This Date's Issues: 3119 •3120
Johnson's Russia List
"The bible of serious Russia watchers"
1 April 1999
[Note from David Johnson:
1. Chicago Tribune: R.C. Longworth, POLICY COULD WEAKEN MOSCOW'S GRIP
ON ITS NORTHWEST.
2. Washington Post editorial: More Billions to Moscow?
3. Reuters: Gareth Jones, Russian culture defying crisis - minister.
4. The Guardian (UK): James Meek, A man with a growing reputation as a
5. Boston Globe: David Filipov, CRISIS IN KOSOVO / RUSSIAN REACTION
Moscow readies a warship.
6. Itar-Tass: Russian MP Supports Dialogue to Stop Kosovo War.
7. Reuters: U.S. Official Urges Russia Not To Fan Kosovo Flames.
8. Bloomberg: Yeltsin Calls for Emergency Meeting of G-8 Countries on
9. AFP: Report: Russia Leads For Suicides.
10. The Economist: Debt recovery.
11. Itar-Tass: Zhirinovsky to Run in Belgorod REGION'S Gubernatorial
12. Itar-Tass: Yeltsin Calm about Upcoming Impeachment Vote: Official.
13. Reuters: Yeltsin woos Ukraine over Yugoslav crisis.
14. Itar-Tass: Primakov: War, Not Genocide, Drives People out of
15. Obshchaya Gazeta: New Administration Head Voloshin Profiled.
16. AFP: Russian warships to be Serbs' "eyes and ears": defense analysts.]
1 April 1999
[for personal use only]
POLICY COULD WEAKEN MOSCOW'S GRIP ON ITS NORTHWEST
A FLOW OF WESTERN INVESTMENT INTO OUTER REGIONS COULD SPLINTER RUSSIA, BUT THE
STATE DEPARTMENT DENIES THAT'S THE INTENTION.
By R.C. Longworth, Tribune Staff Writer.
The United States and its European allies have launched a policy that could
weaken Moscow's control over northwestern Russia and draw that region into
closer ties with the West.
Everyone involved says the purpose of this policy is not to splinter
Russia, encourage the independence of its city-states, or establish Western
beachheads in Russia beyond control of the central government in Moscow.
But no matter what the intentions, this splintering could be the result,
especially as the chaos and financial crisis inside the Russian government
encourages the Russian regions to set up their own economic--and even
"Do we want to weaken Moscow's control?" asked F. Stephen Larrabee, a
scholar with the Rand Organization who is studying the policy for the New York
Council on Foreign Relations. "This is not the goal, but it could be the
"Moscow's control is already being weakened now. As the center's power
weakens, the regions are likely to become increasingly important. U.S. policy
should be designed to promote and encourage the process of regionalization
that is already under way in Russia."
The policy is aimed at steering Western investment to oblasts (provinces)
and at getting the oblasts to cooperate in dealing with problems--pollution,
for instance--that affect their neighbors to the West, such as Finland, Poland
or the Baltic states.
This campaign is part of a larger Western policy, called the Northern
European Initiative, which aims at creating an economically and socially
unified region, with strong ties across borders.
The NEI basically encompasses the old Hanseatic League, including the
Nordic nations of Norway, Sweden, Denmark and Finland; the Baltic nations of
Latvia, Lithuania and Estonia; plus Poland and northern Germany.
But the Baltic Sea ends at St. Petersburg in Russia, the Baltic nations
border Russia, Finland shares a long land border with the Karelia region of
Russia, and even Norway and Russia meet in the far north. This geography means
that Russia's problems become the region's problems, so the Russian oblasts
near the frontier are objects of the NEI, whether Moscow likes it or not.
The area includes some of Russia's most advanced and most distressed
cities, its most cosmopolitan and its most remote. Among them are fairly
Westernized places such as St. Petersburg and Novgorod, and such far northern
ports and mining outposts as Murmansk and Nikel.
The NEI also deals with the sensitive issue of Kaliningrad, a Russian
enclave wedged between Lithuania and Poland but separated from Russia itself.
Kaliningrad, once a major Baltic port, is now a cesspool of crime and
corruption and, hence, a concern to its neighbors as they try to keep the
Russian mafia at bay.
"We're not trying to break up Russia," a State Department official said.
"But Moscow doesn't have the resources to deal with some of the issues
(addressed by this policy.)"
For instance, the official said, the far northern nickel-mining town of
Nikel was established by the Soviet government and supported by it. With the
end of communism, Nikel will survive only if Western investment saves it.
The official said Western governments are keeping the Russian government
informed as the policy goes forward. "Where appropriate, we want Russia
involved," he said. "We want the Russians not to think that this is (aimed) at
them. This is not anti-Russian."
But the Russian government is keeping a wary eye on the project, Larrabee
said. "Moscow is not enamored," he said. "It fears this will decrease the
center's hold over the regions."
For the record, though, the Russian Embassy in Washington said: "We don't
have any problem with this. We support any regional cooperation in Europe."
There is more to NEI than economics and ecology. Among other things, it
aims to integrate the Baltic nations into Western organizations, including the
European Union and NATO. Russia hotly opposes any NATO membership for Latvia,
Lithuania or Estonia.
Although NATO has no plans to include any or all of Russia in NATO, the
military undertones of NEI make it doubly sensitive to the Kremlin.
That is especially true now, given Russia's bitterness at NATO airstrikes
against another Slavic country, Yugoslavia, a long-time Russian ally.
NEI is not exactly secret, but it has received little public attention in
the United States. It was launched in September 1997, in Bergen, Norway, and
was followed four months later by the Baltic Charter, which the Clinton
administration signed with the three Baltic nations.
That document gave the Baltics assurances that Russian opposition would not
keep them out of NATO and the EU.
At a U.S.-Baltic Partnership Commission meeting in Riga in mid-1998, Deputy
Secretary of State Strobe Talbott said that "your American friends are
committed to help you as you progress toward--and in due course through--the
open doors of the Euro-Atlantic community's evolving and expanding
institutions, very much including the new NATO."
Closer ties with the Russian regions--especially Kaliningrad--are hampered
by the same economic, legal, political and criminal problems that bedevil any
approach to Russia as a whole. The regions want Western investment, Larrabee
said, but have not taken the necessary steps, including a reliable code of
commercial law, that would attract foreign money.
The State Department official said the Clinton administration hopes the
European members of NEI will take the lead on investment and other programs.
The process is expected to get a push in the latter half of this year when
Finland takes over the rotating presidency of the European Union. The EU also
has its own program, Northern Dimension, which encourages cooperation in areas
such as energy and the environment in the northeastern European region,
including parts of Russia.
"But many Baltic and Nordic states are wary of cooperating too closely with
Russia, for fear this will lead to a criminalization of their economies,"
Larrabee has written.
The Baltic area is a grab bag of alliances and ancient feuds and
friendships. Lithuania borders on Poland and sees that nation's new membership
in NATO as a bridge to its own membership. Estonia has close ties to Finland,
which is in the EU but not in NATO; Estonia is the first Baltic nation to
begin negotiating membership in the EU.
Germany, Norway, Denmark and now Poland are all NATO members, but Finland
and Sweden are not.
For that reason, the administration is trying to channel the NEI policy
toward the Russian regions through Finland and Sweden, to mute Russian fears
of any military intentions.
1 April 1999
More Billions to Moscow?
THE INTERNATIONAL Monetary Fund faces not one but two difficult questions as
it considers again its Russia problem. One is whether to lend more billions to
the Russian government. If the answer is yes, then the IMF must decide whether
to lend only enough to allow Russia to repay the IMF loans coming due this
year, or -- as Russia would like -- be considerably more generous.
The unpleasant truth is that Russia has not taken the necessary steps to
promote its own prosperity; its economic policy cannot ensure good use of IMF
funds. Some nations, from tiny Estonia to sizable Poland, resolutely
implemented economic reforms to make a rapid transition to a free market. They
still have a long way to go to recover the years lost to communism, but
already their reforms have promoted economic growth and political stability.
Russia, by contrast, has yet to muster the political will or consensus to push
reforms through. It is "stuck halfway" between communism and capitalism, as
President Boris Yeltsin acknowledged in a speech Tuesday, with a "freakish
model . . . a hybrid." This hybrid has produced corruption, disillusion and
Given that failure, some supporters here and in Russia of extending more loans
make a political case. Russia is too important to isolate, they say, and, with
its nuclear weapons and scientists, too dangerous to antagonize. These factors
have inclined the IMF to lend to Russia before, and they could play a role
again. After all, the IMF is controlled ultimately by politicians from the
wealthy countries that support it, with the United States in the lead.
But Russian politicians who rely on this argument should understand that it
can play both ways. If politics are to be a factor, members of Congress
naturally will ask why U.S. taxpayers should extend assistance to a government
that boasts when Russian-made missiles are used to shoot down a U.S. plane.
They will watch videotape of Russian Prime Minister Yevgeny Primakov arm in
arm with Slobodan Milosevic, both grinning cheerfully as Serbia's ethnic
cleansing proceeds off-screen, and wonder why the U.S. interest lies in
helping this man.
The best that can be said is that Mr. Primakov's economic policies have not
been as bad as they might have been. He has not produced the hyperinflation
many feared; the ruble has not crashed as far as it might have. And this
sullen stability, this gradual decline, is preferable to total crash or
national disintegration. Preserving this much is the strongest argument for
some IMF involvement.
Lending Russia just enough to pay its IMF bill would not be quite as churlish
as it sounds. It would help keep Russia from falling into complete pariah
status and boost its efforts to work out repayment schemes for its debt to
private banks. It would maintain a connection between Russia and the West, no
small thing. But it is worth repeating that only Russia can implement the
policies that would attract private investment and promote prosperity. Absent
those, more loans from the IMF or anyone else are likely to end up in Swiss
bank accounts, serving only to more deeply burden the Russian government that,
someday, will get serious about economic reform.
INTERVIEW-Russian culture defying crisis - minister
By Gareth Jones
MOSCOW, April 1 (Reuters) - Economic crisis has forced Russians to tighten
their belts but it has also sealed their reputation as culture vultures ever
hungry for music, art and literature, Culture Minister Vladimir Yegorov said
Culture helped to bind Russians usually divided by political and economic
worries and could also be a useful bridge at a time of bloodshed in the
Balkans, which has strained Russia's ties with the West, he said in an
``I have never heard a single voice, not even among our struggling pensioners,
calling for less money to be spent on the Bolshoi Theatre or the Hermitage
Museum (in St Petersburg),'' he told Reuters.
``Our society is polarised over most issues, but there is a general consensus
about the importance of culture and the need to support it,'' said Yegorov, a
historian and former director of Moscow's Lenin Library, now called the
Russian State Library.
In other countries, a trip to the opera or a concert might be the first luxury
sacrificed in hard times, but Russian theatres, concert halls and opera houses
still overflow with people and queues snake outside museums and art galleries.
``It is as though culture was part of the Russian people's biological defence
mechanism against the sickness ravaging our society,'' said Yegorov, who
joined Prime Minister Yevgeny Primakov's new government in September after a
``Going to the theatre or to a concert reminds people that they are part of a
culture with a great heritage,'' said Yegorov.
Russia had fought to preserve, albeit in a sorely underfunded condition, its
extensive system of state museums, libraries, theatres and orchestras
inherited from Soviet times, he said.
Yegorov said Russia now boasted more theatre companies than before the fall of
Soviet Communism in 1991, many of them private. He gave no figures, but
Britain's Economist magazine has put the number at about 1,000, twice that of
Yegorov said Russia's economic crisis had taken a toll on his ministry, where
many employees have lost their jobs, but he said culture would receive 85
percent of the 3.5 billion roubles ($145 million) allocated to the ministry's
budget last year.
``This actually means we receive much more than in 1998 because we received
only a quarter of the agreed figure then,'' he said.
Asked how he would justify his budget when pensioners, teachers and doctors
wait months for their meagre salaries, Yegorov said every last kopeck would be
Among big projects the ministry must fund this year are a long-planned
renovation of the Bolshoi Theatre in central Moscow and events to mark the
200th anniversary of the birth of Russia's national poet, Alexander Pushkin.
Yegorov said cash had been set aside for the Pushkin events. Eighty percent of
the funds were earmarked for restoration of monuments, museums and other sites
linked to the poet, revered by Russians as much as William Shakespeare is by
The United Nations' cultural and educational body, UNESCO, and Western
sponsors are helping with the Bolshoi refurbishment, which is expected to last
two years and to cost $350 million.
With Russia at loggerheads with the West over Kosovo, Yegorov said culture
remained a crucial bridge between nations.
Russia's cultural, linguistic and religious ties with Orthodox Serbia have
made it much more sympathetic to Belgrade's position than Western countries.
However, the Kosovo crisis has already hit Russian cultural life. The veteran
U.S. rock group KISS this week cancelled planned concerts in Moscow and St
Petersburg due to increased anti-American feelings amid NATO's bombings.
Russian rock group Alisa has scrapped plans to tour the United States this
month in protest against the bombings.
The Guardian (UK)
31 March 1999
[for personal use only]
A man with a growing reputation as a peacemaker
By James Meek in Moscow
The rising popularity and power at home of Russian prime minister Yevgeny
Primakov, who began digging for peace among the smouldering rubble of Balkans
war yesterday, is testimony to the power of presentation over reality.
In Russian politics, it's not what you do so much as the style with which you
do it. Mr Primakov's growing reputation as a patriotic peacemaker determined
to recover Russia's fallen pride certainly coincides with his desires.
But his actual achievements are less important to a weary public than his wry
composure, his lack of bombast, and his firm insistence that Russia will not
be ignored. And if it is ignored, well, Mr Primakov makes sure everyone
understands how personally unhappy he is about it.
The tireless 69-year-old arrived in Belgrade on a roll after claiming to have
secured for Russia the multi-billion dollar IMF loan it needs to stave off the
next financial crash.
Mr Primakov, who became foreign minister in 1996 after a five-year stint as
head of the country's overseas spy agency, the SVR, came to Belgrade with a
decade of tricky international negotiating under his ample belt.
An expert on the Arab world and friend of Saddam Hussein, Mr Primakov was
Mikhail Gorbachev's envoy to Baghdad during the Gulf War. As Russian foreign
minister, he carried out high profile shuttle diplomacy, trying to mediate
between the West and the militant despots in the Gulf and the Balkans.
He struck up a closer relationship with Madeleine Albright than with Saddam
and spent long hours closeted with Nato's secretary general, Javier Solana.
In March 1997, Mr Primakov tossed the case for and against Nato expansion back
and forth with top US defence officials in the Pentagon.
Yet the actual achievements of these talks for Russia have been meagre -
because Russia had neither the force to threaten, nor the investment and loans
to promise which the US and EU could use as leverage.
Mr Primakov is in favour of foreign trade, a regulated free market and open
borders; he believes passionately in the inviolability of national
Few Russians accept the idea that Nato could be bombing Yugoslavia from a mix
of benign and self-interested motives. Mr Primakov's indignation at the air
strikes is the official expression of that cynicism.
1 April 1999
[for personal use only]
CRISIS IN KOSOVO / RUSSIAN REACTION
Moscow readies a warship
By David Filipov
MOSCOW - Russia has until now tempered its harsh criticism over NATO
against Yugoslavia with pleas for a political solution. But yesterday, Moscow
added a little muscle, preparing one warship for travel to the Mediterranean
and readying as many as six others.
In addition, a senior Russian commander said that Moscow would not hesitate to
use its nuclear weapons, if forced. And Russian lawmakers asked the Kremlin to
begin arms shipments to Yugoslavia.
The moves came as Prime Minister Yevgeny Primakov returned empty-handed from a
one-day trip to Belgrade and Bonn aimed at stopping the fighting in
Defense Minister Igor Sergeyev said one warship of the Black Sea Fleet would
leave the Ukrainian port of Sevastopol tomorrow and another six were ready to
sail ''to ensure Russia's security when the Defense Ministry considers it
Moscow has escalated its protests against the bombing of Yugoslavia by saying
NATO's action threatens Russia because it sets a precedent for intervention in
Officials said the ships, most likely missile frigates and antisubmarine
frigates, would be used to gain information about NATO operations.
Sergeyev said Russia was considering other ''decisive actions,'' but did not
elaborate. The chairman of Russia's General Staff, Anatoly Kvashnin, chose the
moment to remind the world that Moscow no longer ruled out the option of
launching a preemptive nuclear strike against a potential foe.
''If it comes to a matter of whether Russia will exist or not, then everything
the military has, including nuclear weapons, should be used,'' Kvashnin told
Until last year, the Kremlin had said it would use nuclear weapons only in
retaliation to a nuclear attack. But that doctrine has been widened to include
conventional conflicts in which Russian forces were outnumbered.
''I'm sure'' Kvashnin's comment ''was intended as a semi-veiled threat,''
commented Pavel Felgenhauer, military analyst for the daily newspaper
Moscow, which has cultural ties with its fellow Orthodox Christian Slavs, the
Serbs, has revived the language of the Cold War to condemn the NATO attacks on
Yesterday, Foreign Minister Igor Ivanov lashed out at what he called the
''barbarous aggression against Yugoslavia,'' and called Western reports of
ethnic cleansing in Kosovo by Serb forces an ''American propaganda campaign.''
Meanwhile, the Federation Council, the upper house of parliament, passed a
resolution asking the Kremlin to consider arming Yugoslavia with Russian
weaponry, such as the latest antiaircraft technology.
President Boris N. Yeltsin and Primakov have said that Russia would not get
involved militarily in the conflict over the separatist Yugoslav province of
Kosovo. Both have said they want Russia to continue its partnership with the
West, despite the split over NATO's airstrikes. And Russia's tough economic
situation makes it hard to make good on its threats.
For example, a spokesman for the Black Sea Fleet acknowledged a lack of fuel
that would make it difficult for many Russian ships to reach the Adriatic
coast of Yugoslavia. And Felgenhauer said the fleet lacked sufficient
provisions for many ships to sail.
But yesterday's show of force, however symbolic, raised concern from US
officials. State Department spokesman James Rubin said the United States did
not view the deployment ''as a particularly helpful gesture.''
A senior US government official, speaking on condition of anonymity expressed
hope that Yeltsin intended to stick to his promise, delivered in his state-of-
the-nation address Tuesday, not to let Russia become involved in the war.
''I think it's one of the harder times'' in US-Russian relations, the US
official said. But he added: ''What I'm hearing - and these are high-level
people - is that there is every desire to keep the bilateral programs going.''
While Russia has pulled out of military cooperation with NATO to protest the
airstrikes, the official said that the alliance and Russia had agreed
yesterday on amendments to a Cold War-era treaty limiting conventional forces
The official said the US Embassy in Moscow, closed for the last four days,
would began issuing visas today. Police promised protection after last week's
raucous demonstrations and a failed rocket attack on the embassy building.
Popular reaction has been so widespread that some moderate Russian politicians
express concern that NATO is inadvertently helping Communist and nationalist
parties in Russia gain support.
Some Russians have signed up to fight in Yugoslavia. But according to a poll
published in the newspaper Kommersant, 57 percent of those surveyed said
Russia should use diplomacy to stop the fighting, while only 2.8 percent said
Russia should get involved in the fight.
Russian MP Supports Dialogue to Stop Kosovo War.
MOSCOW, April 1 (Itar-Tass) -- An influential Russian lawmaker on Thursday
described Prime Minister Yevgeny Primakov's peace mission to Serbia and
Germany as "very important."
"Primakov's visit to Belgrade and Bonn was very important, though it is clear
that negotiations are never successful right away," Vladimir Lukin, chairman
of the State Duma committee for foreign affairs told reporters.
Lukin said "it is absolutely necessary to continue negotiations, dialogue" to
settle the Kosovo conflict.
According to the lawmaker, the main problems today are to reach "a ceasefire
and normalise the humanitarian situation in Kosovo." New efforts to continue
the dialogue with all parties in the conflict are necessary, he said.
"The major role in the Balkan developments is played by the United States,
(and) we have serious claims against it," Lukin stressed. "But we must
negotiate with those who make decisions."
Speaking about the resolution of the Federation Council, the upper house of
the Russian legislature, which sanctioned military aid to Yugoslavia, Lukin
said that "it would have very serious consequences, which we must thoroughly
weigh and examine."
"It is necessary to help Yugoslavia, but it is not always necessary to shout
loud, make noise, and slam doors," he said.
U.S. Official Urges Russia Not To Fan Kosovo Flames
MOSCOW, Apr. 01, 1999 -- (Reuters) A senior U.S. government official urged
Russia on Wednesday to choose its words carefully to avoid inflaming public
anger over NATO air strikes against Yugoslavia.
The official also told a briefing that Moscow had put some bilateral projects,
including a review of a major military program, on hold but was keen to limit
the damage to U.S.-Russian ties.
As an example of behind-the-scenes cooperation at a time of public Russian
bluster, the official said Russia and NATO had agreed a document in Vienna
paving the way for the Cold War-era Conventional Forces in Europe (CFE) treaty
to be adapted.
"What I am hearing, and these are senior people...is that there is every
desire despite the really profound disagreement over this set of events to
keep the programs and the bilateral relations going," he said.
The official, who did not wish to be more closely identified, said protests
outside the U.S. embassy in Moscow in the past week had not been spontaneous.
He did not blame the Russian government but said: "I frankly think that first
of all the government has a certain amount to do with exactly how these
emotions are played out, as do other elements in the political leadership
"I think there is a relationship between the way the government talks about
these events and the degree to which the emotions are either calmed or
inflamed," he said. "I think that there is a responsibility on the part of the
leadership here to keep that in mind, and one would hope that they would do
Despite his comments, State Department spokesman James Rubin said in
Washington the United States was concerned by Russian plans to send a Navy
reconnaissance ship to the Mediterranean to be close to the Kosovo conflict.
"While the Russian Foreign Ministry has made it quite clear that Russia does
not intend to become entangled in the conflict in the Balkans...the deployment
of these ships we don't see as a particularly helpful gesture," Rubin said.
The U.S. official in Moscow said Russia's public and official response to
NATO's military campaign had been deep and broad but had a strong domestic
political tinge in a parliamentary election year. There is also a presidential
poll in 2000.
"Almost anything that happened -- small, large, economic, political, security,
cultural, it doesn't seem to matter -- was going to get a certain political
twist," he said.
But he cautioned against assuming Kosovo would have an automatic impact on the
parliamentary election in December.
"There are nine months till the elections," he said. "Therefore I'm not
prepared to argue how significant this will be."
The official said some "high profile" U.S.-Russian projects, particularly
military ones, had been put on ice but not cancelled.
Russia had asked to postpone a review of the Cooperative Threat Reduction
program, under which Washington is helping to dismantle warheads and remove
nuclear materials, he said.
"On the other hand almost all the programmatic activities are going on without
interruption," he said.
On the deal to help adapt the CFE treaty, he said: "Today... in Vienna they
will basically sign a document which is going to be the next big step in the
adaptation of the CFE treaty."
The official said the United States had no evidence Russia was supplying arms
to Yugoslavia and had not been given advance details of what Prime Minister
Yevgeny Primakov took to Belgrade on his unsuccessful mediation trip on
He said Russian police had made no arrests in their probe into a failed attack
on the U.S. embassy on Sunday. Beefed-up security had prompted the embassy to
stop issuing visas.
"The security authorities are providing us with security now that we believe
is going to allow us to resume normal operations," he said. "So you'll see an
announcement that we are reopening the consulate tomorrow (Thursday)."
Yeltsin Calls for Emergency Meeting of G-8 Countries on Kosovo
Washington, April 1
(Bloomberg)</A> -- Russian President Boris Yeltsin called for an emergency
meeting of foreign ministers of the Group of Eight industrial nations to try
to end the conflict in Yugoslavia after an earlier Russian peace initiative
``We are sorry that irrespective of Russia's most determined moves, the
military action of NATO against Yugoslavia continues to expand,'' Yeltsin
said. ``This escalation threatens to grow into a great tragedy and not only
for the Europeans.''
Yeltsin said he told Foreign Minister Igor Ivanov to bring together foreign
ministers of the G-8 countries, the U.S., the U.K., Germany, France, Italy,
Japan, Canada and Russia, to work out a plan for resolving the crisis.
``The Kosovo problem can only be solved at the negotiating table,'' Yeltsin
The North Atlantic Treaty Organization widened its air raids on Yugoslavia
overnight, and said it will step up attacks in and around Belgrade.
The escalating campaign comes after diplomacy failed to persuade Yugoslav
President Slobodan Milosevic to end his crackdown on ethnic Albanians in
Russian Prime Minister Yevgeny Primakov traveled to Belgrade earlier this week
and passed on a peace proposal from Milosevic to Western European leaders.
That proposal was rejected by the NATO allies.
Russia, which opposes NATO's decision to use force, ordered seven of its Black
Sea Fleet ships to go through the Bosporus to the Mediterranean Sea, starting
Report: Russia Leads For Suicides
PARIS, Apr. 01, 1999 -- (Agence France Presse) Russia leads industrialized
countries in terms of suicides while Britain is the least affected, a French
magazine reported Wednesday.
The magazine Population said that 42 out of 100,000 Russians committed suicide
in 1995, placing the country way ahead of France (21), Japan (17), Germany
(16), Canada (13), the United States (12), Italy (8) and Britain (7).
It said that Russia also had nearly double the number of murders as the United
States with 45,000 killed there in 1995 compared to 25,000 in Russia.
The magazine added that suicide was also more common in countries experiencing
"transition" than those in the West. Lithuania, Estonia and Latvia had 44
people out of 100,000 committing suicide, putting them ahead of Hungary (33)
April 3, 1999
[for personal use only]
FINANCE AND ECONOMICS
M O S C O W
PUMPING money into Russia was a good job while it lasted. Getting it back can
be quite lucrative too—at least for the financial engineers involved. From the
tens of billions invested in Russia since 1991, some foreigners have been left
with bonds and equities trading at a tiny fraction of their original value; in
the case of some rouble loans to dodgy borrowers, the value is literally zero.
That leaves investors with three options: to wait; to sue—if the borrower has
actually defaulted—or to haggle. None looks very attractive. The wait could be
eternal. Russian managers are adept at switching liabilities to one company,
and assets and cashflow to another, leaving outside investors with nothing.
Suing is expensive and likely to be fruitless. Few Russian borrowers have
assets abroad. Courts in Russia usually prove toothless, or even corrupt. And
any foreigner who starts a law-suit risks gaining an unwelcome reputation as
hostile and arrogant.
At first sight, haggling looks difficult too. Investors with small holdings of
debt or equity barely feature in Russian managers’ world-view. Even if
Russians are prepared to negotiate, the assets on offer (typically raw
materials or the production from a factory) are rarely looked on as prized
trophies in western boardrooms.
If you consolidate the holdings to increase bargaining power, and use an
intermediary to turn the proffered assets into cash, the picture looks more
encouraging. This is where Russia’s newest financial service, asset recovery,
hopes to make its mark. Modelled on the example of Latin America in the 1980s,
the aim is to turn non-performing Russian assets into performing dollar ones
(albeit at a huge discount—25 cents on the original dollar is regarded as
Early examples include the Samara region, which is now paying some of its
rouble-bond holders in oil; and Russia’s main diamond producer, Alrosa, which
has swapped its non-performing rouble and dollar debt, originally worth $100m,
into $40m in dollar bonds, secured against gem-export revenues guaranteed by
De Beers, an international diamond company.
More are to come. Victor Huaco of Russia Capital Recovery, which has brokered
more than a dozen deals, including those with Alrosa and Samara, says that one
of the country’s biggest cities is close to a deal that involves swapping its
debt-obligations for buildings. Unlike timid foreign investors, specialist
asset-recovery companies such as his are not afraid to sue.
None of this helps cure Russia’s ailments, of lousy corporate governance,
macroeconomic weakness, and low productivity. And whereas some well-organised
investors cut and run, others wait and get nothing, which is hardly evidence
of an orderly market. Nor does the vogue for asset recovery say much for
perceptions of Russia’s economic prospects. Nonetheless, that asset recovery
is working at all is a small gleam of light. Mr Huaco and others have shown
that a lawsuit—or a well-administered reminder of the costs of defaulting—can
make Russian borrowers think a bit harder about their investors’ interests. A
shame it wouldn’t work for the IMF.
Zhirinovsky to Run in Belgorod REGION'S Gubernatorial Polls.
MOSCOW, April 1 (Itar-Tass) - Leader of the Liberal Democratic Party (LDPR),
Vladimir Zhirinovsky, will run in the Belgorod region's gubernatorial
election, scheduled for May 30, a lawmaker told reporters on Thursday.
"The party will make all efforts, it will send thousands of people there to
ensure Zhirinovsky's victory," said Aleksei Mitrofanov, an LDPR member at
Russia's State Duma, the lower house of parliament, who chairs the Duma's
Mitrofanov said the LDPR leader intends to make a working visit to Belgorod on
April 5 to take stock of the situation, "because the election is in two
Yeltsin Calm about Upcoming Impeachment Vote: Official.
MOSCOW, April 1 (Itar-Tass) - A presidential representative at Russia's State
Duma, the lower house of parliament, said on Thursday the head of state "is
quite calm about the impeachment procedure," scheduled for April 15.
Yeltsin "has committed no crimes, he does not feel guilt and therefore is not
afraid of the impeachment vote," Alexander Kotenkov told Itar-Tass.
Kotenkov was commenting on the Wednesday statement by deputy head of the
presidential administration Oleg Sysuyev that it made no sense to postpone the
"It is the general position of the presidential administration and Boris
Yeltsin himself," Kotenkov said.
In his view, "if the Duma delays the issue the president would be in suspense
and remain a target for opposition."
"We do not need foot-dragging over the impeachment procedure," the
presidential representative said.
At the same time, he stated that "we do not insist either on postponement or
on a concrete date, let it be as the Duma will decide." Kotenkov also said
there is "a certain logic" in the speaker's proposal to postpone the
impeachment debate due to the situation in Yugoslavia.
Yeltsin woos Ukraine over Yugoslav crisis
MOSCOW, April 1 (Reuters) - President Boris Yeltsin said on Thursday the
Yugoslav crisis made closer cooperation between Russia and Ukraine an ``urgent
task,'' Russian news agencies said.
Yeltsin, speaking after talks with visiting Ukrainian President Leonid Kuchma,
said NATO's bombing campaign against Yugoslavia -- opposed by Russia and
Ukraine -- underlined the need for a strategic partnership between Moscow and
``(Russia and Ukraine) agreed to coordinate to a high degree their efforts to
achieve a swift end to NATO's military action against Yugoslavia,'' Kremlin
aide Sergei Prikhodko was quoted by RIA news agency as saying.
Moscow and Kiev, intially distrustful of each other after the 1991 breakup of
the Soviet Union, have moved closer together since Yeltsin and Kuchma signed a
long-delayed friendship treaty last year.
Yeltsin outlined to Kuchma his plans to help restore peace in the Balkans and
the Ukrainian leader said he would send his foreign minister to Belgrade in
the near future, Prikhodko said.
Ukraine sent its foreign and defence ministers to Belgrade last week to try to
mediate in the Kosovo crisis but they returned empty-handed.
A Russian mission led by Prime Minister Yevgeny Primakov also ended in failure
on Tuesday. Primakov was unable to wring sufficient concessions from Ukraine
to stop the NATO bombing.
Russia and Ukraine both have cultural, linguistic and religious ties with
their fellow Slavs in Serbia, who are fighting separatist ethnic Albanians in
the province of Kosovo.
Belarus, the third mainly Slavic republic of the former Soviet Union, also
strongly opposes NATO's bombing campaign and said on Thursday it was
suspending cooperation with the alliance, as Russia has already done.
Russian Defence Minister Igor Sergeyev announced on Wednesday Moscow would
send a reconnaissance ship on Friday to the Mediterranean Sea to monitor the
Yugoslav crisis and said more ships might follow.
The ships are based at the Black Sea port of Sevastopol, leased to Russia by
Ukraine under a post-Soviet agreement.
Yeltsin and Kuchma, who also discussed their wider bilateral relations, agreed
to hold an informal meeting in May.
Primakov: War, Not Genocide, Drives People out of Kosovo.
MOSCOW, March 31 (Itar-Tass) - "It is war, not genocide, that is driving
people out of Kosovo," Russian Prime Minister Yevgeny Primakov told Tass on
Wednesday upon returning from his trip to Belgrade and Bonn.
Primakov cited the information of the United Nations High Commissioner for
Refugees that 90 thousand people, that is one tenth of the civilian
population, have left Kosovo over the past week of NATO bombing strikes at
The Russian prime minister believes that information being spread in the West
that the policy of genocide, allegedly conducted in Kosovo, is aimed at
justifying the continuation of air strikes against Yugoslavia.
New Administration Head Voloshin Profiled
March 25, 1999
[translation for personal use only]
Article by Dmitriy Dokuchayev: "The President Has Found a New
'Heavyweight' Candidate; the Unknown Voloshin Is Supposed To
'Counterbalance' the Experienced Primakov"
There is a conspicuous new player on the Kremlin
political field. Aleksandr Voloshin was appointed to head the
Presidential Administration after Nikolay Bordyuzha was forced to resign.
In view of the fact that the present hierarchy in the upper echelon of
government puts the head of the Presidential Administration among the
five most influential people in the country, the rise of Voloshin, who is
absolutely unknown to the general public, was as unexpected as it was swift.
Aleksandr Voloshin is 43 years old. He has two higher academic degrees to his
credit: in engineering and in economics. His biography includes jobs in
blue-collar work (assistant engineer on an electric train), the Komsomol
(Secretary of the Moscow-Sortirovochnaya Depot Komsomol Committee),
science (sector head at the Scientific Research Institute of Market
Conditions, Ministry of Foreign Economic Relations), and business
(manager of several consulting companies in 1992-1997). He was appointed
first as Valentin Yumashev's assistant and then became Deputy Chief of
the Presidential Administration for Economic Affairs in August 1998.
When scrupulous journalists explored this rich biography, they came up
with two "black marks" against him: his participation in writing
Aleksandr Lebed's economic program before the latter took office as
Governor of Krasnoyarsk Kray and his operations with the securities of
the notorious AVVA concern while he was a businessman. Some were quick to
infer from these facts that Voloshin is Boris Berezovskiy's man. In the
offices of the Kremlin, however, no one seriously believes that Voloshin
owes his quick rise to the "eminence grise" in our politics: Berezovskiy
is known to be in trouble with the President at this time.
Aleksandr Voloshin has a reputation as an intelligent economist with a much
stronger commitment to market views than the present leaders of the
government's economic bloc.
In Boris Yeltsin's well-known system of "checks and balances," the
excessive increase in Prime Minister Yevgeniy Primakov's political weight
after the dismissals of Valentin Yumashev and Boris Berezovskiy
jeopardized the authority of the ailing President. That is why Yeltsin
promoted a man who could give the Prime Minister some competition with
his different views on economic policy and on the government officials
conducting this policy. There is only one problem here. Yevgeniy Primakov
is an acknowledged political "heavyweight." Aleksandr Voloshin cannot
claim this status yet, and this means that he will have difficulty
"counterbalancing" the Prime Minister.
Economists who have worked with Voloshin commented on his appointment at our
request. Mikhail Delyagin, Director of the Institute of the Problems of
Globalization: "Voloshin struck me as a calm and intelligent man--as an
economist and as a staff member.
"Political motives were foremost in his appointment, of course, but it also
suggests that the President will be paying more attention to economic
issues. As for the political preferences of the new administration chief,
I would call him a member of the common-sense camp, capable of initiating
a dialogue with representatives of various parties and movements.
Voloshin has not been in the public eye to date, but I would call that an
advantage instead of a drawback."
Vladimir Mau, Director of the Economic Reform Center of the Russian
Government: "I have known Aleksandr Stalyevich for approximately half a
year now, since the time he became Deputy Administration Chief. In our
private conversations, I have found him to be extremely reasonable and
objective. In matters of economics, he and I speak the same language. I
do not think he is a conniving man, and I do not know whether this is an
advantage or a disadvantage in his present position. In general, I think
the President made the right choice by putting his faith in a
non-politicized economist in our present complex political situation."
Anton Danilov-Danilyan, head of the Economic Office of the Presidential
Administration: "Voloshin is an extremely diplomatic man, and this
quality is not confined to his decisions on economic matters. I think the
representatives of the different political forces who come into contact
with him will appreciate this. I can tell you that he can be an extremely
firm and demanding boss, but he is always willing to discuss problems and
to hear constructive rebuttals of his own views."
Russian warships to be Serbs' "eyes and ears": defense analysts
MOSCOW, April 1 (AFP) - Russian warships are preparing to steam into the
Mediterranean for the first time in 10 years, in a defiantly-trumpeted
spying mission on NATO whose results, experts say, will end up in Serb hands.
Defense analysts are mixed on the usefulness of any information that Moscow
can supply to its historic friend, Belgrade.
Some say Yugoslavia has enough technology to track NATO fighters and
warships on its own. Others suggest Russia will serve as the Serbs' eyes
and ears after NATO's pounding air assault has taken out most Yugoslav
But either way, Russia's decision Wednesday to dispatch a reconnaissance
ship, the precursor of a possible seven-vessel flotilla, marks a military
flourish in the Balkans that has NATO admitting to concern.
The Black Sea Fleet press service told AFP an unarmed reconnaissance ship
was completing preparations in Sevastopol Thursday for the voyage through
Turkey's Bosphorus to take up station off the Balkans.
According to unconfirmed reports, the cruiser Admiral Golovko, the
anti-submarine vessel Kerch and the surveillance ship Smetlivy, were also
preparing to leave.
Russian Foreign Minister Igor Ivanov on Thursday told Washington the ships
were being dispatched to "guarantee Russian security."
Western analysts privately suggest the ships' presence is there only to
remind NATO that down-and-out Russia can still mobilize a force if it is
"The ships are part of a range of measures Russia is taking to demonstrate
its concern about the crisis, that it is still there and will not leave the
way clear for NATO," one western military expert said.
"These ships do not represent a threat to NATO. It's more of a political
than a military gesture."
Russian observers however say that Moscow has everything to gain by spying
on NATO's first military campaign in its 50-year existence.
They say Russia will study the West's war techniques and feed the details
"We are curious about NATO. But more than that, these ships will also turn
into the Serbs' own eyes and ears," said Pavel Felgenhauer, defense editor
of the daily Sevodnya.
"Russia may not admit to this publicly, but of course all the information
will go to Belgrade, and NATO knows this.
"The Serbs will know when and how many bombers are coming, when a rescue
operation to save captured soldiers might begin, and so on. This will be
very useful to Yugoslavia and a huge irritant to NATO," Felgenhauer said.
Nationalists here are angry over what they say is western disdain for
Russia's military power and are crying out for Moscow to break a UN arms
embargo imposed on Yugoslavia.
"The longer the war drags on the more likely it becomes that Russia may
actually break it," Felgenhauer said.
"In the long run that would only make the West respect us more because
Russia would then turn into a challenging sparring partner."
But at the moment Moscow is acting confused about just how far it is
willing to follow the path of confrontation with NATO, say analysts. Its
naval deployment clashed loudly with President Boris Yeltsin's repeated
assurances that Russia will not get dragged into a war over Kosovo.
Today individual generals are mentioning that Russia would defend itself
with nuclear weapons if itself pressed into a corner while the Northern
Fleet underlined that point Thursday by test-firing a ballistic missile.
"This does not at all look like a well thought-through decision," said
Itogi magazine defense correspondent Alexander Golts.
"When you make military threats against someone, the other side must at the
very least believe that you can affect some damage in case you decide to
actually do something.
"But vague threats only make an already difficult situation all the more
complicated," Golts said.
to CDI's Home Page I Return
to CDI's Library