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January 14, 1999    
This Date's Issues: 3015  3016   



Johnson's Russia List
#3016
14 January 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Fred Weir on Russian reaction to US sanctions re Iran.
2. Reuters: U.S. Sanctions over Iran Aid Claim Puzzle Russians.
3. The Moscow Tribune: John Helmer, SOUR GRAPES. (Re IMF).
4. Baltimore Sun: Kathy Lally, Toasting an uncertain future.
Russia: Economic despair is dampening Russians' weeks of religious 
and new ear holidays. But grudgingly they celebrate.

5. NTV: Interview with Alexander Lebed.
6. Voprosy Ekonomiki: V. Radayev, "On the Role of Force in Russian 
Business Relationships."]


********

#1
From: fweir@rex.iasnet.ru
Date: Thu, 14 Jan 1999
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT Jan 14) -- Moscow has reacted furiously to a new
round of sanctions imposed by the U.S. against Russian research
institutes for allegedly helping Iran develop nuclear weapons and
ballistic missiles.
"Any attempts to speak to us in the language of sanctions
and pressure are absolutely unacceptable," said an official
statement issued by Russia's Foreign Ministry Wednesday. 
"The U.S. action can only complicate the Russian-American
relations. Naturally, they will not go unanswered."
The sanctions stem from American charges that Russia has
secretly aided Iran to develop weapons of mass destruction and
their delivery systems. The U.S. has so far refrained from
blaming the Kremlin directly, and has targeted specific Russian
organizations and institutes for punishment.
Last summer Washington slapped sanctions on 7 Russian
agencies which it accused of providing experts and sensitive
materials to help Iran develop the "Shahab-3", a mid-range
ballistic missile capable of striking targets within a 1,200
kilometre radius.
This week the U.S. singled out three key Moscow research
centres for additional punishment: the Mendeleyev University of
Chemical Technology, the Moscow Aviation Institute and the
Scientific Reseach and Design Institute of Power Engineering.
The penalties mean the three institutes will be unable to
conduct any business in the United States, and include a
prohibition on academic exchanges.
"These are very well-known Russian academic institutes, with
very strong reputations," says Pavel Felgenhauer, military expert
with the daily Segodnya newspaper. "Russian people will not
understand why Washington is punishing such respected
institutions, and the public attitude toward the United States
will worsen further."
The U.S. has threatened further measures, including banning
Russia from access to the lucrative global market for launching
satellites into space.
Moscow angrily denies the charges. Russia's Atomic Ministry
did sign a contract with Iran in 1995 to help build a civilian
nuclear station at Bushehr, near the Persian Gulf, but Russia
says the deal fully accords with international law and is open to
inspection by the International Atomic Energy Agency.
Russia insists it has done nothing to help Iran develop
nuclear weapons or guided missiles.
"A considerable amount of attention is currently paid in
Russia to export control, which has been tightened in every
direction," deputy minister of atomic energy Lev Ryabev told
journalists this week. "I do not think it is possible for
sensitive technologies with relevance for the nuclear sphere to
pass our barriers."
And Russia's Federal Intelligence Service, the former KGB,
siad Thursday that an exhaustive check of the three institutions
named by the United States revealed no leaks of vital personnel,
information or materials.
"There have been no violations on the part of these
organisations of international regimes of export control of
non-proliferation of weapons of mass destruction or the means of
their delivery," the official ITAR-Tass quoted the agency's
senior spokesman, Alexander Zdanovich, as saying.
Mr. Zdanovich explained Washington's accusations as the
result of poor quality work on the part of U.S. intelligence
services or simply "a biased attitude of the American side toward
Russia's cooperation with foreign countries, including the
Islamic Republic of Iran".

********

#2
U.S. Sanctions over Iran Aid Claim Puzzle Russians 

MOSCOW, Jan. 14, 1999 -- (Reuters) Russian commentators were bewildered and
angered on Thursday by the U.S. imposition of sanctions and threat of further
action over alleged Russian exports of missile and nuclear technology to Iran.
Washington on Tuesday banned aid and commercial links with three Russian
scientific institutes, provoking a strongly worded statement of condemnation
from Moscow. On Wednesday the United States added a new threat, to halt space
launches of U.S. satellites aboard Russian rockets. 
The moves came only weeks after a U.S. decision to bomb Iraq without
specific
U.N. Security Council approval provoked Moscow into recalling its ambassador
briefly from Washington, amid some of the chilliest rhetoric between the two
capitals since the Cold War. 
The sanctions against the three institutes were not unprecedented.
Washington
took similar action against seven Russian organizations last July, and U.S.
officials have said Russian cooperation on the issue has been scant since
then. 
But Russia's press seemed baffled by the U.S. moves, which journalists said
were not backed up by evidence of any specific wrongdoing. 
The accusations against the three institutes "to put it bluntly, do not
contain sufficient basis," said the usually pro-Western daily Segodnya. 
"Moreover, so far no facts supporting the accusations have been presented by
Washington -- the trails of certain 'supporting documents' supposedly sent to
the Russian side could not be found," the paper said. 
Russia has rejected the U.S. claims that the three institutes were helping
Iran, and the head of one institute has also said the claims were unfounded. 
The threat to cut off U.S. satellite launches by Russian rockets, if carried
out, could cost Russia hundreds of millions of dollars sorely needed for its
space program. 
A commentator interviewed on NTV commercial television on Thursday echoed
the
views of some that Washington's saber rattling arose from domestic politics,
as President Bill Clinton faces an impeachment trial in the Senate. 
Asked by NTV if he believed Washington's moves were linked to a planned
visit
by U.S. Secretary of State Madeleine Albright later this month, U.S. affairs
expert Genrikh Borovik said: "I think we should look not at the visit of
Albright, but at the situation surrounding the president." 
"Whenever a U.S. president feels the need to boost his rating you see this
sort of action." 
Republican lawmakers in the U.S. strongly supported the sanctions on the
seven
Russian institutes in July and have called for strong measures against Moscow
if it allows exports of missile and nuclear technology to Iran to continue. 
Russian First Deputy Prime Minister Yury Maslyukov held constructive talks
with U.S. Deputy Secretary of State Strobe Talbott in Washington on Wednesday
on the Iran issue and other topics, Russian Public TV reported on Thursday. 
The TV station, monitored by the British Broadcasting Corporation (BBC),
quoted Maslyukov as saying of the Iran issue that "the views held by the two
sides should not be referred to as mutual grievances. It is rather a question
of mutual concern, and joint work is therefore necessary." 
The United States considers Iran to be a rogue state determined to develop
nuclear weapons. Iran currently faces U.S. economic sanctions and a Western
arms embargo dating from its 1980-88 war with Iraq.

******

#3
Date: Thu, 14 Jan 1999 
From: helmer@glas.apc.org (John Helmer)
To: davidjohnson@erols.com

The Moscow Tribune, January 15, 199
SOUR GRAPES 
John Helmer

It was the ancient Greek lawyer Aesop, who popularized the practice of 
dramatizing his courtroom points by telling fables populated
by well-known animals with human foibles.
It was Aesop who invented several terms we still use today, like "sour 
grapes" and "swan song".
It was a combination of both that led the former Finance Minister, former
Deputy Prime Minister, and former chief tax collector, Boris Fyodorov, to 
reveal what he had told John Odling-Smee, two days before the Russian
government devalued the rouble and defaulted on its domestic debt.
Now Odling-Smee ought to be a household name in Russia. Noone else, with
the possible exception of Boris Yeltsin, has been continuously in charge
of Russia's government since 1991. Odling-Smee is an official of
the International Monetary Fund (IMF).
He was the man to whom Fyodorov presented himself at the Metropol Hotel on 
Saturday, August 15, after Fyodorov learned that Prime Minister Sergei 
Kirienko and Central Bank chairman Sergei Dubinin had decided to devalue and 
default.
"Something suicidal is being prepared," Fyodorov told Odling-Smee, according
to Fyodorov's published recollection of their meeting. Kirienko, he urged
the IMF functionary, "should be barred from incorrect actions."
Fyodorov recalls that Odling-Smee was stonily silent. The IMF, 
according to Fyodorov, "knew everything before me, and supported it
de facto."
Another version of what happened has depicted the mini-tsar Odling-Smee,
the day after Fyodorov's visit, threatening to expel Russia from the IMF, if 
the plan went ahead without protection for the foreign banks holding
the default bonds. 
Yet another version suggests that a combination of Odling-Smee's 
threats, and those of Russia's leading commercial bankers induced 
Kirienko and Dubinin to add one measure that hadn't been thought of at the
start. This was a 90-day moratorium for Russian banks and enterprises on 
repayment of their debts abroad. This converted the default into an
opportunity for the insiders to empty their tills, and leave the government
with the mess. Odling-Smee, reportedly satisfied that this privilege
extended to the foreign bankers, as well as to the Russians, agreed.
Odling-Smee hasn't remained silent about what happened on the fateful
days of the August financial crash. On the contrary, he has written a public 
exoneration of everything he, Kirienko, and Dubinin did. According to him,
the August crash was an unfortunate surprise that had interrupted such
modest marvels of policymaking, as "significant progress in cutting
(government) reliance on domestic borrowing", "signs of modest growth
in GDP", and "serious progress in stabilization and reform."
Blame for the crash, according to Odling-Smee, was easy to pin. The
federal government and parliament lacked the "will to impose the fiscal
discipline needed"; the regional governments avoided implementing
"difficult measures"; and city governments "often wanted little more than
to keep their local businesses afloat." Since all this government was
at fault, Odling-Smee has declared the only lesson to be learned
from the affair is to get rid of them, leaving himself in charge. This
manoeuvre he calls "scaling back the size of the state."
It's an idea Aesop used when defending a politician with the fable of
the fox, the hedgehog and the blood-sucking fleas. 
The fox had lost his footing while crossing a river, and was wedged
between two rocks in the fast-moving current. There he was attacked by swarms
of fleas. A sympathetic hedgehog offered to drive the fleas off, but
the fox demurred. "These fleas are already full of me," he said. "If you
take them away, others will come with fresh appetites, and drink all the
blood I have left."
Aesop thought that was a powerful argument for leaving a blood-sucking
official in place, so that his replacements would not be even more
rapacious.
Former minister Fyodorov might have tried that Aesop line on Odling-Smee,
but Odling-Smee was already a step ahead of him, having rehearsed the
same argument more than once with his bosses at the IMF. The fox they
were intent on saving was themselves. The fleas they are content to
suffer are their friends.
Now the months have rolled by as swiftly as the stream in which the fox was 
stuck. The fleas have kept up their blood-sucking. And so it turns out that 
another deputy prime minister of another Russian government has presented 
himself to Odling-Smee, this week in Washington.
"Something suicidal is being prepared," Yury Maslyukov announced, as if he
didn't know how many times before Odling-Smee, wedged firmly in his chair,
had heard it.

*******

#4
Baltimore Sun
January 14, 1999
[for personal use only]
Toasting an uncertain future
Russia: Economic despair is dampening Russians' weeks of religious and new
year holidays. But grudgingly they celebrate.
By Kathy Lally 
Sun Foreign Staff 

MOSCOW -- Few nations could take the punishment the Russian people have
endured the last three weeks.
But Aslan Aslanov was preparing for one more round last night. He wheeled a
shopping cart up to a supermarket display of approximately 6,000 bottles of
Soviet Union brand champagne. Wearily, he reached for a bottle.
Another party was about to begin in a country that has little to
celebrate and
much to fear. Since Dec. 25, Russians have celebrated four holidays, one of
them for four days. The final one began last night, and economic crisis or
not, Russians valiantly rose to the occasion, laying their tables with
whatever food and drink they could afford.
"We have had some breaks between holidays," said Yevgeny Danilov, explaining
the five bottles of champagne in his cart, "so it's not as if it's been every
day."
Still, many of his countrymen have started flagging. They've had too much
time
to see too many friends whose lives have gotten much worse since the last time
they met. They're ready to go back to work and resume normal routines, if only
they could.
A year ago, Aslanov, 30, could tell friends how well he was doing importing
consumer goods from Korea. The crash of the ruble in August brought an abrupt
and complete collapse to his business.
His business is gone; his wife, who is Jewish, feels uneasy living here
because of a rise in anti-Semitism. The holidays have been long and painful
for Aslanov. He's been saying goodbye.
"I have a sister in Australia," he said, "and the papers are almost ready
for
me to leave, too."
Today is New Year's Day, according to the Julian calendar dropped in 1918 in
favor of the Gregorian used by the rest of the world. And even though it's not
a work holiday, Russians really feel they should be celebrating what everyone
calls the Old New Year. Hardship or not, they seem constitutionally unable to
ignore an occasion to gather around a table with friends.
The holidays began Dec. 25 -- what Russians call Western or Catholic
Christmas. That celebration, once suppressed by the Soviet authorities, has
come into vogue over the past few years although it is not yet an official day
off.
Then came New Year's Eve and New Year's Day -- the big Soviet holidays. Then
came the Orthodox Christmas, Jan. 7, with celebrations beginning Jan. 6.
Friday, Jan. 8, was declared a holiday, too, because the government figured no
one would go to work with only one day until the weekend. Sunday was supposed
to be a regular workday in exchange, but many people stayed home.
"I'm very tired of the holidays," said Yelena Zhukova, a 42-year-old
housewife, who also celebrated her mother's 70th birthday. "We have been
eating and drinking and toasting. Our main toast is that things don't get even
worse in the next year."
Alexander Tkachyov, 45, who works in public relations for a bank, also saw
friends for the first time in months. "We talked about how life had changed
for the worse," he said. "It was the usual topic during the holidays. We're
not sure of the future."
Tatyana Dyachenko, 52, is a doctor -- among the country's lowest-paid
employees these days. That didn't prevent a round of celebrations, with guests
invited to her home and invitations from friends.
"I went to see my friend Yelena whom I hadn't seen for a long time," she
said.
"We talked about the lack of money. My friend complained that though she liked
guests, she was sorry she could not put out as much food and drinks as she
used to. She worked at a bank and lost her job in August."
How anyone can afford even a little celebration remains a mystery in a
country
in financial ruin, where even many of those who still have a job don't get
paid regularly. People dig into the last of their savings rather than ignore a
holiday. And it's still cheap to drink. Vodka can be found for as little as $1
a half-liter -- about a pint. Soviet Union brand champagne sells for about
$2.50.
With two opportunities to make resolutions, Russians might be expected to
have
long lists of them. They don't. The word "resolution" doesn't translate well
in a country where individual action appears useless, where citizens watch
helplessly and hopelessly as those at the top do what they will.
So Russians make wishes, instead. Lots of them.
Alina Melkumova, 22, tried a new way of wishing this year that she heard
about
on television. She wrote her wish on a piece of paper, burned it and poured
the ashes into a glass of champagne that had to be drunk as the clock struck
midnight.
"Some people didn't have enough time to burn it and had to swallow the clump
of paper," she said, sitting somewhat incongruously in a display high chair in
the store where she sells children's furnishings.
Among her wishes?
"At least something better than we have now."
Tatyana Dyachenko and her friends had several wishes.
"To keep friendly relations no matter what happens in this country, not to
lose our jobs, to be healthy.
"And I had a special wish for the New Year -- to buy a beautiful blouse."

********

#5
Lebed on 'Hero of the Day' 

NTV
January 9, 1999
[translation for personal use only]
Interview with Krasnoyarsk
Governor Aleksandr Lebed by announcer Irina Zaytseva in Krasnoyarsk,
date not given; from the "Hero of the Day without a Tie" program

[Zaytseva] Hello, this is the "Hero of the Day" program. We flew into
Krasnoyarsk in the run-up to the New Year and found out, to our surprise,
that the locals still peer curiously at their new governor and even,
strange as it may seem, make a serious study of the individual parts of
Aleksandr Ivanovich's body, as the newspaper Krasnoyarskiy Komsomolets
reports. 
It writes: Let us study the face. The broad forehead shows the owner's
good brain and outstanding post. The three wrinkles on the forehead show
his literary talent, the lower eyelids betray his sexuality. The face is
oval-shaped, which is a sign of his aristocratic nature, while his ears is
yet another proof of the fact that he is working too much but will not ever
get outside help. But while some Krasnoyarsk residents are closely
studying the general, Aleksandr Ivanovich himself has become quite
comfortable in his governor's seat. [Video shows Lebed doing physical
exercises on the banks of a river]
So, in fierce fighting, Gen Lebed won the pitched battle for the votes
of the Krasnoyarsk electorate. His expert knowledge of campaign tactics
helped him just as well in the elections as in his military career. But
then, as the governor of Krasnoyarsk Territory says himself, he has never
known how to lose.
[Lebed] I quite deliberately went after a governorship so as to
experience that difficult school - to plunge into the process, dive into
it, find out how it looks from the inside; who is flowing with the current,
who is swimming against it, and who is rolled up in a ball on the bottom. 
That has to be understood from the inside. I acted quite deliberately.
It would have been easier to sit on the fence, away from the process,
as many are doing at the moment. That's a splendid position. Whatever the
government does, he just comes along, says "What idiots!" and goes off to
bed once again. And then they do something else, so once again he says
"What idiots!" and goes back to bed. A splendid position! 
[Zaytseva] But Lebed cannot say "What idiots" to the government
because, as he has already said, this is the easiest position leading
nowhere. It is worthy of those beetles which skim across water surface, as
he put it in his usual eloquent manner, while he is General Swan [Lebed]
and is worthy of greater things and dreams of greater things - for the
country, naturally.
[Lebed] It is vitally important to me to remain the master of my own
land and to leave that land to my children and grandchildren as a worthy
land - not a land of lackeys or crooks.
[Zaytseva] Some may say that these words sound too lofty, but Lebed
is, as we know, totally indifferent to whatever anyone might say.
[Lebed] I live by my own wits.
[Zaytseva] We decided to find out, by flying to Krasnoyarsk for the
New Year holiday, what Aleksandr Lebed is doing to see that our country
does not become a land of lackeys and crooks. 
There we were met by a cheerful and smart General Lebed and his always
smiling and friendly wife, Inna Aleksandrovna Lebed. Incidentally she says
that she feels well and settled in Krasnoyarsk but she does not regard
herself at all as Krasnoyarsk Territory's first lady.
[Inna] A wife is a wife. Special nuances have come into my life.
Yesterday I was asked whether I started attending presentations. I simply
have no choice. Otherwise it is all right, I think. I seem to be coping.
[Zaytseva] Do you bake pies here?
[Inna] No, I am not allowed near the cooker [laughs].
[Zaytseva] Is it already unworthy of you?
[Inna] Only when I go to Moscow, then I am so happy to be in my
kitchen!
[Zaytseva] Local people told us that the governor's wife is loved and
respected here. She has taken up social activities and, in her own words,
not because she had to but because she would like to help people. 
Naturally, she has to support her husband and not only on foreign tours. 
If she is asked to dance at the governor's New Year ball, she has to
comply. [Video shows Lebeds dancing].
A wife's success reflects on the husband, as is known. I will repeat
once again that everything Inna Aleksandrovna says, does or cooks has
always been the most precious thing for Lebed.
One could get the impression that he was yet again declaring his love
for you when you were dancing.
[Inna] Yes, there was something like that.
[Zaytseva] Does he do this often?
[Inna] Whenever we dance [both laugh]. Well, in fact he does this
much more often.
[Zaytseva] There is a view that virtually every woman can turn her
husband into a real man. After so many years with Aleksandr Ivanovich, do
you think that you have made him what he is now?
[Inna] No, this would have been too presumptuous to claim that I have
made him. And after all I have never sought that. I fell in love with a
real man, I thought, and later I could only see that that was the case. 
But to mold him in accordance with my own ideas? I do not belong those
women, perhaps, who take raw material and then start molding it. If I fall
in love, it must be a real one.
[Zaytseva] It turned out that the governor and his wife live not on a
state dacha but in a hotel on the bank of the Yenisey in Krasnoyarsk's most
beautiful spot called Sosny. And they live at their own expense.
[Lebed] I am not a sponger, I pay rent. I do not like to owe anything
to anyone. Someday there will be a residence for the governor, whatever
his name. If the governor takes up his duties, he should go to live and
work there, and that is the way it should be. But we will not reach this
stage very soon, because, given our 5-billion debt, people will not
understand us if we begin by building a residence.
[Zaytseva] Have salaries been paid yet to the budget-funded sector?
[Lebed] There are no funds to pay the sector. There was some movement
in this direction, we started work but than everything collapsed. Those
conditions in which the decision was taken simply do not exist any longer.
[Zaytseva] I remember that you said that you yourself would refuse to
get a salary until ...
[Lebed, interrupting] True, and I am not getting any, that is what I
am doing.
[Inna] That is precisely what he is doing. The only thing is that the
rent and food are being deducted from that mythic salary [laughs].
[Zaytseva] But how are you getting by?
[Lebed] I am still a military pensioner. After all, I was
lieutenant-general when I left the army.
[Zaytseva] And what is the governor's salary?
[Lebed] I do not know, I never inquired about it or got one.
[Zaytseva] I have understood this, but do you know what the figure
should be?
[Inna] I have read in a newspaper. A question was sent to local
newspaper - how much is the governor's salary? Incidentally, I started
pestering him with the same question but he did not answer me. And I have
not seen it, that salary [laughs].
[Zaytseva] Aleksandr Ivanovich, this way you can ruin your family
utterly. After all, prices are going up.
[Lebed] If I have not ruined the family yet, I will not in the future,
I think. The most difficult time was in 1982, that was really difficult
when I was a major and a student in the academy. I used to spend whole
days attending lectures, whilst we had three children and lived in Moscow. 
On Sundays I had to take bottles to get the deposit back.
[Inna] Very romantic! [laughs]
[Zaytseva] Milk bottles!
[Lebed] Yes, milk bottles indeed.
[Zaytseva] During his time as secretary of the Security Council and
now in the governor's seat, Aleksandr Ivanovich has not become a gourmet. 
He says there are no changes in this area. As before, he remains one of
those who eat in order to live rather than live in order to eat. The
caviar was put on the table only for us, his dear guests. And the general
knows how to keep his word. He stopped drinking five years ago and has
stayed like this. It is only on holidays that he allows himself a glass of
good cognac.
And what about his character? No changes here either, anyway,
according to Lebed He remains the same, with his peculiarities, principles
and ambitions. True, there have been acquisitions over the last six
months.
[Inna] He has become wiser.
[Lebed] Yes, wiser.
[Zaytseva] And of course, his wife thinks, the governor's seat has not
spoilt him a bit.
[Lebed] This phenomenon of trial by power is as old as time itself. 
It is an absolutely old truth: if you want to try someone, give him power. 
Very many people have been broken indeed but quite a few have survived. 
These are genuine ones.
[Zaytseva] Haven't you changed at all since settling into the
governor's seat?
[Lebed] I have changed, of course. But not for the worse, I think.
[Zaytseva] How then?
[Lebed] I came here - not the greatest of gifts. I came here and set
myself the task of resolving all problems by exclusively lawful, one could
say democratic, methods. I'm conducting an experiment along those lines to
see what will come of it. It's going badly. But I shall pursue the
experiment to the end. I have to see that the negative results of the
experiment are the actual result. I shall pursue it to the end [lengthy
pause] so that later on I can say: that's it. [Lebed wipes his hands
significantly, as though washing them clean of something].
[Zaytseva] Accusations have already started to surface to the effect
that the governor of Krasnoyarsk Territory cannot cope, that the situation
there is worse than in the time of Brezhnev. And then, no matter how often
you say: "I carried out that experiment, and I pursued it to the end, and
maybe the results were negative" , no one will listen. Everyone will say:
he simply couldn't cope, and that's all there is to it.
[Lebed] I'm not going to say that to anyone. The main thing is for me
to see that it's wrong. And that's what I am seeing.
[Zaytseva] All right, you pursue that to the end. What next?
[Lebed] Well, I'll pick up some wisdom here. I'll get to know all the
mechanisms and then I'll start to crush them.
[Zaytseva] How?
[Lebed] I know how a war is organized, and I know what has to be
broken so that it stops. I know that. But I haven't yet studied that
right to the end. I'm still studying it so as to know what to break in
that tough mechanism so that it withers away quietly.
[Zaytseva] As usual, the general gave a laconic answer to the question
of how he would do that and what would happen next.
[Lebed] You'll see later.
[Zaytseva] The governor whetted our curiosity but he gave us to
understand that he had been indignant for a long time.
[Lebed] How artful must one be in order to organize such a mess in a
country like ours, a country which is absolutely self- sufficient in every
respect! It takes a genius! To have everything and to have nothing!
[Zaytseva] One thing is clear for the general: even is the result of
his governorship is negative, he will not lose heart or surrender. He is
incapable of either. The school of governorship has taught him a lot.
What has it taught you?
[Lebed] What? I have inherited a 5- billion debt, and this is my
principal headache. There is succession in administration, which means
that I have to pay back the debts. There are various debts, those to the
budget-sector employees or commercial banks, and they all have to be paid
back. For the time being it is like robbing Peter to pay Paul and three
days later it is the other way around. But now I am getting deeper and
deeper into the problems existing in the territory, and through them I can
see the country's problems. I get a better understanding of the corrupt
mechanism that we have. I think that before I only used to tread the
surface whereas now I am seeing deeper. It is a good school.
[Zaytseva] There are no time limits for the governor's special
education. Inna Aleksandrovna says that it is only rarely that she sees
her husband. He spends days and nights at work. And of course he has more
important things on his mind than to help her iron bed linen, something he
always used to do.
[Inna] In the entire time as governor, he has had only one day off. 
We went fishing to a northern river. But I myself do not like fishing very
much. So I left him to it.
[Zaytseva] Incidentally, let us mention the peculiarities of national
fishing [reference to a recent film title].
[Lebed] The funniest story in this respect took place in summer. I was
sitting quietly and fishing by a pond when I heard behind me: Ah, look at
that, bloody hell! There were four drunken men, and as we started talking
I realized that they took me for Buldakov [lead actor in the film
"Peculiarities of National Fishing"], the actor. And I spent about 15
minutes telling them about the difficult process of filming, numerous
trips, lousy hostels, low wages and nasty film directors, everything.
[Zaytseva] But did you reveal later who you were?
[Lebed] No, what for?
[Zaytseva] Despite his tight schedule, Aleksandr Ivanovich has not
given up sport. He exercises early in the morning and does everything
required. He regrets that he has swum in the Yenisey only twice.
[Inna] If before he used to leave all the problems outside and after
crossing the threshold he was for me alone, it is a different story now.
[Zaytseva] What do you think, will he achieve something in the
territory?
[Inna] I think he will but not as quickly as he hoped.
[Zaytseva] And what do you think about the fact that there have been
very many critical articles about him, alleging that the governor has
failed, that virtually nothing is being done for citizens of the Territory,
and that his main interests are with the [presidential] election campaign?
[Inna] I think that it is totally untrue about the election campaign,
it is the wrong view. If he does anything now, he thinks first of all
about the Territory.
[Zaytseva] Do you get upset when you read such articles?
[Inna I am trying not to read all of them but they reach me anyway,
there is no place to hide from them. But it is a normal situation, they
used to write a lot of "good things" in quotation marks before too.
[Zaytseva] Aleksandr Lebed himself says that he is even too
indifferent about articles on his activity in Krasnoyarsk Territory.
[Lebed] I have a cool and calm attitude to this. I am a man with
strong doubts. It has always been difficult for me to take a decision. 
Perhaps, that is the way my head works that about a dozen options are
circulating in it, and for some reason, each option has more minuses than
pluses. And therefore I have to look for an option with more pluses. But
after I have completed this process and have taken a decision, I sigh with
relief and turn into a flying sword which cannot be stopped.
[Zaytseva] But if it transpires later that the decision was wrong?
[Lebed] This does not happen. Even if a mediocre one, a timely
decision backed by willpower will yield success anyway.
[Zaytseva] You have been working for six months now. Can you say what
you have managed to do during that half-year?
[Lebed] Nothing positive for the very simple reason that there is
nothing left of the situation in which the decisions were taken. You see,
17th August [when the rouble collapsed] was a turning-point at which
everything that had seemed at least relatively firm simply collapsed. It
no longer exists. There are just extensive ruins. 
[Zaytseva, over video of Lebed at a military meeting and standing on
the top of a hill] But Lebed says that even when there are such ruins he
still manages to pay wages on time. The governor thinks that the situation
in his region is not yet catastrophic but not far from that. The problem
can be solved, he is convinced, by urgently dealing with three things:
tariffs, taxes and mutual offset deals.
[Lebed] There is no point in doing anything here, in the region. If
you try and lift something, it turns out that it is impossible to lift
anything because everyone is in debt. I, who represent the administration,
owe 5 billion rubles and others owe me 6 billion rubles. It seems that I
am better off but this is not so because those who owe me are above me, in
the federation, and they do not want to pay their debts or set up mutual
offset deals.
[Zaytseva over video of Lebed, his wife and Zaytseva herself sitting
at a table with tea and cakes] And conclusions are obvious for Lebed: the
system is flawed and it should be destroyed.
[Lebed] Just imagine that there is a large airport somewhere and that
lots of people are stuck there because of bad weather. They made
themselves as comfortable as possible. Some went to the most expensive
rooms, others had to stay on the settees, on the bench or under the bench,
or even in a draughty corridor. Naturally, because a huge number of people
had to stay at the airport for a long time, the usual order was broken in
many respects. Everyone appreciates the need for order and understands
that the premises should be cleaned, the floor swept and the furniture
rearranged for everyone's benefit. Everyone seems to agree with this but
then everyone starts thinking: what if in the process of putting things in
order I will have to forfeit my room and end up on the settee or will have
to move from the settee to the bench, or from the bench to under the bench
or the corridor, or I may even end up out in the street. I may have
something small and miserable at the moment, but I am afraid to lose even
that. This is a country which may be short of many things but the
possibility of things turning worse is always there!
[Zaytseva] But if someone would argue that Lebed is saying commonplace
things, and everyone knows what's what, the general would say that in this
case we should act calmly and with a clear purpose.
[Lebed] There is a joke. An entry in a Red partisan's diary reads:
The day before yesterday we took a hut from the Whites, yesterday the
Whites took it from us, today we took the hut from the Whites, and then the
forest-guard came and kicked us all out of the forest.
[Zaytseva] No other politician has such expressive and colorful speech
like the general. Here is his famous reply to a question.
[Female voice over archive footage] Some people say that you are an
unpredictable politician. What do you think about this?
[Lebed] This is great. This is the landing troops' tactics: the enemy
expected us to arrive by sea but we came down from the mountains on skis.
[Zaytseva] Today too Aleksandr Ivanovich has an edifying topical story
about the crisis.
[Lebed] It was very cold. A sparrow was flying along, froze and fell
to the ground. A cow was passing by, she produced a cowpat which covered
the sparrow. The sparrow revived under the warm cowpat and started
twittering. Then a cat came by, got the sparrow from under the cowpat and
ate him up. The first moral of the story is: it is not only your enemy who
can drop a cowpat on your head. The second moral is: it is not only your
friend who may get you out of it. All in all, stay in the cowpat and keep
quiet.
[Zaytseva] His wife thinks that Aleksandr Ivanovich has not lost his
sense of humor. And those who have known Lebed well for a long time are
saying - and we have noticed this too - he is smiling more often nowadays. 
Many people are also asserting that the general is shedding his image of a
typical military officer. He is being constantly seen in smart suits and
ties. Ill-wishers add, though, that he is seen more often in Moscow than
in Krasnoyarsk. There is a caustic joke that the governor has invented a
new way of governing the territory by remote control. But Lebed rebuffs
such remarks in his usual straightforward manner: it is up to him to decide
who, where and when to meet and where to govern the Territory from.
[Zaytseva] The interests of several financial groups clash here, in
Krasnoyarsk Territory. Do you manage to get on with them?
[Lebed] I inherited a situation, or rather a Territory, in which the
interests of absolutely all the largest commercial banks and
financial-industrial groups are present. I am simply obliged to maintain
smooth, normal working relations with all of them. That does not always
happen, but many have had the idea of putting me in someone's trench. But
my interests run counter to that. I'm not going to go down into anyone's
trench. 
My task is to be above the fray as an arbiter. I have nothing to do
in other people's trenches. But then people feel offended: why are you not
sticking up for me?
[Zaytseva] Do you have in mind Bykov [a Krasnoyarsk businessman]?
[Lebed] There are enough people without Bykov.
[Zaytseva] Whereas Bykov may be at odds with Aleksandr Lebed, he says,
Lebed is not at odds with Bykov, head of the Krasnoyarsk aluminum works. 
Let us better have a game of backgammon, he suggested. A game of
backgammon before going to sleep has been the Lebed's family ritual for
years. They play for fun, not money.
[Lebed shown playing backgammon with his wife] Well, one had really to
try hard to lose like that!
[Zaytseva] He says that there is no harm in losing a game to his dear
wife. He never loses in anything else, Lebed claims. He is a man of
purpose, and if he has a goal he will reach it by hook or by crook. 
Incidentally, when asked two years ago about his main goal, he gave a
straightforward answer.
[Lebed] To save the Russian state and to stop the mess that has
engulfed it. I am fed up with it.
[Zaytseva, voice-over] Two years later, it turns out, the aim has not
changed, but there can be no question of achieving it at the moment,
whatever anyone might say, Lebed declared firmly.
[Lebed] An interesting situation arises. Successes achieved right
here, in Krasnoyarsk Territory, may be a necessary condition for my
potential running. It is ridiculous to go into elections if your own
Territory jeers at you behind your back and throws stones at you. It will
probably go all round the country, and the potential voter will draw the
appropriate conclusions. It will be simply ridiculous. It is a total
waste of time, when all's said and done. Everything has started off badly.
That is probably so obvious. It is now such a strange question - have I
decided to go? Where shall I go? It is better, after all, to master the
situation for the better here.
[Zaytseva, voice-over] After saying goodbye to us, Aleksandr Ivanovich
set off to master the situation for the better, as he put it, to score some
successes and make up his mind so as later to set out on the right road.
[Zaytseva to camera in studio] You have been watching the programme
"Hero of the Day without a Tie" . So Aleksandr Lebed, governor of
Krasnoyarsk Territory, has firmly declared once again that he does not
intend to stand as president until he chalks up visible successes in the
territory that has been entrusted to him.

********

#6
Role of Force in Russian Business Viewed 

Voprosy Ekonomiki, No. 19
October 1998
Article by V.Radayev, director of the Center for Economic Sociology and
Social Policy of the Russian Academy of Sciences Institute of Economics,
Inter-Center director, doctor of economic sciences: "On the Role of
Force in Russian Business Relationships"

It is well known that the use of force and violence are widespread in
Russian economic relationships. Economists consider this practice to be a
harmful outgrowth inhibiting development of "normal
economics." They do not consider it a subject for research into
economic models but leave it instead to the criminologists. But rather than
being an alien topic, the problem of force long ago became an inescapable
part of economic activity. Under conditions where entrepreneurs are
encountering a high risk of nonobservance of business obligations by their
contracting parties, when state and social organizations acting as
"third parties" do not provide an adequate defense, then
"horizontal" forms of control to attain agreements and
fulfillment of obligations acquire a special meaning. The image of the
economy as a supranormal field where the “winds” of
unrestrained egoism blow is oversimplified. In fact, the existence of
frequent nonobservance of obligations has expedited the emergence among
entrepreneurs of protective norms of business interaction, based not on
hallowed tradition or a core of values, but on a faith in the correctness
of one's behavior or expectation of recompense for services.
These conclusions have been reached based on a survey of entrepreneurs
conducted during 1997-98 by I. Bunin's Center for Political
Technologies at the direction of the US Center for International Private
Enterprise (CIPE) of 227 enterprise leaders from 21 regions in
November-December 1997 who filled out survey forms, followed by in-depth
interviews with 96 respondents through the winter of 1998.
While it has been stated that almost all (or at least up to 70%) of
commercial structures have been forced to pay tribute to criminal rackets,
the survey found that 15% noted problems in encountering such groupings,
primarily among retail, public catering, and everyday service organizations
(26%), which are more visible to the public and use cash. Only 9% of
enterprises in the spheres of science, medicine and culture reported
problems, and 6% in the finances sphere. It should be noted, however, that
the racket phenomenon is one of the more primitive forms of forced criminal
action, associated with use of “boys” to collect tribute from
small entrepreneurs.
The following responses were obtained on the general scale and
dynamics of use of force in Russian business:
To the question: "How often are threats and forced extortion
used in Russian business?" the replies were "often"
(17%), "sometimes" (62%), and "never" (21%).
To the question: "How often did you yourself come up against
threats and forced extortion?" the replies were "often"
(3%), "sometimes" (39%), and "never" (58%).
To the question: "How has the situation changed regarding
threats and forced extortion over the past 2-3 years?" the replies
were "are more frequent" (14%), "no change" (56%),
and "are less frequent" (30%).
To the question: "Is successful activity possible today without
threats and forced extortion?" the replies were "no"
(8%), "with difficulty" (34%), and "yes" (58%).
It was found that magnitude of advertising expenses correlated
positively with experience in encountering organized force. Those who want
to escape an unpleasant "acquaintanceship" often are advised to
keep "quiet." This advice is easier to follow in some fields
than in others, as noted above in differentiated experiences by sphere of
activity.It was found that the more recently an enterprise leader had taken up
his position, the more likely he was to have a positive outlook on the
situation: 43% of pre-1989 leaders have "never" (and 57%
"sometimes") come up against threats and forced extortion,
while 66% of leaders taking up their positions in 1996-97 have
"never" (and 33% "sometimes") encountered use of
threats and forced extortion. 
It was found that views on the possibilities for successful activity
without threats or forced extortion correlated positively with degree of
respect for law on the part of the business leaders: of those who saw
"high risk" in violating the law, 63% found it
"possible" to not use methods of force, while of those who saw
"no risk" in violating the law, only 31% found it
"possible" to not use methods of force.
To a question regarding how entrepreneurs react to the use of threats
and forced extortion, the replies were: "prefer to deal with it on
our own" (34%--mostly middle-aged respondents, privatized-enterprise
leaders, more female respondents, construction and transport respondents),
"appeal to the police" (13%--mostly large firms with high share
of government property and with higher incidence of encountering threats,
higher share of men and young respondents), "use registered security
agents" (8%--mostly new and small enterprise directors, more
Muscovites, especially financial-sphere respondents), "appeal to
criminal groups: (15%--those who at an earlier time fell under
racketeering influence--especially small enterprise directors in wholesale,
retail trade, those in first "cooperatives" wave), and
"difficult to answer" (30%--primarily the pessimists who see
forced methods expanding, but have no personal experience with forced
methods, primarily industrial, science, medical, and culture leaders,
leaders of larger and older enterprises).
Analysis of open-ended responses provides evidence of increasingly
more restricted zones of activity for use of forced methods in Russian
business, as opposed to the beginning of the 1990', seen as an era
of unrestricted racketeering. In small towns far from the capitals,
however, business and force structure relationships are closer, more
interwoven, more "dmestic."While the zone of actual use of
force is decreasing, organized force is becoming more routinized.
Resistance is being replaced by mutual penetration, which is
pessimistically sometimes seen as a "dffusion"of criminal
elements into the business world.
There is a sense that state law-enforcement organs have improved their
effectiveness and have less "fear" of criminals. State
structures have become formally and informally more commercialized, and
have grown closer to and even grown together with the criminal world.
In conclusion, the growth in use of force in horizontal economic
relationships among enterprises in the post-Soviet period is seen in many
cases as replacing the previous instruments of vertical pressure on
partners via party and administrative organs, a "compensatory
reaction" to the loss of administrative defenses. Approximately 15%
of legal enterprises are estimated on the basis of various and
complementary indicators to lean toward criminal market segments. This
indicates that the opinion that Russian business is totally criminalized is
based on a serious exaggeration, but more important is the qualitative side
of this question: methods of force have succeeded in becoming a normal
element woven into the fabric of Russian economic relationships.

*******




 

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