance, are casting a shadow on tested patriotic
leaders and offering themselves as new chiefs. They are aspiring to the
role of self-styled president of Russia.
All this individual activity will end in embarrassment and loss of
face. A nomination to ensure victory is only possible if it is presented
on behalf of the entire coalition of patriots. If it is announced at a
forum of patriotic forces. This forum will determine the strategy leading
to victory. As in every serious battle, commanders of the "left" and
"right" armies will be named, a commander in chief will be named, strategic
allies and strategic foes will be identified.
And for the time being we will offer our nervy comrades a friendly
dose of tranquilizer and assure them that, after victory is won, everyone
will get his due. Especially considering that there will be enough work
for everyone in the Russia destroyed by the Yeltsinists -- for the speaker,
for the prosecutor, for the general, and for the governor -- provided only
that our living goal does not disintegrate but becomes indestructibly
consolidated for the moment of the decisive clash.


Spokesman Disowns Published Version of Government Program 

Moscow, Oct 27 (Itar-Tass) -- The Russian government and Central
Bank's program of top-priority measures to stabilize the social and
economic situation in the country, which was published in the Kommersant
daily on Tuesday [27 October], is only one of the tentative versions, First
Deputy Prime Minister Yuriy Maslyukov's spokesman told reporters.
"Yesterday, this version was discussed and adjusted considerably,"
said the spokesman, Anton Surikov. "As of today, it differs quite
dramatically from the final version in many respects."
"We know who is responsible for this leak," Surikov said. He pointed
out that the person who had leaked the document to the newspaper "already
knew at the time that this version does not correspond to reality."
The government has decided not to publicize its program until it is
completely finalized, the spokesman said.
"In a few days, the program will be published and all of you will be
able to get familiar with it," Surikov told reporters.


Russian Ag minister sees poor grain harvest

MOSCOW, Oct 29 (Reuters) - Russia's grain harvest now drawing to a close is
shaping up to be the worst in decades at 47.3 million tonnes, Agriculture
Minister Viktor Semyonov said on Thursday. 
``The forecast for the 1998 grain harvest is 47.3 million tonnes,'' he told a
news conference. ``This figure could change slightly, since the harvest has
not yet ended.'' The harvest in 1997 was a robust 88.5 million tonnes. 
The ministry's forecast had previously been around 50 million tonnes. 
Russia had threshed 49.7 million tonnes of grain, bunker weight, or direct
from the fields, on October 12, down 46.7 percent from a year earler, with
only 2.4 percent of sown area remaining to be harvested. 
Bunker weight is heavier than final weight due to moisture and impurities. 
Russia's harvests are constantly beset by trouble finding sufficient equipment
and fuel. 


Yeltsin Concentrates on Power Transfer in 2000, Official Says

Moscow, Oct. 29 (Bloomberg) -- Oleg Sysuyev, first deputy director of
President Boris Yeltsin's administration, gave an interview to the Russian
daily Sevodnya. Following are extracts from the interview: 
Question: Not long ago, the president announced that you had been promoted. Do
you feel this to be a promotion? 
Answer: I don't feel it to be a promotion. It's just a different job. Now that
it has become absolutely clear that there will be a new president after the
elections in 2000, regardless of what the constitutional court may judge, the
major objective for the president has become to maintain and transfer stable
power to his successor. He has no right to be interrupted by less important
problems. The president's other objective is to re-review the constitution.
The government has taken full responsibility for the economy. 
Question: Recently, there has been much talk about the trasnfer of power from
the Kremlin to the government... 
Answer: Yevgeny Primakov's candidature has defused the political tension. The
government was formed largely by the parliamentary lower house's majority
which is trying to make the government accountable to it. This kind of power
distribution was impossible in the previous government, which used to be fully
accountable to the President. However, this does not mean that the president
has no control over the government now. 
Question: You have mentioned one of the President's objectives to be a review
of the constitution. What do you think he can come up with? 
Answer: The failures in economic reforms can largely be blamed on the weakness
of the executive power. We have 89 subjects of the federation who are barely
accountable to the federal government. Same problems exist between mayors and
governors -- there is no vertical structure of power. Therefore, we think it
would be appropriate to change the paragraphs of the constitution which say
that a governor must be elected, not appointed. 
Question: The solution of these problems will more or less depend on the
adoption of the law on constitutional assembly. When will the President's
administration be ready to come up with its version of the document? 
Answer: The President can not accept the Duma's proposition of electing the
constitutional assembly members from the members of parliament. We think that
the assembly has to have two chambers -- the chamber of the experts and the
chamber which will make the final decision. The second chamber should consist
of elected representatives. 
Question: Aren't there questions about the costs of such elections? 
Answer: The problem may be solved by running the constitutional assembly
elections at the same time as the Duma elections. I think the procedure will
be defined before the end of the year. 
Question: Meanwhile, the constitution together with the elected governors stay
the same. The federal center used to make agreements with them on power
division. Are you ready to continue this work? 
Answer: I'm convinced that all such agreements previously concluded have fewer
pros than cons. No future agreement must go beyond the limits of the
constitution and federal laws. It is important for the governors to show their
population they have a kind of special relation with Moscow. However, we shall
do our best to make sure the future documents do not affect the integrity of
the federal state and its economic unity. 


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