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Johnson's Russia List


November 8, 1998    
This Date's Issues: 2465 2466 

Johnson's Russia List
8 November 1998

[Note from David Johnson:
1. Reuters: Alastair Macdonald, ANALYSIS-Yeltsin ``revolution'' may be

2. Anonymous: Request for information on northern regions. (DJ: I can
forward responses or circulate them if of general interest.)

3. Boston Globe: David Filipov, Russia's Arctic north holds extra perils 
in coming winter.

4. Barbi Harris: homeless children in Russia.
5. Web page of Moscow Center for Arms Control, Energy and Environmental 

6. AP: Russia Tycoon: Ban Communists. (Berezovsky).
7. Fred Weir: Re 2464-Ekman/Lubyanka Demo.
8. New York Times editorial: Parlous Times in Russia.
9. Los Angeles Times: John-Thor Dahlburg, WHAT NOW FOR RUSSIA? 
10. Washington Post: Jim Hoagland, Russia: What Went Wrong?
11. Itar-Tass: Winter Fuel Reserves in Regions Said Very Low.
12. Rossiyskaya Gazeta: Russian Market 'Strategically Important' to U.S. 

13. Radio Rossii Network: Russian Business Tycoon Potanin Says Thieves 
Siphoned IMF Money.]


ANALYSIS-Yeltsin ``revolution'' may be over
By Alastair Macdonald

MOSCOW, Nov 8 (Reuters) - Russia's era of revolution is over, Boris Yeltsin
said on the 81st anniversary of the Bolsheviks' seizure of power in 1917. 
``The revolutionary period in Russia's history is over. Finished. Forever.
There can be no repeat,'' Yeltsin said. 
The sight of the tired-looking 67-year-old president, speaking on Saturday
from the Black Sea resort of Sochi where he has spent more than a week
convalescing from exhaustion, gave the impression that the Yeltsin era may be
all but over too. 
Claiming credit for putting paid to authoritarian communism and installing
democracy in Russia, the ailing president sounded to many like a man more
concerned with history, and his place in it, than with the problems of the
Strengthening the sense of a coming sea-change in Russian politics came a
ruling by the Constitutional Court last week that Yeltsin could not stand for
a third term in 2000. The 1993 constitution sets a limit of two consecutive
For over a year Yeltsin and his aides had kept up the suspense, suggesting his
first election in 1991 under the Soviet constitution might not count and
hinting he might try to hang on to power. So what was startling was that the
decision, by judges largely approved by Yeltsin himself, caused barely a
``(The Constitutional Court) drew a line under the Yeltsin era only in a
formal sense,'' Georgy Satarov, a former senior aide to the president, told
Interfax news agency at the weekend. 
``History had already effectively done so.'' 
Even some of his allies have suggested the president should step aside. Forced
to curtail travel plans last month because of what the Kremlin says is fatigue
and irregular blood pressure, some question whether he is fit to see out his
last 20 months. 
Typical of the mood, a television channel that was one of Yeltsin's loudest
anti-communist backers in the 1996 election, aired a film last week to mark
the second anniversary of his heart bypass surgery. Sketching unflattering
parallels with senile 1970s dictator Leonid Brezhnev, it concluded Russia's
leaders were often too addicted to power to give up willingly. 
Seemingly a lame duck leader, Yeltsin has passed much of the responsibility
for policy to Prime Minister Yevgeny Primakov, although the president
personally retains huge constitutional powers and control over the world's
second nuclear arsenal. 
The Kremlin said on Sunday he would return to Moscow later this week to meet
Japanese Prime Minister Keizo Obuchi. 
But the political focus has shifted firmly to Primakov, the 68-year-old former
spy chief, and his efforts, criticised in the West as a retreat from market
reforms, to dig Russia out of its worst economic crisis since the collapse of
Potential candidates are already gearing up for the battle to succeed the
president in an election many expect soon. 
The collapse of the state finances and sharp devaluation of the rouble in
August, five months after Yeltsin had said he was stepping in personally to
supervise economic policy, opened the way for his communist opponents in
parliament to force him to appoint Primakov and a communist first deputy
The economic crisis confirmed the disillusion of most Russians with Yeltsin's
seven years of market reforms, which have been marked by hardship and
corruption on a grand scale. 
An opinion poll last week found just six percent solidly in favour of market
economics, while Yeltsin's personal approval rating has long been in the low
single figures. 
The president seems concerned now with preserving his place in history. His
address on Saturday to mark the 1917 revolution anniversary -- which he has
renamed Reconciliation Day -- was laced with a strong dose of self-
justification for his rule. 
``I was not mistaken,'' he said referring to his decree redesignating the
November 17 holiday. It was a sentiment that he seemed to wish to apply more
Mindful perhaps of threats from hardliners to begin criminal proceedings
against him -- parliament has already begun a move to impeach him -- Yeltsin
stressed that even today's communists were ``civilised'' and believed in
democracy and the free market. 
``No matter how much our reforms are criticised today, they have achieved
their main purpose,'' Yeltsin said. ``They have changed not only the course of
history but people's minds, from animosity and hatred to tolerance and
Satarov said history would remember Yeltsin for that. 
``In the late 80s, the country needed just such a man,'' he said. ``He ran
ahead of us, threw himself at the wall and smashed it down...And if we're now
in a rush to reject Yeltsin, it's simply because Boris Nikolayevich has
accomplished his mission.'' 
Powerful business and media tycoons rallied round a deeply unpopular Yeltsin
in 1996 when there seemed a danger of a victory for old-style communism. That
threat has now faded and a new generation of politicians seems ready to take
the Kremlin. 
Yeltsin has been down before, however, and some analysts warn against counting
him out too soon. 
``Boris Nikolayevich (Yeltsin) is known as a seasoned fighter who could yet
unsheath his claws,'' his former campaign adviser Vyacheslav Nikonov told
Interfax at the weekend. ``It may be Boris Yeltsin himself who decides when
the Yeltsin era is over.'' 


Date: Fri, 06 Nov 1998 
From: anonymous 
Subject: Request for information on northern regions

In confidence, I work for the...government and we are currently in
the process of organizing some type of governmental response to the
humanitarian crisis in Russia...Our focus would be the northern regions of
Russia, where the preparations for winter are demonstrably poor. 

The problem is this: there is a dearth of up-to-date information on
precisely what is the situation in the north, which regions are the most at
risk, what local Russian initiatives are in the works etc...Without
reliable information, it is difficult to plan a response....It is
difficult to get information out of the regions. It seems to me that with
the numbers of people that I am sure you reach, some of your readers may
have information. 


Boston Globe
8 November 1998
[for personal use only]
Russia's Arctic north holds extra perils in coming winter 
By David Filipov (

MURMANSK, Russia - Lyubov Anastasyeva shivered and cast a worried glance at the
aging heating duct in Murmansk's Special Home for Children. It was a tad
chilly inside the orphanage she runs in this port city 1,000 miles north of
Moscow, but this was only November. 
Winter, and three months of bitter cold and polar night, are a few weeks away.
But already Anastasyeva has run up debts to keep the orphanage, home to 66
infants and toddlers with birth defects or other medical problems, heated and
And the power companies, with huge debts of their own, have begun limiting
service to deadbeats, even if they are helpless children. 
And that's not all. With the city government that funds the orphanage bankrupt
in the wake of Russia's economic crisis, Anastasyeva has no medicine and
barely enough food to keep the children fed. 
``We used to be able to solve these problems, but the prices have become too
high for us,'' said Anastasyeva. ``It's humiliating and there's a lot I don't
This is the harsh reality of winter in Russia's far north, a remote,
inhospitable place where some 12 million people live. They are the legacy of
Soviet leaders' efforts to tame the harsh tundra and tap the region's abundant
natural resources. 
The Soviet centralized economy could afford to keep towns and cities alive in
the vast Arctic. But the annual ``Northern Deliveries'' of food, fuel, and
supplies have become a luxury that cash-strapped post-Communist Russia can ill
This year, after the August devaluation of the ruble sent the economy into a
tailspin, the burden has become too great. Shipments of food and fuel have
dropped to half their usual levels, according to Russia's Ministry for
Emergency Situations. With winter near, the waterways that supply the most
remote regions are now frozen. Costly air routes are now the only alternative.
With no money to pay for shipments, northern regions are doing without. 
Already, the Yakutia region in northeastern Siberia and Chukotka and Koryak on
Russia's north Pacific coast, areas where temperatures can plunge below minus
40 degrees Fahrenheit, have imposed strict fuel rations. Residents of Sakhalin
island on the Pacific receive only a few hours of light and heat per day. On
Kamchatka peninsula, in the grasp of an early cold snap, the average
temperature inside apartments has dropped below 50 degrees Fahrenheit. The
region last week appealed to the United Nations for ``fuel aid.''
Russia's fleet of atomic ice-breakers used to play a critical role in
supplying many northern regions by carving paths for supply ships from
Murmansk along the country's Arctic coast. But six of Russia's eight ice-
breakers have been retired or laid up for long-term repairs. The Murmansk
Shipping Co., which operates the two remaining ships, has no money to pay for
Russian lawmakers have called for the evacuation of over 1 million residents
of the worst-hit areas. Some economists have said for some time that the whole
concept of the northern cities should be acknowledged as a bad Soviet idea and
be permanently closed. But this week, Tatyana Regent, head of Russia's Federal
Migration Service, acknowledged that the rest of the crisis-hit country has no
place to put them. 
Murmansk, home to 500,000 people, has fared better than most northern cities,
thanks to a rail connection with central Russia and an ocean port that never
freezes. But the city and the surrounding Kola Penninsula are still in dire
straits. In September, Governor Yury Yevdokimov appealed to Norway, Finland,
and Sweden for food aid. 
Yevdokimov's deputy, Igor Chernyshenko, said some 50,000 to 60,000 residents
earn less than half the subsistence minimum of $47 a month and require
From 1991 until 1994, Murmansk region received 6,000 tons of food aid a year,
Chernyshenko said. In 1998 it has received a mere 80 tons. 
``No one has ever died of hunger or cold in Murmansk,'' Chernyshenko said.
``This year, I am concerned.''


Date: Fri, 06 Nov 1998
From: Barbi Harris <> 
Subject: homeless children in Russia

I'm hoping you can hook me up with some information or references.
I am looking for current information regarding the problem of homeless
children in Russia. My teenage son was very moved by a tv story on the
news. He wants to collect mittens and socks for the children in Moscow.
I will be in Moscow in March as part of a Medical Mission,and will have
them delivered to the childrens welfare workers for the children.


From: "nikst" <>
Subject: Center for Arms Control, Energy and Environmental Studies
Date: Fri, 6 Nov 1998 

Moscow Institute of Physics and Technology Center for Arms Control, Energy and
Environmental Studies - non-governmental organization which studies
problems of nuclear weapons reduction. 

Russian version = 

Russian Strategic Nuclear Weapons (in Russian) - a book, published
recently by the Center 
Nuclear Disarmament and Transparency Measures - in Russian (by Prof.
Anatoli Diakov, presentation at the seminar, organized by the PIR Center on
October 8, 1998) 
The Future of Russian-U.S. Strategic Arms Reductions: START III and
Beyond (meeting jointly organized by the Security Studies Program of
Massachusetts Institute of Technology and the Center for Arms Control, 
Energy and Environmental Studies of MIPT, February 2-6, 1998). 
The Meeting Summary is published in July, 1998). 
Nuclear Arms Reduction. The Process and Problems (published in English
in June,1998) 
Further Nuclear Reductions: Our Center's Vision (problems of START II
ratification, preservation of the ABM Treaty, disposal of weapon-grade
plutonium, etc.) 
Papers on submarine related issues (strategic sea based forces,
submarine detection, nuclear powered submarine disposal, etc.) 
START II Treaty and Further Nuclear Arms Reductions (START Web site)
(events, publications and discussions on START II Treaty related issues - this
information page is again updated weekly) 
Arms Trade and Military & Technical Cooperation Register 

9 Institutski Dolgoprudny, Moscow reg.
141700 Russia
Phone/Fax: 7 (095) 408 6381


Russia Tycoon: Ban Communists
November 8, 1998

MOSCOW (AP) -- Russia's Communist Party is causing the country to splinter
and should be banned, a prominent and controversial businessman said Sunday.
Russian business tycoon Boris Berezovsky criticized the Communists for their
continued support of parliament deputy Albert Makashov, a Communist who
received only a light reprimand from his party after making anti-Semitic
remarks last month.
``As was the case with the Soviet Union, which split into ethnic entities, the
Communists are now causing the Russian Federation to split into ethnic
entities,'' Berezovsky said, according to the Interfax news agency.
Some Communist speakers at Saturday rallies celebrating the 81st anniversary
of Russia's revolution said Makashov was a hero who was unfairly vilified by
other politicians and the press for his remarks.
``By expressing their solidarity with Makashov at a rally in Moscow on Nov. 7,
the Communists placed themselves outside civilized laws and outside Russian
laws,'' said Berezovsky, who is of Jewish origins.
Berezovsky, who heads the Commonwealth of Independent States, a loose
coalition of former Soviet republics, also said that the Communist Party was
to blame for the collapse of the Soviet Union and ``must be immediately banned
in Russia.''
The Communists are the country's leading opposition group and have the largest
faction in parliament's lower house, the State Duma.
The Communists have frequently criticized Russia's business ``oligarchs,''
including Berezovsky, saying they have taken control of large chunks of the
economy through corrupt, insider deals.
The businessmen in turn have been critical of the Communists, saying they are
determined to keep economic control in state hands.


From: "Fred Weir" <>
Subject: Re: 2464-Ekman/Lubyanka Demo
Date: Sun, 8 Nov 1998 

Well, I suppose I have to do the hardest thing, and eat crow. Peter
Ekland is surely right to lambaste the estimate of 50,000 participants I
used in my story on the November 7 Moscow demo. I take numbers fairly
seriously, so this exercise can't be avoided.
I have a very early deadline for the Hindustan Times, usually around 1
pm Moscow time for a weekend news story. I was at October Square early in
the morning, watched the KPRF rally forming up and then the Anpilov
demonstration gathering -- it later held a meeting at Vasilyevsky Spusk, by
the Kremlin -- then arrived at Lyubyanka around 11, just as the KPRF march
was arriving there. There was definitely vastly more people than the later
police estimate of 8,000, but how much more is hard to tell when they're
strung out on those broad avenues. I had an estimate of 100,000 from one of
the KPRF organizers, which I halved in my mind, and rushed off to write my
story. It was a mistake that would have been corrected by hanging around an
hour longer, if I could have. My memory of these things is that the police
grossly underestimate, while the organizers do the opposite. Reporters
usually tend toward the police estimates, partly because they're official
and partly because we're affected the general sense of decline and
disappointment (in the midst of objectively explosive social conditions)
that surrounds the KPRF and all its works.
Judging by all subsequent reporting, I must have been very high on the
estimate of that demo and I'll accept that. I also agree with Peter Ekland
that the general impression of these demonstrations is a sad one. This is
not, however, because Russians don't agree with the KPRF's rhetorical
positions -- ie. Yeltsin should be impeached, the elite have robbed and
pillaged the country, it was a mistake to disband the USSR, etc -- because
virutally all surveys show they overwhelmingly do. It's because the KPRF has
totally failed to come to grips with its own history and pose a new set of
ideas (drawn either from the nationalist or the communist streams that it
bathes in) delivered in contemporary language. What we see at these
demonstrations is not fresh people inspired by the KPRF, but all the old
ultra-conformists of yesterday. Hence the mismatch between revolutionary
rhetoric and dull, resigned civil obedience on the march. Still, there are a
helluva lot of those old conformists, even in Moscow. Best regards, Fred.


New York Times
8 November 1998
Parlous Times in Russia

With food stocks dangerously diminished by a disastrous harvest and the
economy still reeling, Russia is headed into a winter of deprivation and
discontent. The critical question is whether Russians will stoically endure
another season of hardship, as they have so many times before, or strike out
in anger against the political order. 
The answer depends in part on decisions taken in Moscow and Washington in
the days ahead. With President Boris Yeltsin sidelined by illness and in
political eclipse, Prime Minister Yevgeny Primakov must develop a program that
pulls Russia back from the abyss without abandoning democracy and economic
reform. The United States must do whatever it can within reason to help Russia
get through the winter and start down the long road to recovery. 
Mr. Primakov is off to a shaky start. Though he shows little inclination to
reverse course entirely and return Russia to a Communist-style command
economy, he is embracing anachronistic advisers and policies that threaten to
put Russia in a state of perpetual decline. 
Mr. Primakov inherited a desperate situation. The Government cannot pay its
bills, food imports have declined precipitously, foreign investors have fled
and prices are skyrocketing while wages and pensions are stagnant, if they are
paid at all. 
But the economic plan Mr. Primakov recently outlined is misguided. It does
little to deal with the oligarchs who control enterprises that have refused to
pay taxes, and thus helped bring on the Government's fiscal crisis. Instead,
it seeks to prop up favored enterprises and print rubles to pay back wages and
other Government obligations. The Government says it wants to avoid the
hyperinflation that will surely come if it prints too many rubles, but its
only strategy to avoid this is to ask for Western aid. 
Previous efforts to reform Russia's economy collapsed for a variety of
reasons, including corruption and effects of the Asian economic implosion that
scared investors and depressed the prices of commodities Russia exports, most
notably oil. But that failure does not justify a return to the failed strategy
of Soviet-era economic planning. 
Russia badly needs foreign investment. To get it, the country will have to
do more to establish rules of law so that investors know what they are getting
and to assure that the capital is put to productive use, not siphoned into
foreign bank accounts. 
Russia will also need to negotiate acceptable terms for restructuring the
billions it already owes. If foreign companies can be persuaded to help
develop Russian natural resources, and to make use of the highly educated work
force, a prosperous Russia could eventually evolve. 
For now, the outlook is grim. The International Monetary Fund has rightly
refused to support Mr. Primakov's plan, but aid for Russia may still be
necessary. After the poor harvest, the country needs food aid this winter, and
the United States has promised $625 million worth of grain, meat, milk and
other goods. More should be provided if donors can assure themselves that the
food will feed the needy, and not benefit the powerful. 
These are perilous days in Russia's passage from tyranny to democracy. To
navigate them safely, Mr. Primakov and Russia's friends in the West should not
assume that the patience of the Russian people is infinite. 


Los Angeles Times
November 8, 1998 
[for personal use only]
The dream of a better future is growing dim for most people. Economic
collapse and political paralysis have eroded post-Soviet optimism. Most
Russians believe that harder times are still ahead. 
By JOHN-THOR DAHLBURG, Times Staff Writer

MOSCOW--It's impossible to understand this country with cold reason, cautioned
19th century poet Fyodor Tyutchev: "In Russia, you can only believe." 
Grigory A. Tsvetkov, a computer programmer, is one 20th century Russian
whose faith has run out. 
The 45-year-old Muscovite's salary has been whittled by economic crisis
to the equivalent of less than $20 a month. It was August when he last was
paid. He wants to emigrate with his wife and children, ages 13 and 15. 
"We were ready to wait and struggle for five, 10 years, but seven years
have passed, and our leading democrats we trusted and loved turned out to be
thieves and liars, our president turned into a senile old man who doesn't
care, simply doesn't care, about his people," said the bearded and
bespectacled Tsvetkov, who has been importing and selling used cars from
Germany and France to support his family. "To put it briefly, we want to have
a normal life now--and not in a generation or two." 
Where once in post-Soviet Russia there was wildly optimistic talk about
becoming a "normal, civilized country" in a decade or less, there is deep,
pervasive gloom. Many, if not most, people wonder whether things will ever
This autumn, a survey of 1,500 Russians found existence of late has
become so much worse that fully half of those polled "don't know how they are
going to live further." 
"Where did we go wrong?" the director of a regional hospital asked as she
flew recently on a Tupolev jetliner to St. Petersburg for a refresher course
in medicine. 
Also unpaid for months, the physician, in her late 60s, slipped the pat of
butter from the airline meal into her pocket as she described how her hospital
had no more funds to purchase pharmaceuticals or meet staff salaries. 
"Perhaps we didn't have the right people at the top," she said. 
Political paralysis in Russia ended with the September appointment as
prime minister of Yevgeny M. Primakov, former foreign minister, head of the
espionage service and Soviet-era Communist Party apparatchik. But distressing,
seemingly insoluble economic problems, and dashed expectations, remain. 
"In 1991, the regime of which everybody had been sick and tired
collapsed, but people had savings, enthusiasm and hopes," Alexander I. Lebed,
a former Soviet army general who hopes to use his position as governor of the
Krasnoyarsk region as a springboard to the presidency, said recently in
Moscow. "Today they have nothing of this. No savings. Their hopes are almost
dead. The credit of trust is almost used up." 
In contrast with the euphoria that crested with the end of the Soviet
Union in December 1991, many thoughtful Russians believe that their homeland
has entered a long and dreary phase of economic hard times and of inglorious
political leadership. 
For the United States, the fate of this former superpower is of great
concern if only because it possesses about 10,240 nuclear warheads. In
Washington, where a State Department official has likened Russia to a car that
is spinning wildly after hitting a patch of ice, the debate is over whether
Russia has been "lost"--and if so, who lost it. 
Two competing scenarios--the return to some sort of socialism or the rise
of a nationalist strongman--are said by some observers to be possible, but not
as likely as a long, gray period of muddling through. Disappointed with a
decade's worth of leaders who first promised a reformed Soviet system, then
Western-level politics and economic bounty, many Russians are no longer ready
to believe in anyone offering a miracle. 
A crimson banner hanging near the White House, seat of the Russian
government, sums up prevailing suspicions succinctly and rudely: "All bosses
are bastards." 
"Our people do not trust anyone anymore--they do not trust the
government, they do not trust their neighbors, they do not trust the rest of
the world," said Dmitri Y. Furman, a Russian historian. "But what is most
important, they have lost faith in themselves. A nation that has never had a
chance to determine its own fate does not trust its own judgment. 
"But least of all," Furman added, "they trust the so-called elite, the
highest echelons of power, which for decades attracted like a magnet the most
despicable, unworthy, dishonest and immoral members of society--the ones who
were capable of surviving in the Communist Party machine and rising to the
very top." 

A Disastrous Plunge in Living Standards 

For a people who endured decades of socialist shortages and bread lines,
the free market promised to be a veritable horn of plenty. Perhaps it will
prove to be yet. But the short-run results for many, if not most, Russians are
little short of catastrophic. 
According to Graham Allison of Harvard University, a former assistant
secretary of Defense, ordinary citizens here have suffered, on average, a 75%
plunge in living standards under President Boris N. Yeltsin's rule. That is
almost twice the decline in Americans' income during the Great Depression. 
Veniamim S. Sokolov, public accountant of the Audit Chamber, a government
watchdog agency that tracks state expenditures, recently estimated that Russia
was $200 billion in debt, while $300 billion had been pillaged and covertly
transferred overseas. 
It sounds like a one-liner from "The Tonight Show," but Russia's economy
is performing so poorly that the Federal Security Service, the spy agency that
is heir to the KGB, has said it will have to let some employees go. 
"We pinned all our hopes on the free market, which we believed would cure
the country and rectify all wrongs," said Pavel G. Bunich, an economist and
lawmaker in the lower house of parliament who is also a member of the Russian
Academy of Sciences. "Instead, we ended up with utter anarchy and disorder. We
have a situation when everything is allowed, when thieves of all sorts have
ripped the country off and gotten away with it, for there were no laws." 
So the moroseness of the moment is understandable. But deeper and more
subtle processes also have been at work in Russian society in the 1990s, which
make the current question--whither Russia?--more difficult to answer. 
Civil liberties, such as the freedom to speak one's mind, that the Soviet
Communists tried to eradicate as bourgeois perversions have taken root
speedily and firmly in Russian soil. So has the concept of private
property--one former high-ranking Soviet official in the current government
holds a controlling interest in half a dozen business ventures. 
And a land that deliberately kept itself isolated--Russians in the 1960s
could not understand Beach Boys songs played over the Voice of America radio
because dictionaries here did not include the word "surfing," which Russians
assumed was an obscene synonym for fornicating--has proved eager to rejoin the
rest of the world. In the heart of Siberia, halfway around the globe from
Hollywood, a newspaper on sale this autumn was carrying jokes about the movie
"I would not wholly subscribe to the point of view that one of the
pillars of Western civilization, namely the principle of democracy, has not
worked in Russia," political analyst Andrei A. Piontkovsky, usually a
blistering critic of present-day Russia, told a foreign journalist. "For if
that were so, we would not be able to have this interview, and I'd have to
think many times before telling you what I really thought." 
There are competing diagnoses of the changes experienced by Russia in
recent years. One argument says that this continent-sized nation skirted by
Roman law, the Renaissance, the Reformation and the Enlightenment--in short,
by the formative experiences of the West--does not have it in its collective
gene pool to be democratically governed and prosperous. 
"One has to bear a great deal of faith and love in one's heart in order
to keep any hope at all for the future of the most powerful of the Slav
tribes," T.N. Granovsky, a prominent Russian scholar, sadly wrote to a friend
abroad. That was in 1854. Events in the next few years will show whether, once
again, the pessimists are right about Russia. 
Underlying the new government's obvious priorities--shoring up the ruble,
paying back wages, ensuring people have food and heat during the winter--is an
urgent psychological task: winning back people's trust. It may be mission
impossible; one poll this autumn found that Yeltsin's approval rating was a
mere 1%. 
With disconcerting regularity, Russian television has been showing the
populace its sick and sometimes befuddled leader. Recently, after a bizarre
public exchange between Primakov and Yeltsin's spokesman, it was uncertain
whether Yeltsin was being kept informed about even the most crucial matters of
"Unfortunately, there's not much money, there's a lot of people to be
loved, and we have to combine that," Russia's president--his words slurred,
his pasty face contorted from hamming for the camera--said in one surreal
televised moment. 
Late last month, aides to the 67-year-old Yeltsin said he was suffering
from a debilitating disorder that will force him to play less of a role in
government. He may not be able to serve out his full term, which runs until
2000. On the other hand, nothing compels him to leave office immediately. 
"We have a czar again, who can sit in the Kremlin and drink," a 60-year-
old tourist from the Urals, Yeltsin's home region, lamented during a visit to
the Stalingrad battle memorial in Volgograd. 

Stranded in 'a Land of Permanent Promises' 

There are already many hopeful successors--the retired Gen. Lebed, Moscow
Mayor Yuri M. Luzhkov, Russian Communist leader Gennady A. Zyuganov, liberal
economist Grigory A. Yavlinsky. Their challenge will be to build a nationwide
base of support and staunch the hemorrhage of popular confidence in Russia's
Can it be done? Perhaps not. In 1992, a team of young Russian liberals
lifted socialist-era economy controls, and Russians saw prices soar by more
than 2,000%. Another, supposedly reformist plan to give each citizen an equal
share in the businesses and industry built under the Soviets resulted in
wealth and political power rapidly falling into the hands of a few nouveaux
riches known as the oligarchs. 
Last August, under Primakov's predecessor, political neophyte Sergei V.
Kiriyenko, Russia in effect devalued its currency, defaulted on government
treasury bills and delayed the repayment of private debts to foreigners. The
ruble tumbled, big banks shut their doors, and Russia's leaders discredited
themselves again. 
"Yet another time, the government has told its people, 'You can't rely on
us,' " said Vladimir A. Poleshchuk, deputy governor of the Kemerovo region, an
area of Siberia as large as Maine. 
Like many of his fellows elsewhere in the country, Poleshchuk is now
working to insulate his region economically and politically from the whims of
the capital. 
Russia, with one dominant ethnic group, language and culture, seems in no
serious danger of spinning apart, as did the Soviet Union. However, the logic
of events should continue to drain power and influence from inside Moscow's
Ring Road to the country's 89 oblasts, republics and other constituent areas. 
"Now it is clear--the transition will take decades, with retreats,
defeats and crisis," Anatoly B. Chubais, the former head of Russia's
privatization program that turned into a fire sale of state assets to
insiders, told a Moscow newspaper recently. His biggest mistake, Chubais said,
was to believe that the Russian economy could be reinvented in a few years. 
In this season of uncertainty, Alexi II, patriarch of the Russian
Orthodox Church, has been urging his flock to have courage and be patient. The
Orthodox prelate even went to a Moscow picture gallery in September to pray to
the Virgin of Vladimir, the icon said to have saved the Russian capital from
invading Mongol horsemen six centuries ago. 
"We believe that the Lord will spare our motherland misfortunes,
suffering and civil strife," Alexi said. 
Tsvetkov, the computer programmer who wants to emigrate, now believes
that it will take a generation, maybe two, for things in Russia to stabilize. 
"We want to live in a normal country," he said, "where if you have a job,
you know that you can buy the things you want, you can pay rent and have an
apartment or house, you can go to the hospital and expect to be treated rather
than humiliated, cheated and murdered, where you can put your money in a bank
or a mutual fund and not wake up in a cold sweat every night worrying about
it, where you can trust your government leaders, where you can at least
understand what they say on television and not be ashamed of them. 
"I am sick and tired of this sort of living in a land of permanent
promises, that looks like a huge dirty railway station where all the trains
are late or going the wrong way," Tsvetkov said. "Now I know my train will
never arrive. I am stranded at the wrong station." 
Sergei L. Loiko of The Times' Moscow Bureau contributed to this report. 


Washington Post
November 8, 1998
[for personal use only]
Russia: What Went Wrong?
By Jim Hoagland

Food grows scarce and gallows humor abundant in post-reform Moscow. One story
making the rounds is that only two scenarios exist for the recovery of the
Russian economy: The optimistic scenario is that aliens will descend from
outer space and put things right. The pessimistic scenario is that the job
will be left to the Russians themselves.
Like most jokes, this joke is no joke. It captures the current and dangerous
mood of many Russians, as reflected in their media and by a growing stream of
Russians journeying to Washington to glimpse the future as seen here.
The aliens -- western financiers, IMF and U.S. Treasury experts and other
envoys of capitalism -- have in fact already landed and turned their invisible
monetary ray guns on the populace, in the view of some Russians. Now they are
departing, leaving the Russians to deal with the destruction these
otherworldly economic experiments have wrought.
Whether the capitalist aliens had good intentions that misfired or simply hid
evil designs to break up Russia is the subject of intense and important debate
among Russians. The initial, knee-jerk mood of bitterness and blaming of
others for their problems grows deeper and more serious as winter approaches,
as detailed post mortems of the western role in the Russian financial debacle
emerge and as Russians wonder: Where did the billions go?
The evil conspiracy theory gives false credit to U.S. policymakers for single-
mindedly following a plan to bankrupt and fragment Russia. Try to imagine
George Bush or Bill Clinton having the daring or the sustained attention and
energy to carry out such a secret plot. Face it, comrades: The notion is
A stronger case can be made for a more subtle proposition: The conditions for
loans set by the International Monetary Fund, guided by the U.S. Treasury and
State Department, did not cause but clearly contributed to the de-
industrialization and impoverishment of post-Communist Russia. That case is
outlined in a new study, "The Russian Crash of 1998," written by Sergei M.
Rogov, director of Russia's USA and Canada Institute, and published by the
Center for Naval Analyses in Alexandria, Va.
Rogov acknowledges quickly and correctly that Russians are responsible for
their own fate. But he says the IMF's insistence on monetary orthodoxy
resulted in sky-high Russian interest rates that helped smother productive
investment at home. To meet IMF concerns about inflation, the central bank
kept rubles out of the hands of Russian workers and consumers. This created
the "virtual economy" of weak financial markets and foreign-financed
speculation that collapsed last summer.
Does the argument, this continuing reconstruction of who shot John or in this
case who lent to Ivan, matter outside Russia? Or should Russian
disillusionment with the West simply be met by western frustration and a
shrugging, inward-turning, file-closing rejection of continued involvement
That approach is tempting but shortsighted in the extreme. Western
institutions need to examine with honesty their failures or inadequacies in
the most important failed global enterprise of this decade: integrating a
democratic, free-market and viable Russia into the world community.
And there is a broader point. Washington and other capitals have an enormous
stake in the writing of the history of the Yeltsin era that has begun in
Moscow. Remaining engaged in the intellectual and psychological dimension of
the Russian crisis, which is now paramount, is a vital western responsibility.
Joschka Fischer, Germany's new foreign minister, made just that point on his
first visit to Washington the other day. "Russia must develop a strong civil
society," he said, contrasting America's reliance on community and private
institutions to Russia's history of centralized authority. "The cultural
traditions of the free market are needed in Russia" more than financial
techniques and loans, and should have been emphasized more all along.
The secretive IMF and the Clinton administration resist public review of the
internal debates and analyses on Russia that preceded the August debacle. When
several former officials urged an in-house full policy review recently as a
way of figuring out where to go next, the State Department scotched the idea.
Instead, a policy adjustment now is underway: The United States expects little
from and promises less to a self-isolating Russia in the immediate future.
Deputy Secretary of State Strobe Talbott gave voice to the new looser
engagement in a gloomy, skeptical speech at Stanford on Friday.
Talbott predicted further deterioration in the Russian economy because of the
policies being followed by Yevegeny Primakov's government, and went to great
lengths to deny any U.S. intent to break up Russia..
The final two years of the Clinton presidency then are unlikely to be a time
of effective new initiatives toward Russia. The time could profitably be
devoted to assessing where we have been as a way of charting where we are
going, though.
Sen. Chuck Hagel ( R-Neb.), a refreshing new voice on foreign policy on
Capitol Hill, suggested in a recent speech at Harvard that the 106th Congress
undertake sweeping oversight hearings on U.S. foreign policy to "encourage new
ideas and new solutions."
Russia is the right starting point for a truly bipartisan and constructive
congressional review of what, and how, official Washington can do better


Winter Fuel Reserves in Regions Said Very Low 
Moscow, 4 Nov--The situation regarding the Russian economy's readiness
for the autumn and winter period remains complex, says a release of the
press service of the Fuel and Energy Ministry, which ITAR-TASS receivedtoday.
The document says the Russian Fuel and Energy Ministry on Monday [2
November] discussed progress in preparations for the forthcoming autumn and
winter period, and said that in some regions fuel reserves still remained
critically low. So, in Magadan, Sakhalin, Chita, Novosibirsk, Ivanovo,
Archangel, and Murmansk Regions, and in Maritime, Khabarovsk and Altay
Territories coal reserves even went down in October.
On 1 November, the document says, coal reserves at the country's
electric power stations were just over 85 percent of the target and fuel
oil reserves 85.2 percent.
In the opinion of the Fuel and Energy Ministry, the extremely low
level of funding is to blame for the delays in preparations for the winter.
The Russian Finance Ministry has in practice failed to implement the
government's decision on funding. So, of R313 million that was to be
allocated in October to the Far East regions as compensation for tariffs,
only R60 million has in fact been allocated. Of R1.7 billion that was
supposed to have been allocated by 15 October to the far north regions as
state support for fuel deliveries before the end of October, only R58
million has been allocated.


Russian Market 'Strategically Important' to U.S. Farmers 

Rossiyskaya Gazeta 
5 November 1998
[translation for personal use only]
Report by Aleksey Baliyev, Dmitriy Ivanov: "Let Us
Congratulate the Americans: 'Bush Legs' Are on Our Tables Again.
U.S. Food Deliveries Have Been and Still are Form of Indirect
Subsidy for U.S. Farmers"

This year we will have to recall the long-forgotten expression "the
second front." This is precisely what we called U.S. canned stewed meat
and other products given to the USSR as aid during World War II. Talks
between the Russian Government and the U.S. Agriculture Department indicate
that Russia will not be left without U.S. grain and meat.
According to Russian Government Vice Premier Gennadiy Kulik, head of
our delegation, U.S. food will be exported to Russia within the framework
of the state program of aid to foreign countries under the "Products"
section and within the framework of humanitarian deliveries. Kulik noted
that it is also planned to import food from the United States on special
credit on terms acceptable to Russia.
Aid is needed above all because, for example, this year's Russian
grain crop harvest totaled only around 50 million tonnes -- this is the
lowest indicator in the last half a century. Moreover, last year almost 90
million tonnes of grain was harvested.
The situation this year is such that we have only 14 million tonnes of
our own food wheat which is needed to bake bread, although over 20 million
tonnes is needed to last until the next harvest.
In turn, the Agrarian Market Conditions Institute estimates the meat
shortage in Russia at 600,000 tonnes. The "freezing" of imports will
ravage meat counters even more.
Remote regions -- the Far North, many Siberian regions, the Far East
-- are experiencing especially difficult conditions. This winter they risk
being left without any proper food at all. That is why during the talks
attention was mainly devoted to urgent food deliveries to these particular
regions.It has been learned that the question of deliveries to Russia of up to
3-4 million tonnes of products, including at least 1.5 million tonnes of
grain, is being discussed during the talks. The final volumes are being
thrashed out.
As already mentioned, it is planned to send the bulk of the products
to remote regions and to war invalids, large families, and other badly-off
strata of the population.
But deliveries of U.S. food to Russia have been and still are a form
of support ("indirect subsidy" in U.S. terminology) for U.S. agricultural
producers. Suffice it to say that, for example, since the mid-nineties
Russia has annually consumed up to 80,000 tonnes of "Bush legs" -- 7-8
percent of the chicken legs produced in the United States. Since they
stopped being imported in the fall because Russian importers were
insolvent, according to the latest data 13 ships carrying U.S. chicken
legs, and not only them, are stacked up at Baltic ports.
Consequently, in the second half of September poultry meat and
combined feed prices in the United States started falling. Bearing in mind
the increasing difficulties in selling these products in other regions of
the world, the Russian market is virtually becoming strategically important
to farmers and especially U.S. poultry farms. It is not surprising that,
in the opinion of U.S. Agriculture Secretary Dan Glickman, everything must
be done to ensure that U.S. food products reach Russia.
Thus, deliveries of "humanitarian" food from the United States (not to
mention export of it on credit) are undoubtedly advantageous to U.S.
producers. But will Russia be unable to do without this aid?...


Russian Business Tycoon Says Thieves Siphoned IMF Money 

Radio Rossii Network
5 November 1998

Oneksim-Interros group chief Vladimir Potanin has rejected allegations
that money from IMF loans was immediately credited to Swiss bank accounts. 
In an interview with the Zurich newspaper Tages Anzeiger, he described
these suggestions as superficial since transfers of this kind are
technically impossible. He said most of the IMF money was either
distributed in various peculiar ways inside Russia itself or was simply
stolen. The flight of capital happened at the start of the 1990s, but
tighter control was imposed from 1994 onwards, Potanin said. He claims
that the capital has been flowing back to Russia since the middle of the 1990s.


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