March 25, 1999    
This Date's Issues: 3109• 3110  • 

Johnson's Russia List
"The bible of serious Russia watchers"
#3110
March 25, 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Russia's Ivanov revives Cold War anti-US rhetoric.
2. Itar-Tass: Lavrov: Lawlessness Can only Breed Lawlessness.
3. Washington Times: Brent Scowcroft and Arnold Kanter,
Don't isolate Russia.
4. Reuters: Russia prefers anti-NATO words to deeds.
5. Reuters: Russia PM sees ``fruitful'' talks with IMF head.
6. Interfax: Russian Analyst Warns Against Raising Foreign Loans 
(Illarionov).
7. Interfax: Chubays Says Russia Cannot Do Without IMF Loan.
8. Jamestown Foundation Monitor: NATO BOMBING MAY FACILITATE IMF LOAN. 
9. RFE/RL NEWSLINE: SWISS PROSECUTOR-GENERAL HAS NO DIRT ON YELTSIN, 
FAMILY and KIRIENKO TO RETURN TO KREMLIN?.
10. Moskovskiy Komsomolets: Korzhakov May 'Tell All' About Yeltsin's 
Philandering.
11. Reuters: Russian GDP seen down 7 pct in first quarter-agency.
12. Moscow Times: Andrei Piontkovsky, SEASON OF DISCONTENT: Political 
Elite Goes MAD Over Skuratov.
13. Moscow Times: Larisa Naumenko, Education Fair Reveals U.S. Options.
14. Moskovskiy Komsomolets: Mikhail Rostovskiy, Behind-the-Scenes War 
in Kremlin. (Skuratov Case: More Theories Examined).
15. Reuters: Russia proposes paying Soviet debt in kind-agency.
16. Reuters: Russian patriarch prays sinful NATO will rethink.] 

*******

#1
Russia's Ivanov revives Cold War anti-US rhetoric
By Oleg Shchedrov

MOSCOW, March 25 (Reuters) - Russian Foreign Minister Igor Ivanov, outraged by
NATO bombings of Yugoslavia, said on Thursday a U.S. desire for world
domination had led Europe to the worst crisis since World War Two. 

In Cold War-style rhetoric rarely heard these days, Ivanov said European NATO
members were trying to appease U.S. ambitions and hinted Moscow saw this in
the same light as the policy the West used towards Nazi Germany before World
War Two. 

``For the first time since World War Two an act of aggression against a
sovereign state took place in Europe,'' Ivanov told a news conference. ``Never
since 1945 was Europe so close to serious ordeals.'' 

Ivanov -- who was careful to avoid threats despite the harsh language --
linked NATO bomb raids against Yugoslavia, launched on Wednesday, with recent
U.S. and British strikes against Iraq. 

``First Iraq, now Yugoslavia,'' he said. ``Who is next?'' 

``Whatever reasons U.S. strategists offer to justify their actions, their true
aims are clear -- to impose the political, military and economic dictatorship
of the United States, to establish a kind of unipolar world in which the
destinies of peoples would be decided in Washington,'' Ivanov said. 

He said Russia regretted that European members of NATO had fallen in behind
the United States. 

``I wonder whether Europeans have forgotten where a policy of appeasement and
encouraging actions violating international law could lead,'' Ivanov said. 

Russia and NATO had a brief if strained honeymoon after the Soviet Union
collapsed and Moscow sought to reconsider Cold War stereotypes. 

But their ties soured as the alliance announced plans to grant membership to
some of Moscow's old allies. Hungary, Poland and the Czech Republic joined
this month. 

As compensation for NATO enlargement, the alliance signed a pact with Moscow
outlining their special relations. Following strikes against Yugoslavia,
Russia put this pact on ice. 

Ivanov said the military attack against Yugoslavia had unveiled the true
nature of the Western alliance. 

``We are being told that NATO bombs Yugoslavia to defend democratic ideals and
uphold the creation of united and stable Europe. What kind of ideals and
values need to be imposed by missiles and bombs?'' he said. 

``NATO leaders have been full of pathos trying to persuade us that it was
practically a new organisation, rid of the vestiges of the Cold War,'' Ivanov
added. ``But NATO has now shown its aggressive nature.'' 

******

#2
Lavrov: Lawlessness Can only Breed Lawlessness.

UNITED NATIONS, March 25 (Itar-Tass) -- Russia's ambassador to the UN, Sergei
Lavrov, stated here on Thursday that the attempt to motivate the NATO strikes
against Yugoslavia by the desire to avert a humanitarian disaster in Kosovo
were "absolutely invalid." 

Speaking at the extraordinary meeting of the UN Security Council, convened on
Russia's call, Lavrov said that "not only are these attempts at variance with
the UN Charter and other norms of international law, but it is the unilateral
use of force that will entail really disastrous humanitarian consequences."
Lavrov further added that according to the definition of the notion of
aggression passed by the UN General Assembly in 1974, "no considerations of
political, economic, military or any other character can vindicate
aggression." 

Lavrov pointed out that Russia was far from protecting any breaches of
international humanitarian law, no matter who committed them. "To fight
against breaches of the law one should have clean hands," Lavrov said.
"Otherwise, lawlessness will only breed lawlessness," he emphasized. 

"Any attempts to apply other standards to international law and to ignore its
fundamental principles create a dangerous precedent fraught with rapid
destabilization and chaos at regional and global levels," the Russian diplomat
reasoned. "If the dangerous tendency is not checked the virus of unilateral
illegal approaches may spread not only over other regions, but over other
spheres of international relations as well," Lavrov noted. 

In conclusion Lavrov read aloud the text of President Boris Yeltsin's
statement, made on Wednesday immediately after the launch of the NATO military
aggression against Yugoslavia. 

******

#3
Washington Times
March 25, 1999
[for personal use only]
Don't isolate Russia
By Brent Scowcroft and Arnold Kanter
Brent Scowcroft was national security adviser to Presidents Bush and Ford.
Arnold Kanter served as under secretary of state for political affairs from
1991-1993.

Russia finds itself in the midst of a latter day Time of Troubles. There is a
sense of despair about the political and economic disarray into which the
country has descended. Above all, there is an overwhelming sense of
humiliation at its abrupt fall from one of the world's two superpowers to the
status of a political middle weight with a Third World economy. It is
accompanied by a sense of vulnerability deriving from its sudden weakness. 

The combination of humiliation and weakness, in turn, has fostered a
search for scapegoats, and an intense and growing resentment at those in the
West -- starting with the United States -- whom many Russians believe are
deliberately seeking to keep their country down. This conjunction of events
and attitudes creates a real risk of Russian hyper-nationalism built on a
foundation of anti-Americanism. Such a development not only would pose
substantial obstacles to our ability to achieve near-term policy objectives,
but is likely to linger long after Russia once again becomes a great power.

For our part, there is a large and growing gap between words and
deeds. Our declaratory policy is forcefully stated as one of engagement. Our
actions, however, suggest something different: routinely announcing to the
Russians what we want and require, and then telling the Russians what they
therefore need to do. In doing so, we behave in ways which to Moscow must look
arrogant and demeaning. We both need to do better.

We should not expect a Russia, no matter how democratic, dependably to
support whatever we seek to do. After all, we regularly have serious
differences and disputes with our closest allies. Second, substantial
additional economic assistance almost certainly is not the answer at this
point. Until there are sound institutions in Russia capable of making tough
economic, monetary, and budgetary decisions, further non-earmarked assistance
is more likely to end up in foreign bank accounts than be invested in
activities which will foster Russia's rebirth.

One important place to start would be the threat posed by the
proliferation of weapons of mass destruction and the means to deliver them.

The approach we have been taking with the Russians on proliferation
issues, however, has tended to be piecemeal and hectoring, with results which
have ranged from the ineffective to the counterproductive. Although there are
potential or actual cases of nuclear and missile proliferation in a number of
countries, such as Iraq, Iran, Libya, India, Pakistan, and North Korea, the
only one on which we have seriously attempted to engage the Russians has been
Iran.

On Iran, that engagement has largely consisted of pressure on Russia
to stop providing nuclear and missile assistance to Iran. Our condemnation of
Russia's support for Iranian nuclear power coincides with our leadership of an
effort to construct nuclear power reactors for North Korea -- a project from
which the Russians are entirely excluded. The cases are not identical, but the
Russians could be excused for seeing similarities and feeling resentful.

Even our means of pressuring Russia on Iran seem seriously
counterproductive. We are threatening to block any more satellite launches on
Russian boosters --depriving certain hard-pressed rocket manufacturers of
badly needed hard currency -- unless other Russian companies stop providing
assistance to Iran. But penalizing law-abiding Russian companies as a way to
get at those who are not, seems destined to drive them to engage in exactly
the kind of behavior we are trying to curb. We should be rewarding, not
punishing, Russian companies which are being responsible world citizens.

We need to reverse the present tendency to make our anti-proliferation
policy into an anti-Russia policy and instead try to give Moscow a real stake
in effectively addressing a problem we both face. The point is not to overlook
Russian actions such as those which strengthen Iranian nuclear and missile
capabilities, but rather to find ways which will engage Russia constructively
and increase the chances that we will achieve our goals.

We should consider an analogous approach to the issue of missile
defense. Both our national missile defense (NMD) and theater missile defense
(TMD) programs are aimed at the proliferation problem, i.e., responding to
rogue nations who might be tempted to use missiles armed with weapons of mass
destruction (WMD) against American forces, allies, or territory. But
assertions that we intend to modify or abrogate the ABM Treaty must make it
seem to the Russians as though our goal may be as well to undermine one of
their last claims to great power status -- their nuclear missiles. At the same
time, we continue to press them to ratify the START II treaty, a treaty which
outlaws precisely those systems --MIRVed ICBMs -- which could give them
confidence that the missile defenses we might deploy would not deny them a
credible second-strike capability, even in the worst case.

NATO expansion is the source of much Russian bitterness. NATO itself
is the symbol of Russian defeat and fall from power. We are now embarked on a
process which pushes NATO's borders closer and closer to Russia, a process
which seems to consist of swallowing up territories that only a few years ago
were a part of the Warsaw Pact.

NATO expansion has become a consensus policy of its members. But now
that the first tranche is a fact, could we not explore the possibility that
there might be alternatives to further expansion -- including enlargement of
the European Union -- which could provide enhanced security for other
countries in Europe without being so hateful to Russia?

What we can do to encourage a constructive relationship with Russia is
limited but could be vital. And currently our actions all too often seem
designed to isolate or alienate Russia. That is a road better not traveled.

******

#4
ANALYSIS-Russia prefers anti-NATO words to deeds
By Timothy Heritage

MOSCOW, March 25 (Reuters) - While President Boris Yeltsin was loudly
denouncing NATO air strikes against Yugoslavia on Thursday, his prime minister
was quietly confirming the International Monetary Fund's chief would soon
visit Moscow. 

Their contrasting actions -- one attacking the West, the other seeking Western
loans -- highlighted a dilemma facing Russian leaders as they consider how to
respond to air raids that have humiliated Moscow on the world stage. 

A failure to respond resolutely will open the Kremlin and the government to
criticism by nationalists and Communists. But acting too strongly will put at
risk relations with the West and could reduce Russia's chances of securing
much-needed IMF loans. 

As one Russian leader after another on Thursday stepped back from advocating
``extreme measures'' in response to NATO, independent analysts said Moscow
would keep up its anti-NATO rhetoric but would not risk all-out confrontation
with the West. 

``Russia can make a series of symbolic gestures, and it has done so by
suspending ties with NATO, but the main thing is to avoid a confrontation with
the whole of the Western world,'' said political analyst Igor Bunin. 

``That would mean isolation for Russia and put it in a very difficult
situation,'' Bunin, head of the Centre of Political Technologies think-tank,
said in a television interview. 

He said Moscow's best option, given its economic weakness and diminished role
on the world stage, was to portray the air strikes as a grave political and
moral error but to keep relations with the West on track. 

Russian leaders showed signs of bearing out this view on Thursday. Although
they continued the barrage of criticism of NATO, and particularly the United
States, they signalled they would not back up their words with tough deeds. 

Yeltsin said he had ``extreme measures'' in reserve after freezing ties with
NATO, but he had decided not to use them. 

``We are above that,'' he said. ``On the moral level we are superior to the
Americans.'' 

Primakov said Russia would not let itself be isolated economically because of
the crisis and Foreign Minister Igor Ivanov said Moscow would not meet force
with force. Interior Minister Sergei Stepashin said Russia should not
overreact. 

``We should say that no, we will not take part in NATO strikes, we do not
approve them, but do remain open for talks,'' former Foreign Minister Andrei
Kozyrev said. 

He called for the rhetoric to be toned down too, saying it would be
disgraceful for Russia to call its Western partners aggressors and then turn
to them for financial aid. 

In a sign the West is also determined to keep Russia on board, U.S. President
Bill Clinton and French President Jacques Chirac telephoned Yeltsin on
Wednesday to discuss the crisis. 

In a further sign of Western concern, Primakov said IMF Managing Director
Michel Camdessus would arrive in Moscow on Saturday in a hurriedly arranged
visit. 

Primakov had been due to see Camdessus and Clinton this week in Washington but
turned his plane around in mid-air and headed home on Tuesday when told air
strikes were imminent. 

Although Western leaders have misgivings about Yeltsin and Primakov, the West
generally regards them as men with whom it can do business, and realises their
removal would be fraught with danger and uncertainty. 

Although Primakov's economic policies are more cautious than the West would
like, he has provided a measure of precious political stability since his
appointment in September. 

IMF credits could be vital to protect Primakov, especially if Yeltsin decides
the premier has become too influential. 

``It had become obvious that if Primakov returned from Washington empty-
handed, without IMF credits or even firm promises, Boris Yeltsin would soon
have fired him,'' the Kommersant business newspaper said. 

Some analysts said the West may be so keen to appease Russia over air strikes
that it might be more ready to offer loans. 

``We may even get more money now,'' said Sergei Karaganov, head of the
advisory Council for Foreign and Defence Policy. 

******

#5
Russia PM sees ``fruitful'' talks with IMF head
By Brian Killen
March 25, 1999

MOSCOW (Reuters) - Russian Prime Minister Yevgeny Primakov told a government
meeting Thursday that he expected productive weekend talks with International
Monetary Fund Managing Director Michel Camdessus. 

``Michel Camdessus will come to Moscow on the 27th...and we count on holding
fruitful talks,'' he said in a clear signal that Russia did not want tensions
with the United States over Kosovo to stand in the way of a deal with the IMF.

Primakov's spokeswoman told Reuters that Camdessus would stay in Moscow until
Monday evening. 

Primakov had been due to meet Camdessus earlier this week in Washington, but
he turned his plane around in mid-air after failing to receive U.S. assurances
that NATO forces would not bomb Serbia during his stay in the United States. 

Primakov's return to Moscow sent ripples of anxiety through Russian markets,
with the rouble remaining under pressure on Thursday, partly due to concerns
over an influx of roubles from a state debt restructuring scheme. 

Dealers said central bank support kept the official rate at 24.18 roubles to
the dollar, compared with 24.22 previously. However, the rouble fell below 27
to the dollar for ``tomorrow'' settlement in open afternoon trading. 

Russian shares recouped some of their losses of the past three days. The main
RTS1-Interfax index was up 4.05 percent to 79.94 at 1330 GMT. 

``The market is much better after hearing that Camdessus was on his way to
Moscow...Now investors feel more confident about Russia getting money from the
IMF,'' one Western trader said. 

Russia might be able to get by without IMF credits for another month or two,
but its foreign exchange reserves have already been severely depleted due to
central bank efforts to support the rouble and cover foreign debt obligations.

The central bank said Thursday that its foreign exchange and gold reserves
March 19 were at a three-year low of $11.2 billion, down from $11.4 billion in
the previous week. 

About $2 billion will be needed for foreign debt servicing in April and May,
according to the finance ministry. 

Russia is seeking Camdessus' approval for new credits that would help it to
repay about $4.5 billion which it owes the IMF itself this year and launch
debt restructuring talks with other creditors. 

Former deputy prime minister Alexander Shokhin, a centrist member of the State
Duma (lower house of parliament), told a news conference there could be an
agreement in principle with the IMF during the Camdessus visit. 

``It is quite possible that the IMF board will take a decision by the end of
April to allocate credits to Russia,'' Shokhin said, adding that the Kosovo
crisis should not damage Russia's chances of reaching an IMF deal. 

******

#6
Russian Analyst Warns Against Raising Foreign Loans 

Moscow, Mar 23 (Interfax-FIA) -- Russia should not 
raise new foreign loans, including from the International Monetary Fund, 
as this would only deepen the country's debt problems, a prominent 
Russian economist said Tuesday [23 March]. Russia is capable of paying 
"even $17.5 billion" on its foreign debt this year, Andrey Illarionov, 
the head of the Institute of Economic Analysis (IEA), said at a news 
conference in Moscow Tuesday. He based his calculations on the ratio of 
foreign debt payments to gross domestic product, exports and overall 
government expenditures. Foreign debt payments this year amount to 9.6% 
of GDP, Illarionov said. A number of underdeveloped countries with even 
heavier debt burdens in relation to GDP have been able to service their 
foreign debt, he said. Illarionov attributed the ongoing economic crisis 
in Russia to a lack of liberal market policies. "The actions of all the 
Russian governments in the past seven years can be described by the 
concept of 'populist, socialist policy,'" he said. Socialist economic 
policies have greatly damaged Russia, pushing the country to 104th place 
in the world by economic development in 1998, down from 24th in 1913, 
Illarionov said. IEA forecasts that by 2010 Russia will fall to 120th 
place according to GDP per capita, he said. Commenting on Finance 
Minister Mikhail Zadornov's statement that Russia had paid $5 billion on 
its foreign debt in the past six months, Illarionov said that the 
country's forex reserves had shrunk by only $1 billion, therefore the 
other $4 billion could have been bought on the domestic forex market, or 
raised from foreign banks or firms. But this is "only an opinion," he 
added. 

******

#7
Chubays Says Russia Cannot Do Without IMF Loan 

SAMARA, March 23 (Interfax) -- An IMF loan "is 
absolutely essential for Russia, and everything must be done to secure 
it," Unified Energy Systems of Russia's CEO Anatoliy Chubays said at a 
news conference in Samara on Tuesday. Russian Prime Minister Yevgeniy 
Primakov has a difficult job to do in talks with IMF officials, but he 
cannot pass the buck, he said. Chubays wished Primakov every success in 
the talks.

******

#8
Jamestown Foundation Monitor
25 March 1999

NATO BOMBING MAY FACILITATE IMF LOAN. Some observers are speculating that
the NATO bombardment of Serbia and Kosovo could, ironically, facilitate an
agreement between Russian and the International Monetary Fund (IMF). The
theory is that an IMF agreement would assuage Moscow's anger over NATO's
action in the former Yugoslavia. This theory was given some indirect
evidence yesterday when it was announced that IMF Managing Director Michel
Camdessus, with whom Prime Minister Yevgeny Primakov was planning to meet
before canceling his trip to Washington, will arrive in Moscow on March 27.
In addition, Russian media today reported the comments of U.S. Treasury
Secretary Robert Rubin that there was no link between the two sides'
disagreement over Kosovo and Russia's negotiations with the IMF (Russian
agencies, March 25). The Primakov government is hoping to win a pledge of
US$5 billion from the IMF, which would be used to pay off Russia's debts to
the Fund.

In the meantime, "Nezavisimaya gazeta" made the opposite case today, saying
the IMF might use the "complicated" international atmosphere caused by the
Kosovo crisis as a pretext for not reaching an agreement with Russia. The
newspaper also warned that Russia's Central Bank is resorting to
"administrative" methods to prevent the ruble from falling against the
dollar and that Russia could, by May, run out of the hard currency reserves
needed to both prop up the ruble and make payments on its external debt. The
paper, it should be noted, is reportedly controlled by the tycoon Boris
Berezovsky and has been waging something of a propaganda war against the
Primakov government (Nezavisimaya gazeta, March 25). Another newspaper,
meanwhile, reported today that there was a "massive increase" in Russia's
money supply in early March, which is threatening to ignite inflation and
send the ruble sharply downward (Moscow Times, March 25).

Indeed, despite the short-term optimism of some observers concerning a
possible IMF deal, a gloomy note--for the Primakov cabinet, at any rate--was
sounded by First Deputy Prime Minister Yuri Maslyukov, who is responsible
for the government's economic policy. He told a Russian weekly that in May
or June, "the time allotted to this government will objectively end" because
of a sharpening of electoral battles, an upsurge of mud-slinging and a
campaign aimed at the cabinet's "destruction." Maslyukov said the Primakov
government was an interim one which can, at best, only prevent Russian "from
sliding into the abyss" without solving "basic issues" (Argumenty i fakty,
No. 12, March 1996).

*****

#9
RFE/RL NEWSLINE Vol 3, No. 59, Part I, 25 March 1999

SWISS PROSECUTOR-GENERAL HAS NO DIRT ON YELTSIN, FAMILY.
Carla del Ponte, who arrived in Moscow on 24 March for talks
with Prosecutor General Yurii Skuratov, issued a statement
that day saying that she has brought no evidence with her to
compromise anyone. However, an Interior Ministry source told
Interfax that Del Ponte gave Skuratov evidence on "dubious
financial operations of Russian citizens." Interior Minister
Stepashin stated that Del Ponte brought no materials
"regarding the members of President Yeltsin's family or the
president himself." Duma Security Committee Chairman and
member of the Communist faction Viktor Ilyukhin told
reporters the previous day that $2.3 billion of a $4.8
billion IMF credit had been illegally transferred to an
Australian bank and that from there $235 million was
deposited with an Australian company, in which Yeltsin's
daughter Tatyana Dyachenko has a 25 percent stake. Former
Central Bank Chairman Sergei Dubinin told "Segodnya" the next
day that Ilyukhin's charges revealed only his "incompetence"
in financial matters. JAC

KIRIENKO TO RETURN TO KREMLIN? Former Prime Minister Sergei
Kirienko confirmed on 24 March that members of the
presidential administration have approached him about his
becoming secretary of the Security Council, a post left empty
by the dismissal of head of the presidential administration
Nikolai Bordyuzha on 19 March, Interfax reported.
"Kommersant-Daily" reported the same day, citing a Yeltsin
administration source, that presidential representative to
the CIS Ivan Rybkin and former ambassador to France Yurii
Ryzhov are also under consideration. "Moskovskii komsomolets"
suggested the previous day that Rybkin's assumption of the
post would lend further credence to the theory that Boris
Berezovskii has revived his influence in the Kremlin.
"Nezavisimaya gazeta" predicted that another man in uniform
is likely to take over the position, such as General Anatolii
Kvashnin, chief of staff of the armed forces. JAC

*****

#10
Korzhakov May 'Tell All' About Yeltsin's Philandering 

Moskovskiy Komsomolets
23 March 1999
[translation for personal use only]
Report by Aleksandr Khinshteyn: "Kremlin Morality Police. President 
Claims Infidelity Is Good for the Health" 

"But who are the judges?" Were it not for the laws 
of the genre and strict editorial control, I could have easily made this 
hackneyed Griboyedov quote the headline. 

President Yeltsin has condemned the general prosecutor's moral turpitude. The 
president is angry that Skuratov (or someone very like him) has been 
unfaithful to his wife. 

To determine how far the prosecutor has fallen, a Security Council 
special commission has been set up to check the "reliability of 
information about misdemeanors detrimental to the honor and dignity" of 
Skuratov. A kind of Kremlin morality police. 

Let us suppose the commission establishes that the video is genuine. 
What then? A public trial? A personnel action? A severe reprimand and warning?
It is an impasse. An absurdly cynical situation, in fact. 

"Boris Nikolayevich is the last person who should be condemning Skuratov," 
Aleksandr Korzhakov, former SBP [Presidential Security Service] chief and 
State Duma deputy, reckons. 

[Khinshteyn] Aleksandr Vasilyevich, has the president ever been
unfaithful to
his wife? 
[Korzhakov] Depends what you mean by unfaithful... 
[Khinshteyn] OK, let me put the question another way: Has Yeltsin had
lovers? 
[Korzhakov] Lovers are people you love. I don't know whether he loves
anyone 
apart from himself. 
Boris Nikolayevich always used to say: To have a good family life you must 
have something on the side. He would say: It is even medically advisable. 
He would cite his personal physician Tamara Pavlovna Kurushina. 
How can a man talk of morality when he conducts bands drunk? When he 
urinates on the wheel of an aircraft in the presence of journalists and 
pilots? That was in 1989. He was flying to the United States to speak at 
Johns Hopkins University.... 
[Khinshteyn] Didn't this speech, which was shown on television, cause a
major 
sensation? 
[Korzhakov] Yes, he could barely control his tongue. A video engineer had to
be 
quickly found to explain that with modern equipment you can stretch out 
any speech and make someone appear drunk.... 
I am often asked why Boris Nikolayevich used to have waitresses, but 
now has waiters. I always try to avoid answering this question.... 
Incidentally, I still regret not swapping the female nurses for male nurses. 
Unfortunate women. 
[Khinshteyn] Why, in fact, were the waitresses replaced with waiters? 
[Korzhakov] Now there is such a thing as male solidarity. I would not
want to 
cause any family scenes. All I can promise is that if they don't leave 
Skuratov alone I'll tell all. 
About interns fleeing the president's office with their lipstick smeared 
all over their faces. About who we would give apartments to and why. 
About where I would take Boris Nikolayevich in the Volga with tinted 
windows, leaving the Kremlin by the back entrance. About the passions 
that raged in the Yeltsin family. There is all manner of stuff. Bill 
Clinton is an amateur in comparison. 
But that was then. The president is not the same person nowadays. Maybe 
that is why he has started to speak out. 
It all reminds me of the anti-alcohol campaign. Yegor Kuzmich Ligachev 
drank like a fish and then started combating drunkenness.... 
Neither Yeltsin nor his image adviser has any moral right to criticize 
Skuratov. 
[Khinshteyn] So is Tatyana Dyachenko not exactly noted for marital fidelity 
either? 
[Korzhakov] Ask Naina Iosifovna. She knows more than I do.... [Korzhakov
ends]
S. According to our information, the video of the adventures of the 
"man resembling Skuratov" was given to the TV people by one of Boris 
Berezovskiy's aides. But doesn't the post of CIS executive secretary call 
for impeccable morals? 
Moskovskiy Komsomolets has written before about the big-hearted oligarch.
If 
necessary we are prepared to provide the Council of CIS Heads of State 
with documentary corroboration, including first names, surnames, and 
addresses of Berezovskiy's numerous girlfriends.... 

******

#11
Russian GDP seen down 7 pct in first quarter-agency

MOSCOW, March 25 (Reuters) - Russia's crisis-hit economy is likely to shrink
seven percent in the first quarter of the year although this is two percentage
points better than expected, a news agency quoted the economy ministry on
Thursday as saying. 

The Interfax news agency quoted the ministry as giving the forecast although
it could not immediately be confirmed. 

The ministry said some indicators were better than expected in the first
quarter, with production seen falling four percent year-on-year rather than a
previously forecast 7.5 percent. 

Russia seemed last year to be heading for its first year of growth since the
collapse of the former Soviet Union in 1991, but a financial crisis which
broke out in August has caused the country's economy to contract yet again. 

Analysts have estimated that this year's GDP would fall around five percent
after a 4.6 percent decline in 1998. 

The ministry gave a breakdown for areas of output, with production seen up
between one and 2.5 percent in coal, chemicals, petrochemicals, paper and
construction materials. 

It was expected to fall in several areas, including machine building, metal
working and food production, with the largest contraction expected in light
industry at 21 percent, seven percentage points worse than expected. 

Cargo volumes were expected to be down 7.5 percent in the first quarter and
passenger transport turnover off 16 percent. 

******

#12
Moscow Times
March 25, 1999 
SEASON OF DISCONTENT: Political Elite Goes MAD Over Skuratov 
By Andrei Piontkovsky 

There is a concept in nuclear strategy with the symbolic acronym MAD,
which stands for mutually assured destruction. What is now going on within
Russia's "political elite" is exactly this - mutually assured destruction.
A striking example took place late in the night on March 17, when the main
state television channel aired a five-minute excerpt from a hardcore porno
movie starring a gray-haired, not very skillful gentleman "looking very
much like Prosecutor General Yury Skuratov." 

Following this broadcast, the above-mentioned gentleman continued to look
very much like Yury Skuratov, but no longer looked very much like a
prosecutor general. 

And no appeals as to the inviolability of privacy could not help the
prosecutor general. An official frolicking with two call girls at a
specially rented apartment should know that he can become the target of
blackmail. If he does not understand this, then doubts arise concerning not
so much his moral qualities, but rather his intellectual ones. 

By the way, why say that Skuratov simply left himself vulnerable to
possible blackmail? He apparently became a real victim of blackmail - from
Colonel General Nikolai Bordyuzha, "a person with clean hands, a clear head
and a warm heart." 

By threatening Skuratov with the possibility that the video would be
shown, Bordyuzha reportedly forced the prosecutor general to announce his
resignation at the start of February. 

Sometime during the evening of March 16, however, Skuratov changed his
mind - or, rather, somebody made him change his mind. Bordyuzha's threat
was then put into play, and the prosecutor general was morally and
politically destroyed. 

But it was really mutually assured destruction. 

The scandal around Skuratov has considerably weakened the position of
President Boris Yeltsin just at the moment when the president seemed to be
about to launch a counteroffensive against Prime Minister Yevgeny Primakov,
who was increasingly irritating him. 

On March 16, Yeltsin publicly read Primakov a humiliating lecture on how
to deal with the media. The dismissal of Boris Berezovsky was evidently a
move that Yeltsin saw as a way of untying his hands so that he could sack
Primakov deputies Yury Maslyukov and Gennady Kulik for their alleged
corruption. Now, however, it is virtually impossible for Yeltsin to do
that, both politically and psychologically, given that his immediate
entourage and even some of his family members are implicated in a scandal
involving even more serious corruption charges. 

Primakov's secret evening with the leaders of the leftist opposition
showed that real power is rapidly flowing away from Yeltsin's hands.
Yeltsin is in a desperate situation, and not for the first time in his
political career. In 1991, hundreds of thousands of people came to the
White House to protect him with a human ring. And in 1993, he was saved not
by the four tanks that General Pavel Grachev decided to send after an
all-night drinking session, but by 20,000 unarmed Muscovites who assembled
to defend their beliefs and their president. 

But who will come tomorrow to protect the luxurious villas and yachts
allegedly belonging to the president's image adviser, named Tatyana
Dyachenko? 

*******

#13
Moscow Times
March 25, 1999 
Education Fair Reveals U.S. Options 
By Larisa Naumenko
Staff Writer 

Studying in the United States is an attractive option for many young
people, especially in the wake of the economic crisis. But the obstacles
are great - a U.S. higher education can cost tens of thousands of dollars a
year, and admission to elite institutions isn't easy. 

How to jump those hurdles is the topic of the Sixth Annual U.S. Education
Fair, taking place Friday and Saturday at the American Center of the
Russian State Library of Foreign Literature at 1 Nikolo-Yamskaya Ulitsa. 

Representatives of 31 U.S. universities will be there, including Dartmouth
College, George Mason University, Georgetown University, the University of
California at Los Angeles and the University of Illinois. And there will be
lectures on the ins and outs of the U.S. system, how to find scholarships
and the application process, including how to write the all-important
statement of purpose. 

Other topic include Russian alumni sharing their advice and information on
visa rules. Presentations begin both days at 10:30 a.m. 

The United States is a favorite destination for Russian students.
According to the Institute of International Education's statistics, about
6,200 Russians attended U.S. colleges and universities in 1996-97, which
was an 11% increase from the year before. This means that Russia ranks 15th
in the world among countries with students in the United States. 

In fact, Russia is third among European countries, behind Germany and
Britain, and just head of France. 

Those who come to the fair will also have an opportunity to get
information about sponsored educational programs that pay the costs of its
participants education in the United States, including the Fulbright
program, The American Council of Teachers of Russian, IREX, the Freedom
Support Act programs and others. 

Programs are for high school students, undergraduates, graduate students,
teachers, professors and researchers. 

At the moment about 600 Russians are studying and teaching under the
Freedom Support Act, which sends people to the United States for five to 10
months. 

Since 1993, when the fair first took place, it has been very popular,
according to the Information Education Center statistics. Last year, about
2,000 people attended the event, and this year its organizers expect at
least the same number of visitors. 

Irina Denisova, a 22-year-old graduate of the chemistry department of
Moscow State University, hopes to pursue a Ph.D. in chemistry. Since
chemistry is one of the fields in which students are in the greatest
demand, it was easy for Denisova to find a grant. She hasn't decided what
university she wants to attend yet. The fair is a chance to find out more
about the educational system and to learn about the experiences of Russians
who have already returned from the United States. 

She is headed abroad because she fears the difficult financial condition
of Russian science will close off opportunities at home. 

"In our country scientific research is mostly impossible because of the
lack of finances, especially since the crisis started," she said. "The only
way out is to study abroad." 

Russia's recent economic woes, dating to the Aug. 17 financial collapse,
appear to have fueled a sharp increase in the number of people looking into
studying in America. From September through February this year, 66% more
people visited the center than during the same period in 1997-98. 

******

#14
Skuratov Case: More Theories Examined 

Moskovskiy Komsomolets
March 20, 1999
[translation for personal use only]
Article by Mikhail Rostovskiy: "Behind-the-Scenes War in Kremlin" -- 
followed by Political Desk "postscript" 

"There is no wedge in existence that could be 
driven between me and Yevgeniy Maksimovich," Yeltsin stated at the 
beginning of the week. But if such a wedge does appear, its "creator" 
will be... Boris Nikolayevich himself. For several days now people have 
been whispering in the corridors of power that in Tatyana Dyachenko's 
opinion only the premier's resignation can put a stop to the powerful 
Communist offensive on power. 

But you would have to be very naive to believe that the premier has 
really become a puppet of the left wing. That means that there are also 
other reasons for the Kremlin's disapproval. What are they? Perhaps after 
obtaining the answer to this question, we will be able to find out both 
the true underlying cause of the Skuratov affair and what is really 
happening in the world of Russian politics today. 

"The Communists' tactics are clear: To exacerbate the situation to the 
utmost degree and provoke early elections," a Russian politician close to 
the Kremlin told Moskovskiy Komsomolets. "If the elections are held in 
four months' time, then Luzhkov's Fatherland, for instance, will not be 
able to take part in them: The registration deadline will not allow it. 
But the Zyuganovites will not lose out: They are the most mobilized party 
right now. And given that Skuratov may well turn out to be employed by 
the Communists, the situation looks even more alarming. Yeltsin's 
supporters are drawing the following firm conclusion from all this: We 
cannot afford to let the Communists control the government as well. It 
would be better if Primakov left. 

Yesterday Zyuganov once again threatened mass upheavals if the government is 
dismissed. But this certainly does not mean that Yevgeniy Maksimovich has 
sold out to the Communists. In his ideological views Yevgeniy Maksimovich 
is not a Communist but the advocate of a strong state. And the 
strengthening of the influence of Makashov and the extremist wing of the 
Communist Party simply disgusts the premier. 

Relations between the left-wing Duma majority and Yevgeniy Maksimovich are 
built not so much on affection as on mutual exploitation. The Communists 
want to get as much power as possible with the premier's help. And 
Primakov considers the existence of a support base in the Duma to be a 
guarantee of the cabinet's success. 

Nor is it a secret to anyone that this marriage of convenience has 
recently been showing signs of breaking up. The refusal to ratify the 
START II Treaty, the adoption of an amendment to the law on value-added 
tax [VAT], which is causing all government policy to collapse -- the list 
of things done to trip up Primakov on the eve of vitally important talks 
in Washington can be continued. So it very much looks as though 
accusations of Communist sympathies are, if not a pretext, then certainly 
not the main reason for the Kremlin's dislike of Yevgeniy Maksimovich. 

The adventures of "porn star" Yuriy Skuratov seem to have been 
scrutinized by the press from all angles. But in actual fact, almost the 
main question has remained unexplained: Why did the general prosecutor, 
who is well known for his cautiousness, suddenly decide to launch the 
Mabetex affair, which presents a threat to the Kremlin denizens, thus 
forcing the latter to release the tape? There is only one possible answer 
to this question. Yuriy Ilich was acting at the request of one of the 
heavyweights of Russian politics, who has launched a fight for the 
redistribution of power and property. 

Circles close to Yeltsin and Co. are gleefully putting forward the theory 
that Skuratov has been working at the behest of the left wing for ages. 
It is with good reason that the General Prosecutor's Office enjoys the 
reputation of being almost the most pro-Communist of all the power 
departments, and Viktor Ilyukhin feels at home there. Claims of the 
direct involvement in the scandal of a close comrade-in-arms of First 
Vice Premier Maslyukov also set you thinking. But the general prosecutor 
does not give the impression of being a kamikaze. And openly going over 
to the side of the enemies of the regime would be an act of political suicide.

This means that only one possibility remains. Certain major politicians 
from the non-Communist camp were behind Skuratov. One can only guess who 
these mysterious heavyweights actually were. For the time being it is 
worth noting one fairly interesting fact. The Kremlin has to fight the 
prodigal general prosecutor on its own. Primakov first of all tried to 
keep out of the scandal as much as possible, and then actually criticized 
the showing of the tape, initiated by the Kremlin, on the Russian 
Television and Radio channel. As for Mayor Luzhkov, he quite openly 
supports the disgraced but not dispirited Ilich. 

S. Some experts believe that we can expect further sensational 
dismissals in the near future -- not only in the President's Staff (for 
example, its boss Bordyuzha, who was responsible for the heavy-handed 
work with Skuratov), but also in the power departments. In the present 
critical situation, it is extremely important for the presidential family 
to ensure that these posts are filled by people whom they can trust 100 
percent. Incidentally, the already dismissed heads of customs and tax 
police Draganov and Almazov could certainly not be categorized as "people 
of the family and Berezovskiy." Just as Skuratov could not be categorized 
that way. It is generally known that Boris Abramovich [Berezovskiy] would 
like to see his protege Rushaylo in the post of internal affairs 
minister, and the conflict between Berezovskiy and the Federal Security 
Service and its director Putin requires no comment. 
Political Desk 

*******

#15
Russia proposes paying Soviet debt in kind-agency

MOSCOW, March 25 (Reuters) - Russia cannot service the debt it inherited from
the Soviet Union in hard currency and is in talks with several countries on
repaying it in kind, a local news agency quoted a government official as
saying on Thursday. 

Prime-Tass quoted First Deputy Finance Minister Mikhail Kasaynov as saying
Russia had already asked the Paris Club of creditor nations, the United States
and Finland to consider a possibility of being repaid in goods. 

"The Italian government has expressed its interest in replacing part of the
debt in goods' deliveries," he told a meeting of an intergovernmental Russian-
Czech commission. 

Kasyanov said Russia owed $3.5 billion to the Czech Repulic, of which it had
repaid $560 million partially in goods and securities. 

It was not clear whether Kasyanov meant that Russia wanted to restructure its
debts into payments in kind or to make payments in goods until Russia signs
restructuring agreeements with its foreign creditors. 

Russia, in dire financial straits, hopes to restructure about $100 billion of
Soviet-era debts, but can only do so after it has signed an agreement with the
International Monetary Fund on the course of its macroeconomic policy. 

IMF Managing Director Michel Camdessus is to come to Moscow on Saturday after
Prime Minister Yevgeny Primakov cancelled a visit to Washington ahead of
NATO's bombings of Kosovo. 

Government officials have said Russia can cope with its foreign debt falling
due in April and May without an IMF agreement. Kasyanov reiterated that
Russia's total overdue debt amounted to $1.5 billion. 

*******

#16
Russian patriarch prays sinful NATO will rethink

MOSCOW, March 25 (Reuters) - The head of Russia's Orthodox Christian Church on
Thursday joined his country's condemnation of NATO's air strikes on fellow
Orthodox Serbia, and said he would pray for a change of heart among Western
leaders. 

Patriarch Alexiy II also urged Serbs and ethnic Albanians in Kosovo to resume
dialogue to halt the NATO bombings which have provoked strong criticism from
Russian leaders. Predominantly ethnic Albanian Kosovo is a province of Serbia,
which together with Montenegro, makes up Yugoslavia. 

``Together with the Serbian nation, we will pray that the Lord makes wiser the
leaders of the NATO countries which carried out a vicious and sinful step and
make them reconsider,'' Itar-Tass news agency quoted the patriarch as saying. 

``I call on the Serbian nation and the Kosovo Albanians: end your quarrel and
quickly begin a dialogue,'' he said in a later statement. 

Tass quoted him as saying he supported the Serbian Orthodox Church in its
rejection of NATO's military action, especially as a peaceful solution to the
Kosovo crisis had not been exhausted. 

``What is being done is a sin before God and a crime from the point of view of
international law,'' the statement added. 

The agency quoted him as saying no justification existed for ``countries which
consider themselves Christian but carry out anti-Christian actions, unleashing
conflict and killing peaceful citizens.'' 

******