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Johnson's Russia List


November 17, 1998   
This Date's Issues: 2481 •• 

Johnson's Russia List
17 November 1998

[Note from David Johnson:
1. Jean MacKenzie: Request for information on agricultural aid to Russia.
2. Stephen Shenfield: Antisemitism in Russia.
4. AP: Russia Urged To Abandon Nuke Treaty.
5. The Electronic Telegraph (UK): Marcus Warren, Diet of despair in Russia's 
cash-starved jails.

6. Moscow Times: Kirill Koriukin, Government Unveils Economic Measures.
7. Reuters: Andrei Khalip, ANALYSIS-Well or not, Yeltsin provides stability.
8. David McFadden: A perspective on what the United States should do, in

of my recent experience as a Fulbright scholar in St. Petersburg.
9. Alex Elder: New book: RUBLES TO DOLLARS.
10. SUMMARY OF DONALD JENSEN BRIEFING at Kennan Institute, “After the Fall: 
Primakov and the ‘Oligarchs.’

11. Reuters: Ukraine stability masks deeper problems.
12. Reuters: Brzezinski says sees no new NATO moves at summit.]


Date: Mon, 16 Nov 1998
From: (Jean MacKenzie) 
Subject: Request for information on agricultural aid to Russia 

Dear David:

I am researching a piece on agricultural aid to Russia -- how much
harm/good it does, historical footnotes, etc. I would appreciate leads and
comments from the JRL community. If anyone cares to contribute, please
contact me at:

Thank you, Jean MacKenzie, Boston Globe Correspondent


Date: Mon, 16 Nov 1998 
From: Stephen Shenfield <> 
Subject: antisemitism in Russia

A few points I would like to contribute to the discussion sparked off by
the scandal surrounding Makashov.
It is true that among the gangsters and swindlers who have robbed the
(multi-ethnic) people of Russia there are disproportionately many "Jews" --
that is, individuals of Jewish origin. I don't simply say Jews, because it
is very doubtful whether these people are Jewish in a religious, cultural,
or any other sense that should matter. We are dealing here with a
semi-mythical "racial", i.e. descent-caste, identity -- like the Buraku in
Japan. But for convenience I'll drop the inverted commas from now on.
Last week we had a talk at our institute by Boris Kagarlitsky, a Russian
socialist himself of Jewish origin. He explained the unfortunate fact of
Jewish overrepresentation among the oligarchs by pointing to the high
proportion of "Jews" occupying informal middleman roles in the Soviet
economy -- the "clever Jews" who would use their varied contacts to fix
things for enterprise managers etc.. Jews have traditionally occupied such
roles for millenia. Such people were well-placed to take advantage of the
opportunities offered by "economic reform." In particular, corrupt
government officials used them as placemen during the process of insider
privatization -- the "clever Jews" were entrusted temporarily with the
privatized assets, but the officials expected to take them over on leaving
government service. But the "clever Jews" turned out to be even cleverer
than their associates thought -- and hey presto! there emerged Berezovsky,
Gusinsky, and the other Jewish oligarchs.
Certainly, as our friends in Khabarovsk point out, the behavior of
individuals like Berezovsky and Kokh fuels antisemitism, and objectively
they can be regarded as "provocateurs of antisemitism" -- in the sense that
it would be better for Jews in Russia (and for everyone else, of course,
but especially for Jews) if they did not exist, or if they were to publicly
repent and commit suicide (which won't happen, I'm afraid). On the other
hand, as Lebed says, every people has a right to their own bastards (sorry,
I don't mean to insult the "illegitimately" born, you know what I mean) --
and the right not to be held collectively responsible for what "their own
bastards" do. The Russian philosopher Berdyaev recounts how a Jewish
neighbor of his complained that as a Jew he was blamed for Trotsky, but
that Berdyaev as a Russian was not blamed for Lenin -- although in fact
there are many nationalists in the "newly independent states" who do blame
"the Russians" for Lenin and Stalin... and the Abkhaz naturally blame "the
Georgians." But the imposition of collective guilt is neither fair nor
rational, is it? Let Kokh and Berezovsky be brought to trial for their
crimes and get the bullets in their skulls that they so richly deserve --
but for their crimes, not for being Jews, and alongside their fellow
criminals of all other ethnic origins.
An important source of the ethnic tension in Russia is the ethnic division
among the ruling kleptocrats. At the level of organized crime gangs, the
main division is that between the ethnically Russian gangs and the
Caucasian gangs (Chechen, Azeri etc.). At the level of the oligarchs, it
is the division between the Jews and their Russian allies on one side and
the antisemitic "national" oligarchs on the other. It is hardly
coincidental that Berezovsky has close links to the Chechen rather than to
the Russian crime gangs. The Jewish-cum-Caucasian gangsters are the main
support of the "reformist" Yeltsin regime, while the Russian gangsters are
the main support of the Russian nationalists and fascists, e.g. the links
between Barkashov's Russian National Unity and the Solntsevo gang in
Moscow. From the point of view of the people of Russia of all ethnic
origins, there really should be no reason to prefer one lot to the other.
"Both are worse." (I refer to the old joke about how Stalin replied when
asked which was worse, the left opposition or the right opposition.)
Another question I would like to raise. Why are Berezovsky and his people
directing what purports to be their campaign against antisemitism against
the Communist Party? For the Communist Party is not the main threat to
Jews in Russia. Not only because a large part of it remains
internationalist, but mainly because it is an inert and declining force.
It is unlikely to come to power, and if it did nothing terrible would
happen to the Jews as a direct result. The main threat comes from the
Russian National Unity, which is a dynamic, well-organized and violent
force, steadily gaining in momentum, and with a clear intention of killing
the Jews (among others). The second national congress of RNU is planned
for the near future in Moscow: it is billed as a huge event, with up to
10,000 participants. Why does Berezovsky not concentrate his fire on the
RNU or call for its suppression -- for which, in contrast to a banning of
the CPRF, there would be ample legal justification? I suspect that it is
not as a Jew frightened by antisemitism that Berezovsky attacks the CP, but
rather as an oligarch fearful of an attempt by the left to confiscate his
ill-gotten gains. And yet, as always, it is precisely the left --
modernized, reinvigorated, and cleansed of ethnic prejudice -- that alone
is capable of putting up effective resistance to the advance of fascism
among the masses of the people.

No pasaran.


Date: Mon, 16 Nov 1998
From: (Renfrey Clarke)
Subject: Russian Communists bend to anti-semitism

#By Renfrey Clarke
#MOSCOW - The setting could have been Germany in the 1930s. Over
a period of about a month, a well-known parliamentary deputy
claimed that
``Yids'' were responsible for the country's economic problems and
should be rounded up and jailed; vowed before media reporters
that he would ``round up all the [Jews] and send them to the next
world''; made the call ``To the grave with all the Yids!''; and
expressed a wish to ``take at least a dozen Yids'' with him when
he died.
#The country, however, was not Germany but Russia. The period was
October and early November this year, and the speaker was former
general Albert Makashov, a member of the parliamentary fraction
of the Communist Party of the Russian Federation (KPRF).
#If there were anything faintly Marxist about the KPRF
leadership, Makashov would have been summarily expelled from the
party. The KPRF deputies would also have voted to strip him of
his parliamentary immunity, so that he could be charged under
Soviet-era legislation outlawing ``incitement of ethnic
#What happened was quite different. Makashov was subjected to a
mild internal party rebuke. ``We took note of the impermissible
form of his remarks and condemned his intemperance,'' KPRF leader
Gennady Zyuganov recounted later.
#In the parliament, opponents of the Communists put a censure
otion on November 4. Makashov's comments, the resolution argued,
were ``harsh and bordering on the vulgar'', and ``provoked
concern in broad sectors of society.'' The motion was defeated,
with almost all the Communist deputies voting against or
#Up to this point, KPRF leaders had had a certain room for
dismissing Makashov's statements as outbursts by an isolated
party eccentric. But by refusing to condemn the statements
publicly, the KPRF leadership took responsibility for them.
Right-wing critics of the Communists seized on the poltical gift.
#Oil and media magnate Boris Berezovsky declared: ``The
Communists should be banned as the carrier of an idea that could
break Russia apart.'' Former Prime Minister Yegor Gaidar accused
the Communists of turning into Nazis, and argued: ``If Russia
wants to remain a democratic country it should ban the Communist
#What Berezovsky and Gaidar were proposing - suppression of the
political party with by far the largest number of seats in the
parliament - would put an end to any meaningful democracy in
Russia. But in setting the idea of a ban in circulation,
Berezovsky and Gaidar came across not as totalitarians, but as
indignant protectors of minority rights.
#If the Communist leaders can be outmanoeuvred so easily, they
plainly do not have much upstairs. But the debacle they suffered
was not just the result of tactical stupidity.
#The KPRF leaders also shrank from disciplining Makashov for the
reason that at least up to a point, they agree with him. Zyuganov
too finds himself upset by the presence of Jews, though he has
been more squeamish about expressing it than the flamboyant ex-
#``There is not a single audience today,'' Zyuganov declared
during October on the television program <I>Akuly Politpera,<D>
``...that does not ask questions about the subject of Jews. And
this subject should alarm all of us. It is no secret that the
personnel policy followed by Yeltsin has violated the principle
of national representation in all our country's law enforcement
agencies, the economy, finances and journalism.... Today the
Russian people feel encroached upon.''
#Zyuganov is also on record with statements arguing that there
are ``too many ethnic non-Russians'' presenting the television
news, serving in the cabinet, and occupying other prominent
posts. The suggestion is that the state should regulate
appointments to make sure that ethnic Russians (who make up about
80 per cent of the national population) are not crowded out by
Jews (who make up about 0.5 per cent) and members of other
minority ethnic groups.
#These views are the political antipodes of the proletarian
internationalism which Marx argued for. But then, Marx would have
difficulty tracing any of his ideas in the practice of today's
Russian Communist leaders.
#While the country's new capitalist elite pursues the concept of
class struggle with vigour and ruthlessness - to the extent of
not even paying wages to millions of workers - Zyuganov and his
colleagues have discreetly put the idea aside. Instead, they seek
a comfortable accommodation with Russian capitalism - an
accommodation that now includes ministries in a government that
is anything but hostile to private business.
#Such a project requires a certain political base. This cannot be
had among politically active workers, few of whom feel anything
but hatred for the new elite to whom the Communist leaders are
cosying up. Instead, Zyuganov and his colleagues have sought to
base the party on nationalist sentiment, presenting the KPRF as
more ``Russian'', and more concerned for the status of Russians
compared with other ethnic groups, than its opponents.
#Once the Communist leaders have set out on this course, it is
only consistent for them to promote febrile chauvinists like
Makashov, who has a wide following among Russian nationalists. If
Makashov calls for the dignity of Russians to be upheld through
massacres of Jews, the party leaders are hard put to move
resolutely against him. After all, Zyuganov himself identifies
the presence of Jews in Russia as cause for ``alarm''.
#Jewish members of Russia's new elite are understandably appalled
by the increasingly open racism of the leaders of the country's
largest political party. But the great majority of Russia's
capitalists are not Jews, and have no special reason to lament
the prospect that Jewish competitors will be removed forcibly
from the scene. Meanwhile, if the Communist leadership encourages
workers to exhaust their energies fighting each other - Russian
against Jew, Russian against Tatar, Russian against Chechen -
that is something the capitalists can readily live with.
#As this suggests, the decision by the KPRF leaders to defend
Makashov is an ominous development not just for members of ethnic
minorities in Russia, but for the country's working people in
general. For years, politically conscious workers in Russia have
understood that Zyuganov and his colleagues represent historical
wreckage that needs to be sidestepped or swept away. It is hard
now to avoid a more far-reaching conclusion: that the KPRF
leaders have become enemies needing to be fought.


Russia Urged To Abandon Nuke Treaty
November 16, 1998

MOSCOW (AP) -- A former Russian defense minister urged lawmakers Monday to
abandon the stalled START II treaty, which sharply reduces Russian and U.S.
nuclear arsenals. 
Igor Rodionov called the treaty it a ``treacherous'' document, and warned
Russia's economic troubles were already eroding the military's strength. He
said reducing nuclear weapons would leave Russia with few defenses left. 
President Boris Yeltsin fired Rodionov last year for failing to radically trim
Russia's armed forces. 
Russia's lower house of parliament, the Duma, is revising a bill that could
pave the way for ratification of the treaty. 
Signed by both countries in 1993 and ratified by the U.S. Senate in 1996, the
treaty would cut Russian and U.S. nuclear arsenals in half to 3,500 warheads
Rodionov, speaking to lawmakers in the Duma on Monday, said Russia ``should
not cater to NATO and the United States'' in considering ratification. 
``It is a treacherous treaty that is strategically disarming us,'' he said. 
Yeltsin has long urged the ratification of START II, but the Duma, dominated
by Communists and nationalists, has repeatedly delayed action. 
Some Russian officials have said the government hopes ratification of the
treaty will improve Russia's prospects of getting international aid. 


The Electronic Telegraph (UK)
17 November 1998
[for personal use only] 
Diet of despair in Russia's cash-starved jails
By Marcus Warren 

RUSSIAN jails, already overcrowded and a breeding ground for disease, are
struggling to feed their inmates because of the nation's economic crisis.
A state within a state, the Russian prison system is now barely able to
provide its one million inhabitants with a proper diet or treat the
tuberculosis from which many suffer.
Its prisons, labour camps and remand centres, described in one United Nations
report as "hell on earth", still have their secrets. But the true scale of the
misery can be guessed at from the few reports that reach the world outside. 
Food, vitamins and clothes are desperately needed for 80 young children and
babies at a women's prison at Mozhaisk, 70 miles from Moscow, it emerged last
week. Some of the children are losing their hair because of malnutrition.
A trip to Ivanovo, 200 miles from the capital, revealed a world where warders
spend much of their time raising funds to supplement the 3p a day Moscow
budgets for feeding each prisoner. Ivanovo has a good record for feeding its
prisoners. Even so, inmates at its remand prison, locked up in cramped cells
for 23 hours a day, complained that they went without sugar and butter and
rarely ate meat.
One in 10 was ill with TB. "We are simple Russian people, zeki," said Sergei,
an emaciated 26-year-old in the TB block, using the slang word for prisoners
coined in Soviet-era labour camps. "The most important thing is to survive." 
Survival is the most one can aspire to in such conditions. "You can judge a
man by his idea of happiness" was the slogan painted on one wall of the main
block. But even the staff seemed cowed by their surroundings.
The officers had every reason to look depressed. They were expected to keep
the place running despite earning a mere £4 a week and still being owed wages
for the past two months. 
At lunch time a foul-smelling tureen of chicken noodle soup was wheeled from
cell to cell and its contents ladled into mess tins poked though the door.
Breakfast had been porridge. Dinner would be vegetable ragout. "Meat? What's
meat?' joked another prisoner with TB.
The unbalanced diet helps to spread the TB. But the shortage of funds that
makes feeding prisoners a struggle also jeopardises any cure. Ivanovo prisons
cannot afford to spend the £25 a month for treatment. Relatives of those with
the illness are encouraged to buy the drugs themselves and then donate them to
ease the burden on the state. 
The Russian government is keen to channel some of the humanitarian aid it will
receive from the West this winter into its prisons. It is also planning a
sweeping amnesty that could free up to a tenth of the prison population.
However, as far as the head of the Ivanovo remand prison is concerned, such an
amnesty will not go far enough. "Half the people in this prison are here for
almost no reason at all," said Vladimir Litvinov. "We are talking about people
pinching cabbages or potatoes in rural areas where life is very poor indeed.
They just shouldn't be here."


Moscow Times
November 17, 1998 
Government Unveils Economic Measures 
By Kirill Koriukin
Staff Writer

The Russian government over the weekend finally released the official text of
its long-awaited economic plan. 
The program, titled "On Measures by the Government and the Central Bank to
Stabilize the Socio-Economic Situation in the Nation," contains a number of
new tax proposals aimed at boosting domestic industry. 
One of the proposals envisages dropping restrictions on sales below cost.
Scott Antel, a tax lawyer with Arthur Andersen, described the planned move as
"the most important amendment to the tax system over the last five years"
along with the 1995 decision to drop the excess wages tax. 
The restrictions, originally meant to curb tax evasion, are instead "crippling
manufacturers," Antel said: Law-abiding companies could not pursue flexible
marketing strategies that were based on selling at a loss. 
A profit tax on sales below cost was already dropped some time ago, but other
prohibitive taxes, including a high value-added tax rate, remained. 
Another important step proposed by the government would allow producers
importing foreign-made equipment to defer customs duty and VAT payments. 
Under the current system, companies bringing in equipment have to immediately
pay an average of $32 on every $100 worth of equipment. 
The government plan says companies will be given an unspecified grace period
in which they can set up the equipment and start production before paying the
The measure "can be very useful" if it is "administered properly" and the
government succeeds in ruling out tax evasion, Antel said. 
The government would "give a little money today and get more later," he said. 
The innovation was probably the result of an agreement with large equipment
importers like Gazprom, Antel added. 
Gazprom has lobbied hard for tax breaks on the purchases of foreign industrial
Antel said, however, that the plan to lower the profit tax to 30 percent from
35 percent, stipulated by the plan, made little economic sense since "nobody
is making a profit." 
Peter Westin, an analyst with the Russian-European Center for Economic Reform,
or RECEP, criticized the program's proposal to gradually lower the VAT, saying
each percent knocked off the tax would cost the budget up to 14 billion rubles
($833 million at Monday's official rate). 
On the whole, according to RECEP estimates, "the net effect of the tax reform
seems to become a loss rather than a gain" for the state, Westin said. 
Antel was also skeptical about the plan in general, saying the government
could not restore taxpayers' trust "by simply modifying a few rules." 
But Arkady Dvorkovich, head of the Economic Expert Group at the Finance
Ministry, said the tax package in the plan was an important step toward the
approval of a new tax code by the State Duma. 
The government has discussed the proposed tax measures with legislators, and
they supported the package, Dvorkovich said. 
The tax proposals have also received the approval of both the Finance Ministry
and the State Tax Service, which have recently disagreed on Russia's future
fiscal policy. 
Apart from the fiscal measures, the government plan contains the requisite
pledges to pay overdue public sector wages and strengthen the state's role in
the economy. 
It says exporters will have to repatriate 75 percent of their hard currency
earnings, up from the current 50 percent. 
The plan also offers a domestic debt restructuring scheme that says individual
investors in the defaulted treasury bills will be paid in cash. The same would
apply to pension funds and insurance companies, which were obliged to invest
in government securities. 


ANALYSIS-Well or not, Yeltsin provides stability
By Andrei Khalip

MOSCOW, Nov 16 (Reuters) - For Russia, Yeltsin's battle with ill health may
turn out to be a blessing. 
The very survival of the 67-year-old leader, with his sweeping constitutional
powers, is a factor for stability, many analysts argue, as Russia confronts
its deepest economic crisis since Yeltsin led it away from communism. 
While many of the president's opponents have called for him to step aside --
the Communist-led parliament is still holding impeachment proceedings -- an
early presidential election would suit few if any of the main contenders to
succeed him. 
Given Russia's anarchic party system, the field of possible candidates is
large and many, both in the establishment and the opposition, are still
building blocs of support. 
``A sick Yeltsin in the Kremlin is a source of greater stability -- it is an
insurance against public disturbance,'' said Vyacheslav Nikonov, a former
campaign adviser to Yeltsin and head of the Politika Foundation think-tank. 
``We already have spent more than 18 months in such a state, and I am sure we
can easily afford the remaining 18,'' he said. 
Yeltsin must step down in mid-2000. 
Georgy Satarov, formerly a senior Kremlin aide and now the chief of the INDEM
think-tank, said Yeltsin's retreat from active political life because of
health problems provided a welcome balance in constitutional arrangements. 
``Illness or weaker powers make Yeltsin's activities more constitutional, as
he is equally remote from the government and parliament. In this way it may go
on easily until the end of his term. That is a very realistic prospect,'' said
The Kremlin brushes aside speculation on Yeltsin's health, saying it is
``okay'' and insisting that long spells in the country do not mean he is
neglecting his duties. 
He looked stiff and spoke slowly during a meeting with an aide on Monday but
the Kremlin insisted he would be well enough to meet visiting German
Chancellor Gerhard Schroeder on Tuesday. 
After he missed a state banquet with the Japanese prime minister last week, a
Japanese official said the Russian president looked ``like a robot'' and as if
he were ``on drugs.'' 
Today's Yeltsin is a far cry from the man who lashed the Communist leadership
in the dying days of the Soviet Union or roused supporters from atop a tank
during the 1991 coup. 
The media, once a vital source of support for Yeltsin, have drawn parallels
with senile 1970s dictator Leonid Brezhnev. 
Yet Nikonov said the present situation suited most opponents as it allowed
them to prepare for the polls in relative calm despite the critical economic
state of the country. 
``An ailing Yeltsin will not disband parliaments and won't start wars in the
Caucasus,'' Nikonov said, referring to actions in 1993 and 1994 that provoked
serious instability. 
Former Prime Minister Viktor Chernomyrdin, a declared candidate for the
succession, said at the weekend that Yeltsin was now unpredictable and
beholden to his advisers -- but said an early election would be even more
Nikonov said the opposition, which has made little progress on impeachment
proceedings, would probably conclude that forcing the cumbersome process to a
conclusion was too politically risky while he saw little chance of Yeltsin
stepping down voluntarily. 
``An impeachment, especially on health grounds, is something unheard of in
international practice and would create a very bad precedent. An early
election would be an extreme distabilising factor,'' Nikonov said. 
Yeltsin has passed much of the responsibility for policy to Primakov, a
compromise appointment made to appease the Communist opposition, but he
retains huge constitutional powers and control over the world's second nuclear
Yet analysts said Primakov, 69, cannot fully fill Yeltsin's shoes, although
they agreed his role was now close to that of a vice-president, a post that
has not existed since Vice-President Alexander Rutskoi led a revolt against
Yeltsin in 1993. 
Seeing a need to provide for a clear deputy for the head of state, some
politicians have called for a restoration of the vice-presidency. The latest,
on Monday, was Andrei Nikolayev, an ally of possible candidate Yuri Luzhkov,
the mayor of Moscow. 
One weakness of Primakov's position compared to that of an elected vice-
president on the U.S. model is that Yeltsin could reshuffle the political deck
again by simply sacking him -- having already fired two prime ministers this
But, Saratov argued, an ailing president was a more stable president. 
``Yeltsin can still bang his fist on the table,'' he said. 
``But he is not in a position to come to the Kremlin and sack everyone like he
used to.'' 


Date: Mon, 16 Nov 1998
Subject: A perspective on what the United States should do, in light of
my recent experience as a Fulbright scholar in St. Petersburg

By Dr. David McFadden
Director, Russian and East European Studies Program
Fairfield University (Connecticut)

Since returning to campus this fall following seven months as a Fulbright
scholar living, working, and teaching American history in St. Petersburg, I
have often reflected on why it is necessary for the United States, and
Fairfield more specifically, to continue its relationship with Russia,
especially in light of the financial collapse of Russian currency and banks
the political instability involved with an abrupt change of government. 
And more and more political pundits, editorial writers, and Russian
"experts," while disagreeing over who is to blame for RussiaUs collapse, seem
to agree that the United States should not get heavily involved this time, but
should stand on the sidelines while the dust settles. 
And yet, the reasons why I went to Russia last January have not changed.
The needs of Russia and its importance to the United States which drew 23
different faculty, administrators, and students on educational missions to
Russia in the past nine months remain as crucial, if not more crucial, than
ever. I would even argue that the very fact that U.S. decisions, American
money, and American advice proved disastrous for Russia in this instance is
all the more reason why American people, American educators, and all those who
have friends and contacts in Russia need to persist and even increase their
The immense challenge facing us now is to somehow keep the links with the
Russian people even as American aid and the American governmentUs role are
discredited, and anti-American sentiment begins to increase. 
What is fundamentally clear in this crisis is that the people are not to
blame--nor are the people-to-people aid programs to blame. Some of the best
programs--those bringing Russian undergraduates to study in the United States
(The Freedom Support Act), enabling Russian graduate students to study
business, economics, public policy and public administration (The Muskie
Fellowships), the various USIA programs of short-term seminars for teachers in
American studies and related disciplines, or the intensive technical
for Russian small businesses, entrepreneurs, and fledgling non-profit
organizations--have struggled, at great odds, and in the face of huge waste
and corruption at the top to build the civil society and community involvement
at the grassroots level so essential to long-term success for democracy and
free institutions, both economic and social, to flourish in a new Russia. 
My own experience teaching Russian undergraduates and graduate
students of
history and English at Fairfield's partner university in St. Petersburg,
State Pedagogical University, was that the interest in and hunger for contact
and information about the United States was strong in the new generation, and
it transcended the natural cynicism in government leaders of either country. 
Students peppered me with questions, borrowed books and videos about American
history, and eagerly accepted invitations to special seminars at the USIS
"American Center"for guest speakers on American topics. Faculty in the
Department were anxious to get training in use of the Internet, receive books
on American English, creative writing, and integrating American culture into
the English language curriculum. This remained true despite the great
difficulties facing higher education: lack of funding, lack of security for
faculty and staff and graduate students (to the point that salaries and
stipends are sometimes not paid and are usually late), and the overall decline
in the society's commitment to education as a whole. 
In the many instances where I or my family was invited into the homes of
colleagues and students, the unfailing hospitality was coupled with tremendous
curiosity, enthusiasm, and desire to learn. The same thing can be said for the
several schools we visited with my children, who are in the seventh and tenth
grades. Classes of English in all the schools wanted American pen pals, and
e-mail links with their American counterparts. 
But what, might you ask, do the Russians in their collapsed economic
have to offer us, as relatively well-off Americans living in Fairfield County?
All of us who have been there have our own stories, but the ones I have heard,
and my own experiences, are variations on several consistent themes. Russian
caring in the midst of want, Russian art and music in the families, even in
the face of the lack of a paycheck or the difficulties of daily living, and the
persistence of family and friends in the face of political and social
disillusionment are important reminders of lasting values, for Americans as
well as Russians.
Now is not the time to think about reducing or scaling back our
connections with Russia. Rather, we need to think creatively how to expand
them, especially those programs such as Fairfield's work with Herzen
University, which value people-to-people links, education, and training. We
need to find ways to bring more Russian students to American universities,
more Americans to Russia, deepen and broaden our cultural interaction, our
seminars, and our opportunities for interchange. Then, perhaps, we have a
chance to reverse over time, the mistakes of U.S. and Russian governments of
the past eight years and the heritage of 80 years of a terrifying and brutal


Date: Mon, 16 Nov 1998
From: Alex Elder <>
Subject: New book: RUBLES TO DOLLARS

Dear Fellow Russia Watcher,

As an expert, you may want to know about
RUBLES TO DOLLARS - the latest book on Russia, just released by the New York
Institute of Finance, a division of Simon & Schuster.
"RUBLES to DOLLARS is a delightful excursion guided by a true insider
into the often inscrutable Russian economy and financial markets. It covers
all the bases. Anyone wishing to gain a truly insightful and entertaining
glimpse of Russia in all its multi-faceted aspects today and what it will be
tomorrow should read this book" - writes Mark Mobius, President of Templeton
Emerging Markets Fund and a bestselling author himself.
Russian-born medical doctor and psychiatrist, Alexander Elder jumped a
Soviet ship in 1974, eventually arriving on Wall
Street. After the fall of communism, he started commuting between New York
and Moscow and wrote this book from his unique perspective -- as a Westerner
who is at the same time a true Russian insider. RUBLES to DOLLARS: Making
Money on Russia's Exploding Financial Frontier (New York Institute of
Finance/Prentice Hall Press, 0-7352-0062-9, November 1998,
$28.00) is really two books in one. Dr. Elder writes his memoir of Russian
history, culture, and recent normalization, while at the same time providing
an investing guide to Russian financial markets. Combining his insider's
knowledge and a Wall Street perspective, Elder gives his readers a roadmap
to Russia's exciting investment frontier.
RUBLES to DOLLARS traces Russian life from the country's
christianization a thousand years ago to its recent conversion to
capitalism. Dr. Elder shares his personal experiences and observations,
starting with the life under communism, through the changes encouraged by
perestroika, up until today's fantastic events and future financial promise.
The collapse of the communist system in 1991 left Russians free for the
first time in a millennium. Freedom has unleashed the creative energy of a
nation, propelling it into a headlong rush to catch up with the industrial
Divided into four distinct parts, RUBLES to DOLLARS guides readers into
Russian thoughts and motivations, as well as their economy. Part One, titled
"The Wild West Has Moved East," describes the recent political revolution,
the Depression of the 1990s, and the struggle against the "New Soviet Man."
With this basic understanding, the reader then moves on to Part Two, "Where
the Money Is" - a guided tour of the nitty-gritty of Russia's emerging bond,
stock, and commodity markets. In
the third part of RUBLES to DOLLARS, Elder explores what he calls "Pearls in
the Dirt," revealing fabulous prospects for investors in various sectors of
Russian economy: oil and gas, telecoms, utilities, and the emerging
consumer-oriented industries that he calls "The Russian Tiger Cubs." The
fourth part, "In with Caution, Out with Money" provides specific do's and
dont's for investors and traders. At the moment, Russian investment
opportunities, may seem a bit unstable to many investors, however
"...investing in Russia will become simpler and easier as time goes on, but
the great early opportunities will be gone."
ABOUT THE AUTHOR - Dr. Alexander Elder found himself on the dreaded
"KGB Wanted List" after he jumped ship in Africa in 1974. In the ensuing
years, he practiced psychiatry in New York, taught at Columbia University,
founded Financial Trading, Inc., and consulted for leading financial
institutions worldwide. Since the collapse of communism, Dr.
Elder has traveled extensively in Russia and other newly independent Eastern
European countries. He is a member of an exchange in Moscow. Dr. Elder's
previous book, TRADING FOR A LIVING, is an international financial
bestseller, published in six languages. Dr. Elder resides in New York and
Please order an autographed copy of RUBLES TO DOLLARS from us for
immediate shipment. Please email me for payment and shipment instructions.
Julie Ballin
PS: If you are not sure but curious, please send me an email - I will 
email you the first chapter of RUBLES TO DOLLARS
absolutely free - read it and see for yourself that you need this book!


Date: Mon, 16 Nov 1998
From: Cleve Gray--Center for Defense Information <>
Subject: Donald Jensen Discussion


WASHINGTON, Nov. 16 - Donald Jensen, Associate Director of Broadcasting for
Radio Free Europe/Radio Liberty in Prague, spoke here today at the Kennan
Institute for Advanced Russian Studies. Jensen, formerly attached to the
internal political section of the U.S. Embassy in Moscow, Russia, delivered a
briefing entitled, “After the Fall: Primakov and the ‘Oligarchs.’”
Jensen began by saying that the 90-day deadline for the debt moratorium in
Russia has recently expired. The result of this will be that legal action will 
now be taken by Western investors, he said. Over $100 billion in investments 
has been lost by Western financial institutions. 
The causes of the economic crisis, which is cultural and political as well,
according to Jensen, can be divided into “proximate” and “broad” causes. 
“Proximate” causes include the financial decline in oil and commodity
poor tax collection efforts, and Yeltsin’s health problems. Another cause is
the “confidence issue,” referring to concerns over the Asian financial crisis. 
“Broad” causes of the crisis include the failure to implement effective
economic reform policies rather than blaming the U.S. for bad advice. Other
“broad” causes include the following: Since 1991, Russia’s gross national
product (GNP) has fallen 50%. Capital flight is estimated at $17 billion a
year and production is down by half. 
Another problem in Russia today, according to Jensen, is the “fragmentation of
power,” including the diffusion of power from the center to regional areas. 
The fragmentation is furthered by the “succession struggle,” the political
wrestling to determine who will succeed Yeltsin. The end of the Yeltsin
era is
upon us, Jensen said. “Patrimonialism,” defined as a consistent cultural
history to regard land as the property of elites, is also a part of Russia’s
problems, Jensen said. In order for reforms to be effective, the economic
benefits of the elite “must trickle down” to the masses. Finally, the
cloud of crime is a prevalent concern as well.
The crisis has resulted in the “discrediting,” in the eyes of some
of the idea of democracy and those candidates in Russia who represent
democracy. This is undoubtedly a welcome development to anti-Western forces,
including First Deputy Prime Minister Maslyukov. 
Primakov, meanwhile, is balancing the main interest groups in Russia,
including the military. He is “acceptable” to many groups within Russian 
society. Despite what many have heard or read, “there is no renationalization”
occurring in Russia, Jensen said. “The continued emphasis is on revenue 
According to Jensen, the role of the oligarchs collapsed on August 17th,
1998. They are merely rearranging themselves, not dying, he said, and the 
city of Moscow itself is an oligarchy. In Russia today, the
majority of politics is informal and “money is the currency of political
power,” Jensen said, and “power is very personalized.”
The U.S. erred in treating Russia as a “normal country,” Jensen said. The
future is nebulous because the reform policies of Lebed and Luzhkov, among
o*thers, “are not seen as normal reforms.” Regarding the fate of Russia,
Jensen said that “continued pessimism is in order.” 
Jensen does not expect popular discontent to rise to the level of uprising
and he also doubts that Russia will breakup.


ANALYSIS-Ukraine stability masks deeper problems
By Christina Ling

KIEV, Nov 16 (Reuters) - Ukraine is starting to bounce back after a
financially bruising summer and autumn, but underlying fragility still
threatens the stabilisation process. 
"There is no basis for being calm about the future," said Viktor Pynzenyk, a
former economy minister turned parliamentary deputy and head of the Ukrainian
Fund for Reform Support. 
"Under this kind of economic policy there can be no economic stabilisation." 
The government has taken heart in recent weeks from the apparent success of
tough trading controls in stabilising the de facto devalued hryvnia. The
currency has been steady at 3.427 to the dollar after recovering from an
earlier low last month. 
The International Monetary Fund, funding Ukraine under a $2.2 billion loan,
praised the currency stabilisation on a visit earlier this month, and
government advisers are talking about starting to gradually lift the controls
in the next few weeks. 
But other economists welcome a relaxation of controls not necessarily because
they believe the hryvnia has stabilised. 
They say the controls make it impossible to determine the currency's real
market value, and that its movements after any easing of restrictions are
therefore unpredictable. 
While the government has pulled off tough debt rescheduling deals in recent
months, easing a major source of pressure on the currency, low budget revenues
and closed external capital markets make prospects for further debt servicing
Finance Minister Ihor Mityukov said last week that state debt totalled $14.9
billion as of October 1, of which external debt had risen $1.4 billion from
the start of the year to $10.9 billion. "We have now reached a critical
point," said Mityukov. 
Anti-crisis measures published on Friday foresee hiring a foreign adviser to
help restructure Ukraine's external debt and call for 8.6 billion hryvnias
($2.13 billion) of domestic debt held by the central bank to be restructured
before the end of the year. 
"They are going to face a very difficult 1999: they have a very large
financing gap," said Salomon Smith Barney emerging markets economist Amer
Bisat, saying parliamentary support for measures needed to keep IMF money
flowing was uncertain. 
"The financing gap, political uncertainty, the loans to restructure -- all
these things make the currency very vulnerable." 
Ukraine's previous success in juggling the demands of the IMF for fiscal
austerity and of investors that Ukraine honour its debts has kept IMF money
flowing so far and not all voices are gloomy. 
"Investors are turning a little more positive," said Peter Botoucharov,
emerging market economist at BankBoston in London. 
"We are seeing some improved interest in Ukraine because of good progress on
reforms and continued support from the IMF and the European Union." 
But the head of parliament's budget committee is already talking about
amending the draft budget, due to be formally presented to deputies on
Tuesday, to allow five billion hryvnias to be printed next year. 
Such talk worries those who see IMF support as key to Ukraine's ability to
weather the financial challenges ahead. 
The IMF says it needs more information and reform progress to make up its mind
on the next loan tranche and, in the first sign of tension in the relationship
this month, rebuffed the government's hope of issuing money to help meet
social payments. 
Finance Minister Mityukov said last week the government would seek other means
of raising the money instead of turning on the printing presses, but efforts
to boost budget revenues in the past have yielded little fruit. 
And even Mityukov says restructuring will not be enough on its own to keep
Ukraine, where economic growth has been capped by a lack of structural reform,
from a new debt crunch. 
"You also have the same old problems from before the Russia crisis -- the weak
revenue base...inefficient public enterprises, the fact that macro stability
is very vulnerable -- all Ukraine's classic problems," said Bisat. 
"The outlook remains very tense and very fragile." 
($1=4.030 Ukraine Hryvnia) 


Brzezinski says sees no new NATO moves at summit

VILNIUS, Nov 16 (Reuters) - Former U.S. national security adviser Zbigniew
Brzezinski, in Vilnius for a three-day visit, said on Monday he saw no
concrete decisions on NATO enlargement coming out of next year's summit. 
``My best estimate is that the Washington summit itself will make no
commitments regarding specific new candidates for membership in NATO,''
Brzezinski told journalists after meeting Lithuanian President Valdas Adamkus.
Lithuania and Baltic neighbours Estonia and Latvia have made European Union
and NATO membership their top foreign policy goals, despite repeated
objections from Russia over expanding the security alliance to its borders. 
All three were rejected from NATO's first round of expansion in 1997 -- which
took in the Czech Republic, Poland and Hungary -- but have maintained optimism
that they might get a more solid indication of membership next year. 
Brzezinski, who was national security adviser to President Jimmy Carter, said
the summit would likely reaffirm the NATO position that ``the door remains


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