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Johnson's Russia List
15 November 1998
[Note from David Johnson:
1. AP: Lebed: Russia Must Maintain Nukes.
2. Itar-Tass: Russian START II Ratification not Linked to US Food Credits.
3. The Sunday Times (UK): Mark Franchetti, Russian villagers eat dogs in
4. Reuters: Chernomyrdin Questions Yeltsin Ability To Rule.
5. Barnabas Johnson: Pondering eXile bewilderment.
6. AP: Yeltsin Fires Military Adviser.
7. Sovetskaya Rossiya: Chikhin, Prokhanov Attack 'Jewish Fascism.'
8. Rossiyskaya Gazeta: Aleksandr Velichenkov, "What Yavlinskiy Fails To
9. Interfax: Nemtsov: Democratic Union Possible for Duma Poll.
10. New York Times: Michael Gordon, For Now, U.S. Calls Russia's Bluff.
11. St. Petersburg Times: Christa Lee Rock, Artists' forecast: Future looks
12. Alexander Samoiloff: A PROVINCIAL VIEW ON STATEMENT OF
13. Komsomolskaya Pravda: Yevgeniy Anisimov, "Fallen Ruble Could Boost Our
Agrarians...But Government Program Could 'Let Slip' Relations With Washington."
14. AP: Russia's Debt Moratorium Ends.]
Lebed: Russia Must Maintain Nukes
November 15, 1998
MOSCOW (AP) -- Russia's armed forces cannot fight a large-scale war with
conventional weapons and the country must maintain its nuclear forces at all
costs, presidential hopeful Alexander Lebed said Sunday.
Lebed, a retired general who helped forge a peace deal in Russia's breakaway
republic of Chechnya, said cuts have robbed the armed forces of much of their
``A dangerous critical mass is being accumulated, which is inadmissible for
any normal country,'' he told the Interfax news agency.
Russia's military, crippled by a chronic shortage of cash, has fallen on hard
times since the collapse of the Soviet Union. There is little money to repair
equipment, train soldiers or modernize aging technology.
Lebed, a presidential front-runner who has decried the neglected state of the
military often in the past, said Russia must concentrate on maintaining its
nuclear stockpiles if it cannot modernize other weapons.
``The only thing for which Russia is respected in the world and which makes us
worthy partners in any talks is our strategic rocket forces,'' Lebed said,
according to the Interfax news agency. ``And this asset must be preserved.''
Lebed's call echoed a recent statement by Deputy Prime Minister Yuri
Maslyukov, who said Russia must sink most of its military funding into the
construction of new nuclear missiles because it doesn't have money for
Russian START II Ratification not Linked to US Food Credits
Moscow, November 10 (Itar-Tass) -- The question of the State Duma's
ratification of the START II was not linked to the American food credits,
Deputy Chairman of the Duma Committee on Budget Aleksey Golovkov said in a
live program of the Ekho of Moscow radio station on Tuesday [10 November].
"There is no such a problem at all," he said.
In the words of Golovkov, First Vice-Premier Yuriy Maslyukov outlined
options in case of the ratification or non-ratification of the START II at
the Duma closed-door hearings. "The ratification of the treaty provides for
the armament reduction by the two sides and the U.S. abstaining from the
development of an anti-missile armament system to keep the nuclear parity
at a lower level," he said. Otherwise, Russia will have to make huge
investments for keeping the proper quantity of warheads and carriers and,
due to the natural expiration, the potential can reach such a level by
2004-1005 when the parity is absolutely broken and Russia ceases to be a
potential deterring nuclear power.
It is a matter of either allocating budget money for the upkeep of the
Russian nuclear stock or ratifying the treaty, the law-maker noted.
Participants in the hearings agreed "to hold normal debates with numbers,
arguments and amounts and take a decision, the time for which has ripened."
The Sunday Times (UK)
November 15 1998
[for personal use only]
Russian villagers eat dogs in big freeze
by Mark Franchetti
TENS of thousands of Russians are stranded in freezing temperatures in remote
villages in Russia's far north without heat, running water or food. The
situation in some areas is so desperate that people have been forced to eat
Amid predictions that this winter could be Russia's coldest in 30 years, up to
50,000 people are struggling to survive in areas that have been completely cut
off, according to a parliamentary committee set up to cope with the problems
of the country's far northern and far eastern regions.
In Oymyaakonsky Ulus in Yakutia, a vast region more than 4,000 miles northeast
of Moscow, some 4,500 people could die unless they are rescued from a cluster
of isolated gold-mining villages.
"The situation is very bad," said Boris Misnik, chairman of the committee, who
visited the area last week. "Hospitals and schools have been shut down. There
is no fuel and hardly any food left. Those lucky enough to have a metal stove
have been tearing down abandoned wooden houses and burning them to keep from
freezing. Several local people also told me that dogs have been killed for
The region, which is stalked by packs of wolves, is the coldest permanently
inhabited place on earth. Winter temperatures regularly plunge below -60C.
The villages were supposed to be evacuated during the summer after the local
authorities decided to close them because the gold mines had ceased to be
profitable. Ten thousand people were meant to be taken from nine villages.
However, a wrangle over whether the local or federal government should pay for
the operation meant that only four villages were evacuated before the winter
began. The other five communities ended up stranded without their normal
supplies of food and fuel.
"I never thought things could get this bad," said Marina Kharchenko, who lives
in Nelkan village. "No food, no heating and no way out."
The only escape route now for the people of Nelkan is by helicopter and they
are beginning to fear that none will come. Across Russia's vast, inhospitable
north, hundreds of villages appear to have been forgotten by Moscow as Russia
struggles to cope with its worst economic crisis since the collapse of the
The financial meltdown in August coincided with the short period when vital
supplies can be delivered to these largely inaccessible regions.
For many remote northern areas, where winter lasts for up to nine months,
shipments are possible only by sea and by river barges. If settlements are not
supplied during the short summer, the waterways freeze and even ice breakers
cannot penetrate them.
Keeping Russia's far north and far east alive has always been an enormous
task; the region of Yakutia alone is five times the size of France. Stretching
over several thousand miles, separated by 11 time zones and strangled by
months of darkness and sub-zero temperatures, the northern regions were
inhabited only by indigenous peoples until the Soviet Union unearthed their
wealth of diamonds, gold, platinum, coal, oil and nickel.
In the 1930s and 1940s Stalin's political prisoners were used as slave labour
to extract the riches. But after the dictator's death in 1953, gulag inmates
were gradually replaced by ordinary citizens who braved the harsh conditions
in return for a higher salary and a larger flat. State propaganda portrayed
them as pioneers conquering new frontiers. The conditions, however, were
Canada, which poses similar climatic challenges, extracts minerals by sending
labourers such as oil workers to harsh regions in shifts: they work their
stint and then return home. The Soviet Union's push for development, however,
meant whole families were dispatched to inhospitable places such as Norilsk, a
nickel-mining city which, with a population of 250,000, is the largest
anywhere in the Arctic Circle.
About 12m people live in the country's northern and far eastern regions; but
keeping so many alive in a place where nothing grows and everything must be
imported is a cost that the state can no longer afford.
This year the Russian government allocated $70m to transport goods to these
remote regions. According to Misnik, it needs 20 times that amount.
"We won't get anything," said Sergei Sakharov, 45, a former miner in Mys
Shmidta, a village in Chukotka, across the Bering Straits from Alaska. Locals
have started to abandon the town before temperatures plummet to -55C. "We are
burning anything we can get our hands on to keep warm, even old car tyres,"
Caroline Hurford, of the Red Cross in Moscow, said the situation across the
whole country was "very serious" and deteriorating further. "According to our
estimates, 50% of Russian children are underdeveloped," she said. "To make
matters worse, schools in many parts of the country have stopped serving
children the only hot meal they received each day."
Chernomyrdin Questions Yeltsin Ability To Rule
November 14, 1998
By Adam Tanner
MOSCOW (Reuters) - Russia's ex-Prime Minister Viktor Chernomyrdin Saturday
cast doubts on President Boris Yeltsin's ability to lead the country but said
it would be a mistake for him to step down early.
``The president more and more often fails to react to and judge the situation
correctly or to take well thought-out decisions and implement these
decisions,'' Chernomyrdin told a congress of his Our Home is Russia party.
``The unpredictably of the actions of his surrounding team is influencing him
more and more,'' said Chernomyrdin, who faithfully served Yeltsin as prime
minister from 1992-98. ``On the other hand, he is striving to refrain from
solving the most urgent problems and questions.''
The Kremlin has said that Yeltsin has turned the day-to-day running of the
economy over to Prime Minister Yevgeny Primakov, but said he is ready to
intervene on major issues and retains control of the nuclear button.
His low-profile in recent months amid an acute financial crisis -- including a
two-week holiday that ended last week to recover from what the Kremlin called
exhaustion -- has fuelled opposition demands that he step down.
Questions about the 67-year-old Kremlin chief's health linger, and Thursday he
sparked more speculation by meeting Japan's Keizo Obuchi and then unexpectedly
skipping a state dinner in his honor.
Spokesman Dmitry Yakushkin said Yeltsin Saturday spent the day at his Gorky-9
home outside of Moscow and said his health was ``normal.''
``The word normal means normal. He can do anything,'' he told Reuters when
asked about Yeltsin's health and activities. ''It's a Saturday. What do you
mean what is he doing? It's not a proper question. He is living, which means
he might be working, he might be resting or whatever.''
One Japanese official this week described Yeltsin as looking ``like a robot,''
as if ``on drugs,'' at talks with Obuchi. Another said his absence from the
evening Kremlin dinner was a last-minute surprise.
``That's their assessment,'' Yakuskin said. ``Let it be on their conscience.''
Yakushkin declined to respond to Chernomyrdin's speech.
Despite strong public criticism of Yeltsin's recent activities, Chernomyrdin
said he did not favor Yeltsin's early retirement.
``It's obvious and clear that an early departure of Yeltsin from his post will
play into the hands of left and extreme radical forces,'' Chernomyrdin said.
``It will negatively affect the political situation and the functioning of the
He also said Prime Minister Primakov, whom the president chose as a compromise
candidate when parliament rejected a Chernomyrdin return to the post in
August, stands a good chance of becoming the next president.
Primakov ``has no less, and probably more, of a chance than anyone else,''
Interfax news agency quoted Chernomyrdin, a candidate himself in the 2000
election, as telling reporters.
Despite growing speculation that he could win the next presidential ballot,
the former foreign minister and spymaster Primakov, 69, has said he does not
want the job.
From: "Barnabas D. Johnson" <email@example.com>
Subject: Pondering eXile bewilderment
Date: Sun, 15 Nov 1998
Like many entertainers, the eXile sacrifices truth for a well-turned phrase.
But I don't read this List for entertainment. I seek light, not heat --
insight and illumination, not sound and fury signifying puffing. He quotes
Anatol Lieven: "In the absence of religion and communism, patriotism is one
of the relatively few emotions that can guarantee a degree of responsible
behavior on the part of the elite. Russia is an excellent example of what
happens when the elite has no commitment beyond their own self-interests."
Lieven's words, as usual, are worth pondering. But I doubt he would be
pleased to see them used to support the eXile's over-heated praise of toxic
Having said this, let me hasten to add that I find this List usually
enlightening -- and I appreciate its range of offerings. I just happen to
wish the eXile -- who is obviously bright and knowledgeable -- would
sacrifice a few well-turned phrases in favor of thoughtful, albeit sometimes
boring, analysis and synthesis for those of us who comfortably acknowledge
that we do not fathom what to make of this post-Soviet mystery wrapped in
too much bungled bewilderment. We seek, at least, at present, competent
Yeltsin Fires Military Adviser
November 14, 1998
MOSCOW (AP) -- Boris Yeltsin fired a deputy prime minister Saturday who was
one of the government's top military advisers and discharged him from the
armed forces, a news report said.
Col. Gen. Valery Mironov was removed from his post as chief military expert
for Prime Minister Yevgeny Primakov and removed from the military, the ITAR-
Tass news agency said.
The report gave no other information about the president's move.
Yeltsin has been prone to making sudden hirings and firings in the past: He
dismissed his entire government both in March and August. He rarely gives more
than a cursory explanation for his decisions.
Earlier in the day, Yeltsin appointed Primakov to head the Russia-U.S.
economic and technological cooperation commission, a post that had still been
held by the last prime minister, Sergei Kiriyenko, who lost his job in the
Yeltsin has stayed out of sight recently, conducting business from his country
residence outside Moscow after a monthlong vacation to recover from a viral
infection, fatigue, and high blood pressure.
Chikhin, Prokhanov Attack 'Jewish Fascism'
10 November 1998
[translation for personal use only]
Article by V. Chikin, Chief Editor of Sovetskaya Rossiya, and
A. Prokhanov, Chief Editor of Zavtra, "from the Patriotic
Informburo": "A 'Campaign of Hate'"
The "liberal revanche," which aims to return Berezovskiy, Chubays,
Gaydar, and their ilk to power is gaining momentum. Beginning with the
cautious attacks on Primakov's disparate government, television has sharply
stepped up this pressure by putting the liberal-radical Yavlinskiy in the
spotlight where he accused Maslyukov of corruption. This revanche is
acquiring the hallmark of hysteria after Makashov's phrase spoken in the
heat of the moment which served as pretext for an all-out "information
war." The doctrine of this war is obvious. The Communist Party of the
Russian Federation is being called fascist because this party of Russian
Communists wants to save Makashov from the fate of Ostashvili
[untranationalist Pamyat activist Konstantin Smirnov-Ostashvili imprisoned
in 1993 for insulting Russian writers of Jewish origin] who was found
strangled in his cell. In the same way the Russian Writers Union was
called fascist prior to this. And before that there was the patriotic
Supreme Soviet, which was shelled by tanks for its "red-brown"
Now the "Nazi" label, which has been attached to patriots, is to serve
as the means of suppression and intimidation. However, it is not working
as it did in the bloody year of 1993 but is merely provoking a devastating
reaction for the liberal revanchists.
In reply to this loathsome bluff we will call the liberal radicals to
account mercilessly for their Russophobic words and deeds. We will present
the concept of their Russophobic policy at all levels of political and
cultural power. We will tirelessly cite the words of the Russia-hater
Kokh, the partner in crime and sympathizer of Chubays, Yavlinskiy, and
their ilk, the kindred spirit of Gusinskiy, Berezovskiy and their kind, who
first razed Russia to the ground and now at a safe distance from it has
drowned it in filth and venom. We will tirelessly call the liberals to
account for the millions of Russians destroyed by the "reforms," and the
billions of dollars stolen from Russia, and the incalculable diamonds
carried off with Fedorov's connivance. We will not tire of accusing them
of a dreadful genocide launched against the Russians which makes the
holocaust and the gas chambers seem pale by comparison. And they must know
that despite the power of the television centers that they have captured
they will drown in the ocean of hatred into which they are pushing thecountry.
The liberal analysts playing on the Russo-Jewish question must
understand that they, the liberals, having destroyed the international
ideology of Soviet society, have released the jinn of nationalism --
Russian, Latvian, and Jewish nationalism. A. Yakovlev, the chief "armchair
liberal," who initiated in the Baltic and the Transcaucasus the "people's
fronts" of nationalists who destroyed the USSR, will answer for the fact
that an aggressive anti-Russian nationalism prevailed in the CIS and is
gaining momentum in Russia. These people, the NTV analysts with their
honorary Cheka insignia, must take into account the dominant opinion
current among the people that the Jews were responsible for the appalling
atrocities of the red terror and dekulakization and that only respect for
the Communist Party of the Russian Federation is stopping many Russians
from openly venting their wrath on the Jewish Communists of that era. Thus
the Communist Party of the Russian Federation is the protective screen
preventing the emergence of anti-Jewish feelings. The destruction of this
screen will have tragic repercussions on the public psychology.
So that the "campaign of hatred" started by the liberals in 1991 and
continuing to this day does not drown Russia's roads and streets in blood
there must be an immediate dialogue -- not under the patronage of the
Israeli special services and NTV's analysts but under the auspices of state
institutions such as the Duma or the Federation Council -- a dialogue of
Jews and Russians aimed at averting a dreadful conflict imposed from
outside. The point of this dialogue is to carry out a frank, honest, and
humane consideration of the drama of interethnic relations in Russia. The
point is to remove the pathologies. The point is to create a mechanism for
lowering the conflict. The point is to create a harmonious multinational
society in which each nation and each national and religious interest is
not suppressed or insulted but preserved and developed.
If the liberals refuse such a dialogue, if it is undermined, and if
the "campaign of hatred" continues, we will show Russia and the world that
the interests of the Jews and Russians who love their motherland -- Russia
-- are being undermined by a handful of oligarchic mass media producing the
loathsome doctrine of "Jewish fascism" which is leading to catastrophe.
The Primakov Government, presenting a tough budget for 1999 to the
Duma, will receive the Duma's approval only if it, the government,
suppresses the Russophobic mass media which are responsible for Russia's
national catastrophe and are ready to use this wretched budget to finance
their cannibalistic channels.
Chikin, chief editor of Sovetskaya Rossiya.
Prokhanov, chief editor of Zavtra.
Yavlinskiy Theories on Government Rebutted
10 November 1998
[translation for personal use only]
Article by Aleksandr Velichenkov: "What Yavlinskiy Fails To Mention"
The government program is eliciting conflicting reactions. But it is
always better to judge something in terms of actions.
Yevgeniy Primakov's government is too often criticized, in
international circles too, for the vagueness and uncertainty in its program
of priority measures to get out of the crisis. The Financial Times,
Journal of Commerce and Commercial and New York Times have devoted articles
to this subject very recently. Here are some typical assessments: "In the
absence of an economic plan that inspires confidence the IMF has no grounds
for giving Russia new funds. Its decision to leave the talks was
inevitable." "This plan... will ultimately lead either to a high inflation
rate or to price controls and quota distribution" (Financial Times). "The
IMF has condemned the Russian Government's economic program and broken off
the talks on granting a new tranche." "The IMF mission believes that the
government's anticrisis plan is a significant step back in the process of
advancing toward a market economy" (Journal of Commerce...").
The New York Times, quoting Grigoriy Yavlinskiy's comment describing
Yevgeniy Primakov's economic program as "pointless," devoted its article
mainly to the Yabloko leader's tilt at the presidency, using his action to
combat government corruption as a flag. After reading this article one
cannot help recalling a very old program to carry out market reforms in
Russia snappily entitled "500 Days." Originally it was called the
Shatalin-Yavlinskiy Program. But then the academician somehow got
forgotten while the candidate of sciences remained. This program comes to
mind precisely because it was extremely goal-oriented, indeed it contained
nothing but a list of goals. A detailed, comprehensive list with deadlines
for achievement or implementation. Except that once again it was somehow
forgotten that Grigoriy Alekseyevich was prepared to reform the entire
/Soviet/ [word within slantlines published in boldface] economy in 18
months or so. Whereas we have been suffering for over six years now and
have so far clearly not received any "benefits of civilization for all"
except crisis. At the same time Yavlinskiy's subsequent actions make us
seriously question whether Grigoriy Alekseyevich is really an economist.
Thus, for example, in April 1995 at one of his numerous scientific
conferences in Moscow G. Yavlinskiy formulated the theory of a natural
(background) inflation rate of 8-10 percent a month inherent in the Russian
economy.We had this inflation rate throughout 1997, not just for a month as
Yavlinskiy had predicted.
Another no less important theory of Yavlinskiy's -- that Russia does
not have a payment arrears problem as such -- has been used more than once
by our famous theoretical economist, who (not counting an three-month
"trial" period in 1991) will never risk becoming a practical economist.
But, as is known, practice is the criterion of truth. He has fallen silent
only now that the nonpayment crisis has reached the banking system.
We have recalled this whole subject to draw our readers' attention to
a curious fact within both the IMF itself and those U.S. and Russian mass
media which reflect only the Fund's opinion: The practice of "double
standards" can be clearly discerned. If somebody is "our own man" and is
prepared to say all the right things to the IMF, then people will be
prepared to forgive him any really foolish acts, to show him from all
angles on television, and to forget his past mistakes. But if he is an
"outsider," like [First Vice Premier Yuriy] Maslyukov or [Premier]
Primakov, then it is a case of "it is not exactly what I want" and the plan
is not a plan. And loans might not be given even if they have beenpromised.
Although in our estimation a plan is a plan and business is business.
Since the crisis the ruble rate has been stabilized, and nobody is trying
to speculate on its fall any longer.
The banking system has quite clearly started to recover. The other
day the Central Bank reported proudly (and for the first time in its
history) that the balance of funds in commercial banks' correspondent
accounts totaled 22 billion rubles [R]. If we ponder this sum, it is
impossible to imagine a more graphic and vivid illustration of the payment
arrears problem. Because it is this money (and not the rubles in State Tax
Service and Finance Ministry accounts or cash in citizens' pockets) that
services the entire volume of production in our country, which this year
totals at least R3.5 trillion. The total balance in commercial bank
accounts is so negligible (in the summer of last year there was four times
as much money) that it is simply absurd to talk of any inflation in the
next few months even given an emission of R80-100 billion. There is none,
there will be none, and there is nowhere for it to come from. On the other
hand the people will receive wages, they will pay rent, and banks will
expedite stalled payments. Inflation, which was 36-38 percent in
September, fell to 3 percent in October and will fall even further in
Gradually, after the lapse in August-September, tax and customs
payments are being restored. During October a full R17 billion was "raked
in," which is, of course, not quite enough since R26-28 billion is needed
but is much more than almost nil in September. After the IMF had terminated
most lines of credit to us, there was finally clarity concerning the
fourth-quarter budget. Since there is no longer anybody to rely on, the
government's hands have been freed and it has submitted a draft law on
amendments to the existing budget to the Duma. The government is sure that
it will collect the necessary taxes, and the experience of October is
convincing evidence of this.
Putting words aside and considering only action, we can judge exactly
what the government is doing entirely realistically and what success we are
having. Currently the government is clearly pulling off Baron Munchausen's
trick of dragging itself out of the mire by its own hair. But, let us
recall, the next "painful date" -- 17 November, when compulsory payments in
respect of all the banking system's liabilities begin -- is very close. If
that date too is successfully negotiated without falling into potholes, the
problematic 1999 budget lies ahead. Problematic by no means because the
government does not know what to do and how to do it. Problematic because
people are playing games with us again: We will give you money, we will
not give you money; we will give you money if you show us your plan.
Nemtsov: Democratic Union Possible for Duma Poll
Kiev, 10 Nov (Interfax-Ukraine) -- Former Russian deputy Prime
Minister Boris Nemtsov has said it is possible that a broad democratic
coalition will be formed in Russia for the 1999 Duma elections.
"The only problem of democratic forces in Russia today is the absence
of unity, which is largely a result of the ambitions of their leaders," he
told an economic conference in Kiev.
Nevertheless, he said time is working to the benefit of democratic
forces. Their positions will be strengthened "by the growth of the
inevitable negative public response to the actions of Yevgeniy Primakov's
left-wing government," he said
Moreover, "two questions will arise -- relations with Our Home is
Russia and Yabloko" movements, Nemtsov said.
"It is possible to predict the outcome of talks with Yavlinskiy -- it
will be almost impossible to agree with him, even though now negotiations
will be conducted not only by Yegor Gaidar but also by united democratic
forces," he said. "But it is possible to agree with Our Home is Russia," he
added.In any case, democrats have good chances in the future Duma. A
democratic coalition may collect 10-15 percent of votes and, in addition,
"Yabloko will surely clear the 5 percent barrier," Nemtsov said.
New York Times
15 November 1998
[for personal use only]
For Now, U.S. Calls Russia's Bluff
By MICHAEL R. GORDON
MOSCOW -- When the Kremlin finds itself in a tight economic squeeze, it acts
a lot like the sheriff in the Mel Brooks comedy "Blazing Saddles." Pursued by
a furious lynch mob, the sheriff puts a gun to his own head and threatens to
pull the trigger if the crowd doesn't back off.
As a bitter winter closes in, Russia has again tried to take itself hostage.
Kremlin aides have drawn ghastly scenarios of the troubles that they say will
swamp their nation if the West refuses to supply billions in fresh aid.
Rubles will roll off the printing presses, they warn, spurring
hyperinflation. The nation will default on billions of dollars of foreign
loans, leaving Western banks high and dry. The oratory has even been salted
with talk of the collapse of the Russian state and the breakdown of nuclear
This time, however, the scare tactics have not worked. Call it tough love,
Russia fatigue or a simple capitulation to domestic U.S. political pressure:
For the first time in President Boris Yeltsin's tenure, the United States
seems prepared to let his government fall flat on its face.
This is not to say that Washington has turned its back on Russia. It is
still spending hundreds of millions of dollars to help safeguard nuclear
materials. It is also sending $625 million worth of food to keep Russians from
going hungry and prevent a breakdown of the social order.
But having addressed the most serious security and humanitarian problems,
Washington is no longer pressing the International Monetary Fund to provide
billions of dollars in new assistance or trying to prop up the Russian
The Clinton administration's hands-off approach has been spelled out in a
series of speeches by top State and Treasury department officials.
"International macroeconomic support of the kind we provide through the IMF
must wait until the Russian government shows itself willing and able to make
the difficult structural adjustments necessary for recovery and growth,"
warned Deputy Secretary of State Strobe Talbott.
"Money from outside will do no good if it is inflated away or it if pauses
only briefly in Russia before ending up in Swiss bank accounts and Riviera
real estate," he added.
In political terms, the Clinton administration's response is hardly
surprising. For most of the Yeltsin years, the Clinton administration was
closely identified with the market reformers in the government like Anatoly
Chubais, Sergei Kiriyenko and Boris Nemtsov. Talbott went so far last year as
to proclaim that Russia had begun to turn the corner under their guidance.
The West did more than talk. A three-year, $10-billion-dollar program of IMF
assistance was announced in 1996 just in time to boost Yeltsin's re-election
prospects. When that was not enough, the West cobbled together a $17 billion
rescue plan in July to help buttress the ruble.
But Washington's expectations were shaken when the rescue plan failed.
Russia's reformers were forced to devalue the ruble and, in a dubious bit of
policymaking, slapped a 90-day moratorium on the repayment of foreign debts
held by Russian banks.
Soon the reformers were out, Yevgeny Primakov was prime minister and a new
coalition government seeded with Communists began to talk about the need for
greater state control of the economy and issued a litany of potentially costly
Having spent billions trying to support Russia's free market proponents
without a clear victory, the West was not rushing to spend billions more -- at
least not until Primakov's team drew up a detailed budget and economic plan.
The Western response has been a rude shock for the Russians. Viktor
Gerashchenko, the Communist now in charge of the Central Bank, and Finance
Minister Mikhail Zadornov came to Washington last month with only the vague
outlines of an economic plan, hoping to line up billions in IMF aid. They
Whether the Clinton administration's tough approach represents a thorough
rethinking of Russia is another matter. Critics say the administration is
rightly wary of bailing out Russia, but note that the crisis came to a head
when the U.S.-backed reformers were in the saddle.
"There is no self-analysis in Talbott's speech, as if we did not play a role
in what happened in Russia," said Thomas Graham, a senior associate at the
Carnegie Endowment for International Peace and a former U.S. diplomat in
It is too soon to say if the Kremlin is really prepared to take the tough
steps that would be required to pry loose the IMF funds.
To try to soften up Washington, the Primakov team has pushed for
ratification of the Start-2 treaty slashing long-range nuclear arms. It has
also promised to limit the printing of new rubles and pledged budgetary
So far, however, the Russia's economic strategy is mostly just talk. A test
may come next month when the government outlines its 1999 budget, which will
show how it plans to deal with its huge deficit.
"They have not done a lot of the things that worry us the most," said the
U.S. official. "But no one has seen next year's budget and it is still not
clear who is really calling the shots."
St. Petersburg Times
November 13, 1998
Artists' forecast: Future looks cloudy
By Christa Lee Rock
St. Petersburg's artists have reached a nadir of disillusionment with Russian
politics. There's no two ways about it. Apathy abounds. Cynicism runs wild.
Fate rules the world.
At least that's the impression given by "Vocabulary, or What We Need Most of
All," an exhibit that opened Tuesday at the Museum of the Political History of
Russia. In "Vocabulary," 17 St. Petersburg-based artists attempt to deal with
the aesthetic remnants of Socialist Realism and Soviet political paraphernalia
- and ultimately decide nothing can really be done with any system, past or
Posters, banners, "sculptures" - all potent media used by the Soviet political
machine once upon a time - lose their purpose in a post-Soviet context.
Banners, which may have once called for the union of the world proletariat,
here cry out to today's apathetic bourgeoisie. "I should have bought those
boots" pronounces one purple banner; another made from what appears to be a
floral bed sheet reads: "Got to do something with my money." A red-and-white
strip advocating "DEMOCRACY" is torn down the middle.
This pervading sense of futility continues with the posters: Denis Chabanko,
for instance, appropriates the old Constructivist practice of creating art
with newsprint by making acerbic little poems out of newspaper headlines. "One
doesn't like to work every day for years," reads one. "But on the brink of
doom all forces are against work!" It is a potent message, indeed, but the
poem looks like some Dadaist concoction made from randomly selected words.
Suddenly, Chabanko's admonition seems less an empowering critique than a
random message handed down by chance.
A group of artists calling themselves "Money" also evoke the famously Russian
fatalism in a wheel-of-fortune installation that asks "Who's to Blame? What to
Do?" Here, Russia's fate is determined by spinning a wheel, which matches the
current political problem to a random solution. Here are the results of my
Who's to Blame? - Yeltsin. What to Do? - Make a buck.
Who's to Blame? - Stupidity. What to Do? - Work a lot.
Who's to Blame? - Oligarchy. What to Do? - Be patient.
Who's to Blame? - We ourselves. What to Do? - Wait.
So there you have it, ladies and gentlemen: Russian artists, supposedly the
vanguard of new ideas, believe the country should sit and wait. Though some
artists admittedly chastise such apathy in the exhibit, no one offers any real
direction - with the possible exception of one Andrei Vasilyev, who uses the
old Soviet poster format to promote redemption through the Orthodox Church.
So for those who believe that art reveals a nation's politics, "Vocabulary" is
worth a visit - if only to witness the frightening sense of helplessness among
Russian artists and the society they represent.
From: "Alexander Samoiloff" <firstname.lastname@example.org>
Subject: Hello Russia #12
Date: Sun, 15 Nov 1998
FREE RUSSIAN WEEKLY NEWSLETTER # 12
November 15 1998
Regional political events, business, culture, crime, way of life and another
issues, coming to you from Khabarovsk, Russia's Pacific Rim.
- To subscribe send mailto: email@example.com with Subscribe in subject
- URL: http://www.angelfire.com/biz2/HelloRussia/index.html
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I.A PROVINCIAL VIEW ON STATEMENT OF KOKH
(From Alexander Samoiloff)
This week many Russian and international press sources have published
flippant remarks of Former Russian Deputy Prime Minister Alfred Kokh's on a
Russian-language radio station in New York. His statement raised up the wave
of indignation and disputes not only among political parties and leaders,
but also among many plain Russians. I hope that our readers earlier had a
chance to read this statement in details.
>From the great complexities the great simplicities may arise sometimes.
I mean that to understand events sometimes it is enough to answer questions:
WHO? WHY? CUI BONO (Who benefits from that)?
I think it's enough to mention that Mr. Kokh was in the same team with a
group of smart young reformers of Russian economy, who leaded Russia to the
edge of abyss by playing a notorious privatization and GKO Pyramid games.
The Law of Matter states that no matter can arise from nothing and no matter
can disappear into nothing. So, Russian wealth and money have not just
disappeared into nothing but were robbed out and first of all by the group
of Kremlin decision-makers.
Kokh was Vice Premier of Russia, Head of the Russian State Property
Commission and President of "Montes Auri" company, which paid to Chubais and
other team members hundreds of thousand USD. He was not the least person
among Russian decision-makers and created his wealth exactly on those
In 1997 Russian reporters caught Kokh and Chubais by the hand, accusing them
of receiving from a small Swiss company about USD 100,000 per person
royalties for never written books about privatization. After the bribe and
tax dodging scandal Chubais was saved by Eltsin, who made a sharp public
statement: "I will not give you Chubais". But Kokh was fired from the
government on August 11. In this way he lost a possibility to suck free milk
from a budget cow and lost his immunity to legal persecution.
After that Kokh immediately lost all his enthusiasm and faith in the future
of Russia and on August 12 1997 fled to USA.
Last week, right after publishing a book "Sales of Soviet Empire", Kokh
suddenly has made few scandalous public statements, where he spoke
condescendingly and sarcastically about Russians. By speaking of Russians in
the third person, he implied he does not consider himself part of the
Russian people. He muckraked Russian government, Zyganov and Communists,
Russian culture and etc. This story has a strong smell of a book
advertisement campaign, when many people will want to buy a book of such
But another side who most benefits from Kokh statements are radical
Communists and Russian nationalists like Makashov, who now are raising
anti-Semitic feelings among plain Russians. They show to Kokh as an example
of a "Jew who robbed your Russians and now spits into your face". We
remember that Hitler raised up similar feelings among German people and than
Nazi came to power. Anti-Semitism was widely used by many Russian rulers,
Czars and than Stalin, and certainly may find a support among some of hungry
and many times cheated by the government plain Russian people.
In this case, no matter if it was done on purpose or not, Kokh plays the
role of provocateur of anti-Semitism in Russia.
Crisis Seen as Chance for Agriculture
10 November 1998
[translation for personal use only]
Article by economic observer Yevgeniy Anisimov under general
heading: "Fallen Ruble Could Boost Our Agrarians... But
Government Program Could 'Let Slip' Relations With Washington"
If Vice Premier Kulik Is a Real Agrarian Lobbyist He Should Now Become
Tougher Monetarist Than Gaydar [subhead]
It is hard to understand Russian officials: Some say that famine does
not threaten us, others are holding talks with America on humanitarian aid.
Luzhkov would like to get food in Poland, paid for by deliveries of
Russian gas there, saying that we will deal with Gazprom ourselves. Poland
is prepared to supply us with humanitarian aid if the European Union pays
for it. Some specialists are trying to persuade us that there is not
enough of our own grain, meat, and poultry to feed the country while others
are reminding us that the private sector produces 90 percent of potatoes,
76 percent of vegetables, and 55 percent of meat, and that sector is
building up production volumes. But the former collective and state farms
have so far only been cutting back production.
The overall picture is approximately as follows: There is enough food
in the country to survive until next year but the problem lies in its
redistribution. In the large cities, geared to imports, things are
difficult right now but throughout the country as a whole there is even a
certain amount in reserve. And that situation creates a unique opportunity
for the Russian countryside -- for the first time in recent years working
the land has become profitable. And seriously profitable, profitable in an
entirely market-oriented manner. Prices for food are geared to the dollar,
so they have increased drastically while expenditure on production is
reckoned in rubles, so its increase lags behind the rise in price.
Today the countryside could drastically increase production volumes
since competition with imported goods has ceased to be a topical problem
because of the leap in the dollar exchange rate. The countryside does not
need much for this -- just a little time and money.
So far there is still time: In the foreseeable future the dollar
cannot fail to rise. In December its worth will probably pass the 20
rubles [R] to the dollar mark and in February, when the economy will be
digesting the emission that has already taken place and the one that is
still to come, the dollar could pass the R30 mark. And it could leap even
higher -- it depends on the size of emission.
If there is a demand for Russian food and if there is time to develop
production, it is only a matter of money. Previously the agrarians would
have dipped into the state's pocket without pause for thought and would
have extracted centralized credits, which since time immemorial have never
been returned, and would have buried them in the ground with greater or
lesser success, after which they would have waited for the fall. Today
that trick will not work despite the fact that the agrarians' chief
lobbyists, G. Kulik, holds the post of vice premier. It will not work if
only because Yu. Maslyukov, the military-industrial complex's chief
lobbyist, holds the post of first vice premier. The military-industrial
complex is as short of money as the agro-industrial complex. And, of
course, there is one more reason which the lobbyists usually forget during
their clashes -- the state's lack of money as such.
Under these conditions Kulik (and all the agrarians with him) will
have no choice but to go through a drastic transformation into a motive
force of the reforms. They can take money from Russian banks but only if
the credits are secured and if the interest rate for using other people's
money is not very high. The countryside has only one way of providing
security for the return of credits -- by mortgaging the land. For that the
land must be in private ownership. And the size of the interest rate for
the credit depends on the level of inflation in the country. The lower
inflation, the more accessible bank credits are.
So the agrarians today are faced with a choice: either sticking to
their former believes and relying on state aid and almost certainly
suffering defeat in unprecedented lobbying fighting, or becoming tough
monetarists and reformers, introducing private ownership of the land, and
struggling with all their might for a minimum emission.
Agriculture has received a chance thanks to the crisis. Whether it
will manage to make use of it depends on its ability to waive its
principles for the sake of economic advantage. usually in a head-on
confrontation between principles and advantage it is principles that have
lost out. And (in full accordance with Adam Smith's theory), it is the
consumers -- that is to say all of us -- who have won.
Russia's Debt Moratorium Ends
November 15 ,1998
MOSCOW (AP) -- A 90-day moratorium on Russia's foreign debt repayments
expired Sunday, but the government and the country's troubled commercial banks
may not be able to resume payments.
The Russian government decided Aug. 17 to impose the 90-day moratorium on
repayments of foreign commercial debt when it devalued the ruble. A number of
foreign creditors threatened to seize Russian assets overseas as a result, but
little action came as a result.
Some of the country's larger banks will be able to pay their debts, but many
will face law suits and see their foreign assets seized, the Interfax news
Russian banks' debt on forward contracts to foreign banks totals about $6
billion, but the banks will probably be able to pay off no more than $2
billion, Interfax said.
And as the banks scramble for dollars to pay off the debts, the ruble rate is
likely to fall hard, Interfax said, citing an unidentified source.
The Central Bank will ``help our banks keep the negotiations with Western
creditors going'' and try to head off any law suits, said Central Bank Vice
Chairman Andrei Kozlov, according to Interfax.
But Central Bank Chairman Viktor Gerashchenko said the body would only support
those banks that can insure debt settlements and retain ``the skeleton of the
banking system,'' according to the ITAR-Tass news agency.