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Johnson's Russia List


December 14, 1998    
This Date's Issues: 2517  2518  

Johnson's Russia List
14 December 1998

[Note from David Johnson:
1. Reuters: Russian minister concerned over NATO strategy.
2. Ray Thomas: INVITING IN FOREIGN BANKS/Re 2516-Ekman/Foreign Banks.
3. George Oswald: Re JRL #2514 #6 'Russia Relies on Imported Medicines.'
4. Ludmila Foster: $40 billion.
5. The Orlando Sentinel: Charlie Reese, We had our chance with Russia --
too bad Clinton let it slip.

6. Washington Post: Fred Hiatt, Return of 'Iron Felix.'
7. Toronto Sun: Matthew Fisher, Boris Yeltsin is alive, if not kicking.
8. Itar-Tass: Russian Forces at 'Lowest Possible Level of Nutrition.'
9. Boston Globe: Jean MacKenzie, Despite promises, many small depositors 
can't get their money.

10. Itar-Tass: Media Campaign Against Nuclear Power Industry Denounced.
11. Christian Science Monitor: Peter Ford, MENACE TO RUSSIAN MEDIA.
Staying independent in tough times.

12. Reuters: Russian FinMin sees economic policies toughening.
13. Jerry Hough: Kiriyenko.
14. Bill Mandel: Abortion.


Russian minister concerned over NATO strategy

MOSCOW, Dec 13 (Reuters) - Russian Foreign Minister Igor Ivanov said on Sunday
he saw only benefits in cooperation with NATO, but he reiterated concerns
about the Western alliance's planned new Strategic Concept. 
The United States wants to widen the alliance's role and area of operation and
enable it to take military action if necessary without a United Nations
Security Council mandate. 
Ivanov said this would undermine the whole system of international relations
based on international law. ``We cannot agree to this,'' he said in an
interview with the TV6 television channel. 
``There are a number of points which worry us. Above all it is the possible
use of NATO forces without U.N. sanction. Secondly, the possibility of actions
by NATO beyond its sphere of responsibility.'' 
However, Ivanov called for continued cooperation between Russia and its former
Cold War enemy. ``I see only benefits (in this),'' he said. 
``This allows us to expand our relations with European countries. It allows us
to further develop our cooperation with the European Union,'' he added. 
Ivanov called for creation of a reliable system of European security. ``Then
we can spend more on settling many social and economic problems, and not on
weapons or on ensuring our security,'' he said. 
NATO has invited Russia to attend a top-level meeting at the alliance's 50th
anniversary summit in Washington next April. 
NATO Secretary-General Javier Solana issued the invitation to Ivanov at a
recent meeting of the Permanent Joint Council with Russia in Brussels. 
Solana, who was also interviewed by TV6, said there were many problems to
settle with Russia. ``But that does not mean that we are not continuing to
work together,'' he said in remarks translated into Russian. 
When asked if the United States dominated NATO, Solana said: ``All decisions
are taken by consensus.'' 
He said the new Strategic Concept was now being debated, but the role of the
United Nations would be respected. 
``Nato will always respect the power and authority of the United Nations,'' he
said. ``Most NATO countries are members of the United Nations and some are
even members of the Security Council,'' he said. 


From: (Ray Thomas)
Subject: INVITING IN FOREIGN BANKS/Re 2516-Ekman/Foreign Banks,
Date: Sun, 13 Dec 1998 

The main reaction to Primakov's suggestion that foreign banks should be
encouraged to establish themselves in Russia seems to be that foreign
banks would fear that they would not be given normal commercial freedom
and would be subject to bureacratic rule by the Russian government.
If such a fear is well-founded then Primakov's invitation is
meaningless. Why give it?
It prompts the question as to why foreign banks been treated differently
from other foreign firms in the past and excluded. Why wern't foreign
banks seen as part of transition? What did all those advisers about
the transition to capitalism have to say about the role of the banks?
Was it imagined that that Russia could grow its own banks?
The point of these questions is that it is impossible to have capitalism
without banks. Banks do not require much in the way of fixed
investment - a building furnished with brass, polished mahogony, and
marble, and a strongroom. But the important requirement is trust.
People have to believe that the bank will take of their money and their
The relationship between the banks and government has to to be one of
trust. I guess that is what Marx meant meant when he said that the
government of a capitalist society is a committee of the ruling class.
The Bank of England was a kind of rich mans club formally independent of
government until 1946. It was then nationalised and for fifty years
acted in accordance with government policy. But the importance of trust
is indicated by one of the first acts of the new Labour Government in
1997 which delegated power to fix interest rates to the Bank of England.
Banking is a kind of confidence trick. Banks create money by giving
credit, and profit from the interest paid. Russia stifles economic
development if, by failing to gain the trust of banks, it fails to
combat the problems of demonetisation which are shrinking the economy. 


Date: Sun, 13 Dec 1998 
From: George Oswald <>
Subject: Re JRL #2514 #6 'Russia Relies on Imported Medicines' 

The December 11, 1998 AP story in JRL #2514 #6 'Russia Relies on Imported
Medicines' highlights once again the generally dismal quality of reporting
on Russia. By starting with the extreme and emotionally charged example of
insulin supplies and then proceeding to drop several unsupported statements
the article creates an impression which departs from reality. It also
appears that the correspondent took the easy way out by repeatedly quoting
an official of the Ministry of Health without further checking of the
facts. Some examples:

1) "Before August, about 90 percent of medicine in Russia was imported or
made from imported raw materials, according to the Health Ministry."

Prior to the August crisis, imported medicines accounted for 60% of the
overall market by value. In volume terms they accounted for 50% of the
market, since locally produced medicines are generally cheaper than
imported ones and are bought more frequently by Russian consumers. [Source:
'Russian Pharmaceuticals - coming out of the dark ages' by Thomas Bachmann,
Alfa Capital, Moscow, Winter 1998, pg. 67]. Regarding raw material imports
the quoted 90% figure is probably correct, but it should be pointed out
that this is the case even in an advanced economy such as the U.S.
According to the U.S. Food and Drug Administration, as much as 80 percent
of the bulk pharmaceutical chemicals used by U.S. manufacturers to produce
prescription drugs is imported. [Source: U.S. General Accounting Office
report HEHS-98-21 'Foreign Inspection Program', March 1998, pg. 1]. Given
the interdependent nature of the global pharmaceutical industry no single
country can, or should, pretend to self-sufficiency of supply. 

2) "Russia has never had much of a pharmaceutical industry" and "The
solution, most agree, is for Russia to develop a pharmaceutical industry.
But that means starting from scratch."

This non-existent industry was responsible for supplying 40% of the market
by value (see above). The U.S. company ICN Pharmaceuticals acquired five
Russian pharmaceutical manufacturers over the past 3 years - presumably
because ICN thought that they were a good investment. The top 50 Russian
pharmaceutical producers had combined sales revenues of $923 million in
1996 - an 18.6% percent increase over the prior year [Source: Bachmann, op.
cit., pg. 113]. Certainly not a moribund sector. 

3) Insulin. 

It is true that the crisis has disrupted supplies. However, the article
(datelined Moscow) should have reported that Moscow city authorities
recently switched foreign suppliers (after using the same supplier for
several years) for the insulin which is financed from federal/city funds
and is provided free, a move which has served to confuse both pharmacists
and patients. There is much debate on why the switch was made. Based on my
limited personal experience, I am aware that at least some diabetic
patients in Moscow are able to get insulin free, albeit with a great deal
of effort and persistence. This is a subject which cries out for careful,
empirical research. In Russia, 45 million people have the right to free or
50% discounted medicines, a level which the federal and regional budgets
cannot support. This is not a problem unique to Russia. Rationalization of
the number of eligible people and the number of eligible medicines for free
provision must occur - at which point financing of truly life-saving
medicines such as insulin could be made without disruption. One example
serves to illustrate the complexity of the situation: prior to the crisis,
the Compulsory Medical Insurance (CMI) system financed approximately 35% of
the free/discounted medicines. By law, 40% of the cash assets of the CMI
were invested in government bonds (GKOs) which have become worthless. In
effect, the government was hoisted by its own petard. 

The reasons for the current state of the pharmaceutical sector and the
people's access to medicines are beyond the scope of this reply. The
reasons are almost exclusively financial (i.e. intra-sector debt,
devaluation) rather than supply-side deficiencies. The article should have
highlighted this difference. 

Finally, Mr. Katlinsky's first name is Anton, not Yuri. As the saying goes,
get the facts or the facts will get you.

George Oswald


Date: Mon, 14 Dec 1998
From: "Ludmila A. Foster" <>
Subject: $40 billion

Peter Ekman (JRL 2516) and lately others in the Russian as well as in
the foreign press keep mentioning that there are $40 Billion stashed
away in Russia by ordinary people under matresses. PM Primakov is even
quoted as saying that, perhaps, these moneys could be extracted from the
population by a cavalry attack by Western banks. 
And noone, nowhere is even raising the question of how to get back the
$150 or so Billion stashed away by oligarchs and other "new rich" in
foreign banks and repatriate those moneys to be invested into the
Russian economy whence it was originally "taken." I don't even want to
think of all the real estate that many of those individuals have
accumulated aboad. If all that money would be invested in the Russian
economy, Russia would not need to beg from the West anymore.


The Orlando Sentinel 
December 13, 1998
[for personal use only]
We had our chance with Russia -- too bad Clinton let it slip 
By Charley Reese (

Alexi Pushkov said, "To understand Russian foreign policy, we have to go
back to 1991. At that time, our goal was to be integrated into the West, and
we adopted a pro-Western foreign policy. This may never have been a
realistic option. But realistic or not, the West decided it did not want us
and made this clear when it expanded NATO to include three former Warsaw
Pact countries."
Now think about that statement. Russia wanted to be integrated into the West
and adopted pro-Western policies. The West rejected her.
Pushkov is an international-affairs columnist for Nezavissimaya Gazeta, an
influential Russian daily newspaper. He made the statement to Alain Gresh,
editor-in-chief of Le Monde Diplomatique, who quoted him in an article in
the Journal of Palestine Studies. Pushkov has very close ties to the Russian
As I have written before, the expansion of the North Atlantic Treaty
Organization is a strategic blunder of catastrophic dimensions. While a
public conditioned to be entertainment spectators focuses on Bill Clinton's
sordid sex life and photo ops, Clinton's greatest damage to America is in
foreign policy.
The consequences of turning his back on an opportunity to integrate Russia
into Western society will not be immediate, but they will be painfully
significant. There is a lot of potential for evil outcomes in that dumb
decision to expand NATO.
I wish I could tell you why it was made, but I have yet to hear any
halfway-rational justification for it. All I can state is that, despite the
hype parroted by a stupid press, Clinton is not a brilliant man. He's a
clever con artist, and his appointments have been of unusually low quality.
I think that some people have gained the impression from the now-standard
superficial news coverage of Russia that it has fallen apart and is in
chaos. It is, indeed, having hard economic times, but remember: World War II
started with all its participants in the depths of the Great Depression.
Consumer economics does not equate to military power. Remember, too, that
Russia has not fallen apart.
It still has its strategic nuclear missiles and, despite its troubles, not
long ago completed the 15th successful test of a brand-new,
intercontinental, ballistic missile. It just put the heaviest component of
the new space station into orbit because we don't have a rocket powerful
enough to do so. Thinking of Russia as if it were some Third World country
that could be kicked around would be wrong. Russia remains a major power.
Furthermore, it's only a matter of time before Russia gets her internal
affairs in order, one way or another. Thanks to Clinton, that is not likely
to be in a Western-oriented way.
Adolf Hitler and World War II were created by the Treaty of Versailles,
dictated mainly by vain, old politicians from Great Britain and France in
1918. Twenty-one years would pass before the consequences of that blunder
began to unfold in a war that cost an estimated 55 million human lives.
History can be said to be the story of human errors and the consequences. As
the power of governments to do evil has grown enormously, so, too, have the
consequences of human error.
The answer is easy. America needs to re-adopt the wise policy of George
Washington -- armed neutrality, entangling alliances with none, friendship
and trade with all. That is easy to say but perhaps impossible to achieve,
given the intertwining of government and international business interests
that began after the destruction of the Republic in 1865.
At best, Americans had better pressure Congress to override another of
Clinton's great blunders, his veto of an anti-missile system to protect
American lives. Count on it: Clinton has not sewn any seeds of peace.


Washington Post
December 13, 1998
[for personal use only]
Return of 'Iron Felix'
By Fred Hiatt
The writer is a member of the editorial page staff. 

On a chilly August evening in 1991, a Moscow crowd cheered the removal of a
statue of "Iron Felix" Dzerzhinsky, brutal founder of the Soviet secret
police, from its pedestal before KGB headquarters.
As I look through news archives now, I find this event described, in
subsequent months and years, as the work of "angry crowds" or even an "angry
mob." But I was in Dzerzhinsky Square (as the plaza then was known) that
August night, when the Soviet Union was crumbling, and I know there was no
mob. As a municipal crane methodically lifted the heavy statue and swung it
toward a waiting truck, onlookers remained orderly and good-natured, a bit
awed at their presence in history. A folksinger sang sad Russian ballads over
a scratchy loudspeaker. People smoked and shivered and chatted quietly and, at
the climactic moment, chanted patriotically: "Russia! Russia!"
It's a small example of how history can get written and then rewritten, and I
came across it only because Russia is still rewriting its history in a much
more momentous way. Earlier this month, the Russian Duma, or lower house of
parliament, voted to return Iron Felix to the perch in the square that no
longer bears his name.
The Duma vote, coming seven years after a seemingly definitive repudiation of
Bolshevik terror, reflects how confused and divided Russians remain about
their past. That in turn helps explain why they remain confused and divided
about how to shape their future.
There is, in this country and elsewhere, justifiable anger at Swiss banks,
German insurance companies and others reluctant to acknowledge their
complicity, however peripheral, in the Holocaust. Think what our emotions
would be if Germans continued to worship Hitler himself, installing his
mummified corpse in a mausoleum by the Reichstag.
Unimaginable, of course. Yet that is about where Russians are in dealing with
their history. Stalin is no longer in Red Square, but Vladimir Lenin remains
on reverential display, a bit too yellow but neatly coiffed and costumed. Most
Russians would like to inter him finally in a cemetery -- a proper Christian
burial would be a fitting punishment -- but too many others still want him in
his humidity-controlled glass case.
How can this be? Lenin created the system in which -- as one elderly man told
me the night Dzerzhinsky came down -- "there was practically not a family in
this entire country in which someone didn't suffer -- either in jail, or in
the labor camps, or shot." The man's uncle had spent 15 years in the gulag
because he had owned a few shares of stock in the 1920s.
For decades, Russians were taught that Lenin was the good-hearted, all-seeing
father of the nation; that Dzerzhinsky's secret police courageously defended
peace and order; that a boy who ratted on his father to the KGB was a model of
moral heroism. Now they are told otherwise. But whom to believe -- especially
when the new historians also seem to have ushered in a period of danger,
uncertainty and poverty in many people's lives?
Every nation fights over its history. Just last month, a South Carolina
governor was drummed out of office in part because he had sought to remove a
Confederate battle flag from the state Capitol.
But some countries in transition today are fortunate to enjoy some consensus
about their past, and -- just as important -- about whom to blame for it.
Blacks in South Africa can hold responsible the white minority; Poles can
blame Russians. Russians can blame only themselves.
"We are all guilty," says Alexander Yakovlev. An architect of Mikhail
Gorbachev's glasnost, Yakovlev has headed for the past decade a commission
intended to "rehabilitate" victims of Soviet repression -- to restore the
reputations of millions upon millions unjustly sentenced to their deaths in
Siberia, to award pensions to those who miraculously survived.
Punishing wrongdoers isn't on his agenda, but even so his commission's
seemingly innocuous work is often stymied, Yakovlev said. To this day, he
said, he can't get key documents relating to Kirov's murder and other Stalin
crimes. Children born and raised in the gulag still qualify for no
compensation. Russians are so uninterested, so unwilling to face their past,
that Yakovlev appealed to an audience here, at the Holocaust Memorial
auditorium, for help in publishing documents he has uncovered.
There are many reasons, but Yakovlev returns to what he sees as fundamental:
"We are all guilty." Almost every arrest of an innocent followed a
denunciation by another "average citizen," he says. "Every group of writers
condemned was done in by the testimony of another group of writers, trying to
eliminate rivals."
All this matters. If Russians aren't sure that it was wrong to round up
peasants who owned more than one cow, how can they agree on reprivatizing
land? If Dzerzhinsky is a hero, what chance can there be for civil liberty and
the rule of law?
That same autumnal evening in 1991, another man, a 56-year-old archery coach,
told me that he had faith, for the first time, that Russia would be free. But
he also warned that the process would take time. "After 70 years, you can't be
free all at once," he said.
Dzerzhinsky is not back up yet; opposition to his return is strong. But the
coach's warning may have been more right than even he, at the time, expected.


Toronto Sun
December 13, 1998 
[for personal use only]
Boris Yeltsin is alive, if not kicking
Sun's Columnist at Large

MOSCOW -- If nothing else, Boris Yeltsin proved to Russia and the world last
week that he isn't dead yet. 
Bruised by weeks of rude public comment not only from the media and the
opposition, but from his own aides, about his frail health and inability to
govern, the Russian president reacted instinctively with a pathetic show of
fist-banging power, leaving his hospital bed for three hours to sack his chief
of staff and a couple of underlings. 
Such over-the-top performances used to scare those close to Yeltsin and
impress the many Russians who love ruthless leaders. But no more. Yeltsin's
histrionics elicited jeers from those consumed by Russia's never-ending
political crises and yawns from those who no longer expect anything good or
rational from the president. 
Like the boy who cried wolf once too often, Yeltsin has blamed those around
him for the country's woes so often and then dumped them that it is no longer
possible to take him seriously - even on those few days when he appears to be
lucid and coherent. The other part of this old routine is that the president
quickly rehabilitates most of those he purges. 
Anatoli Chubais, whose privatization schemes were crony capitalism at its
worst, is a prime example. At Yeltsin's behest the alleged reformer is now
running a huge and hugely inefficient state energy concern. 
There are rumblings that Yeltsin's choice of the moment to succeed him is not
his new prime minister, Sergei Primakov, or his old prime minister, Viktor
Chernomyrdin, but Sergei Kiriyenko. He's the young fellow Yeltsin chose for
prime minister when he fired Chernomyrdin late last winter and who the
president fired when he tried to bring Chernomyrdin back again near the end of
the summer. 
Playing the Russian version of musical chairs is about all Yeltsin seems to
be up to today. The official word is invariably that the president is studying
documents while recuperating from what must be the longest case of unresolved
pneumonia in medical history. But it's hard to imagine Yeltsin as a public
policy geek sifting through stacks of paper. 

Swilling vodka 
Rumours which never used to find their way into the Russian press, suggest
that in those rare moments when he is well, Yeltsin swills vodka just like he
used to before he had several heart attacks and strokes. 
I last caught a glimpse of Yeltsin at a concert at the Moscow Conservatory in
September. As well as lots of thuggish outriders, the president's motorcade
included a fancy new American mobile hospital, which was parked at the stage
Unable to walk into the hall unassisted, Yeltsin spent the first half of the
performance completely obscured from the audience by a thick curtain and then
went home. 
That Yeltsin has not been removed from office by parliament or in a putsch,
says absolutely nothing about confidence in his ability to govern. His
survival can be partly explained by the reluctance of his family and what is
left of his inner circle to give up the fabulous perqs of high office Russian
leaders have always lavished upon themselves, their kin and their flunkies. 
But it's more than that. None of the factions who seek to replace Yeltsin are
ready to make a bid for power. 
The most antsy of the heirs-apparent is Moscow Mayor Yuri Luzhkov, whose
snappy campaign slogan, "Mayor of Russia," is about to go up on billboards.
Luzhkov, who likes to think of himself as the frontrunner, boasts that he
alone made the Russian capital work and transformed it into a world class
That has always been a grotesque exaggeration. To the extent that it's true,
the new Moscow has been built on western loans, oil revenues and dirty money. 

Bad luck 
It's Luzhkov's bad luck that this tap has been turned off since the ruble
collapsed in August. The empty notion that the mayor is superman is now
seriously at risk. But Luzhkov doesn't want elections quite yet because the
national political machine he urgently requires to overcome deep hostility
outside Moscow is still in its infancy. 
Other likely leading presidential candidates such as would-be strongman
Alexandr Lebed, Communist Leader Gennadi Zyuganov and the hapless Kiriyenko,
would gain more than Luzhkov if Yeltsin remains in office, because the longer
he's in charge the more the economic situation can deteriorate. 
Whether Yeltsin lives or dies, life will surely get worse in Russia. 
That's about the only certainty in Czar Boris' crumbling empire today.


Russian Forces at 'Lowest Possible Level of Nutrition'

Moscow, Dec 9 (Itar-Tass) -- The Russian Armed Forces have plunged to
the lowest possible level of nutrition, a State Duma deputy told reporters
on Wednesday."The Army and Navy are unable to live on the money received in
November, which is 39 percent of the amount planned," chairman of the
veterans committee Valentin Varennikov said.
The value of a soldier's ration is now 2.5 rubles, against 4.7 rubles
in early 1998, although the Defence Ministry had demanded 12.5 rubles,
Varennikov said."We are calling on the Russian president to pay attention to
gruesome situation of the servicemen, but the 1999 budget does not provide
for serious financial support for our Armed Forces," he said. (emdall)


Boston Globe
Deember 12, 1998
[for personal use only]
No banking on Russian banks 
Despite promises, many small depositors can't get their money
By Jean MacKenzie, Globe Correspondent

MOSCOW - For Russia's bank depositors, there is a fine line between optimism
and pessimism these days. Locals say that a pessimist is one who looks at his
situation and moans, ''Things cannot get any worse.'' The optimist, on the
other hand, chimes in cheerfully, ''Sure they can.''
Bad rapidly degenerated into worse in recent weeks as the government
backtracked on promises to help Russia's small-time depositors recoup some of
the losses they suffered in the wake of the summer's bank crash. A deadline
for release of frozen accounts in the state-owned savings bank, Sberbank, has
passed without a single ruble being paid out. 
On Aug. 17, the government defaulted on internal debt, clamped a moratorium on
servicing external obligations, and let the national currency slide. The
resulting chaos all but paralyzed the banking system, and millions of
depositors were cut off from their money. 
Early assurances that the deposits were safe did little to calm the resulting
panic. The government then offered depositors whose funds were held in six of
the largest commercial banks the option of transferring their savings accounts
to Sberbank. 
It was a good news-bad news deal: The government guaranteed the deposits, but
on harshly unfavorable terms. Ruble accounts would be frozen until the end of
November, with no interest paid. Dollar accounts would be transformed into
rubles, at the exchange rate in effect on Sept. 1 - 9.33 rubles to the dollar.
The ruble has plummeted in value since then, meaning that those who finally
manage to squeeze some money from Sberbank will end up with less than half of
their original sum. A $1,000 account, for example, would yield the depositor
9,330 rubles, which, at the present rate of close to 22 to the dollar, is now
worth just $425. 
In a society where everything from real estate to restaurant prices is quoted
in dollars, this can be catastrophic. 
Many depositors were willing to take the government's offer, hoping that their
parent institutions would survive the storm. 
''I kept my money in SBS-Agro,'' said Irina, a middle-aged researcher in a
Western firm. ''I figured the government was a lot more likely to cheat me
than a commercial bank.'' 
SBS-Agro was, before the crash, one of Russia's largest commercial banks, with
well over half of all commercial retail deposits. While most banking analysts
say that SBS-Agro is insolvent, it has been put on a list of banks deemed
''socially significant'' and earmarked for rescue by the federal government. 
Tanya, a young computer operator, was also an SBS-Agro customer, but she
agreed to the transfer terms. ''I was sure I would never see a penny if I left
it in SBS-Agro,'' she said. ''Better to get half of it, but right away.'' Both
Ira and Tanya are out of luck for now. SBS-Agro is still not servicing its own
accounts, and Sberbank says it has not received the necessary paperwork to
begin paying SBS-Agro depositors. 
Others were more fortunate. Four of the six banks that fell under the
government's guarantee managed to complete all formalities by week's end, and
their customers were able to begin receiving some cash. But the two largest
institutions - SBS-Agro and Inkombank - remain in limbo, and Sberbank
officials are making no predictions as to when, or even if, the deposits will
be released. 
Of the approximately 9 billion rubles ($450 million) in accounts transferred
to Sberbank, just a little over one billion ($50 million) had been made
available to depositors by Thursday morning. 
There were few long queues and almost no angry faces at Sberbank outlets
recently. A system of telephone hot lines was set up to direct the fortunate
few to the appropriate offices, but the lines were often jammed and the
directions could be confusing. 
''The lack of people at the counters is easy to explain,'' wrote the daily New
Izvestia.'' Some are still trying to get through on that hot line, others do
not believe that there is any money to be had, and still others have not heard
the news yet.'' Some say that months of economic upheaval have left Russians
just too tired to care. 
''I have written that money off in my mind,'' said Ira. ''I really can't be
bothered trying to find out what is happening to it.'' Although Sberbank
insisted that funds could be taken out freely, many offices were imposing a
5,000 ruble ($227) cap on withdrawals, to prevent a disastrous run on the
bank's cash. 
But even that was better than nothing to many. 
''It's my own fault,'' said Sasha, a young businessman who had deposited
$5,000 in a commercial bank in early August. ''I should have known better than
to put my money in a bank.'' Such sentiments bode ill for Russia's future
economic development. International lenders such as the International Monetary
Fund are wary of sinking more cash into a country that has demonstrated little
capacity for economic reform and fiscal restraint. 
With foreign sources of financing drying up rapidly, the country will have to
rely on domestic investment to jumpstart its stalled economy. Savings are
traditionally held in dollars, at home, and analysts estimate that there is
close to $40 billion squirreled away all over Russia, hidden under mattresses
or in the drawers. 
But citizens who have been burned in the current crisis are unlikely to trust
their cash to the country's banks. 
Sberbank is offering high interest rates - 10-11 percent on dollar accounts,
and 42-44 percent on ruble accounts - but the rewards are not enough to make
up for the risks, say observers. 
''The only hope is for foreign banks to be allowed to come in,'' said Peter
Westin, an analyst at the Russian-European Center for Economic Policy.
''Russians do not trust their own banks, and it is the only way we will see
any of those `mattress millions' in circulation.'' 


Media Campaign Against Nuclear Power Industry Denounced

Moscow, December 9 (ITAR-TASS)--The Russian Nuclear Society, uniting
fathers of Russian nuclear weapons and the nuclear power industry,
denounced on Wednesday a mass media campaign against the national nuclear
power industry, stating that it was "clearly inspired" from outside, the
press secretary for the Nuclear Energy Ministry, Yuriy Bespalko, told
Itar-Tass on Wednesday.
The central board of the nuclear society voiced its support for
efforts by the leadership of the Russian Nuclear Energy Ministry to
preserve the nuclear power industry as a basis of national security and
independence of Russia.
The nuclear society will support the ministry's efforts to develop the
nuclear weapons complex and the Russian nuclear power industry "which is
even now the mainstay of ecologically clean energy supplies for some (in
future--for most) regions of the country".
The society intends to help resolve the problem of the national
nuclear-powered fleet, "capable of supplying quickly fuel to outlying
Russian regions", to ensure an adequate level of funding nuclear science
and the state defence order "thanks to export operations of the industry"
and to bring young people to the industry.
"We demand attentive approach by all levels of state power to
examining questions of the nuclear power industry," the document says.
Russian nuclear researchers and specialists call on the media "to use
only confirmed facts and to write more about achievements of national
nuclear science and technology, as well as about workers of the industry,
enabling Russia to remain even now among leading nations".


Christian Science Monitor
DECEMBER 14, 1998 
[for personal use only]
Staying independent in tough times
Peter Ford ( 
Staff writer of The Christian Science Monitor


Battered financially by a continuing economic crisis and under political siege
by Communists eager to reassert their control, Russia's media are facing some
of their darkest days since the fall of the Soviet Union.
Across the board, the future is deeply uncertain for national daily newspapers
owned by suddenly less wealthy tycoons; for small regional papers whose
advertising revenues have collapsed; and for TV stations facing pressure to
accept political oversight boards.
"It is not clear what is going to happen, or how, but I am sure that nothing
good is in store for us," says Masha Lipman, deputy editor of the weekly Itogi
magazine, published in conjunction with the US magazine Newsweek.
The crisis is "creating conditions that threaten the very existence of a non-
state press in Russia over the long term," warns a recent report from the
National Press Institute, a Moscow-based group fostering the growth of the
independent press.
Meanwhile, with the approach of high-stakes elections next year to the Duma,
or lower house of parliament, there are few hopes that newspapers or TV
stations will soon be able to break out of their traditional role as
mouthpieces for whichever politician or businessman is paying them.

The issue of press freedom has come to a head with a declaration of war by the
Communist Party and its allies, who control the Duma, against a group of
prominent anti-Communist journalists at independent TV channels.
In a throwback to Soviet days, Communist Duma Deputy Alexander Kuvayev
threatened in a speech last month to set up a "public committee" over their
"active and deliberate support for the [previous] regime and its criminal
Communist leader Gennady Zyuganov then wrote to Prime Minister Yevgeny
Primakov, demanding that "monitoring commissions" be established at TV
stations to oversee news coverage because "their leaders and owners are
extremely tendentious and absolutely hostile to the new government."
Proponents of such committees say they are not opposed to freedom of speech,
but want it "to be truthful, to reflect the mood of the masses," in Mr.
Kuvayev's words. TV station chiefs, however, fear the committees would merely
be censorship boards if Communists push through a plan to staff them according
to each party's strength in the Duma.
The Communist Party has been acting with renewed confidence since President
Boris Yeltsin last September named Mr. Primakov, a former Soviet apparatchik,
to lead a new government in the wake of a major banking crisis. Communist
leaders in the Duma are reported to be demanding the monitoring committees in
return for their vital support for Primakov's tough budget - up for debate
this month.
At the same time, the Communists and their allies recently enacted legislation
to end customs privileges that the press has hitherto enjoyed. This will
especially hit liberal newsweeklies such as Itogi that print abroad in order
to ensure high quality.
"The motivation is political," claims Itogi's Ms. Lipman. "To crack down on
freedoms there is no need at all to introduce censorship in the old Soviet
way; they can always use economic pressure to make the media business
Laws granting tax breaks and customs privileges were designed to promote a
flourishing media scene after seven decades of Soviet repression, but the real
boost has come from big businessmen buying and founding papers and TV stations
as lobbying weapons. Banking and oil tycoon Boris Berezovsky, for example, has
used the ORT television channel and the daily Nezavisimaya Gazeta to promote
his business and political interests, while rival Vladimir Guzinsky founded
NTV television, Itogi magazine, and Sevodnya newspaper for the same purposes.
Such figures have been doubly hit by the crisis and its political fallout:
They suffered financially from the collapse of the banking system, and also
find themselves distanced from power under the new government. Less involved
in Kremlin intrigue, and less likely to benefit from insider deals, they may
now see less value in their media holdings as ways of wielding influence,
media analysts here suggest.
This might offer the prospect of newspapers operating as commercial
businesses, living on their earnings rather than on handouts. Mikhail
Kozhokin, the newly appointed editor of the influential daily Izvestia,
insists that "we consider ourselves businessmen, so we should not look for
sponsors," and has developed ambitious plans for a national printing and
distribution network so as to boost circulation. At the same time, Mr.
Kozhokin holds another post at the paper: He represents Uneximbank, the main
shareholder. Uneximbank is the financial empire that profited most from close
Kremlin ties in recent years.
In Russia's regions, where a few hundred independent newspapers compete with
thousands owned and subsidized by local governments, the prospects are slim
for a healthy shakeout from the crisis.
"If all the papers were working in a market-oriented society and this was a
market crisis that weeded out the weakest, that would be one thing," says
Robert Coalson, who runs the National Press Institute's Media Business
Development Service. "But this is a crisis that has been heavily politicized,
so those weeded out will be those without subsidies, the ones that are
commercially oriented toward their readers."


Russian FinMin sees economic policies toughening

MOSCOW, Dec 13 (Reuters) - Russia's economic policies should get tougher next
year and help to curb inflation and support the rouble, Finance Minister
Mikhail Zadornov said on Sunday. 
Zadornov told Russia's RTR television channel that the 1999 budget draft,
submitted to parliament on Friday, called for greater control over rouble
printing than in recent months. 
``In 1999, there should be gradual toughening of policy,'' he said, adding
there had been significant money emission since August to meet budget
obligations and support banks suffering chronic liquidity problems due to the
financial crisis. 
The 1999 budget draft, which some economic analysts say sets unrealistic tough
targets, allows for the central bank to issue credits for less than 33 billion
roubles ($1.64 billion). 
Russia's monetary base, a narrow indicator of money supply, has risen by about
the same amount, or about 20 percent, since an August 17 decision to
effectively devalue the rouble, freeze domestic debt and default on some
foreign debt repayments. 
The International Monetary Fund and other creditors have voiced concern about
the possibility of hyperinflation if the rouble printing presses are not
The IMF is not prepared to resume lending to Russia without clear evidence of
fiscal discipline and commitment to reform. 
Zadornov said the government had not received ``a firm yes'' to external
financial support, but he believed measures to curb inflation and support the
rouble would justify such help. Russian consumer prices rose 5.7 percent in
November month-on-month, compared with 4.5 percent in October. 
``We should be able to count on some foreign financing,'' Zadornov said. The
government is hoping for about $7 billion in foreign credits next year and for
a restructuring deal with creditors to ease a crushing debt servicing burden. 
Zadornov said Russia was trying to halt a rise in foreign debt, which was now
120 percent of gross domestic product compared with 20 percent at the start of
reforms in 1992. 
He said the 1999 budget draft target for a primary surplus (excluding debt
servicing) was realistic. The budget draft envisages a primary surplus of 1.7
percent of GDP, with the overall deficit at 2.53 percent. 


Date: Sun, 13 Dec 1998 
From: "Jerry F. Hough" <>
Subject: Kiriyenko

I don't understand the controversy on Kiriyenko. He is not an 
economist, but a shipbuilding engineer who was Komsomol secretary at 
Krasnoe Sormovo. Nemtsov is not an economist. Nemstov was obkom first 
secretary in Nizhnii and Kiriyenko was his obkom secretary for resource 
distribution. His biography makes clear he was Nemtsov's man for 
handling oil distribution to enterprises and farms on a non-monetary 
basis (that is, the supplies procurment man) and balancing the 
financial needs for pensions and other needs. He then occupied this 
post in the ministry when Nemstov went to Moscow. I assume that he is 
a quite compotent political administrator. That the West persisted in 
fooling itself that Nemtsov and Kiriyenko were any more than this is the 
West's problem, not theirs. 


Date: Mon, 27 Aug 1956 
From: Bill Mandel <>
Subject: Abortion

When I was a kid, the American Pavlovian response to the 
words "women--Russia" was "nationalization of women." It 
took 55 years, that is, until the increasing contact 
following the Nixon detente, to dispose of that one. Its 
place has been taken by "abortion is (and was) the chief 
means of preventing conception," which has appeared as a 
mantra in pieces on women in JRL.
In 1966, i.e., the "classical" Soviet period,a study by 
the Demography Lab of Gosstat showed that one woman in four 
had had no abortions at all. 65% had had two or less, which 
was about the same as in the West, although abortion was 
illegal in most Western countries then. One woman in 26 had 
had the notorious seven abortions, the number that seems to 
have been memorized here. For fuller information, see my 
Soviet Women, Doubleday-Anchor, 1975, particularly the 
chapter, "The Light at the End of the Bedroom." There are 16 
index references to abortion.


From: "Alexander Samoiloff" <>
Subject: Hello Russia # 16
Date: Mon, 14 Dec 1998

December 14 1998

(Molodoi Dalnevostochnik #50)
A recent Sociological Poll among different layer of Khabarovsk society shows
the following results:
- 6.5% - trust the President of Russia
- 85.5% - do not trust him
- 5.5% - trust Evgeny Prymakov
- 90.5% - do not trust him
- 20% - trust the State Duma
- 43% - do not trust Duma
- 1.5% - trust the Local Krai Duma
- 6.0% - think that local Duma represents interests of Mafia
- 22% - want to stop markets reforms
- 39.5% - want to change the character of the reforms
- 11% - appreciate the coming reforms

During the contest "The Best Russian Beer - 1998" held this week in Moscow
Khabarovsk lager beer "Taiga" and "Malov" won Golden Medals. The contest is
conducted by the All-Russian Scientific Research Institute of Brewery and
the Russian Union of Brewery Producers.
So, while typing this report in Khabarovsk I drink the best Russian beer.

(Alexander Samoiloff)
The Far Eastern and than Russian national TV have raised a car accident
story. Two months ago US Consul in Vladivostok Mr. Douglas Kent, driving at
high speed hit a small Zaparozhets car. The Consul explained the accident by
a poor street light.
On Sunday National TV program "Scandals of the Week" interviewed a young
Russian driver Alexander, who stays disable in a hospital ward and his
mother. The mother expressed her indignation that Mr. Kent never even cared
to inquire about health of her son, whom he made crippled, not to say about
any financial help.
Alexander said that he is just a plain Russian worker, but the American who
hit him is VIP, and he never can expect any attention from that side.
The comment was, that usually in USA after hitting even a dog, the driver
cares at least to inquire about the dog's health.
Dear Gentlemen from USA State Department.
I can not judge about details of the car accident, but you are the
politicians and diplomats. Why do you add up fuel to the anti-American
feeling fire at the front burner of the Russian nationalists and Communists.
I don't understand you.



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