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Johnson's Russia List


January 11, 1999    
This Date's Issues: 3011•  • 

Johnson's Russia List
11 January 1999

[Note from David Johnson:
1. AP: Russia Beckons Childless Americans.
2. Moscow Times: Julia Solovyova, At Last, Holidays Approach An End.
3. Moscow Times editorial: Russia Must Push Reform Of Holidays.
4. Itar-Tass: Russia's 'Strategic Initiative Foundation' Inaugurated.
5. Helen Halva: Re: 3010-Porter/Language Studies.
6. AP: Israel Welcomes Mikhail Gorbachev.
7. AP: Russia Woes Blamed on Ex-Bank Chief.
8. Komsomolskaya Pravda: Mikhail Rybyanov, "Why Not a Gold Ruble, 
Gentlemen? Introduction of New European Currency Makes You Wonder 
Whether Russia Should Be Going Along With the Dollar."

9. Frank Durgin: statement by Nobel Laureates.
10. Reuters: Ex-Soviet nuclear base home to drug addict.
11. New York Times: John Lewis Gaddis, The View From Inside: Answering 
Some Criticism. (Re CNN Cold War series).]


Russia Beckons Childless Americans 
By Nick Wadhams
January 9, 1999

MOSCOW (AP) -- Americans Tim and Beth Milbrath had just returned to Moscow
from the cold, windswept expanses of central Siberia, exhausted and dazed,
but jubilant. 
Their 10-month quest was over, and the reward was in her arms, dressed
in blue pajamas and little booties, crying for more apple juice. 
With 14-month-old Daniel, the Milbraths joined the growing number of
families that have made Russia the most popular country in the world for
Americans adopting foreign children. 
Milbrath, an Air Force colonel, said that by adopting they felt they
could change the life of one child and give him the opportunity to succeed. 
American and western European couples have turned to Russia since the
Soviet breakup because it has a growing number of unwanted children and has
been relatively open to adoptions by foreigners. Americans adopted more
than 3,800 babies from Russia in 1997, the State Department says. 
Some American families have reported problems, delays and corruption on
the Russian side. 
And there have been a few isolated, but sensational cases of children
allegedly being mistreated by their American adoptive parents. 
In response, Russia's parliament proposed legislation last year to make
adoptions by foreigners much more difficult, but the final version has not
hampered the process, adoption agencies say. 
Russian families rarely adopt, and given the country's economic straits,
far more children are put up for adoption than are taken in. 
Russia now has over 600,000 orphans, many of whom are underdeveloped and
receive relatively little attention in state homes. Some have physical and
mental disabilities. 
``The caregivers really did love these children,'' said Mrs. Milbrath, a
lawyer. ``But it isn't like they're in a family. They don't have the care
and the constant love that a family gives.'' 
The Milbraths, a Maryland couple in their mid-40s who already had one
son and one daughter, wanted to adopt a young, healthy boy. They found
Kirill in the central Siberian city of Tomsk. He was healthy, but about six
months behind in development. 
Kirill, now called Daniel, had rarely, if ever, been outside his
orphanage. His new parents said he would be thrown into American life. 
``I just know he's got to be at a soccer game on Saturday morning at 9
o'clock,'' his father joked. 


Moscow Times
January 11, 1999 
At Last, Holidays Approach An End 
By Julia Solovyova
Staff Writer

Holiday-weary Russians are nearing the finish line of their Christmas-to-New
Year's marathon, with the normal workday rhythms of rush hour and open stores
and offices returning Monday morning. 
But for those not yet tired of toasts, feasting and hangovers, there is one
last sprint to the finish: Old New Year's, which falls on Jan. 14 and is
celebrated beginning the evening before. 
Most factories and offices shut down for four days over New Year's and again
for three more days around Orthodox Christmas, which falls on Jan. 7. Sunday,
Jan. 10, was supposedly a regular working day to make up for the Jan. 8 post-
Christmas day off, although clearly not everyone had to work. 
Some are exhausted by partying and look forward to getting back to their
places of employment, but others are glad to have two New Years, a holiday
bounty caused by the Soviet government's decision to switch to the Gregorian
calender used by the rest of the world in 1918. 
Andrei Bodrov, manager at the French cosmetics firm L'Oreal, complained that
over the long holiday period he "forgot what working is like." 
"It became kind of a routine," he said. "People got drunk and sobered up,
then got drunk again and sobered up once more." He said he was not planning to
celebrate Old New Year's, though he acknowledged many of his friends will
raise a glass to "put an end" to the holidays. 
Artist Vladimir Morozov was eagerly looking ahead. "I can't get enough of
celebrating and wouldn't get out of this process until the 14th," said
Morozov, woken up by a telephone call Sunday at 3:30 p.m. "And then Feb. 23
will draw near" when Russia celebrates Army Day, he said. 
But many private shops and kiosks were open the entire time, disregarding
holidays as their owners could not afford to stop operating. Some businesses,
however, were closed much of the holiday season. 
Even the news media took a prolonged Christmas vacation that will last in
cases until mid-January. The popular Itogi news analysis program at NTV f a
must for news junkies f returned to the air Sunday after a holiday break, and
Kommersant newspaper will reappear Jan. 19. Sunday was on paper a working day
f which occasionally happens due to the government's habit of moving days off
to create blocks of time off, enabling people to desert Moscow for their
The city streets had a near-deserted holiday look Sunday. The number of
shops played a part, said Alexander Mantsevich of the Moscow traffic police
press office, where music blasted at high volume early Sunday afternoon.
Mantsevich added that some drivers may have been wary of driving on roads
coated by ice after colder weather hit Moscow two days ago. 
All told, 36 people died from accidents, fires and the cold just in Moscow
from Dec. 31 to Jan. 10, Interfax reported. 
Road accidents took 15 lives, and Mantsevich said 140 people were injured in
117 accidents. He said roughly 900 people were detained for drunk driving,
adding that these numbers are average for weekends. 
Monday should see a return to heavier morning traffic, he said. 
Even though the weather was unusually warm and snowless at the beginning of
the year, with people in-line skating rather than ice-skating around Moscow in
the first days of January, the cold took its toll, killing four homeless
people on the streets. 
Other casualties included 401 people turning up for medical help with
hypothermia, burns from fireworks f often homemade f and from New Year's trees
that caught fire. Six Muscovites injured by fireworks were hospitalized. 
On Wednesday, Eastern Orthodox Christmas Eve, churches opened their doors
festive Christmas services, with bells ringing in Christmas Day in the early
hours of the morning. Churches, decorated with fir tree branches were crowded
with believers both days. 
Patriarch Alexy II, head of the Russian Orthodox Church, officiated at
nationally televised Christmas services at the Church of the Transfiguration
in the basement of the Cathedral of Christ the Savior, with Prime Minister
Yevgeny Primakov and Deputy Prime Minister Valentina Matviyenko attending
along with other VIPs. 
Alexy delivered a Christmas address filled with references to the country's
tough economic times and urged his flock to "accept every ordeal with faith
and hope that God the Almighty will help us to overcome them." 
"I wish you, dear Russians, patience and reason when dealing with these
difficult social problems," Alexy said. "They should be settled only by
peaceful means." 
The Russian Orthodox Church marks the birth of Jesus Christ on Jan. 7, like
the other Eastern Orthodox churches using the ancient Julian calendar. 
Alexy also appeared at the Christmas concert at the Rossia concert hall, a
gala production at the Bolshoi Theater on Sunday and another celebration at
the Maly Theater branch. 
An alternative holiday party with a political flavor was held at the State
Duma on the initiative of the Communist faction. Even though Communist leader
Gennady Zyuganov didn't show up, his comrade and Duma speaker Gennady
Seleznyov spoke to orphans from Moscow's children's homes, who received
calendars with both Gennadys' portraits along with candy in their gift


Moscow Times
January 11, 1999 
EDITORIAL: Russia Must Push Reform Of Holidays 

It has been a brutally tough time. Personal savings are depleted. People are
exhausted from the forced inactivity of being out of work. And it is going to
get worse before it gets better. 
We are speaking, of course, about the holidays. A casual observer might be
tempted to think that they finally come to an end on Monday. But a closer
examination of the facts reveals the chilling truth that there is one more
holiday to get through, albeit an unofficial one: the so-called Old New Year,
on Thursday, Jan. 14. 
Then it's just 53 days until March 8, International Women's Day. 
What's truly disheartening is how little is being done to end this
state of affairs. Yevgeny Primakov has been in office for months, yet his
government has taken no action. How much longer must Russians suffer from
stuffed bellies, hangovers and the company of irritating relatives? 
There is still time. An omnibus package of legislation on urgently needed
holiday reforms should immediately be submitted to the State Duma. Such
legislation should address the following: 
şThere is a homemade dish called kholodets. It is basically meat in an aspic
jelly. It is usually brownish. It must be stopped. 
şThe Soviet-era propiska system must be revived, but with an eye to
all relatives immediately to their homes f and keeping them there. Law
enforcement authorities should be assertive and decisive in launching an
immediate sweep of all apartments. If extra police officers and vehicles are
needed, Primakov must find the money. 
şAll efforts to turn Feb. 14, Valentine's Day in the West, into a Russian
holiday must be crushed. Russia already has March 8; it does not need another
lovey-dovey holiday. It will not be easy for State Duma deputies to challenge
the greeting card-florist-red heart-shaped box of chocolates lobby. But we
call on them now to summon their courage and to do what is right for the
Finally, a few words about this Old New Year f the one according to the
calendar. It's ridiculous. 
OK, we'll give you Orthodox Christmas on Jan. 7, that's more or less
According to Orthodoxy, Christ was born on a certain day; arguably he's
important enough to merit twisting the calendar. We'll even concede the Great
October Revolution on Nov. 7 on the same grounds. 
But the New Year is an entirely arbitrary and manmade date. Unlike the
anniversary of Christ's birth or Lenin's victory, it is a construct of the
calendar. If you change the calendar, you change New Year's day. Period. 
This holiday carnage must be stopped. The long-suffering Russian people
deserve better. 


Russia's 'Strategic Initiative Foundation' Inaugurated 

VELIKIY NOVGOROD, January 7 (Itar-Tass) -- An Inter-Regional Strategic
Initiative Foundation (IRSIF) has begun to function here. The Foundation
has been established by the Academy of the National Economy to the Russian
government and by the Russian Economics Ministry's Centre for the Promotion
of Foreign Investments.
IRSIF President Valeriy Trofimov, who had worked for seven years as
First Deputy Governor of Novgorod Region and who had been in charge of
attracting investments to the region, and forming a favourable investment
climate, in comment on the tasks of this non- profit organisation, has told
Itar-Tass in particular as follows:
"We must and strive to become a 'connecting link' or a 'bridge'
between Western business and Russian enterprises, between Western business
circles and Russian authorities and local self-government bodies.
"We are called upon to minimise the risk of investors who have opted
to operate in our country. We not only provide advice to businessmen as to
what they should do. We monitor the entire cycle -- from a search for
investor, and the choice of a site for an enterprise to the moment it is
commissioned under a turn-key scheme."
IRSIF now has two offices in Moscow and Novgorod and missions in
Kaliningrad and Novosibirsk, Trofimov said. "However, we constantly develop
our activities and consider it a priority to expand information networks,
not just to increase the number of offices. These networks already cover 14
economic regions of Russia, and CIS countries," Trofimov said.
"Besides, IRSIF makes full use of the resources of its founders and
promotes its activities through the network of their offices in Paris, New
York, and Frankfurt.
"As of now, IRSIF has signed cooperation agreements with a whole
number of regions such as Kaliningrad, Kostroma, Lipetsk, Novgorod, Tver
and Leningrad Regions, the Komi and Karelian Republics. In all these
regions, IRSIF works actively to attract investors and create a favourable
investment climate for them."


Date: Sun, 10 Jan 1999 
From: Helen Halva <>
Subject: Re: 3010-Porter/Language Studies

I am responding to the comments in #3010 and the few immediately previous
issues concerning Russian language studies and language proficiency in the
various professions---oceanography, engineering, etc.
I have a master's in Russian and spent several years coordinating
student/professional exchange programs with Russian institutes and
universities. What became very clear to me, as I studied Russian here and
worked with American students stdying Russian in this country, is that most
of our college curricula are oriented toward knowledge ABOUT the Russian
language---literature and linguistics---but NOT active knowledge of the
language itself. Few classes are actually taught in Russian and few
subject-matter papers are required to be written in Russian after the basic
set of language courses (say a 4-year language curriculum) is completed.
The subject-matter courses taught in Russian---and which require student
oral and written participation exclusively in Russian---tend to be in
literature, linguistics, and history. There are now a few "Business
Russian" courses, but there are few if any courses that develop vocabulary
and fluency in professional areas of the sciences, engineering, law,
medicine, journalism, and so forth.
On the other hand, students and professionals coming here from Russia had
either--at the one extreme-- only the most rudimentary grasp of English,
or--at the other--- a sophistication in language, pronunciation,
stylistics, and subject matter fluency that put our American efforts to
shame. Especially professionals coming from MGIMO (Moscow State Institute
for International Relations--it is now a university rather than an
institute, I understand) were proficient in everyday English AND fluent in
legal, scientific, and other professional areas.
Mr. Porter is correct in his assessment that "hit and run" types of courses
to build fluency in specialized professional areas are not viable means of
building effective communicators. Russian is a difficult, complex language
and even basic conversational fluency (at the level achievable in a romance
or Germanic language) is rarely acquired in a standard 2-year college
course. But my question is this: if, as Mr. Porter suggests, we are to
leave specialized professional communication to the language professionals
(translators, interpreters, etc.), how and where are those language
professionals to acquire the necessary technical fluency for the various
professional areas? We can't all go to the Monterey Institute or serve
professional internships in Moscow. This level and type of language
training needs to be much more widely available here in the U.S. Those
humanities students he refers to cannot at this time find the courses they
need to enable them to translate and interpret in technical or other
specialized professional fields.


Israel Welcomes Mikhail Gorbachev
January 10, 1999

TEL AVIV, Israel (AP) -- It was an unfamiliar sight for Mikhail Gorbachev on
Sunday: crowds of Russians declaring their adoration for the former Soviet
He couldn't crack a single percentage point in Russian elections in 1996,
in Tel Aviv on Sunday, all he got were cheers. 
``Mrs. Gorbachev, you're not the only one who loves your husband,'' former
Israeli Prime Minister Shimon Peres said, introducing the former Soviet leader
to a standing ovation. 
Gorbachev is in Israel to attend the second annual meeting of the
international board of governors for the Peres Center for Peace, of which he
is a board member. 
He was followed by a crowd of Russian-speaking admirers as he toured the
of the 1995 assassination of Prime Minister Yitzhak Rabin, and addressed a
hall full of recent immigrants. 
Gorbachev opened the Soviet Union's doors in the late 1980s with his
of glasnost and perestroika -- openness and restructuring -- also sparking a
flood of Jewish immigration to Israel. 
The arrival and mostly successful absorption of 850,000 Jews helped
precipitate a mid-1990s economic boom in Israel. The immigrants have proven
their political power, electing eight legislators from an immigrant party to
the Knesset. 
Gorbachev expressed his admiration for Israel's recent economic strides --
while bemoaning a Russia where he said a majority of the population lives in
Fielding friendly questions, Gorbachev acknowledged some responsibility for
Russia's current woes. 
``I would have the same strategy, but the details would be different,''
Gorbachev said, when asked what he would do if he could go back 10 years in
He blamed most of Russia's problems on President Boris Yeltsin and Prime
Minister Yevgeny Primakov -- and urged Russians to oust them in coming
``Their politics have come to a dead end,'' he said. ``We need to think
to go from here.'' 
Gorbachev strongly condemned the recent anti-Semitic statements made by some
in the Communist Party that he once led. 
Calling anti-Semitism a ``threat to democracy,'' he said he was concerned
there was no public outcry. 
He drew murmurs of disapproval only once -- when he condemned last month's
U.S.-British attack on Iraq as ``unacceptable.'' 
Despite the group of admirers, Gorbachev's lessening relevance to Russia was
noted even by the former Soviets who came from around Israel to see him. 
``I love him and cherish him,'' said Roman Feldman, a retired electrical
engineer who arrived from Kiev in 1991, ``But he's a has-been.'' 
The Peres Center for Peace gathering also drew more than 150 past and
world leaders, financiers and Nobel laureates. The three-day meeting was aimed
at sponsoring Arab-Israeli economic projects and demonstrate participants'
support for Mideast peace. 
Besides Gorbachev, the event drew South Africa's Bishop Desmond Tutu, former
South African President F.W. de Klerk, and former U.S. Secretary of State
Henry Kissinger. 
Monday, the group will travel to Ramallah, West Bank to meet with
leaders. The meeting concludes Tuesday. 


Russia Woes Blamed on Ex-Bank Chief
January 10, 1999

MOSCOW (AP) -- Former Central Bank chairman Sergei Dubinin was responsible
for the financial moves that touched off Russia's worst economic crisis since
Soviet times, the prosecutor-general said Sunday.
Dubinin was ousted along with Prime Minister Sergei Kiriyenko for making the
decisions in August to default on some government debts and to devalue the
During the past few months, officials have accused Dubinin and other bank
officials of spending the bank's resources on ambitious construction projects
and high salaries to themselves, instead of using them to ensure stability of
the currency and financial markets. No charges have been brought.
Prosecutor-General Yuri Skuratov told reporters Sunday that his office had
completed a report on the Central Bank's activity under Dubinin and would soon
present it to President Boris Yeltsin, the Interfax news agency reported.
Dubinin ``is directly responsible for what happened in Russia after Aug.
he was quoted as saying.
Skuratov said the investigation had uncovered numerous legal violations and
that it had resulted in further investigations. He said prosecutors were
particularly interested in certain unnamed officials in the securities market.
He said the results of the investigation would be made public only after
Russian leaders had reviewed them, Interfax said.
The government also said Sunday that it planned to pay $1.3 billion in
pensions by July.
Deputy Prime Minister Valentina Matviyenko said pensions would be
increased 12
percent in April and 15 percent in October, but conceded that the increases
would not keep pace with inflation, the ITAR-Tass news agency reported.
Meanwhile, the government will conduct a new round of talks Jan. 18 with
foreign holders of frozen treasury bills, the Interfax news agency reported
Sunday, citing Deputy Finance Minister Oleg Vyugin.
Late last year, the Russian officials concluded negotiations with both
domestic and foreign investors on basic restructuring parameters of some $40
billion of bills, on which the previous government defaulted in August.
Foreigners hold about $10 billion of the frozen bills.
While domestic investors seemed mostly content with the terms, foreigners
balked at some aspects of the restructuring plan and demanded additional
Also Sunday, a senior government official said Russia will sell parts of its
holdings in seven companies in 1999 for $670 million.
The government plans to sell a 2.5 percent stake in natural gas monopoly
Gazprom, an unspecified minority stake in the country's leading oil producer
Lukoil and a minority stake in telecommunications utility Svyazinvest,
Alexander Braverman, deputy minister for state property, told the Ekho Moskvy
radio station.


'Gold Ruble' Plan Linked to Euro, Not USD

Komsomolskaya Pravda
January 6-15, 1999
[translation for personal use only]
Feature "prepared" by Mikhail Rybyanov: "Why Not a Gold
Ruble, Gentlemen? Introduction of New European Currency Makes You
Wonder Whether Russia Should Be Going Along With the Dollar"

New year, new money. On New Year's Eve the whole of united Europe was
partying; only 11 EU finance ministers were in their offices. That was
when the new European currency, the euro, was put into cashlesscirculation.
It will be some while before this new-fangled misfortune reaches
Russia, but schemes for adapting the foreign money to everyday Russian
needs have already appeared.

Good Old "Bucks" 

According to the most modest estimates, Russians have around $40
billion in cash lying around in socks, jars, and other hiding places. Over
the past several years aircraft jam-packed with $100 bills have been flying
into Russia every month.... We are not alone in our love for "bucks." 
After World War II all the world's countries started building their
currency reserves in dollars -- they were the most stable currency. The
American economy reaped enormous dividends: The United States prints a
$100 bill and sends it around the world, receiving oil, for example, in
exchange. Lacking such opportunities, the European countries were deprived
of a large chunk of profits and political influence. To create a currency
of its own in which other countries of the world would keep their savings,
the EEC decided several years ago to issue a single European currency.

Lifeline for the Ruble 

Moscow economist Artur Sazonov has dreamed up a way of extracting from
the West another chunk of money for our reforms. There is a banal look to
the essence of this latest proposal for saving the fatherland: The term
"gold ruble" is known to us from the NEP period [the New Economic Policy of
the early 1920's]. But this time the idea is that a "gold ruble" should be
introduced not as a domestic Russian affair but as a venture in which the
whole of civilized Europe would be interested. Because the idea is to
"tie" the "gold ruble" not to the dollar but to the euro.
To start with, Sazonov suggests, an agreement should be concluded
between the EEC and Russia: The EU would grant Russia a credit of 30-50
billion euros, on the basis of which Russia would produce a "gold ruble." 
To prevent the credit getting stolen, it should not be transferred to
Russia at all. Poland followed a similar route in the early 1990's, when
it obtained a dollar credit to stabilize the zloty -- the dollars stayed in
Polish Central Bank correspondent accounts in the United States, but every
Pole and international currency speculators knew that zlotys could be
exchanged for full-fledged bucks at any time.

A "Fix" of Gas for the Neighbors? 

So why should Europe give Russia credit? Because it would help the
European currency itself. If Russia gets credit in dollars, the dollar
rises in value. If Russia gets credit in euros, it helps strengthen the
euro. Virtually as soon as China announced plans to convert some of its
gold and currency reserves from dollars into euros, a worried Clinton
immediately flew there for talks. Meanwhile China has the so-called "gold
yuan," in which foreigners are forced to conduct transactions. Ideally
three financial allies -- united Europe, Russia, and China -- might join
forces against the dollar, which would certainly cause the dollar to fall
and the euro, the yuan, and the Russian "gold ruble" to strengthen. As a
result Russia would at least see a reduction in the part of the foreign
debt that is denominated in dollars, which would mean a possible saving of
several billion dollars. In order to strengthen the "gold ruble" even
further it would be necessary, first, to prohibit the dollar from
circulating and, possibly, being held in the countries. This should be
announced in advance, to prevent panic and convince a suspicious people
that it is more advantageous in these conditions to hold money in "gold
rubles" (or in extreme cases in euros) rather than "greenbacks." Second,
payments for Russian oil, gas, and other raw materials sold to Europe would
have to be accepted only in "gold rubles." This would immediately
generate demand for them in international currency markets. Europe is
"hooked" on Russian natural gas and would have to accept such a condition. 
And we for our part are "hooked" on new credits.

Render Unto Europe That Which Is Europe's 

If the "golden ruble" idea is adopted, we could print as many ordinary
rubles as we like without fear of inflation -- this would immediately
eliminate the problem of nonpayments and unpaid wages and pensions. 
Inflation would be curbed by the existence of a firm "gold ruble."
The initial task of the "gold ruble" would be to squeeze the dollar
out of the country, but gradually it would also replace the "ordinary"
ruble. All the consequences of the proposed reform cannot be calculated on
the fly, of course. What proportion of our wages would we get in "ordinary
rubles" and what proportion in "gold rubles?" Would taxes have to be paid
in "ordinary" or "gold" rubles? Would the value of "ordinary" rubles not
plummet and the value of "gold" rubles soar just as fast?
It will not be Europe that will answer these questions. Even if
Russia eventually joins the EEC and on one-sixth of the earth's land
surface vodka in your local score continues to cost 3.62 -- but euros, not
rubles.Indeed something should have been done about the ruble long ago.

[Feature incorporates the following boxed-off comments by Aleksandr
Pochinok and Lola Ibragimova]
Aleksandr Pochinok, chief of the Government Apparatus FinanceDepartment:
How can you get the ruble to be as revered in our country as the
dollar? The emergence of the euro will change the world financial picture.
The new currency will immediately start competing with the dollar for
primacy. The EEC will certainly have an interest in seeing Russian Central
Bank reserves in euros, and it is perfectly sensible to consider options
for introducing a firm currency in Russia using Europe's assistance. But
the ideal, in my view, would have to be for a transition to using the euro
rather than the ruble in Russia.
Lola Ibragimova, chief economist with the Central Bank of Russia
Department for Monitoring Credit Organizations' Activity in Financial
Mr. Sazonov's concepts can be taken seriously only if the European
countries agreed to grant Russia credits in euros. This is currently hard
to believe. But neither a "gold" nor a "diamond" ruble would help us given
the level of development of productive forces currently to be observed in
the country.But something needs to be done!


From: (Frank Durgin)
Date: Sat, 9 Jan 1999 
Subject: statement by Nobel Laureates

Responding to a request of mine, Marshall Pomer, Coordinator of the 
Economic Transition Group sent me an abridged copy of the famous 
1996 statement by Stanislav Shatalin (author of the 500 day program)
and some US Nobel Laureates on the need for strong government actions 
in the economic affairs of Russia.
To inject a personal opinion here: I am confident that this will 
prove to be an invaluable document when the economic history of 
Russia in the last decade of the 20th century is written.Back in 
1996 the government was probably strong enough to follow thru on the 
advice given in this letter. Regrettably it is far too weak now.
Mr Pomer is coordinating a network of economists who are interested 
in countering IMF simplification of what are the policy priorities 
for transition, recovery and growth in Russia. His e-mail address is 
Marshall Pomer <>
The message from Mr Pomer is:

Following is a slightly abridged version of the economists'
statement. The full text may be found in Abalkin et al. (1996).

Economists' Statement
We would like to propose the basis for a new economic policy for
Russia. It is now increasingly recognized that serious errors were
made in the economic reform program and that a new approach to
economic policy is needed. What should this new approach be? We
submit for consideration the following five-point agenda:

1. The Russian government must play a much more important role in the
economy, as in such modern mixed economies as the United States,
Sweden, and Germany. Many of the current problems of the economy stem
directly or indirectly from failure to do so. The government must
play a central coordinating role in establishing the public and
private institutions required for a market economy to function. The
reaction against a centrally planned economy was predictably to
minimize the state's role, but in the next stage a revitalized and
reoriented activist government must take initiatives to foster a
market economy and to combat depression, inflation, capital flight,
and other structural defects in the Russian economy.

2. Strong governmental actions are necessary to prevent the further
criminalization of the economy. In the absence of government
intervention, criminals have filled the vacuum. Criminalized
institutions enforce contracts by threats against life and property,
illegal courts, mafia control of major sectors of the Russian
economy, and corrupt officials. Thus, to an unfortunately large
degree, the transition has been not to a market economy subject to
the rule of law but rather to a criminalized economy. The government
must reverse and stop this cancer of criminalization and corruption
in order to provide a stable business climate and thereby stimulate
investment and production. This will take reform in the government
itself and strong action in establishing institutions to replace
those that the criminal elements have been providing in the absence
of an effective government.

3. Governmental action is necessary to recover from the major
reductions in output, which are on the same scale as the reductions
in the U.S. during the Great Depression, 1929 -1932. Macroeconomic
policy must foster expansion and encourage non-inflationary growth.
The Russian economy cannot restore its severe losses by itself. The
state must help channel investment away from nonproductive luxury
housing or speculative inventory accumulation into productive capital
formation. It should also provide needed social overhead capital and
restore health services, education, environmental protection,
science, and other social investments. Government must protect
Russia's two greatest assets, its human capital and its natural
resources. It should ensure that rents from mineral wealth are
converted into government revenues and public investments. It should
use the international trade earnings from gas and oil exports to
import not food and luxury consumer goods but rather capital goods
for upgrading Russia's obsolete physical plant. Such an expansionary
policy would require renegotiation with the IMF and World Bank, which
have tied the hands of the government in combating depression and
capital flight. 

4. A new social contract is necessary, including a social safety net.
The social consequences of the current economic situation have been
horrendous, including huge increases in the numbers in absolute
poverty, the destruction of the middle class as a result of inflation
and reductions in real wages, dire outcomes for health and longevity,
and other negative social outcomes. The state must take the
initiative of requiring the payment of earned wages to workers, many
of whom have not been paid for months.

5. If there is a "secret" of a market economy, it is not private
ownership per se, but rather competition. Government policy, whether
at the national level or at the local level, must encourage the
formation of new competing enterprises. Currently, privatized
enterprises retain many problems from the past -- excessive size,
extreme vertical integration, obsolete technology, lack of
initiative, and incompetent management. Some exhibit monopolistic
pricing and engage in asset-stripping sales of raw materials and
plant and equipment, with the proceeds going to private offshore
accounts. New competing enterprises, whether domestically based using
returned flight capital, or joint ventures and foreign investments,
should be bidding away the resources that the privatized enterprises
are not efficiently exploiting. Such enterprises could be the
vanguard of a market economy and stimulate new initiatives for
investment, production, and employment. Overall, the government
should recognize that competition is what makes a market economy

In conclusion, there is a need to achieve a balance between
government and the market. Government action is essential to
establish a well-functioning market system and create widely shared*
prosperity in Russia. Hopefully, this book will build consensus in
support of the type of pragmatic policies proposed here. The time for
ideological remedies has passed. The solution is not minimal
government, but rather effective government.

Abalkin, Leonid I., Kenneth J. Arrow, Michael D. Intriligator, 
Lawrence R. Klein, Wassily Leontief, Marshall Pomer, Valery L.
Makavov, Stanislav S. Shatalin, Robert Solow, James Tobin and Yury V.
Yaryomenko. 1996. "A New Economic Policy for Russia," Economic Notes,
25 (3). [Reprinted in Economics of Transition 5 (1), April 1997. Based
on earlier statement in Russian that was published on July 1, 1996 in
the Moscow newspaper, Nezavisimaya Gazeta.


FEATURE - Ex-Soviet nuclear base home to drug addicts
By Pavel Polityuk

KHMELNITSKY, Ukraine, Jan 11 (Reuters) - Drug addicts tending pigs and
chickens at a top secret Soviet nuclear missile base -- the very idea would
have had Cold War generals packing their bags for Siberia. 
Yet that pastoral scene has become a reality at the former base of the Red
Army's Fifth Strategic Missile Regiment, hidden away among the hills and
barren fields of western Ukraine. 
Soviet troops pulled out from Khmelnitsky after the Union collapsed in 1991.
Now only a crumbling concrete obelisk screaming ``Glory to the Soviet
Strategic Missile Forces!'' stands as a reminder that here nuclear apocalypse
was once just the touch of a button away. 
A nearby silo housing one of 176 intercontinental ballistic missiles
originally stationed in Ukraine was blown up early last year in line with the
U.S.-Soviet START arms reduction treaty. Ukraine has handed over all its
rockets to Russia. 
But despite the Soviet military retreat, well-worn khaki uniforms are still
much in evidence at Khmelnitsky. They are regulation issue for the 15 or so
hardened drug addicts undergoing a rehabilitation course at the base. 
And like the soldiers who once paced their lives to the shrill sirens of
nuclear alerts, they perform their daily chores at a rhythm set by a gong
hammered by the three men in charge, the ``masters,'' who are themselves
reformed addicts. 


``Our method is a combination of work therapy and psychological
said Anatoly Fedoruk, 35, one of the masters who spent 18 years of his
``former'' life on drugs. 
He believes that the rigorous order established on the former base and daily
labour can heal the addicts. 
``The effect of labour is such that a person changes and starts thinking
in a
new way,'' he said. ``Our patients just have no time to think about
In line with a programme designed by the Khmelnitsky regional authorities in
January last year in an attempt to save the lives of at least some of the
thousands of locally registered drug addicts, a group of enthusiasts was
allowed to open the rehabilitation centre. They called it ``Viktoria.'' 
Strict discipline reigns. All patients must sign a pledge to abstain from
drugs, alcohol and sex, to be honest and not to leave the territory of the
As in the army, orders are orders, insubordination is never discussed and
lonely base, 20 km (12 miles) from the nearest village, seems an ideal
location for the camp. 
Every morning, each patient is given work orders for the day. Daily chores
range from tending pigs and chickens at a former military storehouse to
repairing barracks left in a mess after the last Soviet soldiers retreated a
few years ago. 
Despite hard work, tough discipline and sordid living conditions, the
seem satisfied with their life. 
``Only by going through a centre like this can you become human again,''
30-year-old Natasha, who once ran a bookshop. Viktoria is her third attempt at
quitting drugs. 
``We are taught everything here. This is the place to get rid of our


Larisa Vysotska, director of the centre, said around 1,500 drug addicts are
officially registered in the Khmelnitsky region, while the number of those not
reflected in official statistics may be 10 times higher. 
There are no official statistics for Ukraine as a whole, where the 50
population includes a growing army of desperate young people seeking refuge
from hardship in drugs. 
Vysotska said centres similar to Viktoria would be opened in several other
western regions, as well as in the capital Kiev, in Odessa on the Black Sea
and in Donetsk region in the east. 
But she said the planned new centres were unlikely to be able to cope
with the
growing ranks of drug addicts. 
``We understand we cannot help everyone. But if we only save a few lives,
efforts won't be wasted,'' she said. 
Vysotska said she had managed to save her own son, who used to take drugs,
through a similar centre in neighbouring Poland. 
Fedoruk said that turning former addicts into educators was a key to
``A lot of people think a junkie can't quit. But we prove here that this is
possible, that drug addicts can be the same as every other human being,'' he
Natasha, who also carries the HIV virus which leads to AIDS as a result of
sharing an infected needle, has been at the centre for 10 months and her term
will be end in two. 
She would like to help the others to escape addiction when her own treatment
is over. 
``Drug addiction is a horrible disease, incurable for many, but I want to
people to break free of that nightmare,'' she said. ``I would like to become
an educator, a master. I was given help, and now I would like to help the


New York Times
9 January 1999
[for personal use only]
The View From Inside: Answering Some Criticism
John Lewis Gaddis, who teaches history at Yale University, was a consultant
to CNN on the three-year project. 

It always has been hard to view the Cold War dispassionately, so it's no
surprise that CNN's televised version has provoked controversy. Ted Turner's
involvement alone -- he conceived the series -- would have insured that. Then
there's the fact that historians still are hotly debating the significance of
new evidence from the former Soviet Union, Eastern Europe and China. Of course
visual images always pack more of an emotional punch than the printed page,
especially the academic prose in which most Cold War history has been written.
When I signed on as a consultant to "Cold War," therefore, I knew that it
was going to be a great white whale and that harpoons would fly from several
directions. It's been interesting over the last four months, though, to see
their trajectories. 
First, there has been the charge that it isn't scholarly. True enough in a
traditional sense. Video archives still are unfamiliar to most historians; nor
can one pitch a television presentation at the level one might for, say, an
annual meeting of the American Historical Association. But surely visual
evidence is no less valid a guide to the past than what is put down on paper.
The real problem is that previous television histories haven't always been
careful in citing their sources. 
"Cold War" breaks new ground in this regard. Every scrap of film used has
been authenticated and documented; full versions of its 500-plus interviews
are to be made available on line, and there was careful coordination
throughout with the Cold War International History Project and the National
Security Archive, the principal centers now for assessing recently released
documents on Cold War history. The interviews are to be on the archive's Web
Second, some critics say too much is left out. "Cold War" has 24 episodes of
46 minutes each, not counting the commercials that helped pay the bills. This
makes it the longest television documentary since its co-producer, Sir Jeremy
Isaacs, completed his classic series on World War II, "World at War," a
quarter-century ago. 
But the Cold War lasted four and a half decades, not seven years, so even
this much air time left a lot that we couldn't cover. The critics --
particularly the historians -- have noticed: one early review listing all that
we had neglected in a single episode was about twice as long as its actual
Triage comes with the territory. A clear narrative is as vital in doing
history as compelling dramatization is in theater: both involve selecting what
is really important and leaving the rest aside. How that is done, then,
becomes critical. 
Third, other critics say "Cold War" tells the story from a particular point
of view. Correct, but I would argue that our selection criteria were
methodological, not ideological. Turner insisted that the series reflect an
international perspective; hence its global coverage and its reliance on
consultants from Russia and Britain as well as the United States. Isaacs, in
turn, determined the format: minimal narration, interviews only with
participants in the events (not talking-head historians) and a particular
focus on the Cold War's impact on ordinary people's lives. 
As a consequence, the tone is neither as celebratory nor as condemnatory as
some of our critics would have liked. We did not try to settle old arguments
about responsibility for the Cold War. Instead we tried to allow all kinds of
people simply to tell their stories: most surviving leaders to be sure but
also a Berlin baby sitter, a Russian rocket scientist, a Hungarian street
fighter, a Cuban farmer, an Afghan mullah, an American housewife. 
Finally, we've heard the complaint that the series suggests moral
equivalency. Our playing down of ideology has upset the neo-conservative
right, which seems to harbor deep fears that Turner has been hoping all along
to transform the Cold War into the "goodwill games" -- that he wants a history
devoid of moral distinctions. 
The tapes speak for themselves on this issue. Because I use them in my
classes, I've watched the responses of several hundred Yale undergraduates to
certain events portrayed: the Red Army rapes in Germany in 1945, the crushing
of the Hungarian uprising in 1956, the suppression of the Prague Spring in
1968, the invasion of Afghanistan in 1979 and the persecution of dissidents in
the Soviet Union and Eastern Europe throughout the Cold War. I see few if any
students who come away convinced that the two sides in this struggle were
morally equivalent. Most would find the notion laughable. 
What they do come away with is an awareness of moral ambiguity, which is
quite a different thing. The Cold War was full of instances in which moral
priorities competed with one another. 
Was it right, for example, for the CIA to subvert the 1948 Italian elections
to prevent the kind of Communist takeover that had occurred that year in
How, within the United States, did one balance the requirements of internal
security against those of civil liberties? 
Could one justify reliance on nuclear weapons to deter aggression when the
consequences of using them would have been far worse? 
Should the West have risked war to prevent the erection of the Berlin wall?
Did Washington's fears that it might "lose" the Cold War in the third world
excuse all it did there? 
These are tough questions, but it is hardly moral equivalency to raise them.
It was precisely the inability of the "other side" to confront similar issues
that ultimately eroded whatever legitimacy it had left in the Cold War. Taking
morality seriously means posing unsettling dilemmas, not providing smug and
self-congratulatory answers. 



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