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

Johnson's Russia List


November 9, 1998    
This Date's Issues: 2467 •• 

Jo+hnson's Russia List
9 November 1998

[Note from David Johnson: 
If you have not yet responded to my October 31st "MUST READ"
message you should do so NOW.
1. Rory MacFarquhar: Re 2466-Campbell/Blundy and Language Purity.
2. AP: Russia Tuberculosis Problem Worsens.
3. Reuters: Yeltsin back as anti-Semitism row heats up.
4. AP: Russia To Limit Ruble Printing.
5. Newsday: Michael Slackman, A Day to Celebrate and Speculate.
Russians mark revolution, seek direction.

6. Baltimore Sun: Will Englund, Siberian tigers are menaced as 
Russian economy collapses.

7. Toronto Sun: Matthew Fisher, Canada or bust. Russians line up 
at embassy in new exodus.

8. Irish Times editorial: Out With the Old.
9. The Economist: Edward Rossel, Russia’s ungovernable governor.
10. Interfax: Minister Says Environmentalist Nikitin Damaged Russia.
11. Journal of Commerce: Tom Baldwin, Shipping's Russian crisis.
12. Reuters: Adam Tanner, Russia's economic crisis fosters endemic


Date: Sun, 08 Nov 1998
From: Rory MacFarquhar <>
Subject: Re: 2466-Campbell/Blundy and Language Purity

It is unfortunate to have to do so in this forum, but I would like to
correct Thomas Campbell's insinuation in JRL 2466 that Anna Blundy has a
"poor or nonexistent command of the Russian language" and "simply is
ignorant of colloquial Russian." For the record, Anna Blundy speaks
excellent Russian, and, as someone who nearly married a Russian mobster,
knows colloquialisms that might make Mr. Campbell blush. Occasionally, we
should remind ourselves that Moscow correspondents are writing not for the
Russia-obsessed readers of Johnson's List but for a somewhat wider audience.


Russia Tuberculosis Problem Worsens
November 8, 1998

MOSCOW (AP) -- Russia's tuberculosis epidemic has grown worse this year, with
more than 2.5 million people suffering from the disease and no decline in
sight, a news agency reported Sunday.
The rate of infection has grown 8 percent since the beginning of the year, and
the disease now affects 73 out of every 100,000 people in the country, Chief
Sanitary Physician Gennady Onishchenko said, according to ITAR-Tass.
According to the World Health Organization, anything over 50 cases per 100,000
constitutes an epidemic, the news agency said.
Russia's tuberculosis rate has been rising since 1991, and is especially high
among prison inmates, who are 50 times more likely than the general public to
be infected.
A government program aims at reducing the rate to 50 cases per 100,000 people
by 2005.


Yeltsin back as anti-Semitism row heats up
By Alastair Macdonald

MOSCOW, Nov 8 (Reuters) - President Boris Yeltsin returned to Moscow on Sunday
after nine days at a Black Sea resort recuperating from exhaustion as a row
over alleged anti-Semitism in the main opposition Communist Party turned ever
more bitter. 
The feud, including a call from an influential tycoon that the Communists
should be banned over anti-Jewish remarks, has raised tensions as politicians
position themselves for the battle to succeed Yeltsin. 
That election is not due until mid-2000 but many believe it could be called
sooner if the ailing Yeltsin heeds calls to stand down. 
``Boris Nikolayevich (Yeltsin) feels fine and his mood is good. He has paid a
great deal of attention to the latest news and taken it very much to heart,''
the president's press secretary, Dmitry Yakushkin, told Ekho Moskvy radio. 
Yeltsin, 67, went to the resort of Sochi on October 30. He looked tired in a
brief televised address aired on Saturday, the 81st anniversary of the Russian
The Kremlin gave no specific reason for his return but said he had been
expected back for the visit this week of Japanese Prime Minister Keizo Obuchi,
whom he will meet on Thursday. 
Yeltsin had been suffering from exhaustion and irregular blood pressure, the
Kremlin has said. He handed over day-to-day running of the economy to Prime
Minister Yevgeny Primakov. 
It was not clear whether Yeltsin would get involved in reviewing Primakov's
plans to address the financial crisis that broke in August and which left
Russia accepting U.S. food aid last week. 
Primakov's Communist first deputy, Yuri Maslyukov, said on Saturday the
government would publish in full its final package of anti-crisis measures on
Tuesday, including figures and details whose absence prompted criticism of an
earlier draft. 
Maslyukov, a former Soviet central planning chief, defended the plan which has
come under under fire from the United States and the International Monetary
Fund for turning away from the free market and printing money. He called it a
``centrist'' plan. 
More divisive than the economic plan may be the row over alleged race hate in
the Communist Party and Communist attacks on the mainly anti-Communist Moscow
On Sunday, Boris Berezovsky, an oil-to-media tycoon of Jewish origin who is
close to Yeltsin and is secretary of the Commonwealth of Independent States,
said the party should be banned. 
Controversy erupted last month when a Communist member of parliament, former
general Albert Makashov, told a public meeting that Russia's economic
difficulties were caused by Jews. 
It flared again when the Communist-led parliament failed to support a motion
on Wednesday condemning Makashov. At revolution commemorations on Saturday,
party leader Gennady Zyuganov shared a platform with speakers who pledged to
defend Makashov. 
``The Communists now represent a danger to the integrity of the Russian
state,'' Berezovsky told NTV television. ``They are turning into national-
patriots and nationalists and for the first time they have declared this
absolutely openly.'' 
Zyuganov dismissed Berezovsky's call as ``ideological babble'' but defended
his party members' freedom to express their views. 
Under Zyuganov, the Communist Party has dropped Soviet-era rhetoric on
international Marxism and embraced a more nationalist tone. 
Yeltsin has already stepped into the row, issuing a sharply worded statement
on Thursday saying he guaranteed constitutional protection for ethnic
minorities. He also hit out at verbal attacks by some leftist radicals on
leading liberal journalists. 
Yeltsin made similar points in his address on Saturday marking the anniversary
of the 1917 Bolshevik revolution he has renamed the Day of Accord and
Leading television commentators, whom some leftist radicals say they would
punish if they won power, sprang to their own defence at the weekend with
criticial coverage of the Communist Party. 
Having forced the fading Yeltsin on the defensive over the economic crisis,
the Communists are at their strongest since the collapse of the Soviet Union. 
Attacks on them may reflect more the anxieties of their opponents as elections
approach rather than any particular change in the party's own stance. 


Russia To Limit Ruble Printing
November 8, 1998

MOSCOW (AP) -- A top Russian official said the government will print a
maximum of 15 billion rubles ($960 million) this year, an amount that will not
stoke high inflation.
Russian First Deputy Prime Minister Yuri Maslyukov refuted claims by a former
government official that the government had already broken this limit.
``We cannot disregard certain prohibitive limits,'' Maslyukov said Saturday on
the popular ``Vremya'' television program, according to the ITAR-Tass news
agency. ``Otherwise the result would be hyperinflation, which would entail
very serious consequences.''
The government has acknowledged that it will have to print some money to help
pay off wage and pension debts. But it is still unclear exactly how much has
been or will be printed, and some observers say the government is likely to
print much more than 15 billion rubles.
The ruble, which was hovering around 6 to the dollar before the economic
crisis struck in August, plunged as low as 20 to the dollar after that.
After considerable turbulence, it has stabilized at around 16 to the dollar in
recent weeks.


November 8, 1998
[for personal use only]
A Day to Celebrate and Speculate / Russians mark revolution, seekdirection
By Michael Slackman. MOSCOW CORRESPONDENT ( 

Moscow - With her purple wool cap pulled snug over her bangs,
13-year-old Nada Constantinova worked busily yesterday trying to sell
pamphlets celebrating the reign of Joseph Stalin, the ruthless leader of
the former Soviet Union.
"I think that the present government is worse than Stalin," Nada
said, her light blue eyes peering through thick glasses. "Stalin was
cruel, but he had more merits than vices."
Of course, Nada is too young to recall life in Soviet times and was
not aware of exactly how brutal Stalin was. But still, she hawked the
pamphlets, not because her parents told her to, but "because we hope
things will get better."
Those sentiments were evident all over the streets of this city,
and this country, yesterday as tens of thousands turned out to
celebrate the 81st anniversary of the Bolshevik Revolution, the day that
Lenin and his comrades took power and forged the Soviet Union.
During Soviet times, the anniversary took on near religious
overtones, with the country's top leaders standing atop Lenin's tomb for
hours on end as soldiers, military might and loyal Communists marched
by. But today, years after the Soviet Union collapsed, this day has come
- like so much else here - to underscore the desperation of the
people, not only for food and money, but for a sense of identity, a
sense of self and some profound national idea to grab on to.
"The main crisis Russia is going through now is a moral one,"
said Oleg Poptsov, a publisher and former ally of President Boris
Yeltsin. "It is caused by an absence of work and respect and lack of
direction. Every human being is titanically nursing their hopes that one
day life will get better."
Officially, Nov. 7 is called the Day of Consent and
Reconciliation. But it seems that no one is quite sure what to make of a
day that - like the many other national monuments here, including
Lenin's body that continues to lie in state in Red Square - celebrates
a failed idea. 
Recently, officials staged a parade and dance party to
commemorate the 80th anniversary of the Komsomol, the largest Communist
youth organization in the Soviet Union. The celebration was started
during a morning mass in church, an odd place considering Komsomol
members often acted as spies, turning in individuals who went to
religious services.
"March and prayer are apparently the two components of the new
national idea being borne in suffering," said Pavel Lobkov, a
commentator on the Russian television station NTV. "This is the new
ideology both right and left."
This soul-searching confusion has sparked a national debate,
with many of the middle-aged and pensioners reaching back for Soviet
greatness and reformers and members of the intelligentsia pushing
forward into democracy. For the Communists and their sympathizers, that
was seen yesterday in the parades held at the foot of the building that
houses the national security police, formerly known as the KGB.
Though fewer people than expected turned out, thousands of
men and women, mostly middle-aged, removed their hats and bowed their
heads as the former national anthem of the Soviet Union blared in the
streets and the old Soviet flag was hoisted aloft on a makeshiftflagpole.
Many of those who are alarmed by the increasing prevalence
of red flags in the streets chose to reach out through music. A requiem
composed in remembrance of the millions killed and tortured under Soviet
times was performed yesterday evening in the Moscow Conservatory.
"In order to choose this right path, we must understand our
mistakes," said Alexi Bruni, a violinst who performed in the concert.
"That is, we must repent. We have to recognize that what happened was
the fault of everyone, not just Lenin and Stalin."
Said Sergi Kovalyov, a prominent human-rights activist and
member of the federal legislature: "If we still continue believing we
had nothing to do with what happened, we simply cry over our own
participation in our own history."


Baltimore Sun
November 8, 1998
[for personal use only]
Siberian tigers are menaced as Russian economy collapses
By Will Englund (

In 1992, when the economy was very bad here, poaching threatened to get out of
hand. Reports that the tigers faced extinction led to a grant by the German
branch of the World Wildlife Fund to support the poaching patrols.
At the same time, Russia reinforced its customs checkpoints along the Chinese
border. These measures didn't solve the problem, but they kept it in check.
Some experts even ventured that the Russian tigers were better protected than
any other group of tigers in the world.
"This year," says Astafyev, "the situation with poaching had been much better
-- until this economic crisis started. The criminals are still active, and now
the other part of the population has also become involved."
As night falls, the van works its way out of the Sikhote-Alin range, heading
to the coast. Here, in 1906, a military detachment led by Vladimir Arseniev
came through on an expedition trying to get a better understanding of this
distant corner of the czar's realm. Arseniev wrote a book that became a
Russian classic; in it he described how he found the forest infested with
bandits, and he worried that Chinese marauders were wiping out much of the
Not that much has changed since then.
As the van turns east on the coast road, John Goodrich, a field coordinator
here for a program called the Siberian Tiger Project, run with help from the
Hornocker Wildlife Institute in Idaho, offers a quick history: This stretch
was once the range of a tiger they nicknamed Lena. She was killed by a poacher
in 1994. Another female took over; she disappeared in 1997, probably shot. Two
females then divided the range. One vanished last summer, also probably hunted
This was when poaching was thought to be under control. Now the economy is
"I guarantee you," says Dale Miquelle, an American who is resident chief of
the Siberian Tiger Project, "poaching's coming back this winter."
Earlier in the day Goodrich had stopped in to pay a call on Bart Schleyer at a
cabin deep in the woods where he runs the trap lines. Tigers (and bears, which
are also being studied) are caught in spring-loaded cable footholds,
tranquilized, weighed and measured in all sorts of ways, and fitted with a
radio collar. Schleyer had come into camp with a collar in his hand -- from a
bear shot by poachers looking to sell its gall bladder and other bodily parts
to China.
As the van jolts and bounces through the darkness, Goodrich talks about his
work, and about what he and his wife, Linda Kerley, have learned in their
three years here. Siberian tigers generally feast on elk or boar; but
sometimes they eat wolves, and one male at Sikhote-Alin specializes in brown
bears. He weighs in at 445 pounds; he'll kill bears bigger than he is. He
killed one bear and dragged it a mile. Tigers also kill badgers, lynx, people
(two since 1995), cattle and dogs.
They have huge territories. A typical female's range covers about 175 square
miles, Goodrich says. A Bengal female, by contrast, needs a little more than 6
square miles. Males here have ranges of 200 to almost 600 square miles -- even
with the radio collars it has been too difficult to keep tabs on them more
precisely. Goodrich says a male might take a month to patrol his territory.
The taiga -- the vast north Asian forest -- is nowhere near as lush as the
Indian jungle. The soil is thin, the winters long. There are only so many boar
and elk that can live off the land, and a tiger needs about 25 pounds of meat
a day. It needs that much territory to get that much food.
People can live in the taiga for 20 years and never see a tiger. Others
encounter them without wanting to. One man on a rickety Russian motorcycle was
chased by a tiger 30 miles down the road, all the way to the town of Plastun.
Late at night the van pulls into town. When a visitor grumbles to Smirnov
about not seeing any tigers, he replies, "They saw you. I guarantee it."
In fact, there are probably more tigers than ever along the coast because of
the ferocious forest fires raging inland. One fire at Terney, which destroyed
a few thousand acres, was probably set off by a hunter shooting at elk with
tracers. This is a new problem. When the white-hot bullets don't hit their
mark, they make excellent incendiary devices.
The days of aerial reconnaissance and water drops from helicopters are long
past; the government pulls men off poaching patrols but otherwise can do
little. Tigers and elk can escape the flames, but herds of wild boar are being
"You know, to the north of Terney, everything burned down," says Igor
Nikolaev, a biologist who is said to know more about the Siberian tiger than
anyone. "There are no boar or elk there at all."
The survivors are coming down to the coast to get away from the fires, but
this is where the roads and villages are; as the tigers follow, they'll be
making the poachers' jobs that much easier.
Hunters will also be out. Last year, Astafyev calculates, about 1,000 elk were
taken in the forest bordering the reserve, though licenses were issued for
only 500. More and more, hunting and gathering is replacing agriculture.
Valentina Kaushinskaya's experience is instructive. Five years ago, she and
her husband decided that private farming was the way to make a new life in the
new Russia. They quit their jobs and carved out a 150-acre farm along a river
bottom at the foot of the Sikhote-Alin range.
They didn't count on the lack of available credit for anyone without the right
connections, nor did they expect that their neighbors would become too
impoverished to buy their food.
They have beef, vegetables, cheese and milk to sell, but no way to sell it.
They're closing up.
Come January, Kaushinskaya will say farewell to her eight remaining cows, to
her chickens, to her lonely homesteader's life in the forest -- and to
Natasha, a tiger who wanders over from the reserve a few times every year.
"We've been living side by side," Kaushinskaya says. "It's her place as much
as ours."
One night recently Kaushinskaya and her husband woke up and realized that
Natasha was attacking their dog in his doghouse. There wasn't much they could
do about it. The tiger got the dog. That's what tigers do.
"They're not beautiful to me, and they're not frightening," says Bannikov, the
taiga fire fighter. "They're just part of life."
But the tiger's weakness is that it is not afraid of roads or villages.
And in a countryside where the poverty runs so deep that the skin and organs
of one tiger, successfully smuggled to China, bring an amount of money equal
to 100 years' salary for a forest ranger, even Smirnov, the optimist, can't
discount the power of human temptation.


Toronto Sun
November 8, 1998 
[for personal use only]
Canada or bust
Russians line up at embassy in new exodus

MOSCOW -- Yuri Jaroshevski and Viktor Mamontov stood side by side reading a
billboard on the wall of the Canadian embassy. 
Like tens of thousands of their countrymen, they have suddenly decided that
they want out of Russia. 
"It was never my plan before, but I now intend to leave Russia. That's for
sure. A lot of people here no longer have any dreams and I am one of them,"
Jaroshevski said as Mamontov, whom he had never met before, nodded in
Jaroshevski thought his life was unfolding as it should until Aug. 17. That's
the fateful day when Russia confessed to the world that it was as good as
bankrupt, triggering a run on the ruble that may not stop for years. 
An electronics engineer who became a car salesman because it paid a lot
better, Jaroshevski had been selling as many as four used American cars a
month until the "crisis." After paying for shipping, repairs and the usual
official and unofficial payments to Russian customs, his profit was as much as
$4,000 per vehicle. 
Since the "crisis" began, the 33-year-old husband and father hasn't sold one
car. Unless he takes a loss, Jaroshevski doubts he ever will. 
Mamontov's story is only slightly different. A single father, a bank officer
and a graduate of a prestigious foreign affairs institute, he lost his job
when virtually the entire Russian banking sector was wiped out 10 weeks ago. 
"All I know is that it is necessary to leave this country," Mamontov said. "I
am 45 years old and I have no more time to waste seeing if Russia can offer a
decent life. 
"Canada is the New World, with all the possibilities that we don't have. I
can speak French and English. And I suppose my children will have a future
The number of Russians granted landed immigrant status this year won't be
known until several months into the new year. But the Canadian embassy in
Moscow reports that the number of Russians filling out a free pre-application
questionnaire has shot up almost 50% since August. 
At the same time, the number of Russians seeking visitors visas has dropped
"I attribute these trends to the fact that people don't have enough money to
travel as visitors. But because of the economic situation, a lot more people
do appear to be interested in emigrating," said Hector Cowan, who heads the
Canadian immigration office for Russia. 
"As for formal applications, I wouldn't say we've been swamped yet, but we're
very busy. There is a flurry of interest." 
Cowan was bullish on the quality of people that Canada is now getting from
Russia. Most are independent applicants with strong technical qualifications
because, unlike many immigrants from Asia and the Caribbean, they don't have
any close relatives to sponsor them. 
As an electronics engineer, which is ranked second on a long list explaining
what kind of people Canada needs most, Jaroshevski's chances of being granted
landed immigrant status looked fairly good. 
Mamontov is in a tougher spot. Canada isn't looking for many Soviet-trained
bankers. His chances might be better if he was, say, an exotic dancer,
although the criteria for acceptance for that unlikely specialty are becoming
more stringent. 
Canada took in about 5,000 Russian immigrants last year. It's not much
considering that Canada welcomes between 200,000 and 225,000 immigrants a
year. Still, it's rather a lot compared to 15 years ago when the Soviet Union
only permitted a handful of its citizens to emigrate to Canada every year. 
As one of his eight foreign postings, Cowan served here in the mid-80's. In
those days, Canada would submit a list of Soviet citizens with Canadian
connections to the foreign affairs ministry. 
"It was 'Nyet. Nyet. Nyet. Da.' The prime minister would come and then they
might give us five," Cowan said. 
"It was frustrating work, but it was also fascinating and professionally
rewarding. I was always thinking: What is the next angle I can try? 
"It's a lot different now. It's more like conventional immigration." 


Irish Times
November 7, 1998 
Out With the Old 

The Russian supreme court's decision that President Yeltsin cannot stand for a
third term signals the beginning of the end of one of the most extraordinary
political careers of this century. It also heralds the start of the campaign
to replace the ailing Mr Yeltsin. Initially hailed as the founder of Russia's
new democracy, Mr Yeltsin's major achievement was to have destroyed the old
Soviet system. His personal attributes uniquely suited him to that task but he
was unable to cope with building a new society on the ruins of the old.
His judgment in choosing close associates has been suspect: former vice-
president Mr Alexander Rutskoy, former speaker Mr Ruslan Khasbulatov, exKGB
General Alexander Korzhakov and the discredited privatisation chief Mr Anatoly
Chubais were all appointed and then sacked by the president. In the course of
Mr Yeltsin's terms in office more people were killed at the hands of the State
than at any time since the death of Stalin. Estimates of the number of unarmed
civilians who died in the carpet bombing and shelling of Chechnya range from
30,000 to 90,000.
Now, following eight years of Mr Yeltsin's presidency, Russia faces economic
collapse. Banks have closed. The middle class which was to have been the
economic, social and cultural driving force of the new Russia has been wiped
out as quickly, if not as violently, as the Kulaks were liquidated in the
early days of the Stalin regime.
Mr Yeltsin, paradoxically, has been supported in the vast majority of his
erratic actions by western countries who were afraid of who might replace him.
The shelling of parliament, the Chechen war, bizarre appearances and
disappearances abroad, were all tolerated faute de mieux by the West's
guardians of democracy. It is clear that the politician who takes over from Mr
Yeltsin will face enormous tasks and responsibilities. A leader of exceptional
qualities will be required and at present no such person seems available.
The charismatic General Alexander Lebed, a teetotaler, has shown signs of
being every bit as politically unpredictable as President Yeltsin. Moscow's
Mayor, Mr Yuri Luzhkov, while having worked wonders in turning a dilapidated
capital into a vibrant modern city tends towards the dictatorial, does not
score highly in the area of human rights and is something of a GreatRussian
chauvinist. The current Prime Minister will be in his seventies when the
elections take place in 2000.
One politician in Russia who may have the required talents is Mr Grigory
Yavlinsky of the liberal Yabloko party. He has consistently refused to be
drawn into corrupt Kremlin circles, has shown an unerring capacity for the
democratic option in each of Russia's many political crises and was
instrumental in getting the Duma to resolve the chaos which followed
devaluation and the end of Mr Sergei Kiriyenko's short term as Prime Minister.
His great weakness consists of a haughty intellectual image which
significantly reduces his appeal to the electorate. Compared to the weaknesses
of the other candidates it is a fault that, in these days of image-making,
could be overcome with a little effort.


The Economist
November 7, 1998
[for personal use only]
Edward Rossel, Russia’s ungovernable governor

AT HOME or abroad, Russia’s leaders have seldom looked so unimpressive: at
best, indecisive and muddled; at worst, corrupt and unpleasant. While the
economy shrivels, Yevgeny Primakov, the prime minister, still has no credible
economic programme two months after he was appointed, and no apparent
inclination to implement one. But the impression of countrywide Russian
paralysis is misleading. The political landscape outside Moscow is changing by
the day. Regional bigshots, such as Edward Rossel, governor of Sverdlovsk
oblast (province), are using the weakness at the centre to bolster their own
importance: locally, nationally—and, increasingly, abroad. 
Even before the current troubles, Mr Rossel was a force to be reckoned with.
He directly represents the 5m people of Sverdlovsk province, a touch more than
the entire population of Norway, and indirectly more than 23m, in the Urals
Economic Association, a regional grouping which he heads. 
The thick-set 61-year-old governor, a former construction boss, has a history
of insubordination. A few years back he tried to declare a self-governing
“Republic of the Urals” (an entity that existed, briefly, after the Russian
revolution). He recently refloated his suggestion for a local currency, a
Urals franc, to replace the battered rouble. His biggest practical achievement
during the past three years, however, has been to establish his province’s
main city, Yekaterinburg, as one of a handful of prominent Russian regional
capitals. Nestling in the foothills of the Urals, it is, by bleak Russian
provincial standards, a lively place. It has the region’s leading university,
its only high-class hotel, its biggest airport and the base of the Urals
regional airline. Until the economic collapse, it had a thriving stock
exchange; its banks are still less wobbly than those in Moscow. It has even
attracted a sprinkling of foreign investors—most notably fizzy-drink
makers—manufacturing for the regional market. Because of its secret arms
factories, it was closed to foreigners until 1992. Now it is the third most
important diplomatic centre in Russia, after Moscow and St Petersburg, with
American and British missions already established, and others in the offing. 
The push for decentralisation in Russia, which Mr Rossel exemplifies, is
startling. Richer regions have long felt that the taxes they send to the
centre are at best squandered, at worst stolen. These days, increasingly
little comes back. “We are tired of Moscow,” complains Vladimir Frolov, who
runs a big Yekaterinburg-based bank. Western countries are beginning to agree,
and even to deal directly—giving technical help, say, or aid—with Mr Rossel,
and his counterparts elsewhere. Few publicise the fact. But Finland’s
President Martti Ahtisaari used a recent visit to Russia to back this trend:
the alternative to decentralisation by design, he predicted, would be
“disintegration by default”. 
In the past, Moscow tried to keep people like Mr Rossel in their place. In
1993, when governors were still appointed by Moscow, he was sacked by
President Boris Yeltsin—only to storm back into office as Russia’s first
directly elected governor when the rules changed, in 1995. These days, Moscow
is trying to control unruly governors with a different tactic. Mr Primakov has
invited the eight most important governors, heads of economic associations
such as Mr Rossel, to join his government as super-ministers. They have no
direct responsibility, and no departments to run, but the right to advise the
government as they see fit. Mr Primakov hopes this will keep them in line.
Some do promise that their intention is not to break Russia up. But their
loudest message to Moscow is: leave the regions alone. 
Though West Europeans have been cultivating Mr Rossel, he is not yet quite one
of them. His grasp of economics is shaky. An economic prescription which he
outlined on a recent visit to Finland left his audience of businessmen
bemused. It included printing money “solely for the use of industry”, and
banning the use of dollars for commercial transactions. 
Back home, however, Mr Rossel is doing a fair job of shepherding his people
through the current troubles, and particularly the oncoming winter. Supplies
of food and fuel in Sverdlovsk are adequate. “We have enough resources in the
Urals to embark on economic recovery,” he declares grandly. Talk of survival,
however, rather than revival, would be more realistic. Sverdlovsk may be the
centre of Mr Rossel’s universe, but these days it looks like the middle of
nowhere for foreign investors. It is hard to get to; there are no easy
pickings in oil, gas or minerals; most of the industrial structure is
antiquated. Mr Rossel courts foreign investors enthusiastically, but shows
little understanding of the obstacles that face them. The province required
one foreign soft-drink bottler to collect official signatures on 200 different
forms before it could open. A blunt, impatient man, Mr Rossel is no great
listener; his advisers are deferential rather than knowledgeable. 
Mr Rossel and his fellow supergovernors are a rising class, but the new
arrangement that gives them increasing clout in the centre is not backed by
unfettered power over their fiefs at home. Mr Rossel is having trouble, for
example, getting members of the Urals Economic Association to stick to the
idea of a single market. One neighbour is blocking free trade, and Mr Rossel
can do little about it. He is also at loggerheads with municipal government,
in the form of the mayor of Yekaterinburg, who has his own ideas about local
economic development—not to mention his eyes on the election for Mr Rossel’s
job next year. 
All the same, Mr Rossel remains that rare bird in Russia—a powerful,
reasonably effective politician who takes voters seriously, and is driven by
them rather than nostalgia, egotism or self-enrichment. Yekaterinburg, after
all, was the city in which Russia’s old regime, in the form of the Romanov
royal family, met its grisly end. It would be an apt birthplace for another,
new Russia: more decentralised—and, with luck, less self-serving. 


Minister Says Environmentalist Nikitin Damaged Russia 

MOSCOW, Nov 5 (Interfax) -- Russian Minister for Atomic Energy
Yevgeniy Adamov has stated that former naval officer Aleksandr Nikitin, who
is under investigation, spread "critical information" and disclosed state
secrets.He told reporters on Thursday that Nikitin's case is absolutely clear
and that when he was spreading ecological information he had actually been
inflicting damage on the country.
"I saw the materials passed to Norway and as an expert I think that
information about the design and structure of nuclear reactors on Russian
submarines has nothing to do with environmental protection," Adamov said.
Nikitin, as a citizen, did an irresponsible thing, he said.
One can argue about what part of the information passed over to Norway
had already been published. But on the whole, such materials must not be
disseminated as this inflicts colossal damage to national interests, he
continued.Nikitin was arrested by St. Petersburg's security service on
February 6, 1996. In December 1996 he was released from custody with
Court hearings on Nikitin's case began on October 20, but on October
29 a decision on an additional investigation was taken. Judge Sergey Golts
said then that the charges brought against Nikitin were ambiguous.
Nikitin is charged with disclosing state secrets in Chapter 8,
entitled "Catastrophes and Accidents on Nuclear Submarines" and section 3
of Chapter 2, entitled "Nuclear Energy Installations" of a report for the
Norwegian ecological organization Bellona. The report was entitled "The
Northern Fleet. Potential Risks of Radioactive Contamination of theRegion."


Journal of Commerce
November 9, 1998
[for personal use only]
Guest Opinion
Shipping's Russian crisis
By Tom Baldwin
Tom Baldwin writes about shipping and international trade issues for The
Journal of Commerce. 

The stylish women out shopping on breezy Avenue U in Brooklyn are classically
beautiful, especially when they pout. And they do that a lot these days,
chatting about the trouble back home in Russia.
Around the corner and one flight up, in a crowded office, Michael Hitrinov
tries to provide an answer.
"The trade is dead from the United States to Russia," says Mr. Hitrinov, a
cargo consolidator. "I used to deal with customers. Now look at all these
He lifts a pile of correspondence.
"Now I deal with people who write me to say why they cannot pay their bills."
Commerce between the United States and Russia is in a free fall, triggered by
the virtual lockdown of the Russian monetary system since Aug. 17, when Moscow
suspended payments to creditors.
"The volumes (of imports to Russia) have changed and they have changed
dramatically. They have fallen off the edge of the cliff," says Kenneth Glenn,
vice president and general manager in Russia and confederated states for Sea-
Land Service Inc. of Charlotte, N.C.
"September volumes are down almost 50% from last year," he says.
But, he adds, "We have absolutely no intention of scaling down our service. We
are still seeing a great deal of (pricing) activity. While volumes have
dipped, they have not gone away."
Russians cannot reach money in their bank accounts. Workers go unpaid. Banks
in and out of Russia are not signing letters of credit.
Until just months ago, import-loving Russians purchased 48% of their consumer
goods from overseas, says the nation's State Statistics Committee. Three out
of four sacks of sugar were imported, as was a third of the fish and meat.
Now, since the ruble fell from six to 15 against the U.S. dollar, the few new
imports arriving on the market are more than twice as expensive. No shipper
sends goods to Russia on credit.
Prices across the board are up more than 60%, according to the Central Bank. A
beer from Europe is $3 a can. A half-pound of coffee costs $12 or more. And
Russia says imports across its piers since August are down 25%.
"Our estimated volume is down 50%," says Ken Long, Maersk Line's trade manager
for Russia and the Commonwealth of Independent States.
"Volume has definitely dropped off," he says. "New business is off. A lot of
shippers are fulfilling back orders, the stuff that has been paid for.
"We also see a lot of quotations. People are checking rates. It seems the
philosophy is, 'Hey, this is going to change eventually.' When? We don't
The International Monetary Fund on Oct. 1 issued a revised economic outlook
for global nations. Russia's economy was expected to shrink by 6% this year
and next, worse than predictions for Africa and developing nations worldwide.
The IMF said the United States, on the other hand, would grow by 3.5% and 2%
this year and next, respectively, while all industrialized states were to grow
by 2% and 1.9% in the same periods.
Fast vanishing is the middle-class Russian family relaxing at home on Swedish-
made furniture, watching an Italian-made television and dining on U.S.-raised
Visions of cargo such as chickens, which are the No. 1 U.S. export to Russia,
idling away on slow-steaming ships, or waiting out the Russian crisis in a
Finnish cooler are not far-fetched.
Mr. Hitrinov says some shippers have sidetracked cargoes to wait for monetary
stability. He says others have redirected cargo to other nations, especially
now-independent former members of the Soviet Union.
"We thought this would last a few days, and then weeks. Now months. Really?
Now we do not know when," says the native of St. Petersburg, who arrived in
the United States in 1991. Mr. Hitrinov says his business, Empire United
Lines, racked up $35 million in sales last year.
Asked how he is dealing with the Russian crisis, Hank Kohlmann, executive vice
president of I.C.S Logistics of Jacksonville, Fla., only partly joked, "You
learn to stack 'em high."
His company is one of the major exporters of chicken and other poultry to
"The companies we deal with are very reputable, very good businessmen. But we
looked around. There are other markets. Of course the price isn't always the
best," Mr. Kohlmann says.
Mr. Glenn, of Sea-Land in Moscow, reports what others support -- that trade
into the independent states is still robust. "They are doing quite well," he
He sees a troubling landscape ahead, when banks fully reopen their doors and
the customers see their savings are worth less than half what they had been
before late summer.
"When the banking system collapsed toward the end of August, funds were
frozen. Savings are going to be greatly devalued if they become available. The
issue of day-to-day existence is very real," Mr. Glenn says. 


FEATURE - Russia's economic crisis fosters endemic corruption
By Adam Tanner

STAVROPOL, Russia, Nov 9 (Reuters) - Breaking the law comes naturally and
almost inevitably amid Russia's economic chaos says Stavropol's bluntly honest
Mayor Mikhail Kuzmin, and he gives his mother and wife as an example. 
``My parents have a nice dacha and in the autumn my mother, a pensioner, sells
extra pears as they have a very large harvest,'' he said in an interview.
``Does she pay taxes? No. Can we call her a thief under our current government
situation? No. But, in theory, yes, she is a thief.'' 
Kuzmin also mentioned his wife's extra earnings cleaning in their apartment
complex to illustrate that under Russia's often tangled rules and burdensome
taxes skirting the law comes easily. Sometimes it leads down a slippery slope
of corruption and crime. 
Last week, economist Grigory Yavlinksy, head of the liberal Yabloko political
party, said government leaders were prone to corruption. Other political
leaders from Prime Minister Yevgeny Primakov on down rallied to criticise him
and demand that Yavlinsky prove his claim. 
In the southern Russian city of Stavropol in the North Caucasus, politicians
and law enforcement officials agree that corruption is endemic in today's
Russia, which has seen its economy sharply worsen since August. 
``No one should object if you say there is a lot of corruption in the
government,'' said Alexei Selyukov, the region's prosecutor and 35-year
veteran of the department. ``We have to recognise that corruption is
widespread, and it's because of the economic situation. 
``It is especially hard to root out because there are no records of the
transaction written anywhere.'' 


Officials know that state goods disappear. People are drinking far more
alcohol than factories officially make, and bureaucrats can deduce that there
are more cigarettes in the market than excise taxes received. 
``Everyone is stealing all the time,'' said Pyotr Akinin, chair of the
economic department at Stavropol State University. ``If a person is not sick,
old or mentally ill, he wants to feed his family and will violate the law to
Akinin believes corruption and wrongdoing is so pervasive that he calls Russia
today a kleptocracy, or government of thieves. 
``All the politicians understand they are unlikely to be re-elected so they
must seize what they can now,'' he said. 
Asked if Russia was a kleptocracy, Mayor Kuzmin -- the city's highest official
-- said: ``There is some truth in that.'' 
Viktor Cherepanov, the deputy chief regional representative for President
Boris Yeltsin, gave the example of the Stavropol government's 1997 purchase of
foreign medicine at what he said were prices far higher than world levels. 
``If prices go so high, corruption is an inescapable conclusion,'' he said. 
``I think politicians should have money behind them to start with. Take
Kennedy, Reagan, they were millionaires and didn't come to power to make
money,'' he said. ``But many here come to power simply to get rich.'' 
Public prosecutor Selyukov said the medicine purchase matter is under
investigation, but said the shipment's value may have been under-estimated to
pay lower import duties, thus confusing what really happened in the deal. The
Russian middleman has gone to Cyprus and could not be questioned, he added. 
In an interview, Governor Alexander Chernogorov vowed a full investigation. 
In general, experts say diversion of government or private company resources
is commonplace. For example, one Russian magazine executive was dismissed this
year for keeping some of his advertising budget, industry insiders say. 


Kuzmin said officials at government enterprises such as electricity stations
sometimes divert power supplies to earn money on the side. Trade in oil,
vodka, cigarettes and wheat are other common areas of collaboration between
criminal bands and government officials corrupted to turn a blind eye. 
``In principle it is the government that gave life to these businesses because
of their own weakness and uselessness,'' said Kuzmin. 
Stavropol's border with the breakaway region of Chechnya creates other
possibilities for shipping goods into Russia without customs or legal control,
and thus another wave of corruption, experts say. 
Yet few of these cases go to trial. 
``Can someone follow through this matter? It's practically impossible,''
Kuzmin said. 
Ruslan, a tall Chechen wearing a long black leather jacket, recently returned
to Stavropol after a week-long business trip to Siberia. He carried just one a
small bag, which he shared with a colleague. 
``I'm a businessman,'' he said. ``We buy things in one place and sell them in
another. We don't pay taxes.'' 
He did not give details. 
While many of Russia's corrupt deals deliberately confuse with their
complexity, some recent cases in the Stavropol region are straightforward. In
one, a district deputy head was sentenced to three and a half years in prison
for taking a 4,000 rouble ($250) bribe for issuing a permit, Selyukov said. 
``When you are handing out permits for selling something like bananas,
location makes a big difference,'' he said. ``If you're next to the stadium
you'll make a lot more money than on some obscure corner.'' 


Stavropol's law enforcement bodies are not themselves exempt from corruption,
and wage delays averaging about two months only increase the temptation of
fast cash. In June, one of Selyukov's investigators was arrested for taking
money to discontinue his efforts, he said. 
Clouding the issue further is the use of corruption charges as a political
weapon, as in 1992-93 when Alexander Rutskoi, then the vice president who
opposed Yeltsin, charged the president's team with wrongdoing, only to face
counter charges. 
Today Governor Chernogorov raises questions about both his predecessor's
administration and the federal government. 
``Today if you steal a sack of grain they give you five years for theft. Where
they've stolen tens of thousands of tonnes no one is held responsible,'' he
told Reuters. 
``The federal government buys bread for $152 a tonne from abroad and from
Stavropol they want to pay $60,'' he said. ``How could that be?'' 
On an individual level, Russian officials sometimes sympathise with some
bending or breaking of the rules because so much is already wrong in post-
Soviet society. 
``How can you arrest a farmer for stealing corn if he hasn't been paid for six
months?'' Prosecutor Selyukov asked. ``Bribery is an extremely complicated
problem, there are so many nuances.'' 
As Yeltsin's representative Cherepanov put it: ``Nothing is black or white. We
are grey.'' 


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