March 30, 1999    
This Date's Issues: 3116 • 3117 • 

Johnson's Russia List
#3117
30 March 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Yeltsin firm on reforms, foes unimpressed. 
2. Washington Post: Ron Linden, A Role for Russia.
3. Reuters: Russian MoF says three IMF loan options.
4. RFE/RL: Jefim Fistein, Russia: Emotions High In The Face Of NATO 
'Aggression' Against Serbs. (Interview with Sergei Karaganov)
5. Rossiyskaya Gazeta: Vladimir Lapskiy, Bayonets and Placards?
('Hysteria' Over NATO 'Splitting Society')
6. USIA: Ambassador Stephen Sestanovich on Russia and Kosovo.
7. Moscow Times: Gary Peach, THE ANALYST: Forgive Russia's Debt and
Forget New IMF Bailouts.
8. New York Times: Celestine Bohlen, Russian Women Turning to Abortion 
Less Often.
9. Reuters: Russia banks awash with post-crisis roubles.
10. New York Times: Strobe Talbott, Russia's True Interests.]

*******

#1
Yeltsin firm on reforms, foes unimpressed
By Timothy Heritage

MOSCOW, March 30 (Reuters) - President Boris Yeltsin vowed on Tuesday, in
his first major speech for months, to keep Russia firmly on the path of
economic and democratic reforms despite pressing political and financial
crises. 

Speaking forcefully in an 18-minute state of the nation address to
parliament, Yeltsin criticised NATO air strikes on Yugoslavia but said
Russia would not allow itself to be isolated on the world stage or be
dragged into a war by the conflict. 

"Russia's citizens are of course concerned about Yugoslavia, but are even
more concerned about Russia. Our weight in the world arena depends on how
we solve our problems at home," the 68-year-old leader told
parliamentarians in the Kremlin. 

In a rare appearance after months of illness and waning authority, the
president set two main goals for the coming year. 

"The first is to get out of crisis by preserving entirely economic and
political freedoms," he said. 

"The second, and no less important, is the forming of new authorities," he
said, guaranteeing free and fair parliamentary and presidential elections
due to be held in the next 16 months. 

His remarks amounted to a pledge to ensure a smooth transition of power in
mid-2000 when he steps down as president, a post he has held since 1991. 

But his speech failed to command as much attention as in previous years
when his every word was examined closely for a shift in policy and
financial markets responded accordingly. 

Traders said the markets had largely ignored his speech and the slight rise
in prices was mainly due to an outline agreement with the International
Monetary Fund on Monday on new loans. 

Yeltsin's influence has also declined because he has handed responsibility
for day-to-day governing of Russia to Prime Minister Yevgeny Primakov,
whose absence on a peace mission to Yugoslavia overshadowed the president's
speech. 

His address was based on a long report to members of the State Duma lower
house and the Federation Council upper house. 

In the written report, which set out his views on an economic crisis that
hit Russia last August, he said Russia had been right to choose market
reforms but corrections were needed. 

"We are stuck halfway between a planned, command economy and a normal,
market one. And now we have an ugly model -- a cross-breed of the two
systems," he said. 

He said errors had become apparent in the 1999 budget and it should be
amended every three months. He also said state institutions should try to
conclude talks on restructuring Russia's large debts -- an urgent task amid
the economic crisis. 

He said Primakov's mediation mission would help resolve the Yugoslav
crisis. He said Russia would not be dragged into a war and made clear it
wanted to keep ties with the West on track. 

"At the turn of the century Russia must keep abreast of the leading world
powers and build relations with them on a basis of self-respect and
partnership. If we miss our chance again...the gates to the future will be
slammed shut forever," he said. 

Although the parliamentarians liked Yeltin's comments on Yugoslavia, few
applauded his other remarks, especially as he accused the Duma of blocking
reforms last year. 

"It's the same old song, that everything was done right but the Duma
interfered," said Communist leader Gennady Zyuganov. 

Centrist parliamentarian Oleg Morozov said: "There was a lot of political
ritual." 

*******

#2
Washington Post
30 March 1999
[for personal use only]
A Role for Russia
By Ronald H. Linden (linden+@pitt.edu)
The writer is professor of political science and former director of the
Center for Russian and East European Studies at the University of
Pittsburgh. From 1989-91 he was director of research at Radio Free Europe. 

NATO bombing of Yugoslavia has gone on for nearly a week and has produced,
for the most part, exactly the opposite of what was desired. It has
provoked resolve rather than surrender in Belgrade, it has apparently
stimulated an accelerated campaign of terror and ethnic cleansing in the
very territory it was designed to protect, it has made it more, not less,
likely that neighboring countries will be drawn into the conflict, and now,
most alarmingly, it has led to calls for the use of ground troops inside
Yugoslavia. This last is the result of the recognition once again that
bombing alone is usually ineffective.

But is the choice only between prolonging the bombing and human tragedy
indefinitely or fighting our way into Kosovo? That will be our choice
unless we find a way to give both Slobodan Milosevic and NATO a way to
climb down from the barricades.

In the Rambouillet framework, Slobodan Milosevic agreed to all aspects of
the agreement except the NATO peacekeeping force. In part this was based on
protection of Serbian sovereignty, but in large part it was based on
hostility to NATO and suspicion of Western aims. It is possible, however,
that the key aims of the Rambouillet agreement could be carried out by a
force, in Kosovo, made up primarily of Russian peacekeepers, or a mixed
force from Russia and other countries.

Consider three aspects of this idea: (1) Would the Russians want to
undertake this mission? (2) Would Belgrade accept it? Would the Albanians?
(3) What would it mean for NATO?

First, under the right circumstances Russia is likely to view this idea
favorably. Moscow now feels frozen out and even threatened by key decisions
and military action taken in an area in the heart of Europe and closer to
its borders than ours. Despite the current rupture, Russia wants to be
engaged -- Prime Minister Primakov is in Belgrade right now -- and, most
important, not isolated. A mission such as this offers Moscow a chance to
make a real contribution to the post-Cold War world. While Russian
peacekeeping operations within the Commonwealth of Independent States have
not been unproblematic, its cooperation with NATO in IFOR (implementation
force) and SFOR (stabilization force) in Bosnia has been effective. Russia
could be the mainstay of KFOR (a Kosovo force).

Would the Yugoslav leadership accept a Russian presence? Russians are still
foreign troops, after all. The answer can only be maybe. Russian-Yugoslav
relations are based on national self-interest and mutual gains, not murky
notions of Orthodox or Slavic solidarity, as the current Balkan shorthand
has it. But Belgrade does have, obviously, a more favorable view of Russia
and its attitude than it does of the West. It may feel less threatened by a
limited Russian presence than a NATO force -- or a NATO war.

What about the Albanians? Wouldn't they be suspicious of the Russians?
Probably so, but the Albanians have already signed on to the Rambouillet
agreement, so the principle of a peacekeeping force is established.
Albanian suspicions could be eased by including, with the Russian force,
troops and/or observers from members of the Organization for Security and
Cooperation in Europe, from Yugoslavia's non-NATO neighbors, or from
representatives of the Western European Union. Even more important, such a
force would mean the return of relief organizations and the world press to
the region. The Albanians might find such a prospect preferable to being
left to the tender (and unobserved) mercies of the Serbian police.

But would we want the Russians in Kosovo? After all, doesn't this hand over
to Moscow something it has long desired, a "foothold" in the Balkans. It
does, but under much different circumstances than Cold War scenarios
envisioned. First of all, Russia is not the Soviet Union. We are not
talking about granting a military base for expansion (for which Kosovo is
ill suited in any case) to an expansionist superpower. We have repeatedly
said that the new Russia is our partner, and here, where the Russians have
at least as great a stake as we do, their role can be crucial, focused and
cooperative.

Moreover, under this plan NATO would still have an important
responsibility: securing Kosovo's borders. An important part of the
Rambouillet plan involves disarming the Kosovo Liberation Army. Let us be
realistic enough to recognize that some factions of that group would object
and arms would continue to flow across the border, as would refugees.
NATO's job would be to prevent that, to the extent it could, to help
protect vulnerable neighboring states and to ensure close cooperation with
the Russian/international force inside Kosovo.

Finally, if Russian influence is the worry, making a bitter enemy of Serbia
is an almost certain way to create the most favorable environment for that
to grow. Wouldn't it be better to have Moscow's role created in
consultation with the West, be fixed in place and time, and serve purposes
that the West and Russia have already agreed to?

There might be other reasons why such a plan would not work. And there are
other issues, such as cost, that would need to be addressed. The
proposition does not have to be perfect, only possible.

And here's one more consideration: How are we doing so far?

*******

#3
INTERVIEW-Russian MoF says three IMF loan options
By Svetlana Kovalyova

MOSCOW, March 30 (Reuters) - Russian Deputy Finance Minister Oleg Vyugin
said on Tuesday that three options were under consideration for a loan from
the International Monetary Fund. 

Prime Minister Yevgeny Primakov on Monday ended talks with IMF chief Michel
Camdessus by saying the Fund would lend more money to Russia, although the
figure of the funding was not given. 

Primakov said one of the terms of the IMF resumed lending was a two percent
primary surplus Russia was obliged to post in 1999. 

Vyugin said that under the programme being considered extra funds would
come from further export tariffs on raw materials and taxes. He said higher
primary budget surplus was achievable. 

"The sum of our payments to the Fund this year is principal of $3.7 billion
and interest of $0.7 billion for a total of $4.4 billion. Therefore, three
options emerge," Vyugin told Reuters in an interview. 

He said the first option involved borrowing enough from the IMF to repay
the principal and repay interest from the budget. 

The second option was to borrow to repay both interest and principal while
the third involved topping up the amount to meet the budget's external
financing target of $5.5 billion. 

"The joint crediting to Russia by the Fund, World Bank and EXIM Bank of
Japan foreseen by the budget in 1999 is $5.5 billion and the IMF's share
has not been determined so negotiations have not yet been completed," he
said. 

"That means that maybe the sum will be bigger than $4.4 billion. This may
be $5.0 (billion) and so on," he said. 

Russia hopes that effectively refinancing its 1999 debt to the IMF will
remove one of its major liabilities. 

IMF approval for an economic programme would also make negotiations on the
wider issue of cutting its total $140 billion debt burden far easier. 

Vyugin said that during the talks with Camdessus, Russia had presented a
draft economic programme to the Fund in Russian and the IMF officials would
obviously want to see an English-language version. 

"It is likely that they will take our variant, look at it and add what has
been recently agreed," he said. 

A full IMF mission is due in Russia next week at which the details of a
programme are expected to be worked out. The programme will form the basis
of a loan, which needs to be approved as usual by the IMF board in
Washington. 

He said a two percent primary surplus, to be part of the programme, was
possible as it meant only 20 billion roubles ($827.13 million) more must be
collected. A primary surplus excludes debt repayments. 

"It is likely that a further few export tariffs will be introduced...on a
whole range of raw products. A decision is being prepared by the
government," he said. Extra revenues would also come from tax collection,
although he gave no details. 

The government has already slapped a sliding scale export tariff on crude
oil and a fixed tariff on oil products and gas. 

It also imposed a range of tariffs on selected metals and other commodities. 

Vyugin did not see any pressing need to change the 1999 budget law to take
account of the IMF programme. ($ = 24.18 roubles) 

*******

#4
Russia: Emotions High In The Face Of NATO 'Aggression' Against Serbs
By Jefim Fistein

Prague, 29 March 1999 (RFE/RL) -- The following interview was conducted on
Friday (March 26) by RFE/RL's Jefim Fistein in Russian with Sergei Karaganov,
head of Russia's Council for Foreign and Defense Policy. Aurora Gallego
translated it into English:

Jefim Fistein: What are your main arguments for thinking that the action in
Yugoslavia is a mistake?

Sergei Karaganov: First, this is an aggression because it is not sanctioned by
the U.N. Security Council. An attack which is not sanctioned by the U.N.
Security Council is, according to international law, an act of aggression.
Therefore, this constitutes a violation against one of the foundations of
international stability. Second, maybe even more essential is that this action
will lead to an increase and not the decrease of human losses because the only
way the Serbs can respond to the present situation is to pursue a horizontal
escalation of the conflict.

JF: Tell me more about that. How do you see the Serbs reaction?

SK: It has already begun. They have already increased the pressure and the war
in Kosovo. Already unrest has begun in Macedonia and soon there will be unrest
and possibly armed actions in Bosnia. It is quite possible ... terrorist
actions could also occur. That could lead to a Palestine in Europe.

This is an absolutely rash, unacceptable step from the point of view of long-
term stability in Europe. And then, until now dozens of people have been dying
in Kosovo. Now hundreds and thousands will perish. This is already clear. This
step will contribute to the destabilization and possibly a long-term tense
European situation. For the first time we are really creating a source of
military instability in Europe which will unfortunately simmer for a long
time. We have already received all we could endure during the Chechen war; we
have considerable experience. But, unfortunately, the Americans have forgotten
their Vietnam is as well as our Afghan experience.

JF: How do you see the Russian reaction? It is known that Russia began cutting
off relations with NATO and its participation in the Partnership for Peace. Is
this a temporary action or a long- term one?

SK: We did not cut off the relationship, we froze it. This is why everything
will depend on the actions of the other side. We are ready to renew our
relationship if the aggression stops and when the aggression stops. As far as
the declarations concerning the stationing of nuclear weapons or annulling the
regime of sanctions against those who are internationally banned, I don't
think Russia will do that and I don't think it should. 

But in Russia emotions are running high regarding the aggressor. The majority
of the population shares these opinions. The people think the aggressor should
be stopped and that if we don't stop him now, things could become more
dangerous. This I think gives grounds to assume that many Russians will be
ready to fight. 

******

#5
'Hysteria' Over NATO 'Splitting Society' 

Rossiyskaya Gazeta
27 March 1999
[translation for personal use only]
Article by Vladimir Lapskiy: "Bayonets and Placards?" 

Russians have taken the Yugoslav drama to heart -- 
and that is natural. Our closeness to the Yugoslavs has deep historical 
and spiritual roots. And now they are looking to Russia as a faithful, 
tried-and-tested friend who will not leave them in the lurch. 

We have already shown that we are firmly on their side, even at the 
cost of certain losses. Russia has done everything in its power to 
prevent the NATO invasion of the Balkans, and it is now calling for it to 
cease forthwith. But it is not resorting to extreme measures that might 
lead to an escalation of the war. It is not responding in kind to NATO's 
audacity and recklessness. We are above that, our president has said. 

I think that this Russian stance will be properly interpreted in the 
world -- not as weakness and cowardice but as political wisdom and 
farsightedness. In this situation no abrupt movements should be made so 
as not to add additional impetus to the Balkan war. 

Unfortunately, it seems as though some of our politicians have simply been
waiting 
for this aggression in order to whip up anti-Western hysteria, just as in 
the good old Brezhnev era. They are insisting on extreme measures. Some 
deputies in the State Duma are calling for the government to engage in a 
last determined battle with the West -- in particular, to return 
nuclear-tipped missiles to Belarus (the Belarusians probably shuddered at 
those calls from Moscow). 

But if only it were a question merely of radical party members and 
Zhirinovskiy's "hawks." Some ranking military men and leaders in the 
regions are in solidarity with them. 

There have been articulate calls for us to withdraw from the embargo on 
weapons shipments to Yugoslavia that was adopted by the United Nations, 
incidentally. And to immediately embark on shipping state-of-the-art 
weapons to the Balkans -- primarily, the S-300 surface-to-air missile 
system. But even if we hypothetically imagine that we abandoned the 
embargo, it would be virtually impossible to deliver combat hardware to 
the Serbs -- NATO would not let it through. Never mind, the hotheads say, 
we could punch our way through with bayonets and grenades. Some of them 
are calling for the Northern Fleet to be sent to the Adriatic, where NATO 
aircraft carriers and cruisers are on combat patrol. 

But the person who has gone furthest is probably Viktor Chechevatov, 
commander of the Far East Military District and, incidentally, a former 
presidential candidate. In a letter to Boris Yeltsin he states the 
following: "At the time of the severe trials which have befallen the Slav 
peoples of Yugoslavia as a result of NATO's armed aggression, I consider 
it my duty to state my readiness to head up any formation -- be it of 
volunteers or of regular Russian Army units -- to provide them with 
military assistance. There is no sense today in simplifying what is 
happening in the world, there is a harsh need to admit that World War III 
is erupting and extending to more and more regions, as was the case in 
1934-1941. The bombing of Yugoslavia could turn out in the very near 
future to be just a rehearsal for similar strikes on Russia." On with 
World War III! 

As we can see, war fever has gripped people who bear a considerable 
political and military responsibility. What is happening? Have they lost 
all sense of reality or, conversely, are we talking about blunt realists 
who want to make political capital out of an anti-NATO campaign? To my 
mind it is more the latter. 

The danger is that their hysteria is infecting politically immature 
young people. 

The Zhirinovskiyites have embarked on signing up volunteers for the 
Balkan war. In the Liberal-Democrat-owned building that houses the Center 
for the Support of Youth Initiatives on Prosvirinyy Pereulok in Moscow 
around 3,000 volunteers have already signed up. 

Meanwhile political feelings are running high outside the U.S. Embassy on the 
Garden Ring -- containers of ink, eggs, and bottles are being thrown at 
the building's windows. Young people, their faces contorted, are storming 
the embassy and fighting with police and Special-Purpose Police 
Detachment officers. Those who have encouraged young people to engage in 
"feats for the sake of our Slav brothers" include Vladimir [Volfovich] 
Zhirinovskiy. Vladimir Volfovich has addressed the young people through a 
megaphone. 

...It is time to sober up. Yes, we are in solidarity with the Serbs and 
are doing all in our power to protect them. But we need to know where to 
draw the line. The hysteria that has been unleashed is splitting society, 
and a third world war will not save anyone. 

*******

#6
USIA
29 March 1999 

TEXT: AMB. SESTANOVICH WORLDNET ON KOSOVO MARCH 29 
(Special advisor to SecState for New Independent States) (9340)

Washington -- Ambassador Stephen Sestanovich, special advisor to the
Secretary of State for the New Independent States, said the
disagreement between the United States and Russia over NATO airstrikes
in Kosovo is "regrettable" because "we have in the past cooperated
rather effectively on Kosovo" and because the United States wants "to
protect a relationship that involves many common interests."

He cited the United States' and Russia's joint efforts on security and
economic issues, adding that "we want to be able not only to protect
that cooperation but to enhance it, because we have a lot of common
interests and a basis for developing a strong relationship if we can
only create the right environment for it."

"We remain in close contact with the Russian government on this issue
as we have in the past, and we will continue to do that. Secretary
Albright has had numerous conversations with her counterpart, Foreign
Minister Ivanov," Sestanovich said during a March 29 USIA-sponsored
WorldNet interactive television broadcast with European journalists.

"I don't want to pretend to you that this is anything that one could
call joint action. What we are doing here is sharing information,
presenting our perspectives on the situation, and discussing each
side's approach to see whether there are ways of creating diplomatic
openings."

He restated the U.S. position that "the crucial, urgent goal right now
is for the Yugoslav army and police forces to end their offensive"
against the Kosovar Albanians" and that "there be the opening of
serious discussion of the agreements reached at Rambouillet in order
to find a long-term solution to this problem."

Sestanovich said the United States is interested in the results of
Russian Prime Minister Yevgeniy Primakov's planned visit to Belgrade.

He stressed that the situation in Kosovo "has not been a matter of
concern only to NATO, and the decisions taken by NATO do not reflect
simply its own views," citing the UN Security Council resolution
passed last fall -- with Russia's participation -- which found that
"what was happening in Kosovo was a threat to the peace and security
of the region. This was not a casual statement, but one reflecting the
concerns of all governments about the humanitarian disaster that was
unfolding at that time."

Asked about possible Russian intervention on the side of the Serbs in
Kosovo, Sestanovich noted that "there is a U.N. Security Council arms
embargo that applies to Yugoslavia, and in providing arms under these
circumstances to Yugoslavia Russia would be taking a very serious
action and from our point of view making a very serious mistake. That
I believe is recognized by responsible figures in the Russian
government. They've made that view clear -- in the Duma debate, for
example, on Saturday -- and I certainly hope that that remains the
situation."

Sestanovich said the United States and Russia basically agree about
"the underlying problem, that is, the nature of the situation in
Kosovo, the need to find a political solution to it, to end the
humanitarian crisis, and to prevent a spillover into other countries.
We've been able to cooperate on that, because we've seen the situation
largely in similar terms.

"And if we can find a new basis now for a diplomatic way out of this
problem in which Mr. Milosevic actually fulfills his commitments, that
would be a very positive return to Russian-American cooperation. I
would expect that our relations will remain constructive on a great
many other issues where we have common interests. But this week we
certainly need to be able to cooperate again on this issue and to get
Mr. Milosevic to end this offensive."

The WorldNet concluded with a tape of President Clinton's remarks to
the people of Serbia last week, which were carried by television and
radio stations in the Balkans and via satellite.

*******

#7
Moscow Times
March 30, 1999 
THE ANALYST: Forgive Russia's Debt and Forget New IMF Bailouts 
By Gary Peach 

It has been said before, and in all honesty, it probably can't be said enough:
The IMF should not give Russia any new money. Judging on merit alone, the gov
ernment has not earned the privilege to receive new funds. It has failed to
implement many policies still relevant from last year's loan program, as well
as initiate any tough action to clear the detritus of last August's crisis.
Russia should be made to wait another few months before receiving any new tied
international credits. 

Kosovo, however, changes things a tad. To prove to Russia that it can separate
the politics of war from the politics of international finance, the
International Monetary Fund's Western shareholders (the United States,
Britain, France and Germany) may feel an obligation to hand over $3 billion to
$4 billion and make this Russian spring much more pleasant. Slapping Russia
twice - first with bombs across Yugoslavia and then with a polite "No" from
the IMF - might isolate it to the point of no return. Better to accompany the
dirty NATO stick with a dandy IMF carrot, the West may decide. 

This would be a mistake. Giving Russia additional funds at this point, when
the track record - from macroeconomic indicators to banking reform - has been
undeniably sluggish, would be throwing good money after bad. Psychologically,
renewed financial support would show Russia that it is indeed "too big to
fail," and that government and legislature can reap rewards for performing
with minimal standards and a minimum of results. 

The IMF, we can be assured, is not kidding itself. Since Russia joined in
1992, the fund has extended $19.1 billion in various facilities. This is a
phenomenal amount of money, far in excess of the aggregate sum of foreign
direct investment in the Russian economy over the same period of time. 

One month after the IMF's executive board agreed to an $11.2 billion program
of financial assistance, Russia's entire financial system collapsed. The $4.8
billion doled out in July evaporated in an attempt to support a ruble that was
being undermined by an enormous stock of domestic state debt (over $60
billion). The IMF was faced with one of its most embarrassing policy failures
ever. 

When, then, is it to be done? The West wants to provide some form of financial
assistance to Russia to make up for the alienation caused by NATO actions in
Kosovo. But there is arguably no objective basis to extend that financial
support. So an alternative must be proposed. One idea that would go a long way
to easing Russia's financial problems would be debt forgiveness. 

Forgiving some debt would be a well-accepted gesture of support. Russia is
swamped with debt, in particular external indebtedness which it inherited from
the Soviet Union. Total outstanding debt of the Russian Federation amounts to
approximately $150 billion, with slightly less than two-thirds of that sum
consisting of former Soviet Union debt. Of those liabilities, $40 billion
pertains to the Paris Club of sovereign nations, and $32.5 billion to the
London Club of commercial banks. The restructuring of these colossal debts was
conducted in the summer of 1997, during the halcyon days of the Russian
securities market, when it seemed that the economy - led by the young
reformers - was destined to soar. 

In short, the West should swiftly draft a program of debt forgiveness and
present it to Russia. By forgiving part of Russia's external debt, which is
drowning the country's system of public finance, Western leaders such as U.S.
President Bill Clinton, French President Jacques Chirac, British Prime
Minister Tony Blair and German Chancellor Gerhard SchrÚder could extend that
financial gesture they so desperately need now because of Yugoslavia. 

Furthermore, writing off part of Russia's external debt would ease the debt
burden on future budgets. 

The Russian government's ambitious policy to pay back every dime the reckless
Communist party borrowed during the Soviet period has consigned the country's
future generations to fiscal frugality. One restructuring will follow another.
The process would take some time,but a preliminary agreement could be worked
out quickly. 

Still, investors and analysts say that the IMF cannot afford to have Russia
default on its debt to the fund. It would set an alarming precedent, they say.
But, as any keen contrarian would be prone to reply, what would be so wrong
with this precedent? Just because Russia would have failed to pay back the
fund doesn't mean every other IMF debtor would immediately choose to shirk its
financial responsibilities. 

Besides, Russia will not formally default any time soon; that is not to say it
will pay its debts. The IMF will just allow it to run up arrears for some
time. 

Good - not sluggish - policy should be rewarded, and Russia should be
reminded, time and time again, that its fate is in its own hands. 

*******

#8
New York Times
29 March 1999
[for personal use only]
Russian Women Turning to Abortion Less Often
By CELESTINE BOHLEN

MOSCOW -- On a recent Tuesday morning when Women's Health Service No. 15 in
central Moscow held its regular abortion clinic, the waiting room was empty.
Of the half dozen cots in the recovery room, only one was filled. 

Masha, a 23-year-old mother with sad blue eyes, was the only woman in that
day for a "mini," or early abortion, which in Russia, as once in the Soviet
Union, is available on demand. 

Ten years ago, the waiting room would have been crowded with pregnant women.
But as the birth rate in Russia has plunged, so has the number of abortions --
from a high in 1988 of 4.6 million to 2.5 million in 1997. After decades of
waiting, Russian women finally can explore other means of birth control. 

In Soviet times, abortion was the main means of birth control: The rule of
thumb was almost two abortions for every live birth. That fact, then hidden
from public view, was one of the most shameful aspects of a medical system
that routinely neglected its female patients, from birth to death. 

Not only did Soviet women die more often in childbirth and undergo more
abortions than Western women, but they were not even provided with the most
elementary sanitary products, let alone easy access to the Pill or other
reliable contraceptives. 

With Communism's collapse, birth control, once a subject that was considered
vaguely indecent, became a matter of public discussion. Articles appeared in
newspapers, gynecologists appeared on television talk shows but most
important, contraceptives, all imported from the West, appeared in pharmacies.
In 1993, the Russian Health Ministry began a family planning program, opening
more than 200 clinics around the country, retraining doctors, midwives and
nurses, and providing an eager public with information and advice on sex,
pregnancy and birth. 

The government's efforts have been amplified by an active network put in
place by the Russian Family Planning Association and by Western pharmaceutical
companies. These firms' entry into the untapped Russian market has been
accompanied by pamphlets, seminars, billboards and heavily discounted special
offerings on contraceptives made available through women's health centers. 

The results have been noteworthy, particularly against the backdrop of an
otherwise crippled health system. Abortions, maternal mortality and infant
mortality have all fallen. In 1993, for every 100,000 births in Russia, 70
women died during pregnancy or childbirth, while for each 1,000 children under
one year of age, 19 died; in both categories, the rates were roughly three
times those in Western European countries. In 1998, according to preliminary
figures, the maternal mortality rate had fallen to 50 per 100,000 births and
the infant mortality rate to 16.6 per 1,000 infants. 

Both infant and maternal mortality rates are still much higher than those of
Western Europe. Abortions, available on demand through 12 weeks, and for
medical and social reasons up to 22 weeks, still occur at a higher rate than
anywhere in Europe except Romania. 

Attitudes are proving difficult to change. "Abortion in this country had
become a normal state of affairs, and there were many women who had five or
six without any hesitation," said the Rev. Maxim Obukhov, a Russian Orthodox
priest whose parish has become an anti-abortion movement's headquarters. 

"You have to remember that people were raised in an atheist state, where
children were taught in biology that an embryo was like a fish. Abortion is a
tradition, handed down by mothers, even grandmothers. To examine attitudes
toward abortion is to examine the vestiges of communism." 

Considering that abortion accounts for roughly one-third of maternal deaths,
the decision by millions of Russian women to turn to other means of birth
control has itself saved numerous lives. The absolute number of deaths caused
by abortion has dropped dramatically -- from 349 in 1989 to 154 in 1997. 

But some doctors also attribute the improved numbers to the fact that there
are fewer mothers and fewer babies. Russia's birth rate has dropped, from 13.4
per 1,000 population in 1990 to 8.6 per 1,000 in 1997. 

"The fact is that there are far fewer pregnant woman, which means that they
are getting much more attention," said Maya Yerokhina, chief doctor at women's
Health Service No. 15. 

At the Research Center for Obstetrics, Gynecology and Perinatology, Dr.
Vladimir Serov, the deputy director and chief medical specialist, takes
cautious pride in the improved maternity statistics, which, he noted wryly,
are the only health indicators in Russia to show a positive trend recently.
But he worries that Russia's current parlous state threatens even these modest
gains. 

For Russian nationalists and their Communist allies, the drop in Russia's
birth rate -- taken with the surge in the death rate -- is seen as a plot to
smother Russia in its cradle. For these people, family planning has become the
enemy, despite improved maternal health and reduced abortions. 

The nationalist argument, backed by the Russian Orthodox Church, did win one
battle last year, when the Russian parliament voted to block federal funds for
family planning. Other money, including some from regional budgets, has been
made available to carry on the program, but subsidies for free or discounted
contraceptives are drying up. 

After last summer's financial crisis, family planning advocates are watching
closely to see if Russian couples stop using contraceptives because they
cannot afford them. Foreign pharmaceutical companies are also concerned, and
in some cases have held down prices. 

"For instance, we have pills that used to cost $1.40 that are now priced at
the ruble equivalent of 70 cents, so women who have grown used to our products
can continue to use them," said Alexander Shlychkov, a gynecology specialist
at the German pharmaceutical company Schering. 

A recent study in the central Russian region of Ivanovo, where Russia's
Family Planning Association has an active chapter, indicates that the economic
crisis -- which hit in August when the ruble's downward plunge began -- has
already taken its toll. Sales of birth control pills, which had crept upward
from January to July, began to tumble in August. 

Even before the crisis, doctors and pharmacists discovered a strong
resistance to the Pill, which many Russian women were convinced causes cancer.
It is not uncommon for doctors to hear women say that they think abortions are
safer than pills and that safest of all are the old folk formulas concocted by
their peasant grandmothers. 

Even so, use of birth control pills here shot up in the 1990s, as younger
women became sexually active and began using them. In 1990, only 1.7 percent
of Russian women in their fertile years took the Pill; in 1997, the percentage
was 6.8 percent, a surge that family planning experts call rare, and dramatic.

But even with the best of contraceptives, women still get pregnant, which is
why Masha showed up recently for her second abortion. 

In a wan voice, she explained her family's dilemma. Her first child, a
5-year-old boy, suffers from a rare tissue cancer that drains the salary of
her husband, a physician's assistant, and her energy as a mother. At this
point, she said softly, a second child was simply out of the question. 

"Maybe if the financial situation was different, if our child was healthy,
but ... ." Her voice trailed off as she brushed a lock of hair from her tired
face. 

******

#9
Russia banks awash with post-crisis roubles
By Brian Killen

YEKATERINBURG, Russia, March 30 (Reuters) - Believe it or not, Russian banks
have more roubles than they know what to do with. 

Last August's financial crisis was marked by acute liquidity problems and a
run on deposits at many banks. Now the market is awash with cash but starved
of investment opportunities, and the central bank is trying to soak up some of
the surplus funds. 

In Yekaterinburg, capital of the Urals region of Sverdlovsk, few banks had
borrowed heavily at home or abroad, so they emerged from the crisis in a
relatively strong position compared to that of their Moscow-based
counterparts. 

Several major banks are creaking under the weight of foreign debt. Some of the
biggest were brought to their knees when the rouble was effectively devalued
on August 17 and the domestic debt market frozen. 

``The crisis mostly hit the big banks that were speculating,'' Yekaterinburg
Mayor Arkady Chernetsky told Reuters. ``Our small- and medium-sized banks
relied more on serving the real sector of the economy.'' 

``Today there is no shortage of money in Yekaterinburg banks, but the problem
now is not in forming assets but in managing the capital,'' he said. 

The problem is fairly typical and is reflected in the level of commercial
banks' balances in correspondent accounts at the central bank, which are more
than double August crisis levels. 

There are very few options for using the funds, with the domestic securities
market stagnant, foreign exchange trading tightly regulated and corporate
lending restricted by high risks and high interest rates. 

``There is just nowhere to put the money they are taking in deposits,'' said
United Financial Group analyst Margot Jacobs. 

CENTRAL BANK GETS OUT THE MOP AFTER TURNING ON TAPS 

After emergency injections of liquidity, plus stabilisation credits for the
chosen few, the central bank is now struggling to take pressure off the
rouble, which has lost more than 75 percent of its value since last August. 

The bank, which reduced commercial banks' mandatory reserve requirements when
the system was starved of liquidity in August, raised them again on March 19
to seven from five percent. 

``Raising the requirements is simply a reflection of the fact that the banking
system has a lot more liquidity and there is no justification for keeping the
reserves at the low levels they were at,'' Jacobs said. 

She said there were very few rouble investment instruments available, and
bankers in Yeketerinburg agreed. ``The securities market is almost non-
existent,'' said Lyubov Shilchikova, first deputy chairman of SKB-bank, a
major regional bank. 

Shilchikova said lending to Russian enterprises was a risky proposition as
there were very few solvent potential borrowers. ``The risks of not being paid
back are growing,'' she added. 

Yevgeny Bolotin, vice president of Uralpromstroibank, said the task facing his
bank was not to increase the volume of its credits but to improve the quality
of its loan portfolio. 

``The money is there, but there are no securities to invest in,'' Bolotin
said, adding that the gold market and Russian gas monopoly Gazprom were among
the best investment prospects. 

``Moscow banks' clients ran away from their banks and came to us. Now we don't
know what to do with the money,'' he said. 

Another local banker, Dmitry Kotsyuba of Grankombank, said there was still a
lot of mutual distrust because of the risk of non-payments. ``But those who
behaved well enough during the crisis are now seeing a huge flow of funds.'' 

REGIONAL BANKS SITTING PRETTY AS RESTRUCTURING LOOMS 

The regional bankers, comforted by their low exposure to the troubled treasury
bill market, forward currency contracts and interbank lending, have even more
reason to feel secure. 

Under a central bank plan for restructuring the banking sector, a significant
number of the regional banks will receive some kind of government and central
bank support. 

Regional banks regarded as ``structurally important'' are to receive an
estimated five billion roubles ($200 million), while at least 25 billion
roubles will be needed to prop up major nationwide bank networks. 

Sverdlovsk is one of 26 regions where the central bank plans to establish so-
called ``supporting'' regional banks on the basis of existing financially
stable banks. 

These banks are seen as vital components of the country's settlement system
and financial infrastructure. 

Chernetsky, a likely candidate for governor of Sverdlovsk in an election due
this summer, said some of the bigger local banks had already received central
bank stabilisation credits. He added that viable small banks should also
survive. 

``The Russian banking system is not the best, so it is impossible to help all
banks,'' he said. ``But there should be no artificial liquidation of banks. No
big Moscow banks will take on the tasks of the regional banks.'' 

Shilchikova said the state had to help restore trust in Russian banks. ``It is
impossible to liquidate functioning banks,'' she said. 

Bolotin said many banks deserved to be closed, but so far there had been
little restructuring at the regional level. 

Russia has more than 1,400 banks, about 70 percent of which are seen as
financially stable and capable of working without state support, according to
the central bank. 

Jacobs said the process of weeding out banks that were not viable was going
slowly even after the crisis. 

``They've certainly got their hands full, not only in the regions but in
Moscow, with all their problem children.'' 
($-24.19 roubles) 

*****

#10
New York Times
30 March 1999
Russia's True Interests
By STROBE TALBOTT
Strobe Talbott is the Deputy Secretary of State. 

WASHINGTON -- Prime Minister Yevgeny Primakov of Russia is due in Belgrade
today, with the stated purpose of stopping NATO air strikes against
Yugoslavia and laying the groundwork for a peaceful settlement of the crisis. 

As Secretary of State Madeleine Albright stressed to Foreign Minister
Igor Ivanov when they talked by telephone yesterday, the precondition for a
return to diplomacy is an end to the frenzied slaughter that Serbian
soldiers, police officers and paramilitary gangs are carrying out against
ethnic Albanians in Kosovo. If that is Mr. Primakov's message to President
Slobodan Milosevic of Yugoslavia today, the mission may help. If not, it
won't. 

As befits a democracy, Russia's foreign policy reflects attitudes on its
home front. Russian public and parliamentary opinion across a broad
spectrum has been greatly riled by NATO's action. A number of democratic
reformers, including three who plan to visit Washington later this week,
have criticized the alliance for fueling the flames of Russian
ultranationalism. 

Because NATO was founded 50 years ago to deter the Soviet Union, many
Russians react viscerally to its continuing existence, its enlargement and,
now, its resort to force against another country with strong historical,
ethnic and religious ties to Russia. 

However, there would be something perverse about Russia's appearing to
side with the Belgrade regime in the current conflict. During the past
decade, Russia and Serbia have been diametrically opposed in handling their
post-Communist transitions. Since the Soviet Union dissolved, eruptions of
bloodshed and repression like the one in Chechnya have been exceptions to
the rule. By and large, the emergence of 15 new independent states has been
remarkably peaceful, and many of those states, notably including Russia
itself, have moved quickly to join the democratic community. 

By contrast, the breakup of Yugoslavia has been an ongoing horror,
replete with war, irredentism, mass graves, charred villages, concentration
camps and waves of refugees. It is worth pondering how much better off
Europe would be today if Serbia had followed the example of Russia, Ukraine
and the other former Soviet republics. Conversely, it is not hard to
imagine how much worse off the whole world would be if anything like the
meltdown of the old Yugoslavia had occurred across the 11 time zones of the
old Soviet Union, with 30,000 nuclear weapons in the mix. 

While the United States and Russia have had their disagreements, they
have accomplished a great deal together on the basis of mutual interest,
including in the Balkans. Our troops are still serving together in Bosnia.
Along with Britain, Italy, France and Germany, the United States and Russia
hammered out a deal that the Kosovo Albanians, at least, have accepted. In
his rejection of international efforts to end the crisis peacefully,
President Milosevic has violated an agreement he made with President Boris
Yeltsin and repeatedly defied appeals from the very men -- Mr. Primakov and
Mr. Ivanov -- whom he plans to receive today. 

For more than a year, diplomats from the United States, Russia and other
countries conducted patient, peaceful diplomacy while Belgrade brutalized
-- and radicalized -- Kosovo. It was only when that diplomacy hit a brick
wall that NATO decided it had to act, especially since Mr. Milosevic was
clearly using the talks as a cover for village-by-village devastation of
Kosovo. 

The escalation of the atrocities since then has crystallized the
challenge: this is barbarism in our own time, in the heart of Europe, on
the eve of the 21st century. It is hard to believe that Russians of any
stripe would want to defend, or identify themselves with, an abomination
against the most elemental standards of decency and a repudiation of much
that the Russian people themselves have achieved since they put Soviet
Communism behind them.

*******