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Johnson's Russia List


April 1, 1999    
This Date's Issues: 3119 3120  3121 


Johnson's Russia List
"The bible of serious Russia watchers"
1 April

[Note from David Johnson:
2. Jamestown Foundation Monitor: KREMLIN SAID TO TARGET COMMUNIST PARTY, 

3. Fred Weir on Russia and Yugoslavia.
4. Journal of Commerce: John Helmer, MISLEADING RUSSIA -- WHAT PRIMAKOV'S 

5. Bloomberg: Carnegie Moscow's Trenin on Russia's View of Yugoslav Bombing.
6. Jerry Hough: Primakov, Russia, Kosovo, US...
7. Moscow Times: Oksana Yablokova, Expatriates Wonder If Moscow Is Safe.
8. Victor Kalashnikov: Primakov and Nato.
9. Bloomberg: Russian, U.S. Commercial Ventures Continue Amid Rift.
10. Reuters: Russian reform won't be easy, will take time-Rubin.
11. Moskovskiy Komsomolets: Mikhail Rostovskiy, Bill the Ripper. Will
Government Withstand Clinton's Bomb Strikes? (Long Balkan War Seen
Russian 'State System').

12. NTV: Lebed Comments on Yeltsin, Yugoslavia.] 



MOSCOW, March 31 (Itar-Tass) - Industrial output in Russia in March 
grew by 8 percent from February, First Vice-Prime Minister Yuri 
Maslyukov said. 

The Prime-Tass news agency quoted Maslyukov as saying at a press 
conference on Wednesday that the crisis in industry and agriculture 
would end this year. 

He explained his optimism by the fact that the amount of contracts in 
the processing industry grew by 3.5 times in February compared to 

Maslyukov said that 2 percent growth of the gross domestic product in 
1999 is quite possible. However, he stressed that a 2- 25 percent 
increase in GDP is a "catastrophe" for Russia. 

"By the year 2010 GDP has to grow by 4-6 percent a year for normal 
development. Otherwise, Russia will never be able to get off the ground, 
" he said. 


Jamestown Foundation Monitor
March 31, 1999

quoted anonymous officials in Yeltsin's administration as strongly hinting
of late that the president has extra-constitutional contingency plans.
Justice Minister Pavel Krasheninnikov is said to have collected evidence of
extremist statements made by leaders of the Communist Party of the Russian
Federation (KPRF), of illegal KPRF cells at enterprises, and so forth. This
evidence will supposedly be used to justify banning the party. Such a ban
would be accompanied by firing the cabinet of Prime Minister Yevgeny
Primakov (or forcing it out of office), and bringing back Viktor
Chernomyrdin to serve as head of the government for a third time (Moskovskie
novosti, March 30-April 5). According to one report, Tatyana Dyachenko,
Yeltsin's daughter and "image-maker," met with Chernomyrdin at the end of
last week (Argumenty i fakty, No.13, March 1999).

The existence of such contingency plans is one possible explanation for
Yeltsin's most recent personnel reshuffles, including the appointment of
Aleksandr Voloshin as head of the presidential administration and of Federal
Security Service Director Vladimir Putin as head of Yeltsin's advisory
Security Council. Indeed, Voloshin, in introducing Putin to the Security
Council staff earlier this week, warned that "extremist forces" were
threatening the Russian state (Russian agencies, March 29). Such plans would
also explain Yeltsin's meeting last week with Yuri Luzhkov, which was
reportedly an attempt by the head of state to patch up relations with the
Moscow mayor. Luzhkov was quoted today as openly criticizing the Primakov
cabinet for lacking a "precise economic policy" and for "not doing anything
real to support industry." Until now, Luzhkov had been much more critical of
Yeltsin and the Kremlin than of Primakov and his cabinet. The account
suggested that Luzhkov is positioning himself to succeed Primakov as prime
minister (Izvestia, March 31).

At the same time, it is possible that the various leaks from the Kremlin
about possible plans to fire the Primakov cabinet and ban the KPRF may
simply be a way to put pressure on the Duma to drop its impeachment
proceedings against Yeltsin. In fact, NATO's actions in Yugoslavia would
appear to have helped Yeltsin politically at home by taking the focus off
the corruption scandals as well as having a "rally-around-the-flag" effect.
Gennady Seleznev, the Duma's speaker and a top KPRF official, said yesterday
(after Yeltsin's state of the nation address) that the Duma might consider
dropping its impeachment drive in light of events in Yugoslavia. Viktor
Ilyukhin, however, head of the Duma's security committee and a KPRF radical,
insisted that this would not happen (Russian agencies, March 30).


Date: Wed, 31 Mar 1999
From: "Fred Weir" <> 
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT Mar 31) - Russia tried to put the best face Wednesday on
the apparent failure of Prime Minister Yevgeny Primakov's peace mission to
Yugoslavia, while politicians argued over what further steps Moscow could
take to signal its displeasure at the continuation of NATO airstrikes.
And in a move that is sure to jack up tensions between the former
Cold War antagonists, the Russian Navy announced it would send a fleet to
the Mediterranean in April to conduct "training exercises" near the war
"The situation has worsened badly after NATO unleashed aggression
against Yugoslavia," Russian Foreign Minister Igor Ivanov told journalists
after the Russian mission, led by Mr. Primakov, left Belgrade. "They
violated the mechanism of negotiations that was just being formed, and
ruined all the progress that had been made".
Mr. Primakov spent six hours Tuesday closeted with Serbian leader
Slobodan Milosevic, trying to persuade him to make political concessions to
NATO over the breakaway Yugoslav province of Kosovo, in exchange for a halt
in the week-old bombing campaign.
But despite the friendly tone of the talks, Mr. Primakov failed to
draw any substantial change of course from the embattled Serbian leader.
According to news agencies, Mr. Milosevic pledged only to withdraw some of
his forces from the disputed Kosovo region if NATO stopped its attacks.
Mr. Primakov hailed that offer: "A signal was received from Milosevic
which, in Russia's opinion, is sufficient for starting a
political process and renouncing military options which are leading the two
sides only towards deadlock," he said.
But the idea was swiftly, and derisively, rejected by the West as far
too little, far too late. Mr. Milosevic weighed in, saying that Serbia was
prepared to "fight to the very end" against NATO.
"Russia will continue its efforts to counter this unwise, dangerous and
even tragic decision on the part of NATO to continue the bombing of Serbia,"
Mr. Primakov said on his return to Moscow. "We will continue to work for
Analysts say that Russian credibility is severely strained in the wake
of the inconclusive Primakov mission, although Moscow may still be the best
mediator if the two sides do decide to return to the negotiating table.
"It was predictable that Primakov would be unable to solve the
problem in one go," says Vitaly Naumkin, an analyst at the Russian Centre
for International Strategic Studies. "We must look at this as a process.
Primakov has inserted Russia back into the peacemaking process, and that may
bear fruit in time".
In a raucous Wednesday session of the Duma -- which broke out in
fisticuffs at one point -- Mr. Primakov's mission was loudly denounced by
opposition politicians as "a complete and utter failure", and stronger
steps to express solidarity with embattled Serbia were demanded.
Nationalist groups have already opened streetfront recruiting centres
in Moscow and other Russian cities to raise a volunteer force to fight
against NATO in Yugoslavia. Opposition politicians are urging the
government to open negotiations with neighbouring Ukraine and Belarus on
stationing Russian nuclear missiles on their territory to counter the common
perception of a newly aggressive NATO closing in on their frontiers.
Calls are growing to scuttle the arms embargo against Serbia, and
provide the beleaguered Slavic state with advanced Russian weaponry.
General Alexander Lebed, a likely presidential candidate, told
Russian TV that Moscow must take a stand against NATO now, before it begins
pushing Russia around.
"We are witnessing a precedent of NATO's total and global control
being formed," Gen. Lebed said. "This is very dangerous for Russia, Europe
and the world".
On Wednesday the Russian navy announced it will send a squadron of
seven ships, including missile frigates and anti-submarine frigates, into
the Mediterranean Sea, the official ITAR-Tass agency reported.
The ships will only conduct observation and "training exercises" in
the region, the report said.
President Boris Yeltsin has insisted that, although Russia opposes
NATO action against Serbia, it will not be drawn into the conflict.
"Our foremost duty is to prevent disorder in Russia," Mr. Yeltsin
said in his state of the nation address Tuesday.
But some observers are warning that the domestic rise of anti-American
sentiment and political pressures to do something practical to aid Serbia
increase with each day the bombing continues.
"The impact of this on Russian domestic politics has been huge," says
Mr. Naumkin. "If the war goes on for a few weeks, it may change our
political landscape in unpredictable ways". 


Date: Wed, 31 Mar 1999 
From: (John Helmer) 

To come in The Journal of Commerce
>From John Helmer in Moscow

When Rick, the hard-boiled American idealist, met the Gestapo
colonel at Rick's Bar, he was asked why he had come to Casablanca.

"I came for the waters," said the character, played by Humphrey
Bogart in the famous 1943 film.

"But there are no waters in Casablanca," the Nazi replied.

"I was misled," Bogie shot back.

In Moscow and in Washington these days, there are more intrigues,
and more misleading going on, than could keep the audience at the movie
Casablanca on the edge of their seats. 

Hanging on to their seats is what Russia's prime minister Yevgeny Primakov
and Michel Camdessus, managing director of the International Monetary Fund 
(I.M.F.), appeared to be doing most of all, when they wound up negotiations 
a few days ago.

Officially, the I.M.F. and the Russian government look as if they have
reached an agreement to resume lending to Moscow, thus averting a threatened
default by the Russian government on repayments to the Fund for the rest of 
the year.

The brief communique, however, said nothing about a loan agreement at all.
It did say Camdessus and the Russians have agreed on "most of the 
measures" required to produce a primary budget surplus in Moscow of 2%.
That's the money left over, after the government has paid for the
country's basic services, to service its debts. The I.M.F. has been trying
to cut social spending deeper, in order to generate even more
money to pay even more debt.

The compromise that was struck between Camdessus and Prime Minister
Primakov allows both men to cover that part of their posterior
that is exposed to their constituents. It is far from a vote of confidence
by the I.M.F. in the Primakov administration. And it places the Russian
leader in the position of alienating voters, as well as the powerful
energy lobby, as he gives political priority to Russia's foreign debt-holders.

So uncertain was the deal that Camdessus cancelled a press conference
that had been scheduled to explain it.

He also cancelled a briefing which the I.M.F. always gives Moscow 
representatives of the G-7 member governments, whenever the I.M.F. concludes
a major loan agreement with Russia. As the G-7 members are the dominant
members of the I.M.F. board, the lack of a briefing was Camdessus's way of
saying there has been no decision yet for the board to consider. Even
more pointedly, Camdessus's Moscow representative warned Primakov
that board consideration may not happen before May.

This forces Primakov to make good on the $1 billion repayment to
the I.M.F. due in the second quarter. A first-quarter payment of $1 billion
has already been made on time.

By the end of May, assuming the second repayment is made, Russia will owe
the I.M.F. another $2.7 billion for the year. All Camdessus has really 
agreed to consider, and all the board members in Washington will have to think
about until June, is whether to roll over that debt. If they agree,
Primakov will possibly be able to collect another $1.6 billion from the
World Bank, and $700 million from Japan, disbursement of which are
contingent on resumption of an I.M.F. loan program.

If these disbursements are actually made, they will cover, just barely,
Moscow obligations on the debts it has incurred since 1991. Not a dollar
will be available to service the Soviet-era debt, most of which is owed to
Germany. Primakov will go down in the record books as the first
Russian prime minister to sign his name to a deal that allows more
money to go out of Russia, in debt repayments, than will come in. 

Camdessus will also be able to preen himself on achieving the first 
reduction in the I.M.F.'s exposure to Russia -- about $17 billion, instead 
of $19 billion. He will also be able to claim credit for taking a bigger bite 
out of Russia's debt repayment outflow for the I.M.F., relative to other

The achievements are so modest, Primakov can hardly claim he's
been misled. Russian voters won't fall for this either. Although the 
government has been trying to meet promises to pay overdue salaries to 
state-sector workers, the arrears are still huge at more than Rbs11 billion.

But Russian voters aren't likely to turn against Primakov -- if by any
chance that is the reason Primakov's enemies in the Clinton 
Administration are going along with the I.M.F. proposals at the moment. Right 
now, Russians have higher political priorities. They want Primakov to 
continue his drive to clean corruption out of the government, starting at 
the top. And they want Russia to defend itself against the mounting military 
threat in the Balkans.

Because the Clinton Administration has positioned itself in support of 
Russian politicians who are hated for their role in destroying the economy
and enriching themselves and their friends, there is no American candidate
to replace Primakov. And for as long as the bombs and rockets
rain down on Yugoslavia, most Russians believe they must mobilize before
Russia itself will become the next target.

Even if the hawks in Washington would like to launch a political
"Tomahawk" to destroy the Primakov prime ministry, the war against the
Serbs has probably ended whatever chance there was that President Boris
Yeltsin could do that job. The generals in command of the armed units
ringing Moscow are extremely unlikely to back Yeltsin, if he
moves against Primakov now. And without military backup, Yeltsin
is too nervous, too weak, to dare sack the prime minister, triggering
a certain clash with parliament.

This is giving Primakov confidence enough to accept the I.M.F.'s
demands, no matter how disadvantageous and misleading they would 
look in domestic terms, at any other time.


Carnegie Moscow's Trenin on Russia's View of Yugoslav Bombing

Moscow, March 31 (Bloomberg)
-- Dmitri Trenin, deputy director of the Carnegie Moscow Center, comments
on Russia's perspective on the North Atlantic Treaty Organization's bombing of

Dmitri's comments come as leading Russian politicians, including Krasnoyarsk
Governor Alexander Lebed and Moscow Mayor Yuri Luzhkov, two likely leading
contenders for the presidency in 2000, call for Russia to ship arms to
Yugoslavia in defiance of the international arms embargo. Other Russian
politicians, such as Vladimir Zhironovsky, leader of the nationalist Liberal
Democratic Party, and Gennady Zyuganov, leader of the Communist Party, have
called for Russian volunteers to go to Yugoslavia to fight. Russian President
Boris Yeltsin and Prime Minister Yevgeny Primakov have said that Russia should
not be drawn into the conflict. 

``If NATO moves to giving arms to Albanians more officially, and especially if
there are ground troops in Yugoslavia, the Russian side will have to get
involved more actively. 

``I think it is in Russia's interest now to help find a peaceful solution of
the conflict, because Russia is that player that has a little weight at the
moment and at the same time a little chance of being left aside. 

``I think if we can stabilize the situation, the effect on business will be
minimal. But if the situation develops according to present tendencies there
will come a moment when Russian and U.S. will have totally opposite positions.

``In Russia, politics are more important than economics ... or at least they
have been in the past. If there is a serious turnaround in Russian domestic
and foreign politics ... then no one will care that Russia will lose this or
that much from a foreign investment project. 

``What is going on in the Balkans is strengthening positions of those parties
who do not want capitalism in Russia. 

``I think the U.S. will show some reason soon and will not go into another
escalation of the conflict, and if the Russian government takes a reasonable
position ... there is a chance to stabilize the conflict geographically and


Date: Wed, 31 Mar 1999
From: "Jerry F. Hough" <>

The United States is in a very strange situation vis-a-vis its 
foreign policy debate. My request for illumination on Primakov's economic 
policy brought no response. In private, some very knowledgeable people 
simply refused to give answer. Absolutely refused.

On Kosovo, yesterday's column by Thomas Friedman in the New York 
Times is must reading. For the first time that I saw so prominently, the 
question was raised directly: what does a three-year interim agreement mean?
His answer was that it seems to mean a face-saving measure for independence
in three years, despite the fact that our official policy is autonomy only.
Small wonder Milosevic doesn't want NATO troops. Imagine that Britain had 
demanded tens of thousands of British troops stationed on the Potomac in 1861 
with autonomy for the Southern states for a three-year interim period.
Would we think that the British troops would allow any American action to
prevent Confederacy independence in three years unless we had the 
strength to go to war with Britain? 

It is not clear to me why NATO troops are necessary if Milosevic 
is willing to grant autonomy. If, as Friedman says, the rebels are not 
willing to accept that, why should we not say they are on their own?
But the traditional way to get moderates to turn against radicals is to 
grant the autonomy that the moderates want and let them help control the 

The reason for the action seems to be anxiety about having a 
role for NATO. But this is the question that requires real thought. 
If the Euro works and we are on the way to a United States of Europe, 
then Americans commanding troops in Europe and American planes flying 
low in Italy will not long be tolerated. The revolt against the European
Commission to strengthen the European parliament was an important step on the
path to a real Europe, and the creation of a European defense force--but
without US--is coming over the next decade. While Kosovo reflects that
American anxiety, the question is whether it retards the process of the 
Europeanization of the defense of Europe or accelerates it. If it goes 
bad, if European troops are being killed, the danger is not anti-Americanism
in Russia, but anti-Americanism in Western Europe.

I agree that we have to worry about humanitarian disasters in Europe.
But Russia is in Europe. The number of excess deaths in the former Soviet 
Union makes Rwanda numbers look small. It is in Russia that we complacently
are glad if Primakov is able to stave off disaster until the next election as
if that is some salvation. But why should the results of that election be 
benign if we have done nothing to improve things or encourage a change in 
economic policy? Instead, the IMF gives a "loan" to pay off the IMF loan.

In the long run, the only way to save a major American role in 
NATO is to create a major role for Russia within it. The European state 
is going to be contented only if there are two powerful outside "European"
actors for them to try to balance in the community from Vladivostok to
Vancouver of which Baker dreamed. If the face-saving step in Kosovo 
is to have a predominantly Russian peace-keeping force that Milosevich 
could accept, that could serve some long-term interests as well.

I remain amazed at the reaction of the Administration to 
Russia and most of all that of Vice President Gore. Does it really think 
that the election in June 2000 (if something bad does not occur beforehand)
is going to have results that the Republicans will not be able to 
proclaim demonstrate the failure of a policy that Gore has been careful to
identify himself with? Even if Luzhkov, Lebed, or Zyuganov turn out well
for America, do they think it will look that way by November? Is the 
way to spin it is to act surprised or to try to get ahead of the curve?


Moscow Times
April 1, 1999 
Expatriates Wonder If Moscow Is Safe 
By Oksana Yablokova
Staff Writer 

Fearful of angry confrontations with leather-jacketed youths or maybe even
Stalinist babushki, foreigners in Moscow are looking over their shoulders
and keeping their voices down. 

But while rumors of attacks on foreigners and foreign-owned businesses
have flourished, diplomats, police and business associations say there
hasn't been any real upsurge in harassment of citizens from NATO countries. 

Russians from the Kremlin to the corner store are outraged at NATO's
bombing campaign in Yugoslavia - outrage that can be seen in the broken
windows and splashes of paint on the U.S. Embassy. 

Concerned talk is making the rounds of an expatriate community that had
grown comfortable in Moscow, but is suddenly wondering whether it is again
dangerous to be here. 

Certainly Sunday's failed grenade attack and machine gun firefight outside
the U.S. Embassy would give anyone pause for thought. 

And the violence has not been confined to the embassies. 

The Uncle Sam's Cafe on Myasnitskaya Ulitsa in central Moscow, for
example, was attacked at around 6 p.m. on Saturday by a group of teenagers
chanting "war on America." Cafe director Yelena Ugarova said in a telephone
interview Wednesday that the teenagers smashed the cafe's windows and its
neon sign with bricks they had picked up at a nearby construction site. 

"They quickly ran away. It was so unexpected, we could not even think of
detaining any of them," Ugarova said. She said glass from the windows
damaged dining tables and ruined the cafe's pool table. 

Some foreigners also tell of frightening run-ins with angry protesters.
Eva, a British citizen, responded to a query on the Expat List, an e-mail
forum for foreigners in Moscow, that she and her two daughters were
harassed by a gang of skinheads near Manezh shopping mall last weekend. 

"As we hailed the car, I spoke loudly to my daughters so they could hear
over the noise. This drew the attention of a gang of skinheads, who
immediately surrounded us chanting 'Yankees go home.' Not an appropriate
time to point out we are Brits," she wrote. 

But Eva and her daughters were rescued by a cab driver who drove them home
and "refused to take any money at all, saying that the skinheads did not
represent Russians." 

However, from these and a few other isolated incidents, a host of rumors
has been born. 

Some talk of an invasion of MacDonald's or of the popular Starlite Diner
by toughs seeking to avenge their Slav brothers in Serbia. Others recount
how this or that particular expatriate was beaten up or harassed for
looking American, or for speaking English, or even for reading The Moscow
Times on the metro. 

But managers of those restaurants deny all such reports, and in most cases
investigated by The Moscow Times, alleged victims turn out to have suffered
little more than a few harsh words critical of the war their nation
happens to be waging in Europe. 

A driver for the U.S. Embassy who was allegedly run off the road by
another driver who objected to his diplomatic license plates, contacted by
telephone, denied the report. 

Still, the U.S. Embassy has advised employees to think twice before
driving cars with plates that identify them as part of the American
diplomatic mission, and several foreigners interviewed over the past two
days said they were laying lower than usual. 

American Daniel Wolfe, chief operations officer at Troika Dialog
investment company, said he tries to avoid staying out late at night or
speaking English on the street. 

"There are people who just enjoy violence and extremist behavior," Wolfe
said, adding that usually such people don't have many political motives for
such actions. 

"I noticed a couple of dark looks in transport but it could be my
imagination, " said Daniel Rothstein, an American lawyer with a British law

The British Embassy recommends its citizens take reasonable precautions,
but it doesn't expect political violence against individuals. The U.S.
State Department has not seen a need to update its web site's travel
advisory page for Russia, which already contains the usual safety

"Our assessment of the situation is that we don't expect incidents of
abuse to be directed at individuals. There may be isolated spontaneous
cases, but we don't expect them to happen a lot," a British Embassy
spokesman said. 

The spokesman said the embassy had registered no cases of violence against
British citizens in Moscow. So far, he said he has only heard of a few
cases of verbal abuse where people have asked questions like "Why are you

"We take the situation seriously but don't want to arouse panic," he added. 

"None of our members have reported anything so far," said Scott Blacklin,
president of the American Chamber of Commerce in Moscow. 

"We are aware of anti-American sentiments and we are monitoring the issue
closely. But we are just at the beginning of our survey." 

Moscow police said they had noticed no surge of crimes against foreigners. 

Police are still seeking two men with whom they exchanged gunfire in front
of the U.S. Embassy on the Garden Ring on Sunday, after one of the men
pointed a grenade launcher at the building but apparently could not get it
to fire. On Wednesday, a group of demonstrators was turned away before it
could reach the embassy, where police have barred protests following
Sunday's incident. Instead, the demonstrators marched through Moscow. 

The U.S. Embassy did not return phone calls Wednesday. Officials at the
U.S. Consulate in St. Petersburg have issued a safety warning urging people
to avoid demonstrations and to refrain from speaking English loudly in the


Date: Wed, 31 Mar 1999 
From: (Victor Kalashnikov) 
Subject: Primakov and Nato 

let me share some reflections and assessments from my 
recent tour through several European capitals.

Developments around Kosovo are yet another manifestation 
of the new role's distribution in the world. Like in the case 
with Iraq last year, Moscow is trying to capitalise on a quasi-
intermediary function which is, in fact, well-fitting into the 
US-sponsored scenario. The 'endspiel' may become easier 
to Americans through Primakov's missions. The reward for 
Moscow itself will come out in form of both reconfirming its 
special international status and of new financial benefits from 
the West. Moscow also may expect extending its segments 
on Balkan energy and arms markets.

Retrospectively, it's interesting to see how this war has been 
prepared - through integration of a Russian brigade into 
Bosnia mechanics; gradual diluting of UN's role; supporting 
Kosovar separatism; introducing mass-media patterns. 
Regarding both early inclusion of the three states into NATO 
and timing of Nato's anniversary events, one may suggest 
that the day of the attack had been fixed several years ago 

The Americans have once again confirmed their dominance 
over Europe. The key manifestation of it (and one of the 
most important spin-offs of the 'Allied Force' operation alike) 
was the practically total loyalty German political class 
(including the 'anti-militaristic' Greens) has shown toward 
the US action. German propaganda during these days has 
overmatched even the American media in its militant anti-
Serb tones.

Yet, exactly such overstressed support and loyalty invite the 
idea of the so-called 'German agenda' - the built-in pursuing 
of own national priorities, partly in defiance of allied, US-
imposed guidelines. The German publicist Karl Schmidt has 
hit the idea when he said: 'Collaboration is the inherently 
German way of resistance'. 

Primakov's trade with Schroeder (the EU leader at the 
moment) at the peak of Kosovo crisis helps, in fact, to 
advance Germany's own stance - both within NATO and in 
the EU. Moscow can, in turn, now count on some more 
payoffs from Berlin - including those in DM.

The three NATO newcomers are undergoing a serious test 
these days on Alliance-compatibility. It looks, many people 
there are unprepared to the imperative of indisputable 
supporting any major move the Nato's principal may initiate. 
Even high-ranking decision-makers are irritated by the 
perspective to get involved into a Balkan mess instead of 
advancing - jointly with new Western allies - the civilisation 
cause towards the East. It's not what NATO-membership had 
been expected to bring. The decision to make the three to 
full NATO members before this war started was then correct 
from tactical point of view. 

Especially, the Czechs seem to be reluctant to identify 
themselves with the current Balkans operation. Public debate 
on NATO is marked here by deliberations in Kafka and Hasek 
ways which are all but in line with the Nato's political 
correctness. We'll surely contemplate a lot of exciting 
collisions between all these "no plans, no need, no intention" 
clichÝs (a widely-cited phrase on non-deployment of nuclear 
arms in Central Europe) and the Czech political thinking 

As to Primakov himself, he is with no doubt the optimal 
individual to participate in the counter-balancing tactics 
West European elites are so much attached to. His recent 
actions also display his own superiority over many of 
Western partners in matters of international management. 
The new generation of politicians should not miss the chance 
of getting practical lessons from this veteran of classic 
power games. It's fascinating to see how he gains scores 
with practically no real trumps in his hands while exploiting 
the slightest deviations within Western community.


Russian, U.S. Commercial Ventures Continue Amid Rift

Moscow, March 31 (Bloomberg)
-- Russian and U.S. companies are pressing ahead with projects worth
billions of dollars even as Russian politicians loudly denounce air strikes
against Yugoslavia and demonstrations rage outside the U.S. Embassy in Moscow.

A Chevron Corp.-led group continues to build a $2.3 billion pipeline from
Kazakhstan to the Black Sea with Russian partners, while Boeing Co.'s $500
million Sea Launch venture with companies from Russia, Ukraine and Norway on
Sunday completed the first commercial launch of a satellite from a floating
ocean platform, days after NATO started bombing Yugoslavia. 

However stridently politicians from all points on the political map denounce
the North Atlantic Treaty Organization's attacks, the Russian government has
made it clear it has no intention of breaking relations between the two
countries or endangering much-needed U.S. investment. The government also has
made it clear it doesn't intend to be drawn into the conflict, even as some
Russian politicians call for military aid to Yugoslavia. 

``Russia and the U.S. have come a long way in the last few years to establish
the relationship they have now,'' Russian Foreign Minister Igor Ivanov said in
the parliament. ``Russia is and will remain a predictable partner.'' 

In a sign of Russia's changed international status, Russia and the U.S. last
week signed a uranium sale contract that could be worth as much as $12
billion, only hours after NATO forces began their attacks. 

Staying Open 

It signals Russian-U.S. business ties probably won't suffer even though
politicians are talking tough about their political disagreements with
Washington, analysts said. 

``Russia has to remain open to the West as a trading partner, for capital
flows, for technology,'' said Eric Kraus, head of fixed- income at Dresdner
Kleinwort Benson in Moscow. ``They have no intentions of cutting off economic
ties with the West.'' 

The Chevron Corp.-led Caspian Pipeline Consortium's project to construct a
pipeline that will be able to haul 500,000 barrels of oil a day from
Kazakhstan to the Black Sea remains unaffected by the rhetoric, said an
official at the group. 

``A lot of money has already been invested,'' said Anatoly Shatalov, CPC
deputy general director. ``I don't see any changes in American companies'
attitude to the project. It's too big and important to be affected.'' 

Chevron holds a 15 percent stake in CPC and is the biggest single corporate
beneficiary. Arco and Oryx Energy Co. also are shareholders of the project,
along with Royal Dutch/Shell Group, Italy's Eni SpA, the U.K.'s BG Plc,
Russia's OAO Lukoil Holding and RAO Rosneft and the governments of Russia,
Kazakhstan and Oman. 

Shatalov said CPC plans to pick contractors to lay down part of the pipeline
and to construct compressor units next month. 

Lukoil Pressing On 

Lukoil, Russia's largest oil producer, said meanwhile it will press ahead with
plans to develop Siberian oil fields together with Texaco Inc., Exxon Corp.
and Conoco Inc. 

Signing of agreements with the U.S. companies as well as Norsk Hydro ASA of
Norway, scheduled for last week in Washington, will take place in April in
Moscow, said Lukoil spokesman Dmitry Dolgov. 

Two fields to be developed under these projects contain a total of about 3.2
billion barrels of oil in reserves. 

Boeing Co., the world's largest aerospace and defense company, said on March
27 its Sea Launch joint venture completed the first commercial launch of a
satellite from a floating ocean platform. 

The $500 million Sea Launch project represents an attempt to cut the cost of
launching satellites at a time when satellite demand is expanding along with a
boom in telecommunications. 

The venture is 40 percent owned by Boeing, 25 percent by Moscow-based RSC-
Energia, 20 percent by Norway's Kvaerner ASA and 15 percent by Ukraine's KB
Yuzhnoye/PO Yuzhmash, which makes the project's Zenit rocket. 


``The Russian political elite behaves pragmatically, as its members make a lot
of statements but stop short of action and don't obstruct ongoing business
deals,'' said Sergei Markov, director of Institute of Political Studies in
Moscow. ``On the other hand, companies which were too afraid of the political
risk have left long ago. It isn't easy to scare those which have stayed.'' 

Russia's and U.S. uranium sale contract is a part of an arrangement reached in
1993 for the sale of 550 tons of Russia's highly enriched uranium, used in
nuclear weapons, to the U.S. About 40 tons of Russian weapons-grade uranium,
diluted so it can be used in civilian reactors, has already been shipped to
the U.S. 

As joint ventures continue, it's also business as usual for hundreds of U.S.
companies with operations in Russia. The American Chamber of Commerce in
Moscow said 403 U.S. companies are currently working in Russia. 

``The Russian government made many statements that are meant for purely
domestic use,'' Kraus said. 


Russian reform won't be easy, will take time-Rubin

RALEIGH, N.C, March 31 (Reuters) - It will not be easy and it will take time
for Russia to complete its program of economic reform, U.S. Treasury Secretary
Robert Rubin said on Wednesday. 

Rubin, speaking at North Carolina State University, said the world had a huge
stake in Russian growth and stability. But a raft of problems centered around
corruption and the lack of a framework for a functioning market economy, he

"It's a very difficult situation," Rubin said. "They are trying to create a
modern economy in a country that never really had a private sector economy. We
have to recognize that this is not going to be easy. We are going to have to
be supportive but patient dealing with the problems." 

Rubin noted that the international community had spent six years trying to
promote Russian economic reform. He highlighted corruption as one problem in

"The core of the problem lies in widespread corruption. It lies in the
fundamental legal structure... It lies in the lack of anything remotely like a
sufficient financial sector," he said. 

Russia is currently looking for new money from the International Monetary Fund
to allow it to repay loans taken up earlier in the stop-start process of
economic reform. IMF officials said on Wednesday that it would take time to
complete a framework accord reached at talks over the weekend. 


Long Balkan War Seen Undermining Russian 'State System' 

Moskovskiy Komsomolets 
27 March 1999
[translation for personal use only]
Article by Mikhail Rostovskiy: "Bill the Ripper. Will Russian 
Government Withstand Clinton's Bomb Strikes?" 

By making the decision on launching the Yugoslav 
blitzkrieg, Clinton put his own career at stake. But, in the final 
analysis, the fate of the US President is important only for himself and 
his party. The problem is that, playing Russian roulette, the fearless 
seducer of Monica has taken all of us hostage too. If he fails to sort 
out his differences with the Serbs fast enough, the shape of Russian 
power may become twisted almost beyond recognition in just a couple of months.

Whereas last March [1998] put an end to Chernomyrdin's presidential race, 
this March is truly black for Yeltsin. The anti-presidential mutinies at 
the General Prosecutor's Office, the Federation Council, and the Central 
Electoral Commission, the Kremlin apparatus's loss of the last remnants 
of efficiency, the threat of disclosure of the financial escapades of 
[Yeltsin's] daughter and other key members of the presidential retinue, 
and the inexorably approaching impeachment -- in a few weeks Boris 
Nikolayevich has suffered enough defeats to last a whole year. The 
explosions in the Balkans have just added another touch to the picture of 
the destruction of presidential power. No matter how much "Tsar Boris" 
may threaten Clinton with "extreme measures," it is clear to everybody 
that foreign policy, which was always regarded as the president's domain, 
is now actually in the premier's hands.... 

Until quite recently, the Kremlin's rapid loss of influence did not mean 
that the entire current Russian political system could soon collapse. The 
situation remained under the full control of Premier Primakov, whose 
rating has only gone up as a result of the Yugoslav war. But that is now. 
What will happen tomorrow? 

By virtue of the specifics of their history and national character, the 
Serbs are stubborn and ready for sacrifice. They are used to unequal 
struggle against unquestionably stronger adversaries: Turks, Austrians, 
Germans.... Apart from that, even though Milosevic's fellow clansmen in 
Kosovo constitute a minuscule minority, the province is still looked on 
as the cradle of the Serbian nation. Thus, giving Kosovo away to the 
Albanians is for them like severing the right hand. That is why nobody 
can guarantee today that, in the very near future, Belgrade will give in 
and fall to its knees before NATO. 

For Clinton, leaving the Balkans without a victory would mean losing 
face. That is why NATO warplanes will pound Yugoslavia to the bitter end. 
Theoretically, it cannot be ruled out that, in the end, the Yankees will 
be drawn into a ground war against Belgrade. Clinton will of course 
resist this as much as he can. But if, for example, Serb terrorists blow 
up a skyscraper in some American megalopolis, and air operations continue 
to be ineffective, Yeltsin's "friend Bill" may simply have no other 
choice. The consequences for Russia of this development of the conflict 
are not difficult to predict. 

At the moment only the not very influential [Yabloko leader] Yavlinskiy 
and a few other liberals, whose popularity in the country is close to 
zero, who are criticizing Primakov's Yugoslav policy. Moreover, the 
premier has now in effect become a symbol of our rejection of the 
"Yankees' barbarous methods." But if the Balkan carnage drags on, that 
symbol will doubtless no longer be the subtle Yevgeniy Maksimovich 
[Primakov], but the mob that has been throwing eggs at the US Embassy for 
two days, and similarly minded politicians. It is no secret that the 
hands of many of our military men and politicians are itching. The longer 
the conflict continues, the more difficult will it be for the premier to 
face up to belligerent demands. 

"I am convinced that Primakov will be able to keep the situation under 
control for at least a month," one major Russian politician told 
Moskovskiy Komsomolets. "But it is impossible to predict what will happen 
after that." At the same time, the consequences of a triumph for the 
jingoists in Russia are not difficult to predict. In that event, all the 
current high-profile allegations about the 15 billion [monetary unit not 
specified] "wasted by Primakov" and the "rupture with the civilized 
world" will turn out to be justified. 

But even if things do not deteriorate to the point that the jingoists 
prevail, that may be poor consolation. By restraining the hotheads, 
Primakov may start wasting his political capital. And the loss of 
political ground by the [Russian] White House may lead to a situation 
when there will simply be nobody to defend the current state system. The 
Kremlin is incapacitated, the Democrats are too weak and unpopular, 
[Moscow] Mayor Luzhkov does not yet have the necessary set of power 
levers.... For some reason, it is not a very tempting prospect to ruin 
one's life because some Bill and Slobodan have become too engrossed in 
their geopolitical games in the distant Balkans. 


Lebed Comments on Yeltsin, Yugoslavia

March 30, 1999
[translation for personal use only]

[Krasnoyarsk Governor Aleksandr Lebed told 
Russian television in an interview that he believed Russia could do its 
bit for Balkans peace by providing Yugoslavia with air defence systems. 
He called for Russia to elaborate a common position on Yugoslavia rather 
than depatching a variety of delegations with unclear powers. He said 
President Yeltsin's authority and ability to avoid impeachment might 
depend on this. The following are excerpts from the interview broadcast 
live by Russian NTV on 30th March] 

[Presenter Grigoriy Krichevskiy] The governor of Krasnoyarsk Territory 
Aleksandr Lebed is talking to us live from our studio at Rossiya hotel. 
Good afternoon. What can you as governor of Russia's largest region say 
about the remarks on elections that President Yeltsin made in his address 
in the Kremlin? 
[Lebed] Good afternoon, Grigoriy. Well, I listened to the president, took a 
copy of the text of his address, and even started reading it and making 
notes. My impression is that there is a crisis of speechwriters. It's 
always the same style; these words about holding clean elections are a 
regular routine. Nothing new. [Omitted: clip is shown of State Duma 
Chairman Gennadiy Seleznev speaking at an Interfax news conference about 
possible impeachment proceedings] 
[Q] The Communist Party is insisting that the issue of impeachment must 
be included in the agenda of the State Duma session on 15th April. 
Seleznev says that this matter can be postponed until the Yugoslav 
problem is solved. Do you think it is a good time now to raise the 
question of Yeltsin's impeachment? 
[A] If the president does not want to be impeached, he should call a 
joint meeting of both Federal Assembly chambers and the government and 
work out a common position on the matter [Yugoslavia]. What we have now 
is a position of the government; at the same time, a State Duma 
delegation is off there and tomorrow the Federation Council will send a 
delegation of its own. The three weirdos [reference to Yegor Gaydar, 
Boris Nemtsov and Boris Fedorov] have gone on a secret mission; nobody 
knows what it is and who gave the secret orders for it. There are 
numerous things like that. 
Russia should adopt a tough position. We must establish the fact that it is 
impossible to trade geopolitical interests for 4,800m dollars. It must be 
specified that Yugoslavia is a zone of our interest. 
There is one simple reason for that - a very dangerous precedent for 
Russia, for Europe and for the world is being created now. One very 
mighty and rich state does not give a damn about the world community. The 
scope of military and technical assistance to Yugoslavia needs to be 
The world has already been divided into two parts. One must take a clear 
position in such a situation: the tougher the position, the sooner the 
war ends. We will get a consolidated nation with dignity. The president 
must do it tomorrow if he does not want to be impeached. 
[Q] You think then that impeachment proceedings are quite realistic? 
[A] I think that when a war is on, one should not change horses in 
midstream. Nothing will change if the State Duma postpones the 
impeachment for a fortnight or so. State measures must be taken today. 
[Q] You have peacemaking experience in the Dnestr region and Chechnya. 
What do you think of Russia's peacemaking activities, in particular prime 
minister Primakov's mission to Belgrade? What is your prognosis? How will 
the talks with Slobodan Milosevic end? 
[A] Prognosis is an ungrateful business. Primakov's work has been 
seriously hindered by the previous mission of those weirdos. 
[Q] Do you mean the mission of the Right Cause [movement] representatives? 
[A] Yes. Exactly. What we must have is Russia's position. 
[Presenter, interrupting] How do they hinder anything? 
[A] It must be the position of Russia. I think yesterday [29th March] I 
saw Vuk Draskovic on your channel. He is the leader of the Serbian 
democrats. Did you see his disgust [with them], the disgust of a person 
with certain moral views? There is war in the country and when somebody 
approaches the president and the chief commander with so-called advice, 
it clearly irritates him. 
[Q] What would you as a military person, as a general do in such a 
situation? Do you have a plan for settling the conflict in the Balkans? 
[A] I have just suggested to you some points of such a plan - to take an 
extremely tough position. Immediately. Fire should be extinguished with 
fire. It is in the interest of the Americans, too. It is necessary to 
help them keep face facts. Russia can do that easily, and then people 
would not throw apples and inkpots at them [the Americans]. Tomorrow 
people will start killing them all over the world. Do you see how the 
protests are growing even in the USA? 
[Q] I have not quite got it. What do we have to do? Help them [the 
Yugoslavs] with our weapons? 
[A] There are more and more refugees there. Yes, we should help 
[Yugoslavia] with weapons, with defence. Nobody ever went on the 
offensive with air defence systems. The position must be determined. We 
will stop the war. We will stop it by supplying Serbia with defensive 
weapons. More aircraft will be downed if the war does not stop. [Omitted: 
closing pleasantries] 



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