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Johnson's Russia List


March 1, 1999    
This Date's Issues: 3073    


tsiL aissuR s'nosnhoJ
1 March 1999

[Note from David Johnson:
1. AFP: Russian prime minister must combat corruption: Yavlinsky.
2. Itar-Tass: Moscow Communists Favor One Bloc for Elections.
3. Edwin G. Dolan: Re: S. Lawrence on Property.
4. Serguei Sossedkine: Gorbachev and Foreign Radio.
5. The Times (UK): Carey Scott, Russian subs face nuclear meltdown.
6. Reuters: Peter Graff, Yeltsin's Illness Turns Eyes to Primakov.
7. International Herald Tribune: William Pfaff, This International 
Economic Crisis Was Unnecessary.

8. AP: Greg Myre, Russia’s new rich now looking for handouts.
9. Financial Times: John Thornhill, RUSSIA: Rekindled love for iron lady.
10. Boston Globe: David Filipov, In rural Russia, return of swastika 
Anti-Semitism returns, with vague nationalism.

11. The Times (UK): Anna Blundy 'Those Tsars, Tsarinas and party General 
Secretaries who are internationally considered the most impressive were often 
the maddest.'

12. Reuters: Christina Ling, Ukraine ex-missile makers aim for stars.]


Russian prime minister must combat corruption: Yavlinsky

MOSCOW, Feb 28 (AFP) - Prime Minister Yevgeny Primakov must take urgent steps
to fight corruption in the Russian government, leader of the liberal Yabloko
movement Grigory Yavlinsky said Sunday on RTR television.

Speaking on a Sunday evening political analysis talk show, Yavlinsky accused
Primakov of failing to address corruption undermining Russia's government as
the country's economy continues to deteriorate.

In late October last year, Yavlinsky made political waves by sending a highly
publicized inquiry to the Communist-led government alleging that top Russian
ministers paid heavy bribes to join Primakov's Cabinet.

In the three months since then, the only reply has been that there is no
corruption, Yavlinsky stated on Sunday.

The opposition leader linked his accusations primarily to First Deputy Prime
Minister Yury Maslyukov -- Russia's economics chief -- Deputy Prime Minister
Gennady Kulik, and Agriculture Minister Viktor Semyonov.

Instead of combating corruption, the government fights with the media,
Yavlinsky said. "The government should stop fighting the press, which means
fighting the public," he said.

Yavlinsky also roundly criticized the government's economic policies, calling
its decisions increasingly "insane." He said that the Cabinet had pushed an
unrealistic budget through parliament, failed to reschedule foreign debt
payments, and not done enough to legalize the country's "shadow economy" or to
change Russia's Byzantine tax system.

Instead, the government is acting to anesthetize the populace by saying that
conditions in Russia are good while failing to take steps toward stopping the
country's ongoing economic crisis.

Yavlinsky played a key role last September in steering the country out of a
political crisis by proposing Primakov's candidacy to lead Russia's Cabinet.

Primakov asked Yavlinsky to work in the government as first deputy prime
minister in charge of social affairs but Yavlinsky declined, citing his
unwillingness to work with Communist Party members.

Yavlinsky finished fourth in the first round of Russia's 1996 presidential
elections and has since announced plans to run for the presidency in the next
polls, scheduled for 2000.

A radical monetarist in the first years of post-Soviet reform, Yavlinsky has
been equally critical of the Kremlin's efforts at economic reform as well as
state-intervention policies championed by the left.

Yavlinsky's latest statements come as part of an ongoing attempt to keep his
place in the public eye by loudly criticizing politicians on all sides of the
ideological spectrum. 


Moscow Communists Favor One Bloc for Elections.

MOSCOW, February 28 (Itar-Tass) - The Russian leftist and patriotic forces
shall act as a single whole in the future elections of the State Duma,
speakers at a closed-door plenary meeting of the Moscow Committee of the
Russian Communist Party said on Sunday. 

They, thus, reject an idea of the party leadership to form three blocs for the
elections -- a bloc of the Russian Communist Party, a "Patriots of Russia"
bloc and a bloc of Makashov- Ilyukhin. 

The plenary meeting "was heated but constructive," head of the Moscow
Committee's press service Anton Vasilchenko told Itar- Tass. A resolution of
the plenary meeting says it would be the best to form "a common column" of
leftist and patriotic forces in the elections. The Committee views the
Otechestvo (Homeland) movement of Mayor Yuri Luzhkov as one of the main rivals
in the elections. 

Moscow Committee Chairman Alexander Kuvayev said the resolution was given a
unanimous approval. "The communists of Moscow are unanimous in their opinion
that the election bloc shall be one," he said. 


Date: Sun, 28 Feb 1999
From: "Edwin G. Dolan" <>
Subject: Re: S. Lawrence on Property

S. Lawrence (JRL 3072) makes a very important point when he says that for
nominally "private" structures in Russia, power-based control of cash flows,
rather than law-based control of assets, is what counts. Thus
"privatization" in Russia has produced a property system that differs
substantially from Western concepts of property, especially when complex
structures like corporations are involved. Absolutely fundamental pieces of
the mosaic that make up Western property law, such as the fiduciary duty of
managers toward shareholders and the priority of claims of creditors of
insolvent entities over the holders of their equities, are simply missing
from Russian reality.

It is equally worth noting that while private property isn't really what it
seems to be, the same is true of public property. The priority of
power-based claims on cash flows extends to Russian public institutions at
all levels, where one often discovers "owners" in the most surprising
places. For example, our small organization has negotiated for over a year
to obtain an executive washroom, i.e., the right to put a key on the door of
one of the dozens of WCs in the enormous building where we lease space. In
the course of this, we discovered the interesting fact that every single WC
in the building has an "owner." After a friendly administrator, who knows
the system, helped us negotiate sequentially with several of these owners,
we finally found one with whom we could make a mutually advantageous deal.
Neither the formal administrative structure of the institution, nor (heaven
forbid) the Ministry that stands formally behind it, was a party to or
beneficiary of the transaction.

If this system extends all the way down to the lowliest loo in a second-tier
state academic institute, why should we be surprised to find that the same
principle applies to government structures at all levels? Why should we be
surprised to find that in the case of entities where the government
maintains formally controlling ownership, such as Aeroflot or ORT
television, cash flows are routinely skimmed off, not just by the private
shareholders who formally hold minority stakes in these enterprises, but as
often as not by some Berezovsky-like figure whose name appears nowhere on
any official list of owners? In fact, why should we be surprised by an
operation like FIMACO, which simply extends the "law of the loo" to the cash
flows from the Central Bank's multi-billion-dollar holdings of GKOs and
international reserves? 

Edwin G. Dolan, President
American Institute of Business and Economics
An American MBA program in Moscow


Date: Sun, 28 Feb 1999 
Subject: Gorbachev and Foreign Radio
From: Serguei Sossedkine <>

In his comment published in JRL3071 George Marquart accuses Gorbachev of
failing to admit "to his own people" that he listened to Radio Svoboda
during August coup of 1991. I am not an admirer of Gorbachev but still
I'd like to say a few words in Gorbachev's defense. Radio Liberty
(mistakenly identified by Marquart as Radio Free Europe) was surely not
"the only station to which Mikhail Sergeevich could have listened." At
the time of coup the Russian services of BBC, the Voice of America, and
Deutsche Welle (just like Radio Liberty) provided a very extensive and
timely coverage of unfolding events in Russia. 

In 1986/89 my father worked as a communication specialist at Gorbachev's
dacha in Pharos where eventually the Soviet president had his short-lived
house arest. According to stories I heard from my dad before the coup,
many of those employed in Pharos' maintenance regularly tuned in to
Russian broadcasts from BBC even when BBC was still jammed. Many workers
there had short-wave radios. From my own experience I know that BBC had
a very strong reception in Crimea, thanks to its powerful relay station
in Cyprus.

According to Western statistics, in the 80s BBC was the most popular
foreign station in Russia. VoA usually took the second place while DW
and RL shared the third. Out of four, RL was widely mistrusted due to
its obvious propagandist purposes.

I don't think that Gorbachev lied when he said that he was listenting to
BBC. Of course, he might have listened to other international stations
as well. If George Marquart wants a tape of that memorable event he
should get in touch with Russian Service of BBC which broadcasted
Gorbachev's BBC-friendly reply many times in its Russian programs. 
Although I'm sure Gorbachev Foundation already has it.

Serguei Sossedkine
Grand Rapids, Mich.


The Times (UK)
February 28 1999
[for personal use only]
Russian subs face nuclear meltdown 
by Carey Scott 

RUSSIANS are used to finding their lifts broken because somebody has
pilfered parts to sell at a scrap market. Nuclear submarines, however, had
always seemed an unlikely target for petty thieves - until now. 
In the Arctic wastes of Russia's Kola peninsula, a poverty-stricken naval
conscript put an Akula-class nuclear attack submarine out of service last
month after he snipped off 24 lengths of wire from the reactor room and
sold them for £30 to an officer from another submarine. 

What he did not know was that the coiled palladium-vanadium wire he had
pocketed was part of a vital control device. The theft, disclosed last week
after the sailor was arrested, effectively dismantled the reactor. 

As Russia struggles to avert economic disaster, the human factor - rather
than the technology - is becoming the most unpredictable element in the
nuclear equation. 

"It tells you how desperate the situation is," said Thomas Nielsen, of
Bellona, a Norwegian environmental group that campaigns in the area. "When
military staff are worried about feeding their families, nuclear safety
drops down the list of priorities." 

It is a particularly alarming prospect given that the Kola peninsula, which
borders Finland and Norway, has the world's highest concentration of
nuclear reactors - both active and derelict - and is regarded as the
world's most dangerous dumping ground. 

With the cold war over, the Russians are left to deal with ageing, unwanted
submarines that cannot be properly decommissioned because crumbling local
storage facilities for nuclear waste and spent fuel are already full. More
than 70 retired submarines are moored at the peninsula's bases, complete
with onboard nuclear reactors. 

Robin Cook, the foreign secretary, is due to travel to Murmansk, the
regional capital, on Wednesday to emphasise the West's commitment to
tackling the problem. 

He will see for himself the Lepse, a barge moored in Murmansk harbour and
so crammed with nuclear waste and spent fuel that it can no longer be
safely moved. A concrete case has been built around it. However, the barge
still spills radioactive waste into the water and will not be safe for
200,000 years. 

Despite a Russian government decree handing inspection powers to the
country's civilian nuclear authority, the navy continues to block any
access to bases, making assessment of the dangers very difficult. 

"If there was a nuclear accident at one of the military bases, we would not
hear about it for a while," said Andrei Zolotkov, a nuclear safety expert
in Murmansk who revealed in 1991 that the Soviet Union had been illegally
dumping nuclear waste in the sea for 20 years. 

In 1993 there were attempts to steal and sell spent nuclear fuel. In 1995
the electricity to one of the northern fleet's submarine bases was cut off
by the local power company after the navy failed to pay its bill. The power
supply to a reactor's cooling mechanisms was severed - which could have
caused a meltdown - before the military forced the utility company at
gunpoint to restore it. 

There are also fears surrounding active nuclear submarines. Last September
saw the world's first hijacking of a nuclear vessel, when a 19-year-old
sailor at Kola's Skalisty base murdered eight of his colleagues and
threatened to blow up his Akula submarine before being gunned down. 

The chilling incident reminded both the Russians and the rest of the world
of the region's perilous predicament. 


Analysis-Yeltsin's Illness Turns Eyes to Primakov
By Peter Graff 

MOSCOW, March 1 (Reuters) - A few months ago, news that President Boris
Yeltsin was back in hospital would have filled Russia's airwaves with
breathless commentators warning of chaos. 

But this weekend, when doctors said the president's bleeding stomach ulcer
had failed to heal and would need several days of hospital treatment, the
reports caused barely a stir. 

In a nation addicted to intrigue, the weekly Sunday talk shows featured the
usual chorus of pundits, supplying the usual doses of scandal and rumour. 

But the main subject of discussion was not the 68-year-old Yeltsin, whose
repeated health problems no longer come as a surprise, but Prime Minister
Yevgeny Primakov, who has all but run the country as Yeltsin's star has

With Yeltsin back in hospital, Primakov did what no Russian premier had
managed for more than a year: he took a vacation. 

Primakov's casual holiday -- 10 days of planned rest in an elite Black Sea
spa -- is a sign of the surprising success he has had in cooling Moscow's
feverish political temperature. 

But with the economy still stuck in a depression that has made the
population sceptical, bitter and poor, the premier now faces the task of
guiding Russia through an election for parliament later this year and a
presidential poll in 2000. 

Despite the political calm in Russia's capital, doubts remain about whether
Primakov can find the solution to the economic turmoil that has stoked the
country's passions. 

"You can call this political stability, but the price that has been paid
for this stability is complete inactivity in the economic sphere," Andrei
Piontkovsky, a political analyst at the Centre for Strategic Studies
think-tank, told Reuters. 

When Primakov took office five months ago, nobody expected the new premier
would have a chance to relax any time soon. 

His predecessor, Sergei Kiriyenko, endured a five month tenure with no time
for holidays amid bitter hostility from parliament and big business. When
Kiriyenko was sacked last August, the rouble was in free fall, banks had
shut their doors and some Russians were mobbing shops to hoard food. 

Parliament refused to confirm Yeltsin's first choice of a new premier,
sparking a constitutional crisis that brought politicians from across the
political spectrum warning of confrontation in the streets or
Indonesia-style unrest. 

Primakov, named as a last minute compromise, said in his first address to
parliament: "We are facing a serious danger -- a danger of our country

Five months later, those dark days seem like a bad dream. 

The 1999 budget breezed through both houses of parliament in record time.
Despite rumours of rifts, Primakov's coalition cabinet of moderate
communists, liberals, regional mandarins and technocrats has remained
unchanged for longer than any in years. 

Even Russia's stock market, which lost more than 90 percent of its value in
a spectacular 1998 meltdown, has begun to show some faint signs of life.
Some Western analysts have said its depressed shares may be a good bet for

But the financial and economic crisis is far from over. 

Russia has said it can attempt to pay only about $9.5 billion of more than
$17 billion in foreign debt payments due this year, and even that will
depend on winning billions in new loans from the International Monetary Fund. 

With an annual budget of a paltry $25 billion -- about as much as U.S.
computer maker IBM's revenues for three months -- Primakov has little cash
to ease the plight of millions of soliders, teachers and miners who have
not been paid for months. 

The IMF says even that modest spending target is woefully unrealistic
unless Russia collects more taxes. 

Still, many Russians say they are happy with how Primakov has handled his
job. Opinion polls show the premier would be a top contender for the
presidency if he decided to run. 

"So far Primakov has had the political wisdom to do nothing," Piontkovsky

But if Russia's economic woes remain, analysts agree the premier's
popularity will be difficult to maintain. 

"If a crisis takes place in the economy like it did in August... Primakov's
popularity will sink to zero and you can cross off any chance of him
becoming president," newspaper columnist Leonid Radzikhovsky told NTV
television on Sunday. 


International Herald Tribune
March 1, 1999
[for personal use only]
This International Economic Crisis Was Unnecessary
By William Pfaff Los Angeles Times Syndicate and International Herald Tribune

PARIS - There has been remarkably little reaction to the splendid articles
on the international economic crisis, prepared by an editorial team led by
Nicholas Kristof, that appeared from Feb. 15 to 18 in The New York Times
(IHT, Feb. 16 to 19).

Moderate and judicious in tone, the series reveals the extent to which the
crisis of the globalized economy (not yet over) was unnecessary, the
unanticipated product of a self-interested policy that originated in the
American financial community and was taken up by the U.S. government.

During the past decade, the conventional wisdom of governments and
international economic organizations, as well as of much of the university
economic policy community and the press, has been that deregulation and
''globalization'' of the international economy have been a natural, even
inevitable development.

That view has held that globalization results from technological
innovations in communications, from banking and industrial organization,
and ultimately from the economic reality that international trade
exploiting the comparative advantage of national economies produces
progress for all.

Resistance to globalization has been considered futile. Objections to it -
based on political or social arguments concerning the ability of such
nations as Russia or Indonesia to function responsibly in a globalized
economy - have been dismissed. It was said that market forces would
automatically correct excesses and enforce the general interest.

This belief was not universally shared among political economists. It
originated as the sectarian enthusiasm of a minority of writers and
theorists in Britain and the United States, beginning in the 1970s, and it
derived more from their political hostility to ''big government'' than from
objective economic analysis. It was an argument naturally appealing in
business circles and the financial community.

The New York Times series documents the process by which international
financial deregulation was sold by Wall Street to the Clinton
administration (indeed, to Bill Clinton while he was still governor of
Arkansas), causing it to aggressively promote global deregulation and use
the political power of the United States to remake world finance.

Jeffrey Garten of the Yale University School of Management, who was an
official in the Commerce Department during Mr. Clinton's first term, says,
''We were convinced that we were moving with the stream.'' He and his
colleagues pressed ''as a matter of policy for more open markets wherever
you could make it happen.''

''Although the Clinton administration always talked about financial
liberalization as the best thing for other countries,'' Mr. Kristof notes,
''it is also clear that it pushed for free capital flows in part because
this is what its supporters in the banking industry wanted.''

The success of this campaign produced a fundamental change in the world
economy, with consequences yet to be fully felt. Goods and commodities were
replaced, as the principal components of international trade, by stocks,
bonds and currencies. The global financial market replaced the global
economy. The total worth of financial derivatives traded in 1997 was 12
times the worth of the entire world economy.

When crisis arrived that year, the same investors who had profited from
globalized markets worsened the crisis by speculating against newly
weakened currencies. The United States used its own resources and those of
the IMF to rescue Western investors and U.S. and European banks. That is
now generally acknowledged.

The countries that were the victims of the crisis were pressed by
Washington to adopt measures of austerity, imposing severe economic and
social costs on their populations - a policy that is now widely conceded to
have been wrong.

Mr. Kristof adds that ''when the crisis seemed as if it might strike the
United States,'' in September 1998, ''the administration had a change of
heart'' about austerity as the appropriate response. ''Mr. Clinton
[welcomed] three interest rate cuts by the Federal Reserve, pressing Europe
and others to cut rates as well,'' and the Federal Reserve arranged the
rescue of Long-Term Capital Management.

To millions in Asia, Russia and Latin America, deregulation of the
international economy must look like a vast swindle. It was not, in fact, a
swindle. It was something perhaps worse. It was an irresponsible and, in
crucial respects, disastrous experiment, inspired by ideology, promoted by
Western groups that expected to profit from it, backed by the power of the
U.S government.

The more prominent victims were Indonesia, Thailand, China, Russia and
Brazil, and the affair is not over.

Western defenders of the experiment argue that despite all that went wrong,
there has been a large net increase in international growth and wealth.
This does not take into account the political carnage. That, unfortunately,
has in the past proved to be the outcome of economic crises which has the
most lasting consequences.


Russia’s new rich now looking for handouts 
By Greg Myre

MOSCOW, Feb. 26 — Russia’s fabulously wealthy still have their black
Mercedes with tinted windows, the battalions of bodyguards, the extravagant
homes, perhaps even a few remaining friends inside the Kremlin. But these
business barons, who made overnight fortunes during Russia’s unruly
transition to capitalism, have been among the biggest losers in the
country’s latest economic meltdown. 
BORIS BEREZOVSKY, the most outspoken and controversial oligarch when
times were good, now appears the target of a government crackdown. Tax
police raided his businesses and a newspaper hostile to him was handed his
tape-recorded telephone conversations, which it printed.
Ordinary Russians have shed no tears. The most prominent oligarchs, a
group of fewer than 10, are widely reviled by many Russians, who watched
the clique grow rich while much of the country sank into poverty.
Yet the plutocrats’ holdings are so vast — ranging from banks to oil
companies to the media — that reviving Russia’s economy may partly depend
on gluing together their fractured empires.
The well-connected rich have lobbied their Kremlin contacts for
bailouts, and President Boris Yeltsin’s government has aided the country’s
crippled banks — which are run by the oligarchs. But the government is too
broke to guarantee their rescue, most analysts say. 
“The government has no real money to put into these banks. Where’s it
going to get the money?” said Richard Hainsworth, the Moscow representative
of Thomson BankWatch.
In the murky world of Russian business, it’s impossible to put a figure
on how much the oligarchs have been set back. One very rough guide is
Forbes magazine’s list of the world’s richest people.
The country’s business elite were at their zenith in 1997, and
Berezovsky topped several Russians on the Forbes list with an estimated net
worth of $3 billion.
By the middle of 1998, with the financial boom starting to unravel as
Asia’s economic crisis rippled into other regions, business magnate
Vladimir Potanin was considered the richest Russian, with a fortune put at
merely $1.6 billion.
Potanin’s holdings, including the huge Uneximbank, have been pounded by
the financial upheaval since then, and this year it’s possible no Russian
will be able to claim membership in the billionaire club.
Banks helped launch most oligarchs to their stratospheric heights, and
their huge debts are now dragging them down.
Three years ago, banker Alexander Smolensky donated 110 pounds of gold
to cover the onion domes on the rebuilt Christ the Savior Cathedral in
central Moscow. Now his SBS-Agro bank is struggling to survive.
SBS-Agro rapidly expanded to more than 1,000 branches across Russia —
and critics say it tried to grow too big, too fast. Some remote branches
still use abacuses. 
Vladimir Vinogradov’s Inkombank was the largest private bank in
Russia. But like many others, it speculated heavily on Russian government
treasury bonds promising unrealistic returns of over 100 percent. When the
government defaulted in August, the bank suffered huge losses and is now
under the control of Russia’s Central Bank.
As Russia moved to a free market at the beginning of the decade, the
current tycoons were unknowns who got a foothold by establishing banks.
They then went on a wild buying spree, snapping up oil companies, mines,
factories and phone companies that the government sold to its friends at
cut-rate prices.
The competition has been vicious. Berezovsky survived one attempt on
his life — a 1994 car bombing that killed his driver — and he recently
accused the state intelligence service of plotting to kill him.
The oligarchs have waged very public feuds, and continue to use their
newspapers, magazines and television stations to hurl mud at one another.
But the oligarchy was really born when seven of the richest businessmen
formed a temporary alliance to finance Yeltsin’s 1996 reelection campaign.
After he won, the oligarchs came looking for the spoils, and since the
slump have lobbied hard for government help.
“Some sort of banking sector must rise from the wreckage,” the
independent Moscow Times said in a recent editorial. “But this new banking
sector should not be secretive, irresponsible, coddled and unsupervised. If
it is, then we will again be putting the nation’s savings into the hands of
reckless financiers.”


Financial Times
February 27, 1999
[for personal use only]
RUSSIA: Rekindled love for iron lady
By John Thornhill in St Petersburg

In tsarist times it used to be said that Russia was ruled by the knut, or
whip. Nowadays, it seems, some Russians would prefer the handbag.

About 500 Russians gathered in the glittering hall of the House of
Friendship in St Petersburg yesterday for the founding congress of a new
conservative party, the Thatcherites of Russia, which draws its inspiration
from the political principles and practices of the former British prime

The party, backed by a secretive group of businessmen alarmed at the state
of modern Russia, is wedded to the concept of parliamentary democracy,
privatisation, monetarism, a flat tax rate of 20 per cent, and the creation
of a Russian version of the House of Lords.

"Mrs Thatcher successfully changed the attitudes of people towards wealth
creation and that is the main problem in Russia," said Ruslan Fedorovsky, a
commodities trader, who is one of the party's founding fathers. "Thatcher
also curbed the bureaucracy and that too is something we need to do in

Sir Alfred Sherman, Baroness Thatcher's former adviser - described as the
Engels of Thatcherism by his Russian hosts - was on hand to provide some
ideological uplift. "Margaret Thatcher flashed through the skies like a
comet. She brought hope," he said. "Margaret Thatcher was not a woman of
ideas but a woman of belief."

A giant portrait of Lady Thatcher glowered down on the proceedings from
behind the stage - even though the former prime minister has expressed no
public support for her Russian disciples.

Several of the speakers from the floor, including a newspaper editor, a
trade union leader, and a writer, argued that the love of the law and the
virtuous economic policies championed by Lady Thatcher were universally
applicable. "We are not only creating a new party but we are hoping that
society will work with us to change our mentality," said one speaker,
sporting a blue rosette.

But some of the audience grew restless during a speech touching on the tax
policies pursued by the former UK finance minister, Sir Geoffrey Howe. And
some hecklers then seized the platform microphone to air their alternative
political views.

One activist from the ultra nationalist Liberal Democratic party screamed
out that Russia must reject western civilisation. "This party has been born
and will die on the same day," he said as he stormed out of the hall.

Mikhail Gorny, director of Strategiya, an independent political studies
centre, said Lady Thatcher was greatly respected by most Russians but he
doubted whether a local Thatcherite movement would ever take off.

"They have conservative values and human values and I hope they find their
political niche. But they are very, very weak. Nobody supports them," he said.

Even one of the sandwich board men who had been hired to walk alongside the
Fontanka river to advertise the meeting had his doubts about whether a
political ideology could be imported. "I think Russia has to develop its
own ideas and follow its own path," said one.

And which politician would the sandwich board man support? "A Russian
Pinochet," he said. 


Boston Globe
February 25, 1999
[for personal use only]
In rural Russia, return of swastika 
Anti-Semitism returns, with vague nationalism
By David Filipov

BOROVICHI, Russia - Eduard Alexeyev flipped through the latest batch of
anonymous hate mail that turned up at his apartment.

''Get your stinking family out of Russia,'' one letter read. 

''Streets will be washed with Jewish blood,'' read another. ''Every Friday
there will be a pogrom.''

Such messages are routine these days for Alexeyev, 29, leader of the tiny
Jewish community of Borovichi, a provincial factory town of 80,000 that has
become a center of the new wave of anti-Semitism sweeping rural Russia.

In the kitchen, a burly man in his 40s assessed the distance to his own
apartment balcony, 150 yards across the courtyard. This was Alexei
Finkelshtein, Alexeyev's friend and unofficial ''security chief'' and an
avid collector of firearms.

''If anyone tries a pogrom, give me a call and I'll fire a few rounds above
their heads,'' Finkelshtein said, only half joking. ''That'll calm them

Tensions in this town 240 miles north of Moscow have risen sharply in
recent weeks, since the neo-fascist group, Russian National Unity, known as
RNE in Russia, became active here. 

RNE's swastika-wearing followers preach a message of hatred, blaming Jews
and other ''foreign people'' for Russia's recent economic problems and
calling for the establishment of ''Russian order.'' Posters and stickers
with anti-Semitic slogans and pictures have gone up at bus stops and on
sign posts and store windows. Jewish graves were vandalized at the local
cemetery. Someone painted a red Star of David on a Jewish family's door and
set fire to it.

And Alexeyev has been receiving those letters.

Every Sunday, RNE men in their trademark black shirts and red swastika
armbands gather in Borovichi's center to distribute anti-Semitic material
and enlist young recruits. 

Officially, Russia is nothing like the openly anti-Semitic regimes of the
Soviet Union or the Czarist empire. Russia has a law against inciting
ethnic hatred. But in Borovichi, where there are about 500 Jews, and other
rural areas, Jews worry that authorities are doing too little to implement

''Borovichi represents the new Russian anti-Semitism - anti-Semitism in the
vast regions of Russia that grows unchecked by national or international
governmental institutions,'' Yosef Abramowitz, president of the New
York-based Union of Councils on Soviet Jewry, said last week.

Alexeyev has appealed to local authorities for help. But Borovichi's
prosecutor last week refused to bring charges against RNE, saying that the
party itself is not illegal and that the swastikas that its members wear do
not incite ethnic hatred. The local legislature has tried to ban RNE from
displaying fascist logos. Meanwhile, the posters and stickers keep appearing.

''People are afraid,'' Alexeyev said. ''They tell us: `Don't forget that
you're Jews, don't be too loud. You know who you're up against.'''

Alexeyev, who is married with two small children, says he is not afraid.
But he is cautious about criticizing Borovichi. He does not want to harm
his relationship with its mayor, Vladimir Ogontsov.

Two years ago, when another neo-fascist group ran television ads telling
Christians to take up arms and ''kill a Jew a week,'' Ogontsov had the ads

During Hanukkah in December, Borovichi officials helped put on four sellout
concerts of Jewish music. Officials also have offered Alexeyev a building,
for the price of $2,000, for a new synagogue to replace the one destroyed
by the Soviet authorities in 1937.

Alexeyev knows it could be worse. In Vladimir, a gritty provincial center
120 miles east of Moscow, the governor still flies the red Soviet flag and
the regional legislature apparently thinks anti-Semitism and Russian
patriotism are the same thing. 

''We are tolerated here as long as we keep quiet,'' Natalya Itelson, 33, a
leader of Vladimir's 700-member Jewish community. She spoke from the
Tractory Factory club there, one of the two buildings in town where ''Jews
feel safe about getting together.''

''We will not live to see the day when Jews in Vladimir are seen as
ordinary Russian citizens,'' Itelson said. 

She became convinced of this after the past fall's barrage of bluntly
anti-Semitic outbursts in Moscow by leaders of the Communist Party, which
dominates the federal parliament. Prominent Communist lawmaker Viktor
Ilyukhin in November accused Jews of waging ''genocide'' on Russians, and
argued that the country's population was falling because President Boris N.
Yeltsin's government was made up ''exclusively of one group, the Jews.''
(Yeltsin's governments have included some Jews and other minorities.)
Another lawmaker proposed quotas for Jews in government, and Vladimir's
local legislature voted 34-2 to support the idea.

Then in December, Communist leader Gennady Zyuganov said he had nothing
against Jews but that what he called Zionists were plotting to rule the
world. Russian Jews, he said, had to choose which group they belonged to. 

The outbursts were shocking but familiar.

''Why have they brought this up now? Elections are coming'' this December,
''and the Communists need an enemy,'' said Alexander Osovtsov, executive
vice president of the Moscow-based Russian Jewish Congress. ''Whenever that
happens in Russia, the first candidate is the Jews.''

Is anti-Semitism an effective electoral strategy in Russia? The voters are
certainly out there. In a recent survey of 3,000 listeners by Ekho Moskvy
radio, 34 percent said ''yes'' to the question: ''Would Russia be a better
place if all the Jews left?''

Sociologist Lev Gudkov, who studies anti-Semitism in Russia, says both the
Communists and ultranationalist groups such as RNE are vying for similar
voters: the estimated 20 to 25 percent of Russians who harbor anti-Semitic

Not everyone approves of politicians who employ anti-Semitism. Moscow's
mayor, Yury M. Luzhkov, has condemned the attacks and banned RNE from
holding a congress in Moscow. Yeltsin has ordered his administration to
combat political extremism. 

Jews generally report less tension in Moscow and St. Petersburg, home to
most of Russia's Jewish population. Few Jewish leaders in Moscow think a
return to state-sponsored anti-Semitism is imminent. 

But there is a different view in the regions where Communists and their
nationalist allies constitute the main political force and Moscow's laws
carry little weight.

In Krasnodar Territory in southern Russia, RNE last month put up posters
calling on citizens to burn down Jews' houses. Krasnodar's governor,
Nikolai Kond ratenko, frequently demands the ouster of so-called Zionists
from his region. Recently, Kondratenko has introduced a textbook for
Krasnodar schools that blames Russia's problems in the 20th century on a
Jewish conspiracy.

In nearby Stavropol, a large RNE poster welcomes visitors with an appeal
for help in defending ''Russian order.'' When RNE wanted to hold a congress
here, they were given the main exhibition hall. Black-shirted gangs harass
Jews and warn of reprisals.

''Sometimes it's frightening to go out on the street,'' said Fima Fainer,
head of Stavropol's small Jewish community. ''People are starting to worry.''

Although that worry has translated into only a slight increase in Jewish
emigration from Russia, Osovtsov of the Russian Jewish Congress said, the
number of Jews who want to know what they need to do to leave has doubled.

''When Jews leave, it is not a Jewish problem, it is a threat to the idea
of a democratic Russian state,'' Osovtsov said.

Jewish leaders say the federal authorities have to act more decisively in
prosecuting hate crimes.

''People are worried about the lack of action. ... This sends the wrong
signal to regional authorities,'' said Adolf Shayevich, the chief rabbi of
Russia. ''The big danger for Russia is if these people realize they can get
away with anything.

''Today, there are many Jews in business and government,'' Shayevich said.
''But there is fear because the government can't control the situation.
Perhaps some people have started to fear all this fascist literature. Jews
have a genetic memory and they know where that leads.''


The Times (UK)
March 1 1999 
[for personal use only]
Anna Blundy 
'Those Tsars, Tsarinas and party General Secretaries who are
internationally considered the most impressive were often the maddest'

To watch the increasingly frenzied race to be President of Russia, you
would be forgiven for getting the impression that the job was somehow a
desirable one, that you would not have to be seriously unstable to want it. 

It seems that everyone who is anyone, from film directors to food magnates,
is enthusiastically denying any intention to run (seemingly the accepted
way of announcing the beginning of your presidential campaign). 

To any outside observer, the advantages of being President here would
appear to be few. In fact, aside from the fact that the Moscow traffic is
completely cleared from the roads to allow the smooth passage of your
entourage, they are non-existent. No leader in the whole documented history
of the country can be characterised either by their uniformly great
achievements or by their sanity. Those Tsars, Tsarinas and General
Secretaries who are internationally considered the most impressive were
often the maddest. 

Aleksei Konstantinovich Tolstoy's 19th-century poem History of Russian
Government is a satire documenting Russia's changes of leadership, and,
though he recounts the literary triumphs of Catherine the Great's reign and
the naval prowess of Peter the Great, the following refrain echoes
throughout the poem: "Our country is rich but there is still no order here." 

Yet to this day there are plenty of people clamouring to create some. It
seems that half the presidential pretenders do not themselves know why they
seek power. Yevgeni Primakov genuinely had no desire to step in when
persuaded to become Prime Minister last September, and such is the madness
of Russian political life that he is one of the most popular contenders for
President in 2000, although he still insists that he will not be running. 

Vladimir Dovgan, however, a 36-year-old food and drink millionaire, has
saturated the airwaves and billboards with adverts for his new Dovgan
Party, even though he has failed to register even for December's
parliamentary elections. He says he may run for President in 2004. 

Nobody believes Primakov's claims of non-participation but I think his
reluctance is entirely understandable. Primakov has said he wants to retire
and do some fishing, which sounds good when compared with the job of
constant crisis management which could be his, and in fact already is his
since Boris Yeltsin has slipped into the shadows of illness and

Sergei Kiryenko the youthful former Prime Minister, ousted after
precipitating the financial crisis last August, has also hurled himself
back into the fray with his bid for a parliamentary seat centring on a
series of heartwarming television advertisements which depict him building
a toy town with his son. 

His party, Novaya Sila, runs under the slogan "do it yourself", though
Kiryenko has hinted that he might, in fact, do it with Primakov in the
presidential elections, should the Prime Minister finally decide to run. 

In a televised interview last Thursday night, Kiryenko attested to his
relative sanity and said that he hates politics. Although he could easily
become a businessman or a consultant, it seems, nevertheless, that he just
cannot help himself. 

The film director Nikita Mikhalkov, who has admitted the remote possibility
of his running for President if asked, launched his campaign last week with
the premiere of his new patriotic film The Barber of Siberia, described by
some as "an advert for Russia". 

None of the world's many "whither, Russia?" pontificaters really fancy
Mikhalkov's political chances this time round, since Primakov is at least
managing to maintain the distance and dignity required of a man not running
for President, while strenuously consolidating his power base. 

The other candidates, whose intentions are less of a secret, are
hysterically rallying support. Governor Aleksandr Lebed, Afghan War veteran
and currently top of the volatile presidential succession polls, is set to
attend the eighth annual Night of 100 Stars Oscar viewing party at the
Beverly Hills Hotel as part of his unlikely effort to appear more palatable
to the West, and Yuri Luzhkov, the Mayor of Moscow, continues to dazzle
Muscovites and visitors to the city with Moscow's new-look cleanliness and
relative affluence. 

People such as Grigori Yavlinsky, of Yabloko, can be virtually ruled out on
grounds of sanity, whereas Gennadi Zyuganov, the leader of the Communists,
well, you only have to take one look at him to see that this is a man who
must really, really want to govern Russia. 


INTERVIEW-Ukraine ex-missile makers aim for stars
By Christina Ling

DNIPROPETROVSK, Ukraine, Feb 28 (Reuters) - Ukraine's former nuclear missile
makers are battling the odds to prove themselves in the tough commercial space
launch market, but say they still have plenty of fight left in them. 

``The competition is very tough, and of course no one is hanging around just
waiting for us and no one wants us to appear on the market,'' Yuri Alexeyev,
head of the rocket builder Yuzhmash, told Reuters in an interview on Friday. 

``So we have to prove with our own work that we know how to do this well.'' 

Yuzhmash and sister company Yuzhnoye, the designer of most Soviet military
missiles, lie on the edge of this industrial centre in eastern Ukraine. They
have had to adapt quickly to the collapse of their raison d'etre with end of
the Cold War. 

Tucked into wooded corners of the high-security complex, a few workshops are
now using U.S. funding to dismantle the missiles they developed years ago. 

Some workshops have been converted to produce heavy consumer goods, which
Alexeyev said earned about 45 percent of revenues. Among other new projects,
he said Yuzhmash was also working with U.S. firm Case on developing a heavy

Yuzhnoye design bureau chief Stanislav Konyukhov said his firm had developed a
combine harvester and trolleybus. 

But the firms' biggest dreams and stakes ride on finding a niche in the global
commercial rocket launch market, where returns are for now slim. 

``On the one hand...all the specialists working on rocket construction need to
stay and keep working. But what can we pay them with?'' Konyukhov said.
``Right now we are only using things that we developed previously. But all
that is very far from fully utilising the full capacity of Yuzhnoye and

The first attempt to launch 12 satellites worth $15 million each for the
Globalstar telecommunications consortium in Yuzhnoye's Zenit-2 rocket, a
converted Soviet missile, ended in failure when it crashed seconds after

``That brought big financial losses for both (consortium leader) Loral and
Globalstar but for ourselves it was also a big setback for morale -- we lost a
little bit of face,'' Alexeyev said. ``Now we need to brush ourselves off and
show what we can do.'' 

Money problems also complicate matters. The launch of Russia's Okean
satellite, which Globalstar is now monitoring closely, has several times been
delayed for lack of funds. 

But Konyukhov said the money had been found and the launch would take place in
May. The first demonstration launch of a former nuclear missile converted
jointly by Ukraine and Russia into a new ``Dnipro'' rocket would take place in

``It won't bring us big profits but it will open the possibility for us to use
the rocket for commercial purposes,'' he said, adding the rocket would carry a
British-made satellite. 

The companies are also eyeing cooperation with Brazil, which has a launch site
on the equator, although they said talks were only in the initial stages.
Ukraine lacks a launch site and uses the Baikonur cosmodrome in Kazakhstan
which is rented by Russia. 

The $2 billion Sea Launch project, which Yuzhnoye is participating in with
Boeing, Norway's Kvaerner and Russia's Energiya rocket maker, will launch
payloads from a converted oil rig at sea. 

A recent decree by Ukrainian President Leonid Kuchma aims to boost the sector
by uniting all the companies working on space projects into one and granting
tax breaks and special credits. 

``We need to concentrate our resources. There are so many factories which are
all doing something when it should be done in one place. Others could be
converted to a different use,'' Alexeyev said. 

``Our prices are competitive with all of you -- with the Americans, the
French, even the Chinese and Russians. The market likes a reliable, good,
cheap product and we have to prove that we have that product.'' 



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