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Johnson's Russia List


March 14, 1999    
This Date's Issues: 3089   


Johnson's Russia List
14 March 1999

[Note from David Johnson
1. AP: Russian Optimistic about IMF Loan.
2. Itar-Tass: Primakov Says Russia Creating New Banking System.
3. Itar-TAss Agreement Between Arms of Govt Can Be Reached on March 15. 
4. Itar-TAss: Minister Wants Russia to Keep both of Nuclear Centres.
5. Baltimore Sun: Scott Shane, Russia, though muddling, will recover its 
imperial role. Madcap leadership, corruption and bungling cannot hold down
its vast power.

6. Moscow Times: Jonas Bernstein, PARTY LINES: Is It Pygmalion Or
For Primakov?

7. Izvestia: Poland Ready To Help Russia Join NATO.
8. Marian Dent: Sexual harassment.
9. Russ McGinnis: Ekaterinburg.
10. Washington Post: Q&A: Primakov, With an Edge.
11. Pravda on NATO and IMF.
12. Argumenty i Fakty: Amount of Hidden Cash in Russia.
13. Interfax: Russian Experts Say Capital Flight $50-230 Billion.
14. US News and World Report: E-MAIL ADDICTION.] 


Russians Optimistic About IMF Loan
March 13, 1999

MOSCOW (AP) -- Russia's former prime minister and Moscow's mayor expressed
optimism today that a new loan deal with the International Monetary Fund would
be successfully negotiated. 

Former Prime Minister Viktor Chernomyrdin, returning from a visit to the
United States, said he believed talks with the IMF under way in Moscow would
reach a successful conclusion by the end of the month. 

Moscow's Mayor Yuri Luzhkov, a favorite to succeed President Boris Yeltsin in
next year's presidential elections, also said he was hopeful a loan deal would
be negotiated. 

The government recruited Chernomyrdin to help move along talks with the IMF
because he has long experience with such negotiations and good personal
contacts with IMF chief Michel Camdessus and Vice President Al Gore. 

Russia has accumulated about $150 billion in debts to foreign lenders, and is
due to pay off $17.5 billion this year. The government has already said it
can't meet the obligation and is hoping that a combination of new loans and
restructuring agreements will help it avoid default. 

Chernomyrdin, who returned Friday night, telephoned Prime Minister Yevgeny
Primakov on Saturday to brief him on his meeting in New York with Camdessus,
the ITAR-Tass news agency said. 

Although Chernomyrdin pointed out he had no powers to negotiate, he said his
meeting with Camdessus went well, ITAR-Tass said. 

Chernomyrdin was scheduled to meet early Sunday with Finance Minister Mikhail
Zadornov, who is leading the Moscow talks with an IMF delegation, the Interfax
news agency reported. 

The Russian economy plunged last August after the government defaulted on some
debts when the country was hit by the global crisis in emerging markets. 

Yeltsin, seeking to assure the IMF that the government is taking steps to
restore a sound economy, has ordered a larger state role in Russia's banking
system, Interfax reported. 

The IMF mission in Moscow is expected to prepare a report on Russia's economic
condition by March 24, when Primakov is scheduled to meet with Camdessus in


Primakov Says Russia Creating New Banking System 

Moscow, March 11 (Itar-Tass) -- Russian Prime 
Minister Yevgeniy Primakov said on Thursday [11 March] that Russia is 
creating a new banking system instead of restoring it in the way it had 
existed before the August 17, 1998, collapse. 

"We have started reviving the country's banking system," Primakov told a 
meeting with the State Duma's faction leaders, emphasizing that it is not 
an easy task. 

"I don't think it is necessary to restore the banking system as it was 
till August 17, 1998. We don't need it and it is beyond our powers," the 
prime minister emphasized. 

Primakov said the emphasis must be laid on creating a new banking system, 
which will involve "the surviving regional banks and branches of the 
remaining system-forming banks". 

"The banking system must get engaged in work with industry, agriculture, 
the real sector of the economy, instead of short- term speculative 
deals," he emphasized. 

Primakov also stressed that the newly-created agency on restructuring the 
banking system and the Bank of Russia will "pay attention to raising 
several big, system-forming banks." 


Agreement Between Arms of Govt Can Be Reached on March 15.

MOSCOW, March 14 (Itar-Tass) - The political agreement between the arms of
government can be reached "even on Monday", March 15, first deputy chief of
the Russian president's staff Oleg Sysuyev said here on Sunday. 

In other words, he said in an interview with the Ekho Moskvy radio station
that March 15 can see the end of deliberations by the working group on
finalising the draft political agreement between the arms of government, which
can submit this document to the Russian parliament. 

Sysuyev emphasised that in the opinion of the president's office, it is
necessary now to reach an accord "to hold elections and to tell the society
that we do not intend to treat lightly such a document as the Russian

However, according to Sysuyev's conviction, the document on political
agreement should not be idealised, since "we cannot say that it will give a
chance to live in friendship and accord to all political forces". For this
purpose, Sysuyev said, "it is necessary to hold elections at first, then to
start coming to agreement". 


Minister Wants Russia to Keep both of Nuclear Centres.

SNEZHINSK, Chelyabinsk region, March 13 (Itar-Tass) - Atomic Energy Minister
Yevgeny Adamov said Russia should keep both of its federal nuclear centres
despite fierce attacks by some opponents who insist that one should be closed.

Speaking at a press conference in Snezhinsk on Saturday, Adamov commented on
the results of his one-day trip to the federal nuclear centre located here. 

He said that "there is normal competition and mutual control, which is good
for the business." 

Adamov took part in a meeting of the centre's scientific and technical council
and met its trade union leaders. A similar meeting was also held in the other
nuclear centre known as Arzamas-16. 

"It is not possible at this time of general disarmament to make direct use of
many unimplemented nuclear projects. This is why we must do what we can to
translate these ideas into reality in conversion programmes," the minister


Baltimore Sun
March 7, 1999
[for personal use only]
Russia, though muddling, will recover its imperial role
Madcap leadership, corruption and bungling cannot hold down its vast power.
By Scott Shane
Sun staff
Scott Shane, a reporter for The Sun, was Moscow correspondent from 1988 to
1991 and is the author of "Dismantling Utopia: How Information Ended the
Soviet Union."

When Richard Milhous Nixon met Boris Nikolayevich Yeltsin in Moscow in the
spring of 1991, the Russian expressed pleasure at the remarkable connection
between the two men.

Nixon's grandfather, Yeltsin recalled, had lived for a time as a businessman
in Yeltsin's hometown, the industrial city of Sverdlovsk in the Ural
Mountains. "Maybe we are even relatives!" Yeltsin cheerfully declared.

It was a promising beginning to the conversation, except for one thing.
Neither of Nixon's grandfathers had ever left the United States. Nixon
listened politely.

The error, as Dimitri K. Simes recounts in "After the Collapse: Russia Seeks
Its Place as a Great Power" (Simon & Schuster, 272 pages, $25), was
attributable not to bad staff work -- Yeltsin's aides were baffled, too -- but
to the Russian leader's erratic intellect, subject even then to whimsy and
vodka in approximately equal parts.

Eight years later, Russia's political and economic condition seems as shaky as
its leader's physical and mental health. Simes' anecdote could be paired with
Yeltsin's recent declaration on TV that he had just warned President Clinton
both by letter and telephone that Russia would not tolerate NATO air strikes
over Kosovo.

Actually, befuddled American officials said, Clinton had not heard from the
Russian president at all. Not by letter. Not by phone.

Under Yeltsin's madcap leadership, the power that in imperial Soviet garb gave
America geopolitical nightmares for half a century has been reduced to a sort
of international joke. The fervent optimism accompanying the collapse of
Communist rule has gradually transformed into nostalgia and resentment for
millions of Russians, most of whom tell pollsters they regret the dissolution
of the Soviet Union.

Is this Russia's fate? Is this sprawling country sentenced permanently to
disabling incompetence and graft? Don't count on it. As Simes argues in his
clear-headed account of the post-Soviet disappointment, Russia will recover
great-power status.

"While today's Russian economy may resemble that of a third-world nation, no
developing state possesses Russia's combination of size, natural resources, a
highly skilled labor force, a strong technological base, leading universities,
a demonstrable if often misguided entrepreneurial spirit, and a seat among
permanent members of the United Nations Security Council," Simes writes.
"Russia has shown impressive dynamism in recent years which, when added to its
historical sense of mission, suggest that its geopolitical comeback may take
less time than its currently pitiful economic condition implies."

Of course, prognosticating Russia's future is a hazardous hobby. Among past
entries in the fortune-telling competition were "How Russia Became a Market
Economy" (Brookings Institution, 1995) by the Swedish economist Anders Aslund,
biased by his role as Kremlin adviser, and "The Coming Russian Boom" (Free
Press, 1996) by Richard Layard, a London economist, and John Parker, an
insightful Economist correspondent. They bucked the glum conventional wisdom
to forecast prosperity. We're still waiting.

Then there was the opposite approach. In 1994, veteran Sovietologist Marshall
Goldman published "Lost Opportunity: Why Economic Reforms in Russia Have Not
Worked," prematurely pronouncing market reforms dead. When the paperback came
out two years later, the economy was showing signs of life, and the new
subtitle hedged: "What Has Made Economic Reform in Russia So Difficult?" But
with the economic collapse and ruble devaluation last August, the turn toward
optimism in the new edition has itself been overtaken by events.

Simes navigates deftly between the twin hazards of Panglossian optimism (just
permit elections and markets and paradise will surely follow) and
condescension (why can't those crazy Russians do anything right?). It helps
that culturally he is at home in both countries. An emigre who once worked at
a Moscow think tank headed by Yevgeny Primakov, the Russian prime minister,
Simes now heads the Nixon Center, a foreign policy institute in Washington.

Simes traveled to Russia on four occasions with Nixon. His descriptions
suggest that the very deviousness that did Nixon in domestically may have
served him well in judging Russian politics. Nixon even confided to Simes a
secret he had kept for decades -- that he had studied the Russian language
since 1959 and understood it well enough to give him an edge in diplomacy.

"But we're not going to tell this to anyone, right?" he told Simes, in a
remark redolent of White House tapes of yore.

Simes' eagerness to find fault with the Clinton administration leads him into
some contradictions. He says repeatedly that the U.S. should avoid provoking
wounded Russian nationalism -- but takes the administration to task for
inviting Russia to G-7 meetings. That is exactly the kind of cost-free
symbolic gesture that can ease feelings of wounded Russian nationalism.

More persuasive is Simes' insistence on the limits of U.S. influence. "Russia
is too big, too complex, too well educated, has too much of its own tradition
and patterns of operation, and is in effect too much its own universe for any
foreign power -- or even the world as a whole -- to have a decisive impact
upon its fundamental choices," he writes.

Both "After the Collapse" and "Kapitalizm" (Yale, 320 pages, $30), a
compelling, close-up account of the Russian economic struggle by Business Week
correspondent Rose Brady, emphasize the extent of privatization and the
radical nature of Russian economic shock therapy. But to a striking degree,
the Russian economy still has Soviet features.

As in Soviet times, barter takes the place of money in many transactions. What
Soviet Russians called blat -- "pull" or "connections" -- remains a crucial
factor in business success; today entrepreneurs say they need a krysha or roof
-- the protection of a powerful patron in government or organized crime. Most
significantly, business is inextricably intertwined with government and

Hence the rise of the oligarchs -- the industrial chieftains who dominate the
Russian economy -- was fueled less by business acumen than by cozy and corrupt
relations with the state. Simes offers the example of the oil company Sidanko,
obtained from the state in 1996 by wheeler-dealer Vladimir Potanin for about
$20 million. The next year British Petroleum purchased just 10 percent of
Sidanko for $571 million.

The sudden weakening of the oligarchs may prove a silver lining of August's
economic collapse; their immense concentration of wealth and power is the last
thing Russia needs. And a feeble ruble has ironically given a big boost to
Russian manufacturers' sales at home, since competing imports have been
suddenly priced out of the market.

Such vagaries show how unexpectedly Russia's turnaround may begin. Yet as
Simes shrewdly notes, greater prosperity and greater democracy ultimately may
make Russia not more but less pliant in relations with the United States. If
military intervention against the Serbs in Yugoslavia is popular with
Russians, for example, a reviving Russia is less likely to accommodate U.S.

Half a century ago, Walter Lippmann contemplated the intensifying Cold War and
urged Americans to think about history. "The beginning of wisdom on the
Russian question is, I believe, to recognize the fact that the ... rivalry
between Russia and the nations of the West did not begin with Marx, Lenin and
Stalin, nor would it end if the Soviet regime were overthrown or defeated,"
Lippmann wrote in the Atlantic Monthly in 1948. "It was one of the great
fields of diplomacy under the Czars as it is under the Communists."

Relations between Russia and the U.S. will remain a great field of diplomacy
in the 21st century, as oligarchs, Mafia, nationalists and democrats jostle
for power in the new Russia. 


Moscow Times
March 12, 1999 
PARTY LINES: Is It Pygmalion Or Terminator For Primakov? 
By Jonas Bernstein
Staff Writer

According to myriad Kremlin leaks, now that the albatross of Boris Berezovsky
has been removed from around Boris Yeltsin's neck, the president's inner
circle is focused on the main event - "neutralizing" Prime Minister Yevgeny
Primakov. The leaks differ on how this will be done, but should one of the
various scenarios play out, we might have the good fortune to witness the
return of the "energetic young reformers." 

An article in Thursday's Vremya-MN reported that Yeltsin's inner circle -
shorthand for First Daughter Tatyana Dyachenko and former presidential chief
of staff Valentin Yumashev - has decided that the battle between the president
and the prime minister, which is little more than a good old-fashioned power
struggle, needs a lofty ideological justification. Thus they have decided to
portray Primakov as heading a Communist government that will, if not stopped,
move Russia back toward totalitarianism. It is enough to have watched NTV's
"Itogi" and RTR's "Zerkalo" the last several weeks to know that this campaign
is well under way. 

Next, with the ideological backdrop erected, comes the operational phase. Here
there are apparent disagreements over tactics. 

One group of "patriotically inclined oligarchs," as Vremya-MN ironically
called them, want this or next month to orchestrate Primakov's "voluntary"
resignation, followed by the naming of a new prime minister - "a mediocre and
obedient little tyrant who will, for starters, cancel any elections in view of
the threat of economic catastrophe." 

Another group of Kremlin insiders apparently believe that Primakov can be
moved in the "right" direction if he is surrounded by the "right" people -
meaning, basically, the "energetic young reformers." Under this scenario,
Vremya-MN reports, Primakov's entire Cabinet would be removed and replaced by
Sergei Kiriyenko, Yegor Gaidar, Anatoly Chubais and, if worse comes to worse
(from the Kremlin's point of view), Boris Fyodorov and Grigory Yavlinsky. Even
Moscow Mayor Yury Luzhkov is mentioned as a possible new Cabinet member -
granted, in the "worst case" (for the Kremlin). That Luzhkov, who is less than
loved by the Yeltsin inner circle, is part of this scenario suggests the
degree to which Primakov is hated and feared in the Kremlin. 

Meanwhile, Itogi magazine's sources this week suggested a similar scenario,
reporting that the Kremlin, following Berezovsky's removal as CIS executive
secretary, was "breathing life" into a scheme by which "liberals named by the
Kremlin will really run the economy, and the prime minister will have to
provide political cover." 

According to the newspaper Obshchaya Gazeta's Kremlin sources, the
presidential administration is considering a similar but less invasive
procedure. In this scenario, Primakov's Cabinet will not be replaced by
"liberal" luminaries, but his contacts with them will be "widened," while the
Kremlin administration simultaneously provides him with "objective
information" to counter that which he receives from Yury Maslyukov and other
left-leaning deputies. The newspaper reported Kremlin sources as saying
Primakov was informed about this plan and that "there are signals that he
agrees with it." 

In any case, the proliferation of similar reports this week suggests that the
Kremlin is devoting a lot of man-hours to the Primakov problem. 

Whether it will be solved more along the lines of "Pygmalion" or "Terminator"
- or at all - remains to be seen. 


March 12
Poland Ready To Help Russia Join NATO 
By Boris Vinogradov 

Russia might join NATO? Why not? says Poland's President Alexandr
Kwasniewski in an exclusive interview for IZVESTIA. He gives a reminder
that the idea was first put forward by none other than Zbigniew Brzezinski.
Kwasniewski does say that the prospect of Russia joining NATO is a
theoretical rather than practical possibility but he does not rule out this
possibility some time in the future. Of course Russia would need to make a
formal request for admittance or at least indicate that it wants to join
the alliance, which would set procedural matters in motion. Russia would
have to undertake commitments under the [1949] Washington treaty. NATO
membership implies not only a set of rights and guarantees but also clearly
defined obligations. The underlying idea is that a new member is given
guarantees of its security but at the same time it is expected to defend
allies should this become necessary. 
The Polish President sees no threat in the fact that now that three
East-European countries have formally joined NATO the North- Atlantic
Alliance has in effect moved to Russian borders. Nor does he see a threat
in the prospective deployment of Danish and German troops in Poland. He
says no NATO troops will enter Polish territory and no nuclear weapons will
be deployed in it. But Poland is going to modernize its armed forces. 
Poland proceeds from the assumption that there is no more
confrontation between two military blocs in Europe. "We believe that NATO's
first step toward expansion will not be the last one... It will not take
too long for people in all countries, including Russia, to realize that the
expansion of the alliance only leads to stronger security and closer
cooperation between NATO and Russia. This in turn creates positive
conditions for further expansion." 


From: "Marian Dent" <>
Date: Sun, 14 Mar 1999 14:03:40 +0300
Subject: Sexual harassment

I would like to voice support of John Varolis' excellent piece on 
sexual harassment, and to express disagreement with T.S. White's 
rebuttal. I have been living and working in Russia since 
1992, and Varolis article rang so true with what I see here that I 
reprinted it and sent it on to several friends--both Russians and 

We have to admit, there is a significant portion of Western 
businessmen who see Russia as an opportunity to find women just as 
much as an opportunity to find business. I see it all the time in 
many of the people I work with. I am constantly amazed at the 
beautiful and intelligent young women who show up at functions on the 
arms of nice, but quite average, middle-aged Western businessmen. 

The point is, that finding a mate is as legitimate reason as any for 
choosing a country in which to live; but to the extent that the search 
spills over into workplace harassment, the conduct becomes unacceptible. 
Most Western executives stationed here have as much concern 
for their staff morale and guard against the harassment problem much as 
they do back home. But we know that the chances of the problem coming 
to light are fairly slim in Russia. It is also common knowledge that
executives engage in harassment quite openly. Lets face it some 
Western executives take advantage of climate to engage in conduct 
that they would not undertake in their home countries. 
But I'm not writing to preach the fact that sexual harassment is 
noticed and resented by female employees, or that company reputation 
spreads quite quickly in the bubble of Russia's Western business community.
Instead I am writing to completely disagree with T.S. White's denial 
that a problem exists. It seems to me that:

1. While the case of Tanya that Mr. Varolis gives is indeed a single 
example, contrary to White's accusation such an example is a valid 
and excellent literary device for illustrating a problem. We are not 
in a court of law asking to prove the details of a single case, we 
merely need to determine whether an example is illustrative of reality. 

I can give multiple examples of similar incidences relayed to me 
by Russian women I know and have worked with. Three years ago, in 
a meeting of female staff at an organization I headed, an informal 
survey of the seven women on the staff turned up three who had 
experienced serious sexual harassment, including one who had experienced 
the problem twice and handled it only with help of her husband, one 
who had quit a job because of it, and one who felt she still had her 
job only because the American executive involved was transferred to 
another city. In addition, whenever I interview women for a position, I 
almost inevitably run into one or two who say they would prefer to 
work for me, even for lower wages, because I am a woman and 
thus they believe there is less chance of harassment. 

Thus, I have to conclude that sexual harassment is a real problem 
in Russia and John Varolis' example of Tanya is valid. By the way, 
none of the women who have relayed stories about workplace 
harassment to me seemed to think that America's attitude of 
condemning sexual harassment is "silly" or "distainful" as White 
thinks Russian women believe. 

2. Russian public attitude towards the Clinton case, cited by White, 
is absolutely irrelevant to the issue of whether women face and 
resent sexual harassment in Russia. I too think the Clinton case was far 
overblown, but that has nothing to do with my belief that I should 
sanction anyone in my firm who sexually harasses an underling.

3. The issue of whether attitudes towards sexual relations in America 
are different from those in Europe is also irrelevant to what occurs 
in Russia. Indeed America may be much more sensitive to the issue 
that Western Europe. Perhaps America is overboard or perhaps Europe 
is not on board enough. However, executives in any respected
multi-national firm, whether in the US or Western Europe, do not consider 
appropriate the extreme degree of harassment that is quite common here. 
We are not talking about compliments on a dress or a pat on the rump 
in this country--when Russians complain of harassment they are 
talking about blatant orders for sex and advances that would be 
extremely offensive anywhere. 

4. Neither do thoughts of Russian women about American feminists in 
general have anything to do with thoughts of Russian women on the 
single issue of sexual harassment. 

5. Finally, Russian women indeed are afraid of reprisals from 
harassers, even if only in the form of firings or other career 
related harm. This is what harassment is all about Mr. White. And 
in this economic climate is a serious problem. I have yet to meet a 
woman who has pursued a case against a harassing superior. Most 
thought it would do no good, they would lose their jobs, have trouble 
finding a new job without a reference, possibly be laughed out of 
court, and, even if they did win, would be awarded only moral damages 
so low that it would not be worth the effort. 

But here is where my opinion differs in the extreme from T.S. 
White's. I wonder whether--while thinking he was in St. 
Pete--he was actually secretely smuggled to another planet? He 
claims that most attractive Russian women hire a Krisha to protect 
themselves and are thus immune to harassment and all other types of 
work reprisals. I'm sorry, but I have yet to know any average 
Russian woman who enters into a personal relationship with a Krisha--
let alone doing so voluntarily. You translate the term into 
"protection agency," while I think the closer translations are "pimp" 
and "protection racket." Further, I resent thought that a woman 
should have to resort even to legitimate private protection 
organizations as a substitute for a legal and social system that 
protects her workplace rights. 


Date: Sat, 13 Mar 1999 
From: Russ McGinnis <>
Subject: Ekaterinburg

I don't know about what other people are thinking or
doing, but at least one person contacted me directly
about sending some money to the blind girl in E-burg.

Even if nobody else shows up, that's $40 a month.
Which is better than nothing. I think, though, that
more substantial help might be forthcoming if the
right sources are tapped. Since Mr. Rowell is more
familiar with the situation, might I ask that he 
ascertain the situation and forward or administer the

I don't think small scale efforts are necess-
arily futile, certainly not for the victim-- and 
certainly not in terms of symbolism. Last year 
was of course the 50th anniversary of the Berlin
Airlift. One press story said it all by quoting
the recollection of a man who, as a boy, had a
chocolate bar parachute at his feet from a USAF
cargo plane: "What it meant was-- hope. You can't
buy that."

Russ McGinnis

P.S. A curious aside about the complexity of our
world: I attended one of the most expensive
schools in the Southeastern U.S. (this by itself
is irrelevant); one of my classmates went out to
his ATM down the street one night. He was also
shot and blinded by a robber. The one small 
difference is that there was a ATM/bank to sue
and a legal system to sue them with.


Washington Post
March 14, 1999
[for personal use only]
Q&A: Primakov, With an Edge

When Russian President Boris Yeltsin made Yevgeny Primakov prime minister last
September, he was seen as a transitional figure. Since then, Primakov has
become more popular and powerful; indeed, his rise now appears to threaten the
man who appointed him. Last week, the ailing Yeltsin held unexpected and
widely publicized meetings with other prominent political figures. Primakov is
now preparing for a crucial visit to Washington next week, where, among other
things, he hopes to clinch a desperately needed deal for assistance from the
International Monetary Fund. Two days ago, he sat down for an exclusive
interview with Newsweek contributing editor and Washington Post columnist
Lally Weymouth.

Q: What do you hope to get out of your upcoming talks with the [Clinton]

A: I look forward to successful negotiations. That's natural. Everybody who
goes somewhere for negotiations wants them to be successful. I believe they
can be successful because we have many coinciding interests. . . .

Q: Why do you think that the IMF and the West have been reluctant to give you
money since you came into office in September? Do you think it's because
you're not one of the young reformers such as Anatoly Chubais or Yegor Gaidar?

A: I do not exclude the possibility that their contacts with some of my
predecessors could have made their position tougher. [But on the whole] I
think this delay is caused by the wait-and-see approach of the IMF and a
number of Western countries. Maybe some wanted to ascertain the nature of the
policy pursued by our government. . . . Of course, there are objective reasons
as well. The IMF has been assisting our country for a long period of time, and
that period proved to be not very successful.

Q: Inside the U.S. government, some officials argue that the IMF and the West
bear a responsibility because they encouraged Russia to take on billions of
dollars in loans. Do you share that point of view and do you think the United
States should take some responsibility for Russia's present plight?

A: On the threshold of negotiations, I would be a very unwise negotiator, to
put it mildly, if I would begin blaming the IMF for anything at this juncture.

Q: What happens if you don't get the money? How does it affect Russia? Will
there be a civil war? Wii you have instability? I heard that you told a U.S.
Cabinet official that it could affect your own career.

A: I don't think Russia will perish. My personal career doesn't play such a
great role here in comparison with the fate of the state. Nevertheless, I
remain an optimist and I believe we shall come to terms with the IMF.

Q: Many economists say that your budget is unrealistic and that you will have
to either cut social spending, increase tax collection, print more money or
just not pay people in order to close your deficit.

A: No, that is not so. We collect more taxes now than before; and that
increase is not purely a result of inflation.

Q: Experts maintain that you don't collect more taxes than before. Are they

A: I do not collect their taxes, so how should they know?

Q: President Yeltsin just held a secret meeting with Grigory Yavlinsky, the
liberal reform-minded politician. Rumors are swirling around Moscow that there
are tensions between you and the president. How are your relations?

A: They are very good. Yesterday he called me at 11:30 p.m. and we spoke for
half an hour. He told me that he was going to work all through night, and I
replied that I was going to try to work all night, too. He actually likes to
work at night.

Q: During the conversation, what did he tell you? Was he supportive of you?

A: I think he is supportive because he gave me several specific tasks to
attend to. And I can tell you about two of those issues. First, he wants me to
assume the responsibility for the final solution with the IMF as well as the
issue of Chechnya. He said that he was ready to help solve those issues. So it
was a conversation of substance.

Q: A high-ranking general was recently kidnapped in Chechnya. What does the
president want you to do to free him?

A: The president believes that measures should be taken because the situation
is quite dangerous. It is a tense situation. People are kidnapped all the
time; there are terrorist acts. At the same time he is against military
action. In this respect our views fully coincide.

Q: You don't want to bomb Chechnya?

A: No. I do not think it would produce any results.

Q: What about Yuri Maslyukov, deputy prime minister for economic affairs?
There are lots of stories that the IMF is [in Russia for meetings] but that he
is in Asia. [There have been allegations of corruption against Maslyukov, who
is a Communist Party member and who is supposedly in charge of negotiations
with the IMF.] How do you respond to charges of corruption against Maslyukov
and other members of your own government? What evidence do you need to remove
a minister?

A: I was not given a single fact . . . that members of government, while being
in the government, have perpetrated any illegal actions. If such facts are
produced we will, naturally, carry out a thorough investigation. And I do not
think that if somebody's son works for a bank or somebody's daughter works for
some company, that is sufficient proof of corruption.

Q: Can you explain your fight with [Russian business tycoon Boris] Berezovsky?
Do you think he's out of place in Russia today?

A: Berezovsky used to be CIS executive secretary, and in that capacity, he was
not entitled to take part in active politics in Russia. He was not to
criticize the government outright without providing any reasons. And I said so
to Berezovsky, and he agreed with what I said.

Q: But didn't he go on trying to undermine you?

A: In what way? Did he try to blow up my car?

Q: Didn't he use his newspapers to attack you?

A: Nowadays, there is a lot of criticism in the media. Some of it is correct
and some is thumb sucking.

Q: What happens to Berezovsky? . . . Could he be arrested and tried for
economic crimes?

A: When I was head of external intelligence, even at that time I never dealt
with any arrests, and you want me to get involved in arresting people now, in
my present capacity? I don't see any charges which have been leveled against
him that would justify his arrest. But that is my personal view. Generally
speaking, this is a subject matter for the law-enforcement bodies to look at.

Q: Are you running for president?

A: No.

Q: You won't consider it?

A: No, no, no. And I can tell you firmly that this is it.

Q: The United States is convinced, that there continues to be assistance from
10 Russian companies--some closely linked with the Russian government--to
Iran's nuclear and missile programs.

A: I'm telling you that this needs investigation and evidence should be
provided. We should be more realistic in dealing with this subject matter. We
are cooperating with the United States on this subject matter and we have
permanent channels for a confidential exchange of information.

Q: You're against the use of force, against bombing Serbia. How would you
protect human rights in Kosovo against [Yugoslav President Slobodan]

A: Do you believe that human rights can be protected solely through the split
up of Yugoslavia or through stripping Yugoslavia of its territorial integrity?
We want the parties to come to an agreement. Moreover, we do everything to
help in that process. And if the parties come to an agreement, then it's clear
that Kosovo will have all the necessary rights. But there are Serb villages
there as well, and that goes for them, too. In order to protect human rights,
one does not necessarily have to strike another person on the head.

Q: On many occasions you said that capital flight is the main economic problem
for Russia. What is your reaction to the fact that the present head of Russian
Central Bank, Mr. [Viktor] Gerashchenko, was allegedly sending the country's
currency reserves to offshore accounts?

A: I don't know anything about it. This is the first time that I hear that
Gerashchenko was sending his currency reserves, or rather the bank's currency
reserves, to an offshore zone.

Q: That is about FIMACO--the firm that the Central Bank set up to invest some
of its funds offshore.

A: If that took place, I'm against that. You want me to be responsible for the
government that was in office before me? If I get convinced that some illegal
capital flight did take place, I will certainly look for any possible way to
bring it back.

Q: People in Washington are concerned about a crackdown on the Russian media
by your government. Is there a crackdown?

A: For the time being, it is the media that is attacking the government, not
the other way around.

Q: Are you concerned about rising antisemitism and nationalism?

A: I don't think this has become any big threat. But I'm sincerely against any
manifestation [of antisemitism] and I think this is outrageous. 


>From Communist Party web page
The newspaper "Pravda"
MARCH 12, 1999.

Correspondent Pavel Bogomolov publishes in the newspaper a series of
articles about his visit to
the NATO headquarters in Brussels. The North Atlantic alliance, as is well
known, is getting ready
at present for its 50th anniversary. The fifth decade of the NATO
existence, notes the author,
was marked by the fact that , after a long period of peace, wars have again
come onto the
European scene. Less than a quarter of a century passed since the principle
of inviolability of
European borders was solemnly proclaimed in the Final Act of the Helsinki
conference in 1975.
And what have we got now? Czechoslovakia was split in two, Germany hastily
Yougoslavia subjected to violent dismemberment, the Soviet Union
disintegrating with armed
hostilities ensueing. The guarantees were not worth the paper they had been
written upon.
Meanwhile Poland, Czechia and Hungary are joining the alliance, thus
expanding its area in the
easterly direction, up to the borders of the Ukraine and Belorussia.

“The cheese in the mouse-trap is to be paid for” is the heading of the
article written by Ivan
Sharov. Our radical reformers and politicians, he writes, have been
repeating over and over again
that loans granted to Russia by the International Monetary Fund and by
other foreign sources
were the best pledge that the Russian reforms would finally be a success.
When Gaidar,
Feodorov, Aven, Koch and other favourites of the West were in power the IMF
money was
pouring in without hindrance and nobody seemed to notice much of it was
embezzled. But
when the new government of Yevgeny Primakov really tried to change
something for the better
in the economic field this money flow suddenly dried up. The IMF deems it
necssary that up to a
half of Russia’s budget must be used for servicing the state debt. That
might mean that workers,
clerks and pensioners would never see their wages, salaries and pensions.
The reason for this
attitude, the author believes, is that the policy of the Russian government
appeared to the IMF
suspiciously communist. So it’s clear, one has to pay political fees for
the cheese in the IMF debt



March 9, 1999
[translation for personal use only]
rticle by Valeriy Virkunen from the "Money" column: "How Many 
Dollars Are Kept in Russian Money Boxes"; passages and words in 
slantlines are published in boldface

While First Deputy Prime Minister //Yuriy 
Maslyukov// is literally pleading with the International Monetary Fund 
(IMF) to grant Russia a meagre loan of at least 4-5bn dollars, authorized 
Russian banks brought into the country and sold to their clients over 
//87bn dollars// in cash in the last three years alone. All this hard 
currency has been stashed away by Russian individuals and organizations. 
And yet there is even more. According to data from the Bank of Russia, 
//51bn dollars// were brought into Russia //before// 1st January 1996. If 
we add up the two figures, we have a mind-boggling sum of //138bn 
dollars// - about the same amount of cash as that circulating on the 
domestic market of the USA itself. No doubt the Russian banks have 
cleared some the cash and transferred it abroad. One can also assume that 
some of the cash has been taken out of Russia illegally, in trunks and 
crates. A figure of 50-55bn dollars has been mentioned. 

According to expert estimates, however, no less than //80-85bn dollars in 
cash// are still in the country. This is nothing like the pittance 
disbursed by the IMF, we are talking here of an amount equal to //four 
Russian annual budgets//. With this sort of money, the government can 
just as well bow low before its own citizens and ask for a loan at home 
rather then abroad. 

The problem is they won't lend - because they have no trust left, having 
been cheated by the authorities so many times. 

[A table supplementing the report shows that 33,821.25m dollars worth 
of foreign cash was brought into Russia in 1996 and 309.48m was taken 
out; in 1997, the respective figures were 37,494.04m and 355.58m dollars, 
and in 1998 they were 16,156.59m and 376.68m respectively] [Description 


Russian Experts Say Capital Flight $50-230 Billion 

Moscow, Mar 11 (Interfax) -- Experts estimate the 
range of capital flight from Russia at $50 billion to $230 billion. "A 
large share of this capital is put into real estate, enterprises and 
securities, and only a small share is used in economic operations in 
order to evade taxes in Russia," sources in the Russian Interior 
Ministry's Main Department for Economic Crimes told Interfax on Thursday 
[11 March]. The Department said that thousands of Russian and foreign 
firms specialize in the illegal export of capital, offering services in 
converting transfer settlements into cash and in buying up immovable 
property and securities abroad. "The same services are offered by some of 
the Russian and foreign banks and their subsidiaries," Department 
representatives told Interfax. There are several ways of taking capital 
out of Russia: by overstating import prices; by performing operations 
involving non-convertible currencies; and through direct financial 
machinations, including counterfeit import and marketing-services 
contracts, the export of hard currency in cash and the deposit of capital 
on credit cards. The largest amounts of Russian capital have been 
concentrated in Britain, Finland, the Netherlands, Latvia and Hungary. 
The Interior Ministry said that popular off-shore zones in Cyprus, the 
Channel Islands (Britain) and Nauru island in the Pacific Ocean are 
actively used to harbor Russian capital. [Description of S


US News and World Report
Cover Story 3/22/99

So that's why they call them 'users'

E-mail, says Richard Laermer, is as integral to his life as his frontal lobes.
It is "the next part of my being," he deadpans, underscoring the depth of his
infatuation. As CEO of RLM Public Relations, he typically fires off 500
messages a day, an electronic blitzkrieg that has moved more than one
recipient to beg for relief. Before bed, he switches his E-mail pager to
silent mode but never turns it off. That way he can check the display late at
night. The terrifying thought of E-mail messages unanswered has even kept him
from enjoying beach-house vacations. "My pager's satellite system doesn't
reach all the way to Southampton," says Laermer. "So, twice, I drove 15
minutes west to pick up my E-mail."

This all-too-common behavior has provided rich fodder for "You Know You're
Addicted to E-Mail When . . ." lists ("You check your mail. It says, 'No new
messages.' So you check again"). But for some users, the obsession is no joke.
"Whether you get addicted to the Internet, to drugs, to gambling, it's all, in
my experience, the same thing," says David Greenfield, author of the
forthcoming Virtual Addiction: Help for Netheads, Cyberfreaks, and Those Who
Love Them. "When the brain likes something, it wants it again."

Whether heavy E-mail users can be formally classified as addicts is a subject
of a heated chicken-and-egg debate. "There are people who overdo
things–working, watching TV. There is nothing addicting about work or
television," says Ivan Goldberg, a psychiatrist specializing in mood
disorders. "But there are people who are so depressed that they'll repeat any
activity to blot out the reality they don't want to face."

Some of those treating the E-mail-obsessed would counter that heavy computer
usage is a cause–rather than a symptom–of mental distress. They tell of
patients who spend marathon stretches at the keyboard, shun face-to-face
contact, or feel suicidal when electronic pen pals disappear. "Opening an E-
mail is analogous to pulling the handle on a slot machine," says Greenfield.
"Each time you open it, you have a renewed sense of pleasure, of hope, in
anticipation." After all, the next message could mean life-changing news from
a long-lost friend or a mash note from an office crush. And when it turns out
to be just another piece of spam, says Michael Flaherty, a clinical
psychologist at St. Francis Medical Center in Pittsburgh, "there's the crash."

No sweaty palms. The medium also offers wallflowers a sense of power. They
savor the safety of facelessness and the time to select their words with care.
"What you're dealing with is people who may be socially phobic, who may not
want to go out into the real world, and would prefer to be on E-mail because
they can be who they want," says Maressa Hecht Orzack, who heads a computer-
addiction treatment center at McLean Hospital in Belmont, Mass. Interpersonal
relationships fade as these shy types increasingly live online, leading to
social isolation.

Because of E-mail's prevalence, kicking the habit can be tricky. "If it was
cocaine, I would say go cold turkey," says Flaherty. "But the computer is part
of life. You just have to interact with it in a manner where you control it,
not it controls you." Yanking the plug out of the wall never hurts,
either.–Brendan I. Koerner



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