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Johnson's Russia List


February 22, 1999    
This Date's Issues:  3064   

Johnson's Russia List
22 February 1999

[Note from David Johnson:
1. AP: Russian PM Worried About Welfare.
2. Celeste Wallander: Re 3063/NATO Expansion-LA Times.
3. Kamaljit Sood: Primakov's Call for Change in constitution.
4. MiraMedUSA: Re dying children piece/3063.
5. Association for the Study of Nationalities Convention in New York.
6. JINN MAGAZINE: Thomas Goltz, Crying Wolf or Crying Bear? Little 
Azerbaijan Comes in from the Cold.

7. Izvestia: Natalia Neimysheva, Personnel Decide All. (Re firing of
head of tax police).

8. The Globe and Mail (Canada): Geoffrey York, Fear of foreigners fuels
Russian war on cults.

9. Moscow Times: Leonid Bershidsky, MEDIA WATCH: Island Keeps World 
at Bay.

10. Reuters: Japan says no progress in Russian talks on islands.
11. Washington Post: Sharon LaFraniere, Harder Times in the City.
Crash of Ruble Pares One Moscow Family's Budget, and Its Dreams.

12. Reason: Thomas Hazlett, Back in the USSR. Post-communist society's 
top economic output: capitalist straw men.]


Russian PM Worried About Welfare
February 21, 1999

MOSCOW (AP) -- Russia's cash-hungry government should trim its welfare rolls,
Russia's prime minister suggested Sunday.
Yevgeny Primakov singled out benefits for people in Russia's north, who are
entitled to subsidies because of the brutal weather and high cost of bringing
in food and consumer goods.
``The Russian government is concerned by a large number of people enjoying
benefits which the federal government cannot ensure,'' Primakov was quoted by
the ITAR-Tass news agency as saying in St. Petersburg. He did not give
specific figures or say the benefits would definitely be stopped.
Russia, facing an economic crisis on top of years of protracted economic
decline, has already effectively cut off millions of people from welfare by
delaying payments to pensioners, disabled people, the unemployed and veterans.
The government owes billions of rubles in overdue pensions and wages to state
The benefits themselves have not kept up with inflation that has jumped
Russia devalued the ruble last August. Most Russian retirees get about $17 a
The Soviet government developed oil, mineral and other resources in the
-- a region that covers half Russia's territory -- according to the official
``discomfort index,'' by using prison labor and luring other workers with
well-padded salaries and generous subsidies.
Russia's government can no longer afford to colonize the North at any
cost, or
afford the bloated welfare system it inherited from the Soviet Union.


Date: Sun, 21 Feb 1999 
From: Celeste Wallander <>
Subject: Re: 3063/NATO Expansion-LA Times

Dear David,

Just a reminder for those who seem to need it (and presumably the
responsible officials of new members should know this), Article 5 of the
NATO treaty does not guarantee automatic defense of NATO member territories
by other NATO members. It commits members to consider an attack on any an
attack on all, to consult, and to take whatever action they individually
or collectively consider necessary. Technically that could mean inaction.

Not that I think that this is going to be an issue, to say the least. Is
Poland expecting an attack from Serbia any time soon?

> "The most important thing is to maintain the military character of the
>alliance and to maintain the meaning of Article 5 of the Washington Treaty,
>which talks about defending the territory of the alliance," said Bronislaw
>Komorowski, chairman of the National Defense Committee of the lower house
>of Poland's Parliament.
> Defense of NATO countries from any attack should continue to be
>"automatic"--and should aim to repel any invader at the border, Komorowski
>said. Warsaw wants to be sure that NATO is committed to protect Poland's
>eastern frontier, he stressed.


Date: Sun, 21 Feb 
From: Kamaljit Sood <>
Subject: Primakov's Call for Change in constitution

Dear David, 

Yevgeny Maksimovich, I understand, has made a call to change the
constitution of Russia. YM at least gets the credit for bringing
stability to Russia and this suggestion of his is another step to
bringing structural stability to Russia which will form a basis for
avoiding any further excesses on the Russian people by the oligarchs and
the corrupt politicians, provided of course, the constitution is amended
to reflect more democracy and accountability of the leaders. I think, by
now a realisation is setting in that stability of government is a vital
element in generating and environment of economic growth. YM's
contributions are thus important.

There is some level of distrust in YM by policy makers in Washington
because of YM's past linkage with KGB. One should not forget that even
George Bush was Director of CIA prior to becoming the V President of the
USA. So linkages to the KGB should not disqualify YM as a partner to do
business with. I think that it is in the interest of us in the West to
have a stable Russian government wedded to economic growth. So far, YM
has not shown any anti-westernism that may be construed as inimical
behavior. He has played a nationalist card to some extent, but this is
also played by our allies such as France.

The US has channels of influence in the Russian politics and I think
they should use these channels to seek amendments to constitution which
brings more health to Russia. This health will benefit us all.

With Best Regards
Kamaljit Sood
WPC/Anthem Press
P.O. Box 9779
London SW19 7ZG
United Kingdom
Tel: +44 (0)171 928 0200
Fax: +44 (0)181 944 0825


Date: Sun, 21 Feb 1999 
Subject: Re: dying children piece/3063

Thanks for posting our piece--but Dr. Engel did not write this, so please
It was written by Robert Aronson, Program Director. Although this is a
personal piece, it does reflect MiraMed, but Dr. Engel may or may not have 
her personal view and since she is VERY well known, it is important that 
the piece be credited to the author, not just the institution which many 
people know only through her.
Thanks! R. Aronson, Program Director


Date: Sun, 21 Feb 1999 
From: Dominique Arel <>
Subject: Association for the Study of Nationalities Convention

4th Annual Convention of the
Association for the Study of Nationalities (ASN)

"Rethinking Identities:
State, Nation, Culture"

Columbia University, 15-17 April 1999
New York

The 4th Annual Convention of the Association for the Study of Nationalities
(ASN) will be the largest gathering ever of scholars interested in issues
of ethnicity, nationalism, national identity, and nation-building of the
former Soviet bloc. The convention will feature 87 panels, an increase of
almost 50 percent from the number of panels offered in 1998. Close to 400
people will be on panels.

The convention has truly become the World Annual Event on Nationalities
Studies. One hundred and twenty five panelists will be travelling from
abroad for the convention (as well as an additional two dozens from
Canada). Almost 40 percent of paper-givers are international participants
(and this does not include the large amount of non-US born participants
currently residing in the United States).

All post-Soviet areas will be covered in tremendous depth, with nine panels
on Ukraine, nine on Central Asia, more than fifteen on Eastern Europe, five
on the Baltics, four on the Caucasus, and several thematic and
cross-regional panels. Special roundtables will be devoted to Kosovo,
Russia in Turmoil, Chechnya, Ernest Gellner's Theories of Nationalism and
the Caspian Oil. Video screenings will include An Ordinary President (on
Belarusian President Lukashenka), Boy Hero 001 (on Pavlik Morozov) and a
series of short films on the Caucasus.

No less than 17 panels/events will be entirely devoted to the Russian

Dimensions of Russian Foreign Policy
Ethnic Republics of the Russian Federation
Religion, Ecology, and History in Post-Soviet Buriatia
Russian Regional Performance in the Context of Global Instability
Creation and Preservation of Cultural Identity: Anthropological View
Development of Russian Regions: Economic and Security Aspects
Special Roundtable: Turmoil in Russia
Peoples of the North/Far East
Ethnicity, Economy, and State in Tatarstan
Reconfiguring Russian Identity
Russian Nationalism and Geopolitics
Dimensions of Russian Nationalism
Cinema Verite International Documentaries
Post-Soviet Identities in a Big (Russian) City
Boy Hero 001: Documentary on Pavlik Morozov
Russia vs. Chechnya: Two Recent Books on Chechnya
History, Democracy and Stability in Dagestan

The full preliminary program is now available on ASN's new web site
( The web site, still under
construction, also contains back issues of Analysis of Current Events (ACE).

LOCATION. The convention will be taking place in the International Affairs
Building (IAB) of Columbia University, 420 W. 118th St. (metro station:
116th St., on the Red Line). Registration will be on the 15th Floor of IAB
and most panels on the 15th and 12th Floors, where the Harriman Institute
is located.

REGISTRATION. Registration fees are $25 for ASN members, $40 for members,
and $10 for students. A registration form can be requested from our
Convention Coordinator Oded Eran (address below). People who plan to attend
the convention are strongly encouraged to pre-register.

SCHEDULE. Registration will begin at 11 AM, Thursday April 15, on the 15th
Floor of IAB. Participants will have sent their payment in advance, but
they will need to pick up their name tag and the convention program. On the
Thursday, the panels will run from 1 PM-7.30 PM. On Friday and Saturday,
from 9 AM to 6.30 PM. The convention will end on the Saturday evening,
April 17.

ACCOMMODATION. The convention does not have arrangements with a particular
hotel and each participant is responsible to find their own accommodation.
A list of recommended hotels can be emailed upon request.

ASN MEMBERSHIP. Participants are invited to join the fast growing ASN. A
membership form will be included with the convention registration form. ASN
members receive yearly four issues of Nationalities Papers, six issues of
Analysis of Current Events (ACE) and two issues of ASNews, the
association's newsletter (next issue: February 1999). Annual dues are $45
(students: $25). Members have also the option of subscribing to Europe-Asia
Studies for an additional $52, over a hundred dollars less than its usual
yearly subscription rate.

We look forward to seeing you at the convention!
Dominique Arel
ASN Convention Program Chair
Watson Institute
Brown University, Box 1970
Two Stimson Ave.
Providence, RI 02912
401 863 9296 tel
401 863 1270 fax

Oded Eran
ASN Convention Coordinator
Harriman Institute
Columbia University
1215 IAB, Columbia University
410 W. 118th St.
New York, NY 10027
212 854 6239 tel
212 666 3481 fax


Crying Wolf or Crying Bear? Little Azerbaijan Comes in from the Cold
Issue No. 5.03
02/01/99 - 02/14/99 
By Thomas Goltz (
Date: 02-12-99 

An invitation to the U.S. military to establish a base is not all that
common, but nothing is quite as it seems in Azerbaijan, which did the
inviting. In a report that he is uniquely qualified to provide, PNS
commentator Thomas Goltz traces the convoluted history of this invitation.
Goltz is the author of "Azerbaijan Diary: A Rogue Reporter's Adventures in
an Oil-rich, War-torn, Post-Soviet Republic" (M.E. Sharpe, 1998) 

BAKU -- A senior Azerbaijani official invited the United States to
establish military bases in his country recently, setting off waves of
reaction from Washington to Moscow -- and most certainly in Tehran.

But the only thing surprising about the offer was that anyone thought it
was new.

Indeed, the very same official made virtually the same proposal over five
years ago. The date was April 1993, and the official was Vafa Gulizade,
then and now Senior Advisor on Foreign Policy to the President of Azerbaijan.

Desperately seeking any outside interest in the survival of Azerbaijan, its
president in 1993 instructed Gulizade to offer his country as a listening
post for U.S. spy agencies interested in developments in Iran.

But no one in Washington would listen. I know, because after several failed
attempts Gulizade threw caution to the wind. He sought a man who could cut
through the red tape (or at least had a working telephone with an
international line). His choice demonstrates just how desperate and
friendless Azerbaijan was at the time, because the conduit he chose was me.

We met in his 11th floor office in the presidential apparatus building in
downtown Baku.

"It's on," whispered Vafa after turning up the television and radio to
create maximum static.

"What's on?" I asked.

"The John Doe plan -- we agree to all the terms!"

"What the hell is the John Doe plan?"

"Don't play dumb. The John Doe plan -- we want to go ahead with it."

"I do not known John Doe and I have no idea what plan you are talking
about, Vafa."

The senior advisor to the president was silent a moment. Then he put his
head in hands.

I sympathized with him. If his oil-rich, war-torn little country were
relying on ME, it was truly and absolutely alone.

Help did not arrive and then-president Elchibey was overthrown by a
Moscow-backed rebellion in June of 1993, to be replaced in convoluted
circumstances by the current president, Heydar Aliyev -- a former KGB
general, Communist Party boss and Politburo member.

It seemed almost certain that Azerbaijan would slide back into Moscow's
orbit, but Aliyev actually increased Elchibey's independent line. In a wily
move designed to create vested outside interests in the continued existence
of his country, Aliyev began signing every oil contract he could get his
hands on -- more than $50 billion worth between 1994 and 1998, with an
alphabet soup of international oil companies.

Suddenly, the friendless state pinched between Russia, Armenia and Iran was
on the international energy map, with a crush of foreigners arriving to get
a piece of the action. My old friend Vafa, who now prefers to forget about
our 1993 tete-a-tete, began entertaining such luminaries as Zbigniew
Brzezinski and Henry Kissinger in that 11th floor office.

These conversations have focused on the question of how and why Azerbaijan,
unique among the 15 republics to emerge from the ashes of the Soviet Union,
managed to remove the Soviet/Russian military from its territory -- and to
keep the Russians out.

This is a credit to Aliyev's skillful game of smoke and mirrors with Russia
(and Turkey and Iran), but the price has been steep. Russia tried to
maintain its "traditional sphere of influence" in the Caucasus by backing
Armenia in the war over Nagorno-Karabakh. Nearly one million Azerbaijanis
have been displaced from their homes in and around the disputed region, and
Armenia continues to occupy almost 20 percent of Azerbaijan, including

Armenia is forging an ever deeper military alliance with Russia (and,
tacitly, Iran) that continues to threaten Azerbaijan. Indeed, Gulizade's
invitation to the United States is directly related to Moscow's shipment to
Armenia of missile systems and advanced MIG-29 fighters.

This is allegedly to augment Russian security against regional threats, but
the only possible reason can be to threaten Azerbaijan, specifically, the
territory over which the country's "early oil" export pipeline runs toward
Georgia and the Black Sea.

When oil was $15 a barrel and Baku's was filled with western businessmen,
the authorities thought the country's new friends would keep the
Armenia/Russian/Iranian threat at bay. But with the collapse of oil prices,
Azerbaijan experienced a sharp drop on the geopolitical barometer, and
apparently decided dramatic measures were required. Thus my old friend Vafa
Gulizade's invitation to the U.S. military.

How real is the recycled proposal? Congress is unlikely to approve sending
a squadron of F-16 fighters to defend Baku. But Vafa's words have had the
desired impact among those paid to consider such things as global security
in the next century. Little Azerbaijan is back on the geopolitical map.


February 19, 1999
Personnel Decide All 
By Natalia Neimysheva 

President Yeltsin has carried out the first dismissal in the Primakov
government by sacking Sergei Almazov, head of the Federal Tax Police
Service, who had been at the head of the tax police since 1992. IZVESTIA
says Yeltsin "indicted" Almazov a week ago when he ordered his staff to
demonstrate more determination in dismissing ranking personnel for failing
to do their job properly. 
So far the President's staff have given no official reasons for
Almazov's dismissal. The paper notes that rumors of his impending dismissal
became rife after the Security Council considered the results of an enquiry
into the work of the tax police by a government commission. According to
the Security Council's press service, the commission described it as
"unsatisfactory" but an Almazov aide told IZVESTIA the commission had in
fact given a generally positive assessment of the work of the tax police
although it had found some drawbacks. 
It is quite obvious, the paper observers, that anyone controlling the
tax police is in a good position to derive enormous benefits by virtue of
having access to informers planted in major banks and companies. Small
wonder, therefore, that Almazov has been dismissed just before the start of
an election campaign. 
The paper quotes government sources as saying former Interior Minister
Anatoly Kulikov and former FSB Director Nikolai Kovalyov are among possible
contenders for the vacant post. 
For its part KOMMERSANT-DAILY [02/19/99, pp. 1-2] praises Almazov for
his consistent efforts to build a powerful organization from scratch but
notes that rumors of his impending resignation began circulating a long
time ago when Alexander Pochinok [once head of the tax service] and Boris
Fyodorov opened a campaign for a merger of the tax service with the tax
police. They resumed with new force later when it became apparent that
Almazov had failed to align himself with any political grouping. When the
government commission (mentioned above) declared on February 4 that the
work of the tax police was unsatisfactory, Almazov was given to understand
that he was expected to tender his resignation. Yesterday Yeltsin signed a
decree dismissing him from his post. No reason was given. 
According to information coming from the staff of the tax police,
various political forces are locked in battle for the topmost post in the
tax police as they campaign on behalf of their protegees. For example, head
of Yeltsin's staff Nikolai Bordyzha and Premier Yevgeny Primakov would like
to see Alexei Pushkarenko in that post. He is now deputy director of the
FSB's economic counter-intelligence department. Mayor of Moscow Yury
Luzhkov is actively lobbying Boris Dobrushkin, head of the Moscow division
of the tax police. 
On the same subject KOMSOMOLSKAYA PRAVDA observes that in conditions of
a deepening crisis the tax police have become an important instrument of
political power. It is possible for various political forces to use the tax
police as an instrument of suppression spearheaded against opponents or
else that department can be used for acquiring political friends. Analysts
say Almazov was "too neutral." 
On the other hand, Yeltsin might have thought that 37,000 tax policemen
could have done a better job last year than fetching 183 billion rubles to
the state treasury. 
Almazov has been in charge of tax collection for seven years. Now that
he has been sacked Sergey Shoigu, Minister for Emergency Situations, is the
only remaining veteran who has survived several governments. 


The Globe and Mail (Canada)
Febuary 15, 1999
[for personal use only]
Fear of foreigners fuels Russian war on cults
Law on religion tested in Jehovah's Witness trial
Moscow Bureau

Moscow -- When three girls committed suicide in Moscow last week, the
Russian media immediately suggested they were fanatical followers of the
Jehovah's Witnesses.
Police later admitted the girls had nothing to do with the religious
sect. But by then a Moscow television channel had already launched a new
assault on the sect, telling viewers that the Jehovah's Witnesses had
collaborated with Adolf Hitler in Nazi Germany -- despite historical
evidence that thousands of their members were victims of the Nazi death camps.
The propaganda attacks were not a coincidence. They are part of a
growing Russian campaign against so-called "cults" -- proselytizing
religious groups that are regarded as foreign threats to the dominance of
the Russian Orthodox Church.
On the same day when the false media reports were broadcast, a Moscow
prosecutor was resuming a landmark trial that could ban the sect's
activities in the Russian capital.
The Moscow trial is the first major test of Russia's controversial new
law on religion, which imposes legal restrictions on religious minorities.
It reflects a rising hostility toward the foreign-based sects that are
increasingly active in post-Soviet Russia.
Canadian lawyer John Burns, a Jehovah's Witness who has been defending
his religion for 20 years in courts around the world, is one of the defence
lawyers in the Moscow case.
"It's reminiscent of what we experienced in Quebec in the 1940s," Mr.
Burns said, referring to the notorious "padlock laws" that suppressed the
Jehovah's Witnesses in a province where the Roman Catholic Church was
"The first step toward a dictatorship is to go after what appears to be
the most vulnerable minority," he said. "Every religious minority in Russia
better be ready for a long protracted battle."
The campaign is being spearheaded by patriotic politicians, disgruntled
parents, and the Orthodox Church itself. Their most powerful weapon is the
1997 law on religion, which has already encouraged many Russian police
departments and local authorities to harass religious minorities.
If the prosecution succeeds, it could set a dangerous precedent.
Human-rights activists are afraid it could lead to the persecution of other
religious groups and even independent trade unions and political associations.
"Reactionary elements in the Orthodox Church are using a vague law to
eliminate the competition," Mr. Burns said in an interview. "For many years
they lived in a totalitarian state, and now they're experiencing what
democracy is all about -- religious pluralism."
U.S. Secretary of State Madeleine Albright is among those who have
protested against Russia's prosecution of the sect. Independent
human-rights groups have condemned the prosecution.
The Jehovah's Witnesses have been active in Russia for more than a
century. During the Stalinist purges of the 1930s, several thousand of
their members were exiled to Siberia. Their membership began to expand
swiftly after the collapse of the Soviet Union in 1991, and today the sect
claims to be the fifth-largest Christian religion in Russia, with a total
membership of about 250,000.
The Russian Orthodox Church, in a handbook published in 1997, complained
of a "massive expansion" by the sect in Russia. It accused the Jehovah's
Witnesses of being a "totalitarian and destructive cult" that had "nothing
in common with Christianity."
Opponents of the sect have repeatedly tried to use legal weapons against
it. They made three attempts to bring criminal charges against the sect,
although each failed because of a lack of evidence. At the same time,
Patriarch Alexy of the Russian Orthodox Church called for a ban on
proselytizing sects that lure Russians from traditional religions. And a
Russian newspaper demanded "police action" against the growing "cancer" of
foreign-based sects.
Last year, a Moscow court removed a 6-year-old boy from the custody of
his Jehovah's Witness mother. It ruled that the religious sect was a
"serious danger for society."
In the latest Moscow trial, the prosecutor alleges that the Jehovah's
Witnesses are spreading religious discord by claiming to be the only true
religion. He accuses them of insulting other religions, luring young
children into the sect, encouraging suicides, using psychological pressure
and fear tactics on its members, and extracting money and free labour from
Most of the prosecution's case, however, is based on a hostile analysis
of the sect's theology. "It's a disagreement with the religious doctrines
of a minority," Mr. Burns said.
Alexander Dvorkin, an Orthodox layman and director of an anticult
organization who is expected to be a prosecution witness in the trial,
emphasized that the Orthodox Church is not officially supporting the
If the Jehovah's Witnesses lose the case, they will not be driven
underground, he said. "They'll just have to re-register with a different
status. I personally believe they are not a church. They are a commercial
pyramid, a financial organization."
But ordinary Russian members of the sect are deeply worried by the court
case. "If they prohibit our community, it would mean we'll be harassed
everywhere," said Anatoly Lokhankin, who has been a member of the Jehovah's
Witnesses for 10 years.
He said the Russian authorities are waging an "information war" against
the sect. "If they win, they'll try to prevent me from bringing up my
children the way I want to. It would be the beginning of non-freedom."


Moscow Times
February 19, 1999 
MEDIA WATCH: Island Keeps World at Bay 
By Leonid Bershidsky ( 
Staff Writer

Forget what they told you at school. Russia is an island, and Great
Britain is not. 
The way you tell if a country is an island is not by looking at a map but
by scanning a newspaper published in that country. After all, planes fly
over water all the time. Cultural barriers are not that easy to cross. 
Take a look, for instance, at Russia's premier business newspaper,
Kommersant. In a randomly chosen issue - Tuesday's, in our case - there are
two pieces of news from outside Russia. Kommersant reported that Greece is
dragging its feet on joining the Eurofighter program, and Dennis Rodman is
moving from the Chicago Bulls to the Los Angeles Lakers. 
Apparently, that is all a Russian business reader needs to know about the
outside world. 
Kommersant is actually not unique in its reluctance to report foreign
news. The serious daily Nezavisimaya Gazeta contains an average of four
international news stories per day. Izvestia and Segodnya average about
four and a half each. 
By contrast, the Financial Times on a randomly chosen day - Monday - has
15 stories with non-British datelines just in its front section. Those
stories would not be there if people in the city of London did not care. 
Newspaper editors are cynical everywhere. If 150 people die in a railroad
crash in, say, California, that gets on the front pages of most
self-respecting newspapers. If the crash occurs in India, some editors will
put it someplace inside the paper because they adhere to an unofficial
"India front page threshold" of 200 deaths. (Don't ask them where the
figure comes from. They won't even admit the threshold exists). 
A Russian newspaper will either fail to report the crash altogether or
bury it inside. Wherever it happened, it was not here. 
If Russia is an island, Moscow is an island within Russia. Regional news
takes up about as much space in an average Russian newspaper as foreign
news occupies, say, in the Sacramento Bee. 
By the way, Americans may be accused of cultural insularity, even
cultural arrogance, but they compare favorably to Russians in this respect.
A randomly chosen U.S. edition of The Wall Street Journal (Friday's)
contains seven foreign stories in the front section. That is more than any
Russian newspaper can boast on an ordinary day. 
Besides, Americans have a right to be culturally arrogant, at least where
the news is concerned. So much goes on in the enormous U.S. economy every
day that an editor will have no trouble filling a newspaper with company
news alone. And the Washington political machine produces more news in an
hour than even the convoluted Moscow political world can generate in a day. 
In Russia then, with an economy the size of the Netherlands', what is our
claim to insularity? 
Some say that when a country is in crisis people are only interested in
local news. In fact, they are even more interested in guidance. I would
argue that one of the reasons why Russia is always in and out of crisis is
that it is not open enough to the outside world. Most things that are
happening here now happened in other countries years ago. We would not have
to step in the same mud puddle time after time if we ever went to the
trouble to look outside and try to learn from the mistakes of others, not
our own. 
One has to ban foreign news to get us interested in it. In Soviet times,
when all the newspapers were filled with the same propaganda schlock and
the only news from the West concerned rising unemployment, Moscow's
English-speaking community read Time magazine and the International Herald
Tribune to shreds, not just to practice the language but to find out what
was really going on in the outside world. 
The interest apparently dissolved with the Iron Curtain. 
In my line of work I sometimes get calls from foreign reporters and
embassy officials who wonder about the Russian press's coverage (or lack
thereof) of the latest Serbian atrocities in Kosovo or some such issue. 
"Why are the Russian newspapers playing this down?" the reporter or
official will wonder. "Which of the oligarchs is behind this?" 
Easy. Russian journalists and editors just could not care less about
Kosovo. We are in crisis. Everyone else with crises of their own can take a
It's different with the Lakers, though. And with Princess Diana. And with
Monica, of course. We want to know all about them. 


Japan says no progress in Russian talks on islands
By Teruaki Ueno

TOKYO, Feb 21 (Reuters) - Japanese and Russian foreign ministers failed to
make any progress on Sunday towards resolving a territorial dispute that dates
back to the end of World War Two, a Japanese Foreign Ministry spokesman said. 
Visiting Russian Foreign Minister Igor Ivanov met with Japanese counterpart
Masahiko Komura for four hours as part of a visit trying to work out a formal
peace treaty by 2000, a goal set by the two countries in 1997. 
``The two sides tried to push for their own proposals,'' the spokesman
said in
a briefing to reporters. 
But he denied a Japanese news report that quoted Ivanov as saying it
would be
impossible for Moscow to seal a formal peace treaty by 2000. 
Quoting unnamed sources, Japan's Kyodo news agency reported that Ivanov had
told Komura: ``It is not possible.'' 
But the spokesman said: ``There is nothing like that in my memory.'' 
Russian President Boris Yeltsin agreed with Japan's then-Prime Minister
Ryutaro Hashimoto, at a meeting in the Siberian city of Krasnoyarsk in
November 1997, to work towards sealing the peace treaty by 2000. 
For half a century Japan and Russia have been locked in a dispute over
ownership of four small islands, seized by Soviet troops in the closing days
of World War Two. 
The row is the main obstacle to a formal peace treaty ending wartime
hostilities between Tokyo and Moscow. 
Tokyo wants Moscow to return the four islands, known in Japan as the
``Northern Territories'' and in Russia as the Southern Kuriles. 
Tokyo and Moscow have kept details of their proposals secret. But Japan's
proposal is believed to involve fixing the international border to the north
of one of the islands, in effect recognising Japanese sovereignty but allowing
Russian administration for now. 
Yeltsin gave his response to an undisclosed Japanese proposal for solving
dispute when he met Hashimoto's successor, Keizo Obuchi, in Moscow last
November. Tokyo says it will give its views on Yeltsin's response when he
visits Japan. 
Since the Krasnoyarsk agreement, relations appeared to have gradually
Last November Yeltsin and Obuchi agreed in Moscow to set up a commission to
promote joint economic development of the four islands. 
They also set up a separate commission to fix the international border
the two countries. 
Obuchi invited Yeltsin to visit Japan this year when the two leaders were in
Jordan for King Hussein's funeral. 
Russian officials say the visit could go ahead this summer. 
``President Yeltsin is looking forward to visiting Japan. But it is
to tell you when he can visit,'' the Japanese official quoted Ivanov as
``We will try to inform you of the timing of his visit in the near future,''
Ivanov said. 
Japan sees a Yeltsin state visit as a crucial step towards resolving the
running territorial dispute. 


Washington Post
February 21, 1999
[for personal use only]
Harder Times in the City
Crash of Ruble Pares One Moscow Family's Budget, and Its Dreams
By Sharon LaFraniere

MOSCOW—Anya Plokhaya slipped on her husband's old green coat, bundled up her
2-year-old son Sasha in his blue snowsuit and trudged through the slushy snow
in near-freezing temperatures on a recent Saturday for food. She walked
briskly by the grocery store. Not for her are its prices and convenience.

She bypassed the indoor wholesale market as well. Everything she needed was
there, but the prices were still too high. She made a point not even to look
at the clothes, or to pause at the juice stand. "We don't buy juice anymore,
only sometimes for Sasha," she explained.

Finally at a makeshift outdoor kiosk outside the Metro, she opened her purse.
She paid 25 rubles -- about $1 -- for a quart of yogurt, a quart of milk, nine
ounces of sour cream and nine ounces of milk supplement. Her prudence paid
off. But after she slipped the cartons into her plastic bag, she had all of
one dollar left in her wallet.

Anya, 26, and her husband Alexei, 30, are not poor -- not by Moscow standards.
On the contrary, their income of $426 a month is on the high end for this
sprawling city of 8.5 million. The typical Muscovite household of three lives
on $234 a month, compared with a median monthly household income of $2,931 in
the United States.

Just getting by was a big enough challenge before the ruble nose-dived and
inflation set in last August. Now consumer prices are nearly double last
year's. Fully 40 percent of Muscovites can no longer afford reasonable minimal
expenses like a new blouse every two years or three aspirin tablets a month,
according to the All Russian Center for Living Standards, a group that works
with the government to establish poverty levels. 

"The majority of people have had to give up on a lot of necessary, daily
expenses," said Marina Krasilnikova, who researches household incomes and
expenses for the All Russian Center of Public Opinion Studies. They "either
had to start buying less expensive substitutes for what they used to buy or
just buy less."

Anya and Alexei are used to scrimping, but not like this. Both work two jobs
to make ends meet, she as a medical resident and medical center intake worker
and he as a power station operator and printing shop errand boy. Before
August, they could afford an occasional visit to the circus with their toddler
or a new item of clothing. Now, once they pay for food, preschool and other
fixed expenses, they have all of four rubles a day left, or 25 cents.

The couple is resigned to the situation as only Russians can be. "Of course,
we were upset," said Anya, as she and Alexei watched their slender budget
shrink these past few months and their plans for their own apartment and maybe
a second child fade into the future. "But there is no other way." 

"Worse things happened here, you know," said Alexei, whose friendly manner and
easy smile belie his grueling schedule. "It's not the worst thing that could

The young couple lives on the southwestern edge of town, just off a major
commercial artery. Their neighborhood is a set of aging, concrete 10-story
apartment buildings the milky color of the winter sky, all of them identical
except in street number.

Parking is no problem. Less than a third of Muscovites own a car. The snow-
covered path between the buildings to the Metro station is busier than the
pot-holed roads.

The entrance to building No. 26 on Ostrovityanova Street is smelly and dimly
lit, with a dirty floor of broken tiles typical of Moscow housing. But the
seventh-floor apartment where the young couple lives is tidy, inviting and in
good repair.

Anya and Alexei share the four-room apartment with Anya's parents, Olga and
Anatoli Plokhoi, who bought it 26 years ago. Luckily, given the tight
quarters, they are a congenial family. 

Anya's blue-eyed 58-year-old mother, a vivacious former products analyst,
tries to stay on top of everyone's needs. Anya's father, 60, is a dignified
professor of anesthesiology who recently co-authored a medical textbook in the
living room.

It's not unusual for families to squeeze in together in Moscow, although most
couples with children have their own place, according to the state statistics
department. Anya and her mother quickly cite the advantages: Olga does the
laundry, cooking and shopping, giving Anya and Alexei more time with Sasha.

Still, "somehow one feels like keeping house of one's own, bringing up your
child the way we think is necessary, not grandma and grandpa all the time,"
said dark-haired Anya, as reserved as her mother is lively. Said her mother,
as she cooked mushroom soup and stewed meat on a stove no wider than her body:
"I hoped my husband and I would have peace and quiet . . . but when Sasha is
at home, you cannot possibly rest."

The family uses every inch of space efficiently. The young couple sleeps on a
fold-out couch in Anya's old bedroom, about a foot from Sasha's bed. A small
clothes washer fits under the bathroom sink. Three stools slide under the
table in a kitchen just big enough to turn around in, and the five of them eat
in shifts.

The apartment is better equipped than the typical Moscow apartment, with a
cordless phone, two television sets, a camera and a VCR. And in the corner of
Anya and Alexei's bedroom is a computer terminal, an item only 3 percent of
Russians can afford. But the five-year-old terminal is minus a modem or a
printer, reducing it to little more than a fancy typewriter.

Neither family owns a car. It takes Alexei about an hour and a half on public
transportation to get to work. Olga is forced to shop for food nearly every
day because she can only buy as much as she can carry from the outdoor market
one subway stop away. One recent Friday afternoon, for instance, she hauled
home four bags of groceries weighing a total of 26 pounds. The errand took her
almost two hours.

Thanks to a $20,000 gift from their parents and a $10,000 loan from Anya's
uncle, Anya and Alexei also own a one-bedroom apartment in a semi-industrial
section of Moscow. But they can't afford to live in it yet. To repay Anya's
uncle, they are forced to rent it out.

They were hoping to take over the apartment by the end of this year. But when
the Russian economy collapsed, so did the Moscow real estate market, and they
had to lower the rent from $550 to $280 a month. Now they figure it will be
another two years before they can pay off the debt. By then, they will have
been married eight years.

Their kitchen-table balance sheet shows just how tight their budget is.

Anya receives a $9-a-month state stipend as a medical resident and $17 a month
as an intake worker at a medical center. Alexei's two jobs pay no more than
$118 a month. 

Some of the family's expenses are similarly low, partly because of government
subsidies. For instance, heat, electricity, water, telephone, street-cleaning
and garbage collection for the entire household cost only $13 a month. Sasha's
preschool is $8.50 a month. The couple's Metro passes also cost about $8.50 a
month. They enjoy a minimum level of free health care at the state-run

As with most Russians, food and everyday household items like toothpaste eat
up most of their income. The couple recently decided to give Olga $87 a month
instead of $65 for household expenses. Even though Olga has crossed a number
of items off her shopping list, including coffee and butter, she said she is
spending three times as much for food as she did in August.

Anya carries no more than 50 rubles or $2 in her wallet at a time. For
entertainment, Anya and Alexei visit friends' apartments, or watch a borrowed
video. When Anya last took Sasha to the circus, Alexei stayed home to save the
$1.75 the ticket cost. 

They gave each other modest presents on New Year's -- the holiday equivalent
of Christmas in Russia. Alexei gave Anya a pair of woolen socks. She gave him
leather fur-lined gloves. They gave Sasha a cardigan and a set of toy tools.

For months, they've had their eye on a $43 child's climbing gym that would fit
perfectly in a small corner opposite the apartment's front door.

Someday they hope to buy it for Sasha. Right now, though, they can't imagine

Cramped living quarters, low income and rising prices make family life hard in
Russia. Here is a comparison with living standards in the United States. 

U.S. $2,931
Russia $234

U.S. 14.14%
Russia 49.60%

U.S. 15.5
Russia 6.7

U.S. 5.1
Russia 12.3

Health care/public health care
U.S. 0.7
Russia 15.6

U.S. 4.3
Russia 3


U.S. 90%
Russia 20%

Color TV
U.S. 98
Russia 79

Microwave oven
U.S. 90
Russia 5

U.S. 94
Russia 33

U.S. 80
Russia 31

CD player
U.S. 71
Russia 5

U.S. 50
Russia 3

SOURCES: VCIOM survey, Goscomstat, U.S. Census Bureau


March 1999
[for personal use only]
Back in the USSR 
Post-communist society's top economic output: capitalist straw men
By Thomas W. Hazlett
Contributing Editor Thomas W. Hazlett ( is an
economist at the University of California at Davis and a resident scholar
at the American Enterprise Institute.

There is now a rolling undertow in many of the news stories about East
European countries, particularly Russia: Capitalism is by its nature
corrupt, and only a generous dollop of governmental control--a check on the
thugs who inevitably rule the marketplace--can save the wretched masses
since the communist state has withered away.As The Nation, yet tearful over
the collapse of serious socialism, frames the lesson: "After seven years of
economic 'reform' the majority of the Russian people find themselves worse
off economically. The privatization drivehelped to create a system of
tycoon capitalism run for the benefit of a corrupt political oligarchy."

Curiously, the media has mostly ignored the successes of places such as
Estonia and the Czech Republic, where rapid and sweeping privatization
programs--along with relatively secure property rights --created momentum
for the legal, political, and cultural changes necessary to make the
transition from a command economy to a market-based one.

When the Soviet Union imploded in 1991, virtually all productive assets
(not counting human beings) belonged to the state and were controlled by
Communist Party hacks--the nomenklatura. The government owned the
factories, shops, stores, airlines, telecoms, energy sources, land, farms,
houses, hospitals, schools--you name it. With the collapse of the socialist
regime, do you simply flick a switch and put these productive resources in
the hands of new, private owners?

Sure---in the made-for-TV version. In fact, the managers of these
enterprises maintained their power: Only they knew where the inventory was
kept--the state had barely the roughest idea about what assets were held by
the various entities. There's no question that these greedy denizens of
socialism made Donald Trump look like Mother Teresa.

Since the reformers who brought on capitalism and democracy in Russia
consciously chose not to employ Bolshevik methods to pry assets loose, they
"left 'red directors' in possession of all the economic assets and
privileges that they enjoyed in Soviet times," observes Russia expert Leon
Aron of the American Enterprise Institute.

Rejecting civil war, however, left the reformers with little choice but to
privatize assets in a way that mitigated opposition from entrenched
interests. The path chosen in the 1992-94 period was to award two-thirds of
the ownership rights to workers and managers, with the remaining shares
distributed via vouchers to 144 million Russians (each man, woman, and
child). This strategy left company insiders in charge, immune to the
pressure of outside shareholders or the threat of takeover. By 1996, just
one-fifth of Russian firms featured majority shareholding by people outside
the company they worked for.

The result, in other words, was capitalism without capital markets. Bad
things are bound to happen in such a scenario. And they certainly have in
Russia, most notably the pilfering of firm assets (and the interests of
minority shareholders) by firm management.

But far from demonstrating the inherent logic of capitalism, such
unproductive shenanigans have been exacerbated by market reforms not taken.
Price controls to avoid "shock therapy" led to political insiders brokering
their access to cheap energy. Export licenses provided monopo-ly profits
for the politically connected. Loans issued at below-market rates created a
brisk business in currying favor with central bankers. And massive
subsidies to inefficient factories further tilted the competitive struggle
in favor of politics and away from economics.

So terrible things have befallen the former Soviet Union. But the
overwhelming task of turning around an entire system of ownership rights
while not killing anyone and while holding truly democratic elections is
not a job for sissies.

Fortunately for the reformers, Soviet history set a low baseline for
progress. With Gorbachev's communist economy as their starting point,
Yeltsin's capitalists are actually making headway. A key metric on social
progress is that Russian auto ownership has risen from 18 per 100 families
in 1990 to 31 per 100 in 1997, a statistic that becomes all the more
impressive when it is remembered what kind of jalopies those 18 lucky
Soviet families owned in 1990. Here's another sign of progress: Average
monthly wages, just $75 per worker in 1993, rose to $175 in 1997.

Buying off old communists has been an expensive proposition for the Russian
people, but paying the ransom to avert a bloodbath was a wise and noble
choice. To be sure, crony capitalism seriously under-performs what will
obtain once real capital markets develop and bring about true competition.
That will take further liberalization and more time.

But the biggest job has been done. As Anatoly Chubais, Russia's
privatization guru, has put it, "Controlling managers is not nearly as
important as controlling politicians." In the end, history will record that
the corruption of post-communist Russia handily outperformed the corruption
of the late--and strangely lament-ed--USSR.



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