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Johnson's Russia List


December 25, 1998    
This Date's Issues: 2532    

Johnson's Russia List
25 December 1998

[Note from David Johnson:
1. AP: Yeltsin Discourages Early Campaigns.
2. Moscow Times EDITORIAL: Not a Merry Christmas For Everyone.
3. Esther Dyson: Foreign banks.
4. Mark Scheuer: Banks.
5. Jonas Bernstein: Response to Sturua and Albats.
6. Craig DeMott: Comments on Poverty much worse than reported.
7. Moscow Times: Alexander Gordeyev, Primakov Wins First Budget Fight.
8. Jamestown Foundation Prism: Andrei Kalganov, WHO WILL BE THE NEXT 

9. Los Angeles Times: Richard Paddock, Russia Shelves Rhetoric to Accept
U.S. Food Aid.

10. St. Petersburg Times editorial: Squabbling Costs Liberals Big Chance.
11. Rossiyskaya Gazeta: 'Conditions Ripe' for Moscow-Beijing-Delhi


Yeltsin Discourages Early Campaigns
December 24, 1998

MOSCOW (AP) -- Boris Yeltsin, who bristles at being labeled a lame duck,
scolded his potential successors today for acting as if they were already

``There is still a year-and-a-half until the presidential election, and we
already have people who think they are the president,'' Yeltsin was quoted as
saying by Russian news agencies. ``This is unpleasant and it won't help them
at the polls.''

The next presidential election is set for the middle of 2000, but Yeltsin's
health problems have spurred some politicians to launch informal campaigns in
case he leaves office early.

The president did not mention any names, but appeared to be referring to
Moscow Mayor Yuri Luzhkov, who recently launched his own political movement
and has been speaking out on national issues such as economic policy and
Russia's foreign relations.

Luzhkov has been an ally of Yeltsin for years, but recently the mayor has been
critical of the president.

Yeltsin, 67, says he has no serious illnesses and will serve out his full
term. He has been unable to work full-time for months, though he has been more
active since recovering from a bout of pneumonia earlier this month.

The president said there were some candidates he would not like to see in high
office, but he did not name them.

``For this reason we shall use the strengths of our official positions in
order to influence the process in a way that would make the new president
worthy of Russia,'' Yeltsin was quoted as saying by Russian news agencies.

Other leading presidential contenders are Communist Party leader Gennady
Zyuganov, Siberian governor Alexander Lebed and liberal politician Grigory


December 25, 1998 
EDITORIAL: Not a Merry Christmas For Everyone 

The Western Christmas holiday, when many of our readers are enjoying the
comforts of a happy family celebration, is a good time to think about the
millions of people here in Russia who do not have much reason to celebrate
this year. 

The financial crisis has cut living standards dramatically. Many people will
not have the money to pay for presents on the traditional New Year's
celebrations and their family feasts will be very modest affairs. 

It is easy living in the isolated and privileged world of foreign expatriates
to forget how much pain is being felt by average Russians. Certainly, Moscow
is still better off than the rest of the country and its thick layer of "New
Russians" and middle-class Russians is better placed to withstand the current

But even here in the showpiece of Russian society, tens of thousands of people
have lost their savings in the collapse of the country's banking system. Still
more have become unemployed or had their salaries slashed as the banking,
media and consumer-goods businesses have switched from boom to bust. 

Some of the worst affected people, however, are those on fixed incomes,
especially pensioners. Prices have jumped by 60 percent in the past few
months, but pensions and other benefits have not been adjusted, if they are
paid at all. The government is now talking about a modest indexation of
pensions but only in April next year. Even the formerly rich city of Moscow is
being forced to cut back, for instance, by reducing the supply of free
medicines to the elderly. 

Some of the most poignant stories in The Moscow Times have looked at ways in
which Western aid, both institutional and personal, can help. 

Local expatriate community groups are giving money to improve the quality of
care at Moscow's orphanages or to feed the homeless on Moscow's streets.
Groups like the Red Cross are active in those remote regions of Russia where
there is real hunger. 

Even for the more affluent readers of The Moscow Times, now might be a hard
time to think about giving to charity. Many are seeing profits fall at their
businesses and are economizing. 

But it goes without saying that now is the time when Russia needs help. For
Russia's poor, this will be a cold and desperate winter. 

The Moscow Times takes this opportunity to wish all its readers a Merry
Christmas and a happy and prosperous New Year. 


From: (Esther Dyson)
Subject: re2513: (Ray Thomas), Subject: RE: 
2510/Weir/Foreign Banks
Date: Thu, 24 Dec 1998 

I just wish that the foreign banks could do small *commercial* lending, too.
Of course it would take a huge amount of training and support, but that's
where the IMF et al. should be putting the money, not into the hands of
government officials and their friends. Suppose they subsidized the training
and let the loans be for-profit? (cf. the micro-lending schemes in other
underdeveloped countries, and a few in Russia itself) ANyone working on
making this happen?

Esther Dyson Always make new mistakes!
chairman, EDventure Holdings
interim chairman, Internet Corp. for Assigned Names & Numbers
1 (212) 924-8800
1 (212) 924-0240 fax
104 Fifth Avenue (between 15th and 16th Streets; 20th floor)
New York, NY 10011 USA


From: "Scheuer, Mark" <>
Subject: Helpful suggestion
Date: Thu, 24 Dec 1998 

Dave, not to undermine Ira Straus' important points about the help R banks
desparately need, but in case any of your readers have run into the problems
Mr Straus' friends have--i.e. transferring money from abroad to Moscow--they
might consider using Western Union. My wife sent US dollars to her friend
in M a couple of wks ago and the money was received in US dollars. I'm not
an agent of the company, I only wanted folks to know that there are
alternatives until the banks get on their feet---yesli boi. . .


From: "jonas bernstein" <>
Subject: Response to Sturua and Albats
Date: Thu, 24 Dec 1998 

I'd like to have a go at the responses from Georgi Sturua and Yevgenia 
Albats to my commentary on George Soros' remark that Yegor Gaidar was 
"minding the store" on Aug. 7, in the middle of Russia's financial 
crisis. I know this is all getting quite arcane, but, hey - where else 
can you do this but on the JRL?

Ms. Albats states categorically that I was wrong about Gaidar, because 
he was not a private citizen but, rather, an economic policy adviser to 
then-Prime Minister Sergei Kiriyenko. Perhaps so, but, to my mind, the 
record on this is murky. 

If you go through clips from that period, you see Gaidar frequently 
mentioned, quoted or interviewed, and invariably identified as former 
acting Prime Minister, head of Russia's Democratic Choice or head of the 
Institute for the Economy in Transition, but not as an economic policy 
adviser to the prime minister. In July, a detailed New York Times 
analysis of the IMF's actions vis-a-vis Russia, written by Michael R. 
Gordon and David E. Sanger, quoted Gaidar, calling him "the former 
acting prime minister who is now an economic adviser to Yeltsin." (So he 
held two posts?) In the introduction to an interview with Gaidar 
published in Izvestia on April 28, 1998, around the time Kiriyenko was 
finally confirmed, Nikolai Bodnaruk, the interviewer, wrote: "His 
[Gaidar's] position - unconcealed kinship with the young reformers in 
the government and, I suspect, well-informed - all of this gave grounds 
for hearing [his] arguments in favor of the decision taken by the 
president [to appoint Kiriyenko]." Izvestia identified Gaidar only by 
his name; no title. In an interview with Moskovsky Komsomolyets 
published on May 5, 1998, Gaidar, identified only as a former acting 
premier, said he wished Kiriyenko "success" and hoped "very much" he 
would succeed. Asked to comment on Kiriyenko's economic program, Gaidar 
replied: "He hasn't said, in my view, anything stupid, he hasn't said 
one thing which is fundamentally incorrect." 

Nothing wrong with that, except that it's a rather peculiar answer - a 
bit distant - coming from one of Kiriyenko's economic advisers. Indeed, 
two days earlier, on Radio Liberty's "Face to Face" program, moderator 
Mikhail Sokolov had asked Gaidar point-blank whether he and his 
institute had helped develop Kiriyenko's economic program. Gaidar 
replied that the government "asked us to present our ideas both about 
the economic situation, and about what needs to be done. We, naturally, 
did that and will be doing that." But he added: "It's another matter 
that there is always a difference between advisers, researchers, and the 
people who take the decisions. The Kiriyenko government is independent 
and it independently takes decisions."

There is nothing intrinsically wrong with a government using a private 
think-tank for advice or even formulating policy - as, for example, 
Reagan did with the Heritage Foundation. But if Gaidar was, indeed, one 
of Kiriyenko's economic advisers - in the way, for instance, that 
Aleksandr Livshits was Yeltsin's economic adviser - why didn't he just 
come out and say so? Particularly if he is, as Mr. Sturua says, "a man 
of action who does not shy away from responsibility for the decisions he 
makes," which Mr. Sturua calls "a rare quality in politicians, 
especially ... in Russia." After all, everyone knew Aleksandr Livshits 
was Yeltsin's economic adviser - that was his position, that was his 
title. Why was Gaidar so coy? Could it be that Kiriyenko wanted to keep 
it low-profile, given Gaidar's low public opinion rating? Or could it be 
that Gaidar wanted to be able to "shy away from responsibility" if and 
when things went bad - if, for instance, the ruble collapsed?

In his comments on the irrelevance of "rule of law and democracy" for 
"present-day Russia," on how "it is impossible to keep immaculately 
white gloves on and succeed in politics," etc., Mr. Sturua seems to have 
tacitly accepted my criticism of the young reformers for high-handedness 
and lack of accountability. As for my comments seeming to be "stolen 
from the lips of those who in the murky world of Russian political 
infighting have lost ... to Chubais and Gaidar," I can understand that 
after seven years of almost exclusively uncritical Western reporting and 
analysis on the "energetic young reformers," Mr. Sturua might have 
difficulty understanding that some people in the West actually entertain 
doubts about their record.

Now that Soros' recollections on the events leading up to August 17 are 
out, it would be interesting - just for the historical record and in the 
interests of Russia-watching - to find out just what role Gaidar played 
in the decision-making. And I still am very curious to know what Soros 
meant by "minding the store." Aren't you? 


From: "Craig DeMott" <>
Subject: Poverty much worse than reported
Date: Thu, 24 Dec 1998

Poverty much worse than reported

Here is an article that was in The Moscow Times, Nov. 24, 1998. (My
comments will follow.)

42 million Russians below poverty line

Moscow. Around 42 million Russians, or 28.6 percent of the 148 million
population, live below the poverty line of 573 ($35) a month, the State
Statistics Committee reported, cited by Interfax.

A year ago, the committee said around 20.9% of the population, lived below
the poverty line, then put at $67


This is not correct. Notice that they said $35/mo. as being below poverty,
whereas as one year ago it was $67/mo. Since the crisis, the ruble has lost
over 66% of its value (6.3:1 before the crisis, now, 22.0:1, as of Dec.
22). The $67 figure should still be used, as people were dirt poor then and
they would still be dirt poor today. So they should calculate it by $67,
and not $35. They are assuming that prices have dropped. They didn't. True,
what most poor people buy are things that are made in Russia, and these
goods have not gone up in proportion to the rate of inflation, as imported
goods, but they still went up in price.

If you take into consideration what Russians call poverty, and what the West
calls it, it would take even more money to be above the poverty line. Even
if the $67/mo. Figure is used, Russian definition of poverty is different
than the West. If this was taken into consideration, probably 3/4ths of the
people would be living below the substance level. The only explanation for
this is blatant lie put out by the government is, that it will not make it
the crises look as bad as it really is.


Moscow Times
December 25, 1998 
Primakov Wins First Budget Fight 
By Alexander Gordeyev
Staff Writer

Despite opposition from regional governors, the State Duma approved the draft
1999 budget's optimistic macroeconomic targets Thursday, after Prime Minister
Yevgeny Primakov threatened to resign. 

In last-minute negotiations, the Duma, parliament's lower house, and Primakov
reached a vague compromise on the budget aimed at giving regions more funds
and thus settling the main complaint of the upper house, the Federation

The draft budget passed in the first reading by 303-65, with nine abstentions,
several hours after Primakov told President Boris Yeltsin that "we will quit"
if the draft is rejected. The bill needed 226 votes to pass the first reading.

The approval of the draft's tough basic targets, including a primary surplus
of revenues over expenditures equal to 1.65 percent of gross domestic product,
provide the government with a vital argument in its negotiations with the
International Monetary Fund and other lenders. 

"This budget is necessary for our relations with our Western partners, but I
must add, that to them the strength of our government is the parliament's
support for it," Primakov told the house. 

The vote was held Thursday despite earlier announcements by the largest
factions that they wanted to delay it until next week in order to allow
regional leaders to introduce their own amendments. 

Regional leaders, who comprise the Federation Council, had complained to the
Duma on Wednesday that the draft budget leaves too few funds at their

The budget is based on tax changes that would strip regions of their share of
value-added tax revenues and channel some of their income tax revenue to the
federal budget. 

The tax changes have received basic approval from the Duma but its details
still have to be finalized. If the measures are implemented as proposed by the
government, the federal budget's revenue would increase by 80 percent in ruble
terms, while regional budgets would gain only 13 percent, well below next
year's projected inflation of 30 percent, said Konstantin Titov, the head of
the Federation Council's budget committee. 

This would give the federal budget a much greater share of revenue.
Previously, revenues were split almost equally between the federal and
regional budgets. 

After the government's initial presentation of the budget, Primakov held talks
with Duma Speaker Gennady Seleznyov, Federation Council Speaker Yegor Stroyev
and leaders of Duma factions. Primakov convinced the leaders to hold the vote
Thursday rather than delay the bill. 

According to participants, the deal reached at the meeting provided for an
equal 50/50 split of all revenue between the federal and regional budgets,
although it was not specified how the federal budget's total revenue figure
would survive the amendment or how specific taxes would be split. 

Later most factions approved the proposal, except for Liberal Yabloko group,
which maintained its opposition to the draft despite Primakov's personal
presence at the meeting. Yabloko leader Grigory Yavlinsky, who initially
proposed Primakov to the post of prime minister in the wake of the August
crisis, told the Duma that his faction would still vote against the budget. 

Before the crucial vote, Primakov called on the house to show unity. "I would
like to use my presence on this rostrum to call on everybody to come to
accord," he said. "Work on the budget has started today and it will continue.
We accept your demand that the implementation of the budget should be revised
on a quarterly basis. It has been said that if we fail to meet the regions'
demands, the regions will turn their back on us. The government will do its
best so that nobody turns their back on us." 

Primakov's own threat to resign was the only clear-cut argument in favor of
passing the first reading on Thursday. Although the majority of the house
supported the budget on the formal grounds that a compromise had been reached,
there was no certainty as to what exactly the deal involved. 

Some deputies asked for a clarification of what types of revenues should fall
under the 50/50 scheme. 

One major area of confusion was an argument over control of the Federal Road
Fund. Citing the regional governors requests, the deputies said that the
Federal Road Fund, an off-budget fund that is funded with a special tax,
should be excluded from the 50/50 arrangement. 

The fund's projected revenues stand at 29.5 billion rubles, or 6.2 percent of
total revenue. Although it is formally listed as part of federal revenues, all
of its money gets transferred to regional budgets. By keeping it out of the
50/50 split, regions would be able to increase their share of the consolidated
budget. But seconds before the vote took place, Primakov said that all
revenues will fall under the scheme. 

Another major uncertainty concerns VAT, a key area where the budget cuts funds
to the regions. Deputy Prime Minister Gennady Kulik said the federal
government might agree to give a share of VAT to regional governments. 

The VAT is currently set at 20 percent and split 15/5 between the federal and
regional governments. But the government has proposed cutting the tax to 15
percent, with the federal government retaining all the revenues and the
regions getting nothing. 

Sergei Don, a Yabloko deputy, also said that restoring one or two percentage
points of VAT was being discussed as an option. That would help the government
in talks with the IMF, which has objected to cutting any taxes at a time when
the government is desperate for revenue. 


12/25/98 No.25 Part 2

By Andrei Kalganov
Andrei Kalganov is a Doctor of Economics and a Senior Research Fellow at
Moscow State University.

The difference between reading tea-leaves and professional forecasting is
that the former is based on transcendental considerations. But in Russia
these aspects, which do not lend themselves to rational analysis, are often
the determining factor in formulating what is termed the "voice of the
people." And this "voice," contrary to all the well-grounded and
oft-repeated theories of the elite, usually turns out to be nearer the truth
than the predictions of the forecasters and political analysts who follow
internationally accepted methods. Why is this?

I do not propose to rush straight into an answer to this question--we shall
return to it. First, a few words about what to my mind, and there is
inevitably a certain subjectivity here, the voice of the people signifies.

A recent Prism article bore the symbolic title "The people are silent" (see
Prism, October 16, 1998, Vol. IV, Issue 20). This silence continues to this
day, but its tone and degree have changed. The tension in the country is
growing slowly but inexorably. This can be seen not just in the ongoing
industrial action and hunger strikes, which have reached an unprecedented
scale (500 teachers began a hunger strike the day this article was written),
not just in the growing rash of disasters and problems which threaten to
cause a genuine calamity this winter (not a day goes by without the
television or radio reporting fresh warnings of cold weather and famine in
this or that region of Russia), and not just in the unstable political
situation when regional leaders try to escape on their own to avoid being
buried by the economic crisis of the Federation (Ilyumzhinov started this in
Kalmykia, everybody is wondering who will be next).

It is not just all these things. The problem is that the crisis of trust is
deepening in Russia. The longer it goes on, the worse it gets. Half-starved,
and fed up with the ceaseless round of crisis, the majority of workers,
pensioners and even young people, who are now facing mass unemployment, have
lost confidence and show less and less trust in any of the current political
leaders, as confirmed by almost all the opinion polls.

The silence of the people is developing from a rumble into a roar.

People have indeed lost faith. University lecturers who are paid US$70 a
month, teachers who do not even get their US$50 for months on end, workers
and pensioners--we are all tired and as yet do not know what to hope for,
who to believe or which way to turn.

Should we go back to Stalinism or the stagnation of the Brezhnev era?
Surveys show that the latter is the period people prefer, remembering it as
the happiest period in our country's history. No, most people now would not
be able to cope with a return to authoritarianism, general shortages and a
dictatorship of geriatrics who have lost possession of their faculties, as
demonstrated by the results of the 1996 presidential elections, when a
majority (albeit a small one) said "no" to Zyuganov, rejecting a return to
the past. The fact that Zyuganov and company are in fact not heading for
Brezhnevism but for a parody of Hungarian-style "goulash-socialism" is a
matter for separate discussion.

Or should we go forward towards a bright capitalist future? But most of us
are persuaded that the existing semi-feudal, semi-criminal capitalism in
Russia has as much in common with liberal theories of "open society" as
Stalin's gulags have with the Marxist kingdom of freedom.

So what is the poor Russian to do?

This is a question which demands an answer. Only the person who can provide
an answer--and not just a theoretically sound one but one which can
genuinely be perceived as the truth by a majority of the Russian
people--only this candidate and only this political force can have any hope
not just of an election victory (which could go to the current favorite if
no answer is forthcoming), but of success in resolving Russia's problems in
the 21st century.

What is the answer? Who will come up with it?

The greatest tragedy of the current situation is that none of the country's
political forces can hear or wants to hear the rumbling roar of the people,
but continues to inhabit the virtual world of the political games of the
"elite" (in essence, the nomenklatura), and continues to use the usual
terminology of "Left and Right" and "Westernizer and patriot" when
discussing the preferences of the public. But these games are coming to an
end. The experience of the current Duma, not to mention the president, shows
that none of these politicians are able or indeed willing to solve the
country's problems; they are only interested in trying to consolidate their
own positions somehow or other.

Meanwhile Yeltsin's state of health--coupled with the almost universal
opinion that the current president has outlived his usefulness--make the
question of a new leader very relevant today.

Communist leader Gennady Zyuganov's position in Russian society today is
encapsulated in the paradox that he is tied to a sizable but finite
electorate which is slowly but surely shrinking. He is the leader almost
exclusively of those for whom the main point of voting is to register a
protest against the current system crisis in the country, its economy,
politics and culture. There were a fair number of those--about one-third of
the population, and there are still quite a number of them--about one-fifth
according to the latest polls--but their votes were not enough last time,
and will certainly not be enough next time, for victory in the presidential
elections. As time goes by, so Russia's citizens become more convinced that
Zyuganov is not backed by a social force capable of clearly expressing the
aspirations of the majority for the next ten to fifteen years, aspirations
which they themselves have not yet realized, let alone expressed.

The Zyuganov mix of great power mentality, Orthodoxy and state paternalism
is at best taken as the lesser of two evils by those who see their future as
linked to traditional Russian industries and agriculture, those whose only
aspiration is that things should be no worse than they used to be, and those
who are ready to sacrifice their civil liberties for the sake of the "good
Tsar" and a reasonably solicitous boss. Fortunately, as noted above, such
people number no more than one-third of the population today.

Moreover, there is more and more vacillation in the Zyuganov camp: 1996
demonstrated that Gennady Zyuganov can not triumph in the presidential
elections. The most he will get in 1999-2000 is a large faction in the Duma.
But in Russia this does not amount to very much. It does not give access to
state power and the accompanying gravy train. Nor does it allow the will of
the majority of the lower classes to be expressed.

As a result, a significant part of the Popular-Patriotic Alliance
(NPSR)--the pro-Zyuganov coalition--which is not directly involved in the
Communist Party of the Russian Federation (KPRF) is beginning to look around
for a different respectable leader, who would combine state paternalism with
realistic chances of victory. November 1998 demonstrated that the Agrarian
party and many centrist "patriotic" forces are not averse to beginning a new
political game independently of the KPRF. Moreover, the KPRF's announcement
that the elections to the Duma will feature a KPRF list--which will be open
to nonparty members--rather than an NPSR list intensified the centrifugal
tendencies in the alliance. And then a considerable amount of oil was poured
onto the fire by the speaker of the State Duma, KPRF member Gennady
Seleznev, when he declared his intention to run for president independently
of Zyuganov. This led political analysts to forecast that the coalition
would split into a Zyuganov-led KPRF block and a separate Seleznev-led NPSR
block. As yet this is just speculation on the part of political scientists.
But these are the first indications that the moderate opposition has sensed,
as yet perhaps only vaguely, that there will be no victory with Zyuganov and
the KPRF.

The most unusual aspect of the current situation in Russia is the utter
chaos in the so-called "party of power." This whole clique has never been at
such a loss as to whom to back. Chernomyrdin? A half-dead Yeltsin? Somebody
from among the radical right "young reformers" of the Chubais-Gaidar mold?

Or perhaps they should all resign themselves (before it's too late) to
Moscow Mayor Yuri Luzhkov, with whom practically all the political
prostitutes in today's Russia are hoping to get into bed with?

The questions are: Who will win? Who is the person to curry favor with?

This question remains unanswered, exacerbating the commotion (which is as
yet fairly low-key--it seems there is still some time left) in the upper
echelons--commotion which reverberates in the press and among the court

They are indeed in an unenviable position. You only have to look at
Chernomyrdin's acrobatics: First he forms a center-right coalition (and for
Russians these political hieroglyphics can be read in only one way: that he
had decided to patch up his differences with Chubais and Gaidar and sell his
soul to the IMF); then he sucks up to Luzhkov--patriot with a pink hue...

Luzhkov is no better himself. First, all through spring and summer and the
beginning of autumn, he--rather ambiguously but obviously for the benefit of
the public--flirted with various social democrats ("New Socialism" and many
other smaller groups frequently referred to him as their leader, and Luzhkov
did not deny it), then he dropped hints about a possible coalition with
Zyuganov and ranked himself among the center-left. Following this, Luzhkov
did nothing to discourage General Andrei Nikolaev, former chief of Russia's
Border Guards Service, from portraying him [Luzhkov] throughout the media as
a leader of the "Union of Popular power and Labor," Nikolaev's own party.
Then suddenly, literally in the last possible month (in Russia, a political
party or movement planning to participate in elections must register its
charter with the Ministry of Justice no less than one year in advance).
Luzhkov decided to form his own movement, surrounding himself with an
impressive number of governors and other court figures.

The political mongrels keen to find a master immediately pricked up their
ears: was this really the new leader?

I would not rush to confirm that. This has nothing to do with the theories
of arrogant political forecasters who are now working overtime wondering
what if...? What if Luzhkov joins forces with Chernomyrdin? Or with
Yavlinsky? Or with...? The thing is that Luzhkov has not yet been--and in
all likelihood will never be--able to rally the country's top people (the
nomenklatura), or "new" people, or most importantly those who are able to
express what the people themselves are as yet unable to express, but what
will really rescue us from the terrible crisis which has affected every one
of us very deeply. Most Russians (as opposed to the wise political
scientists and highly experienced politicians) understand full well that the
impressive shop windows in Moscow are the fruit not so much of production
but of a redistribution of wealth and theft, and that these resources will
soon not be sufficient even for Moscow. Luzhkov's coffers are running low.

So, if not Zyuganov or Luzhkov, then who?

In Russia there are always generals hovering among the contenders for
political leadership. As yet--thankfully--their efforts have been
unsuccessful. And the predictions which analysts are always repeating--that
General Lebed will be successful in a country fed up with a lack of
order--are looking unlikely.

Why is this?

For the same reason: there is no power or, more importantly, no truth behind
the general.

Lebed--just like Luzhkov and recently Zyuganov, Chernomyrdin and innumerable
others--is grazing on the same political ground where all the grass was
eaten back at the beginning of the reforms and there is only mud and manure
left--the ground of political "centrism."

The inverted commas are not accidental. Essentially, the programs of the
majority of presidential candidates are filled with a standard mixture of
platitudes which are as meaningless as they are correct: the market, but
with major social restraints; a strong state and revival of superpower
might, while observing certain niceties in the field of human rights;
moderate criticism of the past with compulsory praise for the achievements
of our space development program and military industrial complex; a
combination of the values of collective socialism and liberal individualism;
et cetera, et cetera.

You can't argue with any of that--with the exception of one thing: The more
the nomenklatura leaders try to implement this program in Russia, the worse
the crisis becomes. Nomenklatura bureaucratic centrism has already led to a
dead end.

As regards extremism and dictatorship--no one has the power to achieve this.

So what is the poor Russian to do?

...The people are still silent. But we are totally fed up. A solution is as
essential as the air we breathe. There still remains some hope in the "last
valve" (we should remind our foreign readers that this was how Stolypin's
reforms were seen on the eve of the 1917 revolution) in the person of
Yevgeny Primakov, but it is impossible to judge as yet whether this valve
will open and to what extent its opening--if it happens at all--will release
the pent-up steam of the crisis.

So who will be the next president of Russia--and when? Today there can only
be one honest answer to this question among academics and experts: The vast
majority of Russians in the street have not yet decided themselves, and any
attempt on the part of the "elite" to decide the issue for them may lead at
best to the installation in the Kremlin of another "favorite" who is unable
to solve any of the problems facing Russia.

Unfortunately, the majority of politicians and political scientists in our
country are unwilling to admit this.

Then again, perhaps there will be no more presidents in Russia at all?


Los Angeles Times
24 December 1998
[for personal use only]
Russia Shelves Rhetoric to Accept U.S. Food Aid 
Relations: After bellowing about strikes on Iraq, the ex-superpower must take
$600 million in emergency relief. 
By RICHARD C. PADDOCK, Times Staff Writer

MOSCOW--After mounting a blistering attack on the U.S. bombing of Iraq,
Russia swallowed its pride, shelved its anti-American rhetoric and agreed
Wednesday to accept 3.1 million tons of emergency food from the United States.
In an abrupt turnaround that demonstrates how far Russia has fallen from
its days of Soviet glory, officials joined the U.S. in signing humanitarian
relief pacts worth more than $600 million--its largest food-aid package in six
years--to prevent hunger and possible starvation in Russia this winter. 
"We will all overlook the fact that there may have appeared some tiny
little crack in our relations," said Deputy Prime Minister Gennady V. Kulik,
using a pen adorned with a dollar symbol to sign the accords. "We will take
reasonable and balanced decisions . . . that serve the cause of peace and
order in international relations." 
With its economy in tatters and the Kremlin desperately seeking billions
of dollars in foreign loans, Russia today finds itself in the position of
accepting handouts to feed its people--not dictating world policy. 
Although officials repeatedly expressed their outrage last week over the
four days of U.S.-British air and missile strikes, Russia was powerless to
help its longtime ally Iraq. 
"There is no one in the world who can humiliate Russia except Russia
itself," said Otto R. Latsis, a Russian economist and journalist. "What good
does it do to go around showing off your muscles and brandishing your fists in
everyone else's face when you know that tomorrow you will have to go back to
begging for help and panhandling for money?" 
In assailing the strikes, Russian leaders had used some of their harshest
language toward the U.S. since the end of the Cold War. President Boris N.
Yeltsin charged that the United States had "crudely violated the U.N. Charter
and the generally accepted principles of international law." 
Foreign Minister Igor Ivanov warned of a return to "lynch law" and
"medieval times" and said it could take years to rebuild Russia's confidence
in the United States. Yegor S. Stroyev, chairman of the upper house of
parliament, said the United States had "taken to the path of state terrorism."
In a blow to one of the Clinton administration's most important foreign
policy goals, the lower house of parliament, or Duma, said it would continue
to delay the long-awaited ratification of the START II weapons reduction
treaty. And Russia recalled its ambassador to the United States, Yuli M.
Vorontsov, for consultations. 
By Wednesday, however, the rift was on the mend. The food aid deal was
sealed, Vorontsov was winging his way back to Washington, and Russian
officials were looking ahead to the arrival of Secretary of State Madeleine
Albright for high-level meetings in late January. 
"Moscow believes the planned visit of U.S. Secretary of State Madeleine
Albright to Russia will be important for overcoming the negative consequences
of the U.S. use of force against Iraq and for further Russian-U.S.
interaction," Foreign Ministry spokesman Vladimir Rakhmanin said Tuesday. 
To the frustration of its leaders, simple economics prevent Russia from
playing the superpower role of its Soviet past. Much of the country's foreign
policy is geared toward securing massive aid from Western lenders such as the
International Monetary Fund, over which the United States wields great
Prime Minister Yevgeny M. Primakov has proposed a budget of about $28
billion for this massive country next year--about the same amount Californians
spend annually in restaurants. 
But to spend even that modest amount, Russia must borrow $7.5 billion
from foreign sources. 
This summer, with U.S. support, Russia secured pledges of more than $22
billion in aid from the IMF, the World Bank and the government of Japan. But
after Russia devalued its currency, froze foreign debt payments and squandered
an initial $4.8-billion loan installment, the lenders held up most of the
remaining aid. 
Primakov said this week that he is dissatisfied that Russia has not yet
received $8.1 billion in two "promised" installments from the IMF. Compared
with IMF bailouts for Indonesia, South Korea and Brazil, he said, "this is not
so much." Moscow is hoping for a breakthrough in talks next month, when IMF
officials are scheduled to arrive in Moscow for further discussions. 
The biggest casualty of the spat over Iraq is START II, which would
reduce each side's nuclear arsenal to no more than 3,500 warheads by 2003. 
In an apparent attempt to regain U.S. confidence after Russia's economic
collapse in August, Primakov--who was appointed premier in September--and his
ministers had been pushing the Communist-dominated Duma to ratify the treaty.
One Western diplomat said Russia was closer than it had ever been to ratifying
the pact--until the bombs started falling on Iraq. 
"A return to the Cold War in its classic form is not possible," Primakov
said Wednesday during a trip to the former Soviet state of Kazakhstan. "But at
the same time, a cooling in relations is possible, and everything now depends
on the United States and the countries of the West. The ball is in their
For U.S. officials, the food aid pact is a good start. Under the program,
the U.S. will give Russia 1.5 million tons of wheat outright and lend it the
money to buy another 1.5 million tons of agricultural commodities from U.S.
The bulk of the aid is intended to go to Russians in remote regions,
where the government has had difficulty delivering supplies. Russia will be
allowed to sell some of the food to the public, with the proceeds going to pay
pensions, which millions of elderly people have not received for months. 
The U.S. sought to negotiate terms that will make it more difficult for
the food supplies to end up on the black market--as has happened with earlier
aid programs. It also won agreement from Moscow not to tax the humanitarian
assistance, as Russia has done in the past, U.S. officials said. 
The program also will help U.S. farmers by providing a new market for
their crops. 
"In the United States, we have an expression: This is a win-win
situation," said U.S. Charge d'Affaires John Tefft, who also signed the
accords. "The people of the United States are proud that our country is able
to provide these food shipments at this time of need to Russia." 


St. Petersburg Times
Thursday, December 28, 1998
Squabbling Costs Liberals Big Chance 

"THERE is something unteachable about Russian liberals," a historian of the
late tsarist era wrote, and sometimes it seems not much has changed.
Sunday's elections to the Legislative Assembly in St. Petersburg provided
more testimony that today's liberals, like their early 20th-century
forebears, don't know a good break when they get one.

On the face of it, the results were a breathtaking success for the good
guys. Liberal candidates independent of City Hall won 29 of 50 seats: 14
for the bloc associated with Yury Boldyrev, 8 for Grigory Yavlinsky's
Yabloko party, plus seven others. In theory, the City Charter, which
mandates a strong legislature, should enable the liberal majority to push
forward with its agenda.

But the votes had scarcely been counted before the squabbling started.
Boldyrev, one of the original Yabloko leaders, fell out with Yavlinsky in
1995 and now declares that "there can be no discussion of a strategic
alliance with Yabloko. We are antagonists."

Yabloko officials, while a little more restrained, have been busy saying
grumpy things about their former comrade in arms as well.

Fortunately, Boldyrev, though the leader of the electoral bloc, wasn't on
the ballot himself because he is a federal official - the deputy director
of the parliament's auditing arm. Another member of his bloc, Leonid
Romankov, who will actually have the responsibility of sitting in the
assembly, made more sense. "We have a historic chance and we must use it,"
he said.

That's for certain. The gangland-style murder of State Duma Deputy Galina
Starovoitova, one of the country's leading liberals, during the election
campaign is evidence enough that all is not right here in St. Petersburg.
After warning that criminals were trying to use the election to sneak into
power, and after decrying all the dirty tricks used against them, the
democrats look mighty silly declaring that they now can't work together and
exploit their electoral gains.

The liberal divisions threaten to make Gov. Vladimir Yakovlev's position
much stronger than it ought to be. Yakovlev, who has consistently tried to
hamstring the legislative branch, can now manipulate divisions in the
liberal camp. As a result, while the new Legislative Assembly is more
liberal than its predecessor, one gets the feeling it will be no more
effective a force for democratic reform than the crony-filled chamber it is

If advocates of free markets and democratic principles have a chance to
wield effective power anywhere in Russia, it is in liberal St. Petersburg.
The voters have spoken; whether those votes will be translated into action
is a question only the liberals themselves can answer. 


'Conditions Ripe' for Moscow-Beijing-Delhi Triangle 

Rossiyskaya Gazeta
December 22, 1998
[translation for personal use only]
"Topical Comment" by Nikolay Paklin: "Moscow-Beijing-DelhiTriangle"
Moscow-Delhi -- In the Indian capital Russian Premier Yevgeniy

Primakov said aloud something that many politicians have been
half-whispering about: the desirability of creating a Moscow-Beijing-Delhi
triangle. This proposal, made during the Russian Federation head of
government's official visit, immediately became the number one world
The objective preconditions for creating a Moscow-Beijing-Delhi
strategic triangle are in evidence today. But there are also subjective
factors. Taking advantage of the unexpected disintegration of the USSR,
the United States reckoned that the era of a unipolar -- i.e. American --
world had come. The imposition of of political domination goes hand and
hand with economic and military domination. Washington decides on its own
who to punish and who to pardon. The recent bombardments of Iraq in
circumvention of the UN Security Council provide graphic confirmation of
this. And prior to this it was only with the greatest difficulty that the
international community managed to prevent a similar development of events
in Kosovo, which is part of sovereign Yugoslavia.
The United States, which calls the tune in NATO, is pushing this
military bloc -- a vestige of the Cold War -- eastward. It is currently
moving closer to Russia's borders. But what guarantee is there that it
will not move farther east, skirting Russia in the south? What kind of new
"geographic zone" will NATO strategists wearing U.S. Armed Forces generals'
uniforms chose for themselves?
And the globalization of the world economy is developing in practice
into the establishment of American corporations' domination of the raw
material and human resources of many countries and regions. Where this
leads was shown by the recent economic crisis.
The United States' military and economic might today is such that no
country in the world is capable of resisting it on their own. It is no
coincidence that the West European states are merging into a single whole. 
As yet this is primarily economic and financial unification. But
politicians are already discussing the military and political unity of the
Old Continent.
Closer coordination of the efforts of three great states occupying a
large part of the Eurasian continent -- Russia, China, and India -- looks
equally logical. Their strategic cooperation will lead to the emergence of
a new pole in world politics and international relations. The conditions
are ripe for this. Now the political will is needed.
Russian-Indian relations can serve as an example for other states to
emulate. There have never been any serious problems between our two
countries, although there may have been different approaches to certain
given international issues.
Recently all-around ties between Russia and China have also been
developing singularly successfully. And their basis is the long-term
national interest of the two neighboring countries and peoples. We have
nothing to divvy up with China. Having eliminated the border problems, the
two states have found a natural community of interests in politics and the
economy.A territorial dispute cast a shadow over Indian-Chinese relations for
many years. But Delhi and Beijing decided not to deviously contrive to
backburner this long-standing dispute over half-deserted mountain areas and
leave it to the future to sort out. And bilateral relations straightened
out very rapidly and mutual cooperation started rapidly gathering momentum.



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