November 19, 1998   
This Date's Issues: 2483 •2484• 

Johnson's Russia List
#2484
19 November 1998
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Report Says 2 Million Russian Children Lack Families.
2. The Times (UK): Russia in need of 'third way' as economic winter bites. 
Janet Bush says the IMF is wrong to cling to rigid free-market orthodoxy.
3. Financial Times: RUSSIA: Reform or bust (or both). John Thornhill says 
Russia's banking system is bust and there are few signs of healthy
institutions emerging from the wreckage.
4. Interfax: Media Chief Doubts Communists Win in Early Elections.
(Malashenko).
5. Komsomolskaya Pravda: New Yeltsin Book Cites Career Anecdotes.
6. Komsomolskaya Pravda: Despite Alarms, Russia Has Adequate Food.
7. Russian Info&Business Center: Dealing with Russia: A Winning Strategy 
for the Future.
8. Washington Post: Loren Graham and Andrew Kuchins, Scholars in Peril.
9. PANORAMA Extremist Guide.
10. Interfax: Army Decline Due Yeltsin's 'Unwillingness.' (Rodionov).]

******

#1
Report Says 2 Million Russian Children Lack Families 

MOSCOW, Nov. 19, 1998 -- (Agence France Presse) Two million Russian children
lack families, and almost two-thirds of those live in the street, a press
report said Wednesday. 
A study by the non-governmental organization "Association of Child
Psychologists and Psychiatrists," cited by the weekly Literatournaiya Gazeta,
said the number surpasses the period following World War II. 
Only about 650,000 of the children, out of a total population of 148 million
people, live in orphanages. Some 100,000 more are placed there each year,
according to Interior Ministry figures. 
The rest are considered street kids, surviving in cellars, attics, abandoned
houses, and in larger cities seeking shelter from cold in sewer systems. 
After leaving orphanages, children have a 40 percent chance of becoming a
criminal within 10 years. 
One in three become alcoholic and one in 10 commit suicide after a year on
their own, the Labor Ministry said. 
The suicide rate among Russian children has doubled in 10 years, said the
ministry. It said about 10 million Russian school-aged children never attend
school.

******

#2
The Times (UK)
19 November 1998
[for personal use only]
Russia in need of 'third way' as economic winter bites 
Janet Bush says the IMF is wrong to cling to rigid free-market orthodoxy 

Russia's parliament has this week been debating a bill that seeks to establish
the basic needs of Russians in order to calculate minimum wages and pensions.
The minimum requirements for a woman, a Dumas draft bill has decided, include
six pairs of panty hose and five pairs of underwear every two years. She
should be allowed two bras every three years, a skirt and dress every five
years and a winter coat every eight years. One bath towel is deemed necessary
every 23 years. 
If this isn't enough to ram home the message that Russia is unimaginably
different from industrialised economies in the West, nothing is. 
Even after the shock of the catastrophic events of midAugust, many financial
market economists, together with the International Monetary Fund, are still
clinging to the idea that, with a sweeping restructuring of Moscow banks, more
privatisation and proper tax collection, Russia will return, redeemed, to
market reform. 
Most analysis of Russia's current problems still revolves around highly
orthodox analysis honed on 19th Street in Washington. In this mind-set, there
is no acceptance of the possibility of a "third way" between the pure free
market and communism. 
The IMF is still furious that it allowed itself to be pressed by the US
Treasury into giving Russia (in fact, assorted mafioso and oligarchs with
Swiss bank accounts and Russian banks that were speculating against their own
currency) the first tranche of a further $22.6 billion in July. 
An IMF delegation is in Moscow this week but all reports suggest that there is
a stubborn impasse between the Fund and the Russian Government. The IMF is not
prepared to release any more money until it is assured that Russia is set
against the option of printing money to get itself out of trouble and is
committed to a return to free market reform. It made no secret of its
disappointment with last weekend's economic plan which it criticised as short
on specifics and long on state intervention. 
Meanwhile, Russia is resorting to emotional blackmail aimed at getting Western
leaders to persuade the IMF to come up with new funds. 
Yuri Maslyukov, Deputy Prime Minister, said yesterday that, without more
foreign money, Russia faced a "national catastrophe that would write off the
free market economy, democracy and the territorial integrity of Russia". 
Yevgeny Primakov pressed the case for more IMF funds with Gerhard Schröder,
the German Chancellor, in Moscow, and with Al Gore, US Vice-President, who was
in Malaysia for the annual Asia-Pacific Economic Co-operation summit. With
meteorologists predicting that Russia will suffer its worst winter for 30
years, moral suasion has already netted Russia food aid deals worth $1 billion
from the US, Canada and the European Union. 
Behind the intense resonances of the Russian poor bracing themselves for
winter, however, is a reality that is far more complex, and points to the
absurdity of Western insistance on adherence to pure free market principles in
the middle of an economic disaster zone. 
While the Russian Government circulates the begging bowl, the largely
privatised Russian oil companies are set to export 115 million tonnes of oil
this year, a post-Soviet record, and gas exports are up 2 per cent on last
year. An estimated 500,000 tonnes of wheat have been exported this year, 20
per cent of the total amount of food aid so far pledged by the West. 
Clearly, the search for hard currency is taking precedence over food and fuel
for the people which, so far at least, is thankfully being met by Western
charity. The Government is beginning to try to change this balance. Sergei
Generalov, Fuel and Energy Minister, has warned oil companies that they may
face export restrictions if they do not supply domestic customers as well as
those overseas. This is, of course, an instance of state intervention that
would presumably horrify IMF ideologues. 
Not everyone is still uncritically regretful that the West's favourite Russian
economic reformers have been booted out of the Government. One senior
Washington official said that the West had perhaps been naive to back the
reformers because they had never had the instinctive support of the Russian
people. There has, perhaps not in the IMF but elsewhere, been a realisation
that the path to capitalism can only be successfully negotiated with the will
of the people and if the fruits are shared more widely. It is also
acknowledged that the state must play a role in Russia's revival and that,
beyond the pressing need to sort out the banking system, restructure debt and
stabilise the budget, there is a need for top-to-bottom structural reform, not
just of the banking sector but also of the legal and tax systems. 
The American Chamber of Commerce recently organised a conference of leading US
companies on Russia's prospects. Amid the gloom - Russian industrial output
fell more than 11 per cent in October - American firms were positive as long
as chaos acts as a catalyst for change. 
Stan Golis, vice-president of Exxon Neftegaz, said: "This year could be a
watershed year for Russia . . . but political will is necessary to create the
needed legislation that will allow companies to work here." In the months
ahead Russia will have to carry on negotiating the rescheduling of its debts,
close banks and agree a believable budget plan. However, it must do much more
if sustainable economic progress is to emerge from the current catastrophe. 
It must protect tax collectors, 26 of whom were killed and 74 wounded in 1996
alone. It must prevent future privatisations from selling off valuable assets
cheap to a handful of oligarchs in "loans for shares" deals. 
It must start to tackle reform of its antiquated Soviet agricultural system,
as the International Finance Corporation has recently suggested. If anybody
wanted a symbol of the skin deep nature of Russian economic reform, then
consider this: the country may have set up a stock market, but it has yet to
end an 80-year ban on the free purchase and sale of land. 

******

#3
Financial Times
NOVEMBER 19 1998 
[for personal use only]
RUSSIA: Reform or bust (or both)
John Thornhill says Russia's banking system is bust and there are few signs of
healthy institutions emerging from the wreckage

As Russia's bankers sip their tea and cognacs in lavish corporate dining
rooms, they have taken to playing a new post-prandial game: spot the solvent
bank. Every banker draws up a different list; few can name more than three or
four of Russia's 1,500 banks in which they would risk their own money.
The game highlights the collapse of Russia's entire banking sector. No one
trusts anyone and everyone assumes the worst. Following the rouble devaluation
on August 17, millions of fearful depositors rushed to retrieve their savings.
About 10 per cent of all retail deposits were withdrawn in that month alone.
Bruised foreign creditors, who lent billions of dollars to Russian banks in
1997, are refusing to roll over those loans. A 90-day moratorium on commercial
debt repayments expired at the weekend, and creditors are now pressing Russian
banks to honour their obligations - or face bankruptcy. Broadly, the whole
banking system is bust. Messy and protracted legal battles loom.
The collapse of transparency and trust, as much as the evaporation of assets
and cashflow, is the most damaging consequence of Russia's financial carnage.
How the country tries to rebuild faith in its banking sector will play a
crucial role in determining whether Russia staggers towards a market economy,
or sinks ever deeper into its economic quagmire.
There is still hope the crisis will lead to the emergence of a competitive,
regulated banking sector. But the fear is that - as so often in Russia's
recent past - good intentions will be sabotaged by poor implementation.
After weeks of prevarication, the central bank has finally started talking
tough. There is no money to salvage all of Russia's banks, it said. The
central bank forecasts almost half of them will go bust over the next few
months. It has already begun withdrawing licences from some of Russia's
biggest and most troubled institutions, including Tokobank and Inkombank.
Under a restructuring programme presented to parliament this week, the central
bank has divided Russia's banks into four categories. About 600 are supposed
to be strong enough to survive on their own; 190 big regional banks are
relatively unaffected but might need some support from local governments; 18,
as yet unnamed, banks are deemed essential to preserve the integrity of the
banking system, and will be supported with funds from the World Bank and the
European Bank for Reconstruction and Development. But the remaining 720 banks
will be wound up by their creditors, however difficult that may prove to be in
practice because of the absence of a proper bankruptcy law.
Enrico Perotti, a professor at the University of Amsterdam who has studied the
banking systems in many emerging markets, says Russia's central bank, having
devised a general framework, must now spell out in detail how its plan is
going to work in practice.
Prof Perotti argues that the experience of other countries shows that three
elements are critical for the successful restructuring of troubled banking
businesses. First, banks that took undue risks must suffer the consequences.
Second, troubled banks must be closed swiftly to prevent further losses. And
third, the central bank must resist the temptation to whittle away bank losses
with a bout of inflation.
So far, Prof Perotti argues, the central bank has not shown the political will
to implement such tough policies. "It is unclear which banks are going to be
supported, how they are going to be supported, how they are going to be
financed, how they are going to resolve the legal vacuum in which these banks
operate," he says. "I think this is a wish list."
Moreover, the central bank's plan is massively complicated by two unresolved -
and related - problems: the consequences of the government's default on its
domestic debt (GKO) market; and the $6bn of outstanding foreign exchange
contracts signed by Russian commercial banks with foreign investors.
The government's default on domestic debt on August 17 wiped out a large
proportion of the banking industry's assets overnight. At a stroke, hundreds
of otherwise healthy Russian banks became insolvent.
Emergency funds have been injected into some favoured banks, but the central
bank has not devised a comprehensive scheme for recapitalising the banking
industry as a whole.
Some of Russia's stronger banks might have hoped to shore up their finances by
raising additional funds from abroad. But their chances of doing so have been
damaged by the uncertainty surrounding the outstanding forward contracts
signed by many Russian commercial banks.
Following the devaluation of the rouble, several Russian banks face
potentially huge losses on their foreign exchange contracts after having
agreed to hedge foreign investors' positions in the domestic debt market.
Foreign creditors fear Russian banks may have used the 90-day moratorium -
intended to allow an orderly rescheduling of obligations - simply as a cloak
to spirit away whatever healthy assets remained in their balance sheets.
Alexander Lebedev, chairman of the National Reserve Bank, one of Russia's
biggest commercial banks, says the moratorium was a mistake. It has harmed
Russia's solvent banks because it has denied them access to international
capital markets. He is also against the central bank pouring more public funds
into bankrupt banks. Some of them have just used the last few months to cover
up the traces of their stripping of assets," he says.
Prof Perotti argues that any evidence of asset stripping would irredeemably
damage the reputation of Russian banks and spark a series of lawsuits from
foreign creditors. "It would really destroy the last shred of credibility ,
and I cannot imagine any private money coming to Russia for 10 years," he
says.
Grave though all these problems are, there is perhaps a still more important
factor overhanging the future of Russia's banking system: how to draw a
dividing line between the private and public sectors, to ensure that
commercial acumen rather than political clout becomes the determinant of
success.
In a recent book*, Michael Bernstam and Alvin Rabushka, two American
academics, argue that the incestuous relationship between government and
business, and the failure to develop an independent commercial banking sector,
has been a major cause of the ineffectiveness of Russia's economic reforms.
Messrs Bernstam and Rabushka say Russian banks did not flourish because they
were successful at attracting retail deposits and channelling savings to
productive investments. Rather, they acted as quasi-government agencies that
redistributed public funds to semi- privatised enterprises.
As a result, they say, "private property ultimately ended up in the hands of
the most capable predators of public income, not in the hands of those who
might use it to generate the highest possible economic return".
The creation of a healthy commercial banking sector, the authors argue, would
help establish the "sovereignty of private individuals", and ensure that
investments were made for commercial reasons rather than for political ends.
An admirable outcome, no doubt. But for this to come about Russia's central
bank will have to show a far greater degree of independence and maturity than
it has shown so far.
Fixing Russian Banks. Michael S. Bernstam and Alvin Rabushka. Hoover
Institution Press Publication No. 449 

*******

#4
Media Chief Doubts Communists Win in Early Elections 

Moscow, Nov 14 (Interfax)--Communist Party leader Gennadiy Zyuganov
does not stand a chance of being elected president if early elections are
declared in Russia, Igor Malashenko, the first deputy chairman of the
Media-Most holding, told Interfax.
"There are many protesting voters in the country," he said. "But if
people decide to protest by voting against the system, the incumbent
authorities or any form of establishment, many of them are likely to vote
for Aleksandr Lebed."
If the presidential polls are held in the spring or the summer of
1999, the main candidates will be Lebed and Moscow Mayor Yuriy Luzhkov,
Malashenko said.
"By 2000 Lebed may face serious difficulties due to the attitude of
people toward his work as the governor of Krasnoyarsk territory," he said. 
This region is facing serious problems "to which a quick solution is
impossible," Malashenko said. "This is also true for Luzhkov because the
economic crisis has hit the Russian capital badly and, unfortunately, will
continue to afflict the city economy."
"The best presidential candidate for Russia" in the next polls would
be Grigoriy Yavlinskiy, the leader of the Yabloko movement, Malashenko
said. Yavlinskiy is the only hopeful who has an economic program and a
team, and who may benefit from the 1999 parliamentary elections because he
has been preparing for them for many years, he said.
"Time is working for Yavlinskiy," Malashenko said. "If the 2000
presidential elections are held on schedule, he will have a better chance
of winning than he would at early polls."
Malashenko denied statements that during his visit to the United
States in early November he "tried to frighten" those he talked to by
telling them what would happen if one or another presidential hopeful rose
to power in Russia.
"There was just one exception," he said. "I did not conceal my
attitude toward the Communist Party of Russia, which has proved itself to
be a party of revanche. I think it would be a great misfortune for the
country if a Communist candidate won the presidential elections."
Malashenko also said his statements in favor of Yavlinskiy "partially
convinced" his counterparts in the United States. "But Yavlinskiy himself
will have to work a great deal, both in Russia and overseas, to explain and
clarify his economic program.
"The thing is that even sophisticated audiences react better if they
see a simple formula which is easy to digest. This is the sort of formula
Yavlinskiy should offer," Malashenko said.

******

#5
New Yeltsin Book Cites Career Anecdotes 

Komsomolskaya Pravda
11 November 1998
[translation for personal use only]
Interview with author Viktor Andriyanov by Aleksandr Gamov;
place and date not given: "'I Saw That Yeltsin Had Tumbled my Wife
Onto the Bed....' Your Komsomolskaya Pravda Correspondent Made His
Way Into the Workshop of the Writers Who Are Writing a New Epic Tale
of Tsar Boris"

Facts and tall tales "about Yeltsin" hardly come as any
surprise to anyone today. There is tittle-tattle about him from
everyone and his brother: from American congressmen to Russian
housewives....
But the writing fraternity has been preeminent here. If all
the books devoted to "Tsar Boris" were placed in a line, you'd have
a multivolume Yeltsiniana. It was, I confess, with unconcealed
skepticism, therefore, that I crossed the doorstep of the workshop
where yet another--two-volume!--tale entitled Solitary Tsar
in the Kremlin is being written. True, I found only one
rapt author at his post--Viktor Andriyanov, in the recent past a
reporter for Komsomolskaya Pravda. His coauthor, Aleksandr Chernyak,
was rummaging around in the archives somewhere. For this reason my
entire skepticism descended on Andriyanov.
[Gamov] Viktor Ivanovich, why are you writing all this? Whom
do you mean to surprise and how?
"We were performing once in Sverdlovsk. The local
first secretary put on a reception for us at a country dacha. When
we had had quite a few drinks and risque jokes were being told, my
wife got up and said that she was going to bed. Boris Nikolayevich,
as the host and gallant gentleman, offered to show her to her
room.
"We were sitting downstairs and continuing to put it
away. And suddenly I heard my wife calling for help. I immediately
shot up to the second floor. I saw that Yeltsin had tumbled my wife
onto the bed and was pulling off her dress. I took a somewhat
stronger hold of him, perhaps, put him in a bear-hug, and gave him a
good smack in the mug! He tumbled head over heels down the stairs
from the second floor. He quickly recovered his senses and said to
me apologetically: 'I'm sorry, forgive me, I wasn't thinking of
anything of the sort. I was just fooling about.' In a word, he
became soft and cringing. It must be that he is afraid of
force."
[Andriyanov] It's no good, Sasha, you extracting this fragment
from the manuscript. It will most likely not make it into our
book.
[Gamov] Why not? It is something new in Yeltsiniana: The young
and early Boris Nikolayevich gives the late Bill Clinton a
start!
[Andriyanov] The book will only contain evidence that we have
obtained from the "horse's mouth." As far as the racy episode is
concerned.... This is the account of the husband of a well-known
actress conveyed by a third party. I'm afraid that we cannot get
direct confirmation.
[Gamov] A pity. This image is crumbling....
[Andriyanov] We are not aiming to surprise anyone with
something or other, even less are we intent on competing or arguing
with other "Yeltsin experts." It is simply that I was sitting one
time with Aleksandr Chernyak, a person who is well known in
journalism and who is, in addition, a doctor of historical sciences,
a professor, and we were talking to each other about our archives
and we concluded that they could be of interest also to a broad
readership in Russia and abroad.
So the idea for a book on the new Russian strife and on why a
universal idol (almost 90 percent of the vote at the elections in
Moscow) and "people's defender" is ending his political career in
solitude. The book has a strict documentary basis, it includes the
testimony of the direct participants in events.
[Gamov] For example?
[Andriyanov] I shall mention if only Mikhail Poltoranin, who
was at one time the person closest to B.N., and Aleksandr Bir--the
leader of the miners' movement at the end of the 1980s and a deputy
of the RSFSR Supreme Soviet. The miners, as we all know, brought
Yeltsin to power. As far as Bir is concerned, his vote was decisive
in Yeltsin's election as chairman of the Supreme Soviet. Aleksandr
Fridrikhovich was twice a defender of the White House--he was there
both in August 1991 and in October 1993.... I shall mention Mikhail
Bocharov, the well-known entrepreneur--Yeltsin promised him on oath
the post of premier in his first government....
[Gamov] You have assembled only aggrieved parties,
then?
[Andriyanov] Who is not aggrieved, pray? We quote the opinions
of Burbulis, Popov, Gaydar, Chernomyrdin, Kokh.... Since the work is
not yet finished, we are prepared to call on everyone else also who
might have something of interest to say about Yeltsin.
[Gamov] Whose accounts made a striking impression on
you?
[Andriyanov] The recollections, let's say, of Yakov Petrovich
Ryabov, former first secretary of the Sverdlovsk Oblast party
committee and later secretary of the CPSU Central Committee. It is
to this person that Russians are obliged for Yeltsin. It was Ryabov
who brought him to Sverdlovsk Oblast, sponsored him, and considered
him his ward.
Yakov Petrovich told us that he was made wary by the unduly
great ambition of the young party official. Not that bad a quality,
seemingly. But listen to how the wise Dal throws explains it: "An
ambitious person is one who is passionate for rank, distinctions,
fame, and praise and who for this reason acts not out of ethical
convictions but in accordance with these aims." Ryabov invited
Yeltsin, trained him.... Boris Nikolayevich sincerely promised, it
seemed, to turn over a new leaf.
[Gamov] Surely the symbolic story concerning "Yeltsin's 10-
story building" will remain in your book?
This happened when Yeltsin was still chief engineer of
the house-building center. He has to be given his due: He had an
earnest approach to his work. The oblast party committee was
intending to recommend him for the Order of Lenin. And when the
papers had already been signed and the handover of another five-
story building had been prepared, it unexpectedly collapsed. The
house-building center was not to blame here, it is true--as the
commission established, the construction workers had bungled things.
They quickly rectified their defective work and put up a new five-
story building, which local wits christened the "10-
story."
But presenting the chief engineer with the country's
highest award after this would have been absurd. Yeltsin was
recommended for the Badge of Honor.
[Gamov] Do you not mean that Yeltsin is building Russia also
in just the same way: He has erected 10 stories, but half have
collapsed....
[Andriyanov] Were I a believer, I would say that at the start
of Yeltsin's career this was a warning.
[Gamov] So what's there to say about this now.... Although it
is now customary to ask: What was the West thinking of?
[Andriyanov] How do you mean what? Of Yeltsin! We will now
come across the chapter "Trip to America." This was in September
1989. The coordinator of Boris Nikolayevich's trip was James
Garrison, executive director of the Esalen Institute.
Foreseeing that Yeltsin could become president of Russia,
Garrison considered it his duty to prepare a confidential
memorandum. While noting certain of Yeltsin's merits such as "he
knows how to converse both with a highly intellectual audience and
with hog farmers," Garrison emphasized B.N.'s clearly demagogic
nature: "Yeltsin is fundamentally primed for a critical response,
not positive actions. His really strong suit is a capacity for
expressing his dissatisfaction and the dissatisfaction of his
audience."
[Gamov] So the Americans knew everything in advance and did
not warn us?
[Andriyanov] They did. Why do you think Garrison composed his
memorandum? It is a pity that it is practically unknown in our
country.
[Gamov] You do not ask in your book: What might have happened
with Russia had there been no Yeltsin?
[Andriyanov] History is written once, and it has no
subjunctive mood. For this reason we put the question another way:
Could Yeltsin not have come to power in Russia?
[Gamov] And the conclusion?
[Andriyanov] He had to have done so. His appearance on Mt.
Olympus was preordained. Had people in 1990 not helped Yeltsin
defeat Polozkov at the elections for chairman of the Supreme Soviet
of the RSFSR--remember that Boris Nikolayevich had a preponderance
of just three votes--he would still have become leader of the nation
at that time.
[Gamov] You don't say!
[Andriyanov] First, the overall situation in the country had
deteriorated and become exacerbated, and it was clear that Gorbachev
would not be leading the Soviet Union out of the crisis. The
sympathies of a majority of the people were on the side of Yeltsin.
Besides, Boris Nikolayevich was strongly roused by a sense of
grievance at the humiliations that he had endured at the CPSU
Central Committee plenum in the fall of 1987, when he was picked to
pieces. But few people knew about this at that time.
We talk about this in detail, incidentally. A person who
overcomes the dissension between the people and power was seen in
the image of Yeltsin. And something else--Yeltsin was supported by
the West, the United States. There is, finally, the concept of
charisma, fate, predestination.
[Gamov] That is, Russia was simply in desperate need of such a
leader--decisive, energetic, "popular," unpredictable....
...There were sometimes out-of-town bureau sessions,
which, as the participants recall, would turn into drinking bouts.
Yeltsin liked a drink, and quite a few at that. In his cups he did
not understand those who refrain from a libation and would deal
harshly with them.
"Yeltsin would not only pour the stuff down the neck
of whoever would not drink together with him but would stop the
train and put out into the forest or the field the person putting up
resistance, and the latter, pour soul, would dash along the track to
the nearest station," the director of a Urals plant
recalls.
[Gamov] You have not estimated how many such poor devils
Yeltsin put off the train in the years of his rule?
[Andriyanov] This would have been something for Kostikov to
have done when Yeltsin dumped him from the ship. We, though, were
interested in how many teams Yeltsin has replaced. Beginning in
1991, more than 10, and the last is now thinning out before our
eyes. Our book is subtitled, incidentally, "Boris Yeltsin and His
Teams," that is, the book is not only about the President but also
about his associates, the majority of whom have long since been
"dashing along the track."
The well-known writer Vladimir Dudinets was attracted to B.N.,
as he himself said, by moral attributes. "Boris Yeltsin is
attempting to bring back to our social consciousness a code of
honor." This was said immediately following the events of 19-21
August 1991. Unfortunately, there has not been even a whiff of honor
at court. But demagogy and a love of power, yes.
[Gamov] Perhaps we were all expecting too much of Yeltsin, and
that is why we are now so severely disappointed?
[Andriyanov] Well, he promised a great deal also. Here are
lines from the biography of the early Yeltsin spotted by observant
people. He addresses propaganda workers in Moscow and answers
questions and inquiries from the floor. The most sharply worded ones
were compiled in advance in the city party committee; the answers
were prepared there as well. For the hall, the illusion of candid
dialogue, but the person in the front row can see that the most
interesting questions and answers are taken from a different
folder.
And remember his celebrated discharge from the health center
of the Fourth Administration and his march to the district health
center! I saw this clip: In front, in heroic pose, is Yeltsin,
following, only reporters. He never did put in another appearance at
the district health center.
Insincerity, though, is, probably, an innate feature of all
our politicians. In public, say, Gorbachev gave Viktor Afanasyev,
chief editor of Pravda, a dressing-down for the shocking reprint of
an article from the newspaper Repubblica on Yeltsin's trip to
America, but in private he thanked him.
The historian Solovyev linked the start of the first Russian
Time of Troubles with the character of an individual--Boris Godunov,
who "mounted the throne of the Ryuriks." It is a pity, but history
has repeated itself at the end of the 20th century. The system has
embedded in its personnel dishonesty and hypocrisy. The team also
has taken shape in the likeness of the President. You yourself
understand for what paths they have opted....
[Gamov] And what is your conclusion: At what station has
Yeltsin's train ultimately arrived?
[Andriyanov] This does not, I believe, have to be said even:
We are today, in fact, all passengers on this train. You would do
better taking a look out of the window.
[Gamov] I am doing.... You will agree that Yeltsin has, all
the same, built five stories in this actual Russian "10-story
building," and we can, at the very least, survive in them
even.
[Andriyanov] But people want not to survive but to
live....

*******

#6
Despite Alarms, Russia Has Adequate Food 

Komsomolskaya Pravda
12 November 1998
[translation for personal use only]
"Shall We Eat, Then?" feature comprising report by Yevgeniy
Umerenkov, entitled "Agent 007 Counts All Our Potatoes...," and
commentary by economic observer Yevgeniy Anisimov, "...But We Have
Worked Out Where the Roots of This Fable Lie"; followed by
"Incidentally" postscript

[Umerenkov report] A real Russian without his spuds is a goner. 
Staple No. 2, in other words. So British intelligence zeroed in when Her
Majesty's Government received information through secret channels: In a
cold winter Russia will not have enough of either staple No. 1 (grain) or
staple No. 2.Obviously the government could not keep that secret for long. So
an alarmed Robin Cook, British foreign secretary, informed the West that the
trouble Russia has had with the grain and potato harvest is spine-chilling.
It is all a question of time: We have enough grain and potatoes to last
either for several weeks or until spring. The only conclusion is Moscow
must get urgent assistance or mobs of hungry Russians will first cause
disturbances at home and then flood prosperous West European countries in
search of grub, thus threatening their security.
This warning came when the Primakov government's negotiations with the
European Union on food and humanitarian aid were in full swing: Concerning
what we need and what we can do without and in what amounts, at what
prices, and on what terms food imports will be supplied. And against the
background of statements by Russian officials to the effect that we do not
face the threat of famine, except for the odd interruption in the supply of
"Bush's chicken legs." But, apparently, by spring there will be nothing to
bake jacket potatoes with!
The reference to British and U.S. intelligence data is a serious
matter. We asked our "competent organs' to explain. They confirm that
specialists actually can estimate pretty accurately on the basis of
photographs taken from space what kind of grain harvest Russia has grown. 
But it is a bit harder calculating how many tubers have ripened in the soil
beneath the tops. And in fact how you can view from space all our plots,
private, vegetable gardens, and dacha grounds where around 80 percent of
Russia's potatoes are grown is a mystery. And we cannot see how they
managed to count the sacks of potatoes stored in cellars in the countryside
and apartments in the city.
In this case Western intelligence services have clearly stolen a march
on their Russian counterparts.
The West's desire not to leave us in the lurch is a noble one, of
course, and deserves gratitude. But there is certainly another motive
behind their anxiety. Because of our crisis the Western countries could
lose the Russian food market they have conquered. The question of
continuing supplies to Russia is just as important to them as the problem
of survival this winter is to us. And if you sound the alarm by predicting
food riots in Siberia, you put a little pressure on Moscow to make it more
amenable at the negotiations on the terms for providing it with aid. So a
piece of bread and a potato become politicians' small change.
So do we have enough food or not? Who will answer this question? Why
does our government say nothing? So if the Western intelligence assessment
is true, perhaps we should also ask their James Bonds to calculate whether
we have enough pickled cucumbers and sauerkraut to last until spring?
[Anisimov commentary] We were writing about the threat of famine in
September. In October we had stopped. Perhaps British intelligence, which
gets most of its information from open sources, based its calculations on
pieces published in September?
We may face the threat of famine if Russia refuses to pay its state
debt. Then all food imports would be sure to collapse. But the signs are
that we will manage to avoid defaulting on the state foreign debt this year
and will draw on Central Bank and Finance Ministry reserves to pay the $3
billion we are required to pay. It will be worse next year, when we have
to repay $17-19 billion, but that will be in a year's time....
What has happen to the food market this year? People have stopped
buying expensive imported food, producers of Russian sausage and other food
have taken heart, have started producing as much as they can, have raised
prices, and have been dashing all over the country in search of Russian raw
materials. Prices of meat, milk, and grain have started to rise, which has
pleased the peasants no end -- they were hoping for further price rises so
that they themselves would not be operating at a loss. If this situation
persists for a while longer, the countryside will be able to stand on its
own two feet and provide the country with home-produced food. Not
100-percent provision perhaps, but provision nonetheless. Will Western
agricultural producers then have to do without the Russian market? Where
would they send their food, which, I would point out, they have already
been paid for by their own governments, through subsidies?
The recovery of the Russian countryside is bad for the West both
economically and politically: Not only does it lose a means of
pressurizing Russia, but its own farmers, deprived of markets, will also
start to rebel. So U.S. and European states benefit (!) from even giving
us free food! It is a way of beating down prices on the Russian domestic
market and not allowing Russian agricultural producers to find their feet. 
Then, when the situation returns to normal, we will be offered food imports
again, but for money. And we will have no option but to buy it, because we
will have finished off our own peasants.
In conclusion, a few figures. In a year we consume 20-21 million
tonnes of grain; next year we will consume a little more, because the food
consumption structure will change and we will eat more cheap bread and less
expansive meat. So we need 22-23 million tonnes of food grain. The
harvest of this grain was not particularly good in 1998 -- 19-20 million
tonnes. But there are stocks of around 10 million tonnes left over from
past good years. In addition, past years have shown that peasants hide
one-tenth of the harvest from officials' prying eyes for various kinds of
barter transactions. So there is plenty of grain, for sure.
Personal plots provide 80-90 percent of people's potatoes. It is
impossible to estimate the stocks, but there are no grounds for panic in
this case either -- it was a good harvest, on average. OK, so if we have
bread and potatoes, we are not going to starve to death.
[postscript] "Rumors of a probable famine in Russia are obviously
exaggerated and they benefit only the food importers, who put them about in
order to make money," Viktor Semenov, Russian Federation minister of
agriculture and food, said yesterday.

*******

#7
Date: Thu, 19 Nov 1998 
From: "Russian Info&Business Center, Inc. USA" <rusric@erols.com>
Subject: Dealing with Russia:A Winning Strategy for the Future

PRESS RELEASE
New article "Dealing with Russia: Winning Strategy for the Future" is
available for interested readers from the Russian Information & Business
Center, Inc. USA. The article will be sent complimentary upon request.
The article contains strategic analysis of major mistakes of the US policy
toward Russia in 1991-1998 and provides ideas on improving the situation.
To order an electronic copy of the article, please send your request to RIBC.
Strategic Analysis Department

******

#8 
Washington Post
November 19, 1998
[for personal use only]
Scholars in Peril
By Loren Graham and Andrew Kuchins
Loren Graham is professor of the history of science at MIT and Harvard. Andrew
Kuchins is associate director of the Center for International Security and
Cooperation at Stanford University. 

In the midst of the political and economic turmoil in Russia, it's all too
easy to forget the ways in which we can be of enormous help to that country,
greatly improving long-term chances for prosperity and peace among Russia and
its neighbors.
One of the most important is in the fields of science and education, which
have deep roots and traditions of excellence in Russia but have been barely
propped up since the fall of the Soviet Union and are now in more peril than
ever. It is these two sectors that were pivotal in helping to change the
Soviet Union and that can play an important role in helping Russia emerge from
the mess it is in now.
The scientific and academic communities traditionally have been the most pro-
Western segments of Russian society. Throughout the Soviet period, the most
prominent calls for democracy and human rights came from their ranks -- Andrei
Sakharov, the noted physicist and father of the Soviet hydrogen bomb, is only
the best known of a number of leaders in the human rights movement during the
Soviet period.
Now, when they are needed most, the scientific and academic communities have
lost most of their financial and political support. Russian research
institutes and universities are near collapse. Several prominent
administrators have committed suicide in despair over their inability to pay
their staffs.
Some scientists and educators are now flirting with the Communists, not
because of ideological sympathy but simply because the Soviet Union under
Communist rule supported science and education, while the "free and
democratic" post-Soviet state neglects them. The leader of the Communist
Party, Gennady Zyuganov, is making a direct appeal to intellectuals, saying he
will support them in a way Boris Yeltsin does not, and he has adopted as the
official seal of his new Communist Party, in addition to the traditional
hammer and sickle, "the book," adding scholars to workers and peasants as
bulwarks of the political order he seeks to create.
Science and education are areas where Western institutions can act in genuine
partnership with Russians, rather than in the spirit of "we know best." The
West has benefited immensely from Russian contributions to international
science, and the same is true in higher education.
Almost every research university in the United States today, including our
own, has faculty members -- often in the physics and mathematics departments
-- who have come from the former Soviet Union during the past 20 years. It is
important that we not abandon those of their colleagues who chose to stay in
their homeland and who still cherish the belief that they are a part of an
international scholarly community.
This is an area where American universities, foundations, professional
societies and the government can play important roles and, with relatively
modest expenditures, make a significant difference. Whenever a professional
society holds a meeting in the United States or abroad, it should invite
participation by scholars from the former Soviet Union, and pay their
expenses. Universities can establish exchange professorships with universities
in the former Soviet Union, and foundations can make certain that their
established fellowship programs are available to scholars, artists and
musicians from the former Soviet Union.
A few foundations and individuals already have shown the way, led by George
Soros's International Science Foundation (now unfortunately defunct), the John
D. and Catherine T. MacArthur Foundation and Howard Hughes Medical Institute,
which, in the areas of environmental and health science, respectively, have
had major impacts. The Alfred Sloan Foundation has, in the past, encouraged
American professional societies to help their Russian colleagues. This example
should be followed by other foundations.
Prominent Russian administrators in science and higher education recently
announced that they wish to bring research and teaching closer together.
Within the Russian context, this is a dramatic change. The Academy of Sciences
traditionally dominated research, and the universities had teaching
responsibilities, with little contact between the two systems. The finest
system of research universities in the world is in the United States, and we
therefore have an opportunity to help our colleagues in the former Soviet
Union create a similar system, something that they themselves are now calling
for.
At the same time that we work closely with scholars in areas where the
Russians have traditionally been strong -- the fundamental natural sciences --
we also can help them train future generations of citizens familiar with
political science, economic theory and the humanities.
The American and Russian scientific and scholarly communities are the two
largest such communities in the world, and they have much to gain by close
interaction. Investment in these scholars and scientists can give them the
resources and courage they need to stay engaged in their nation's affairs and
not leave for more secure havens in the West.
For Americans, it is important not to allow the former Soviet Union to lose
both its ability to contribute to knowledge and its faith that the West is a
friend.

********

#9
From: "Duckworth, Kenneth" <KDuckworth@usaid.ru>
Subject: PANORAMA Extremist Guide 
Date: Thu, 19 Nov 1998 

The full text in Russian of the PANORAMA study of Russian extremists and
extremists groups is on-line at PANORAMA's web site:
http://www.panorama.ru/works/xeno/

*******

#10
Army Decline Due Yeltsin's 'Unwillingness' 

Moscow, Nov 16 (Interfax) -- Former Defense Minister Igor Rodionov
said Monday that Russian President Boris Yeltsin's unwillingness to deal
with the problems of the army had caused its degradation and decline in
military capabilities.
Rodionov, who held the post of Defense Minister from July 1996 to May
1997, spoke at the parliamentary commission for impeachment on the fourth
set of accusations against Yeltsin involving the collapse of the armedforces.
Yeltsin, the supreme commander in chief, "distanced himself from the
problems of the army, he does not understand numerous issues of military
build-up and defense; he does not deal with them at all," he said.
All forces except the Strategic Rocket Force "are in stagnation," hesaid.
Rodionov said Yeltsin and those around him had put off a Defense
Council meeting for half a year, where he and the chief of the staff of the
General Headquarters were to report on the implementation of the military
reform. Former Prime Minister Viktor Chernomyrdin asked for the classified
reports prepared by Rodionov and former Chief of Staff of the General
Headquarters Viktor Samsonov three months prior to the May 1997 Defense
Council meeting. These reports were lost, he said.
"I think these reports were studied well not only in the Kremlin and
the House of Russian Government but outside them, maybe even in the White
House across the ocean," he said.

*******