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Johnson's Russia List


April 4, 1999    
This Date's Issues: 3225  

Johnson's Russia List
4 April 1999

[Note from David Johnson
1. Los Angeles Times: Michael McFaul, Russia: Indispensable Thorn in 
U.S. Side.

2. Newsday: Michael Slackman, Poverty Is Feeding Hunger / Lack of money, 
not food, starves Russia.

3. Reuters: Gorbachev says NATO strikes will ignite arms race.
4. Gordon Humphrey: Yugoslovia/KLA/NATO cease-fire.
5. Washington Post: Mary McGrory, A Role For The Russians.
6. The Independent (UK): Phil Reeves, Cold War spectre at the Nato table.
7. AFP: Russia-IMF show to resume as concerns deepen over Bank reserves.
8. St Petersburg Times: Fyodor Gavrilov, What Russians Don't Know About 

9. Itar-TAss: Constructive Period of Russia-NATO Relations Over General.
10. Laura Belin: Skuratov the fraud crusader.
11. Interfax: 64% of Russians Think Economic Crisis Worse Than '98.
12. Itar-Tass: White House in No Hurry to Back YELTSIN'S Initiative.] 


Los Angeles Times
April 4, 1999 
[for personal use only]
Russia: Indispensable Thorn in U.S. Side 
Michael Mcfaul Is a Senior Associate at the Carnegie Endowment for 
International Peace and a Professor of Political Science at Stanford 

WASHINGTON--Like no other international crisis of the last decade, NATO's 
bombing campaign against Yugoslavia threatens to undermine support for 
Western-oriented reforms in Russia and isolate Moscow from the West 
internationally. Siding with Yugoslav President Slobodan Milosevic and 
thwarting liberal reforms at home do not serve the long-term interests of 
Russia as a world power or Russians as a people. In the passion of the 
moment, however, Russian leaders may be tempted, or feel compelled to take 
drastic measures to assist Serbia, which, in turn, could precipitate a 
passionate anti-Russian response in the West. The resulting strain in 
U.S.-Russia relations would give new meaning to the term "collateral damage." 
Well before the North Atlantic Treaty Organization's campaign against 
Yugoslavia began, Russia was rapidly declining as an economy, a coherent 
state and an international player. Since 1991, the Russian economy has 
contracted faster and longer than any previous major power's in modern 
history. With economic decline has come state weakness. The Russian 
government struggles to provide the most elementary of public goods, such as 
a single currency, a common market, security, welfare and education. This 
domestic feebleness has played havoc with Russia's international clout, 
turning the once-proud actor into a mere observer with mostly symbolic roles 
to perform. 
To Russians, the bombing of Yugoslavia has brought their country's 
impotence into painfully sharp focus. In reaction, strident anti-Western 
sentiment is spreading throughout Russian society. Conveniently forgetting 
the Soviet invasions of Hungary, in 1956, and of Czechoslovakia, in 1968, 
Foreign Minister Igor S. Ivanov has called the NATO bombing the worst 
aggression in Europe since World War II. No one in Russia is prepared to 
disagree publicly with him. Nationalists and Communists long have rallied to 
the anti-American battle cry. Communist Party leader Gennady A. Zyuganov has 
compared "NATO ideology" to "Hitlerism," while several members of his party 
are calling for a military response. Although Russian weapons have yet to be 
delivered to Serbia, Russian warships are moving into the Adriatic Sea 
reputedly to provide intelligence to the Serbian government. Russian liberal 
leaders, many of whom privately detest Milosevic, have joined the 
anti-American chorus. 
All this comes at a time when the Clinton administration is in no mood 
to tolerate criticism from Russia. President Bill Clinton and his 
foreign-policy team are focused on fighting a war in Yugoslavia and a 
public-opinion battle at home. They regard Russia's support for Milosevic as 
morally abhorrent and strategically shortsighted. Placating Russian concerns 
or paying attention to Moscow's peace proposals are far down on the list of 
U.S. priorities. If the Russians aid Milosevic militarily, anti-Russian 
sentiment in the United States, especially in Congress, will doubtlessly 
reach the same passionate pitch that anti-American sentiment in Russia has 
already attained. 
The administration may well be right in largely ignoring Russia's 
carping and threats. In the short run, Russia desperately needs Western 
financial assistance. In the longer run, it can only benefit from greater 
integration with the West. Yet, the combination of anti-Western hysteria at 
home and growing anti-Russian sentiment in the West may compel Russian 
leaders and citizens to behave irrationally. Russia's extreme nationalists 
and Communists live for such a time. Should it come, the possibility of a 
U.S.-Russian confrontation would grow exponentially. 
Ironically, Russian Prime Minister Yevgeny M. Primakov may be the one 
Russian politician capable of denying the radicals their anti-American brew 
and maintaining the possibility of continued Russian cooperation with the 
West. Primakov is neither a liberal reformer nor a friend of the West. But 
under present conditions, he may represent the best bet for both more reform 
in Russia and continued U.S.-Russian engagement. 
Domestically, Primakov is now stronger than before the NATO operation 
began, a dramatic reversal of his stature on the eve of his planned visit to 
Washington. The Russian press had portrayed that trip as a make or break 
mission: If Primakov succeeded in securing new money from the International 
Monetary Fund, his government would survive; if not, a gaggle of deputy prime 
ministers would have been fired, with even Primakov himself at some risk of 
Primakov never made it to Washington, turning his plane around once NATO 
bombs and missiles began falling in Yugoslavia. But his change of direction 
fortified his standing among Russian nationalist and communists. A week 
later, he secured his IMF money, too. The combination of these two successes 
makes Primakov untouchable today. President Boris N. Yeltsin continues to 
criticize his prime minister, but he doesn't have the political clout to 
remove him. Indeed, if elections for president were held tomorrow, Primakov 
would win in a landslide. 
Primakov's standing on the international stage does not reflect his 
newfound support at home. His first attempt to broker a cease-fire between 
Yugoslavia and NATO was not a serious one. Much like his "peace mission" to 
Iraq in February 1991, Primakov did not try to mediate between two sides, but 
rather represent the interests of one side, Serbia, to the other side, NATO. 
In undertaking his mission to Belgrade, Primakov may have hoped to drive a 
wedge between NATO allies. If he did, he grossly miscalculated. But by 
traveling to the Yugoslav capital, Primakov reminded the world and supporters 
at home that Russia is no longer content to remain just an observer of 
international affairs, but plans to be an actor once again, especially in a 
place, the Balkans, where Russia has been a major player for hundreds of 
years. Expect him back in Belgrade soon if the fighting continues. 
However morally distasteful it may be, the administration needs Primakov 
for the role he can play in Russia and abroad. Within Russia, Primakov is a 
force for stability. As Russian citizens prepare to elect a new president 
next year or sooner, should something happen to Yeltsin, Primakov represents 
the most moderate and viable of candidates in the field. If he falters, 
radicals, either on the right or left, have a real chance of coming to power 
in Russia. 
The West's need for Primakov as an international partner is more 
complicated. The NATO alliance was right to reject, immediately and 
categorically, his initial peace proposal. If the opportunity arises again to 
negotiate a settlement, however, Russia is the one country in the world that 
can exert leverage over Serbia. After the atrocities committed by Milosevic's 
forces in Kosovo, Western officials will have difficulty negotiating directly 
with the Serbian leader. Primakov could act as a valuable intermediary. 
It is tragic testament to the state of Russian reform at home and 
Russia's relations with the West that Primakov is in a position to play such 
a pivotal role. Frequently identified in Western reports as "a wily 
spymaster," he has genuinely anti-American instincts. At home, he has still 
not developed a coherent economic reform plan after six months in office as 
prime minister. Perhaps most alarmingly, he has floated blatantly 
antidemocratic proposals for "reforming" Russia's political system, like 
appointing, rather than electing, governors. Yet, when compared with the 
other options on Russia's political landscape, Primakov looks pretty good. It 
is time the administration took notice and negotiated this delicate moment by 
realizing that each side needs the other now and after the war in Yugoslavia 
is over. 
Any other course of action seems too costly. Should Kosovo reignite old 
U.S.-Russia tensions, the administration will have lost one of its primary 
foreign-policy objectives: integrating Russia into the West. The United 
States would be facing a new strategic challenge: an authoritarian, 
antimarket and anti-Western regime armed with nuclear weapons. Sound 


4 April 1999
[for personal use only]
Poverty Is Feeding Hunger / Lack of money, not food, starves Russia

Kungur, Russia - When Tatyana Shurmanova's six children go to sleep
each night, they slip into rusted metal-frame beds, without any sheets
to cover the rips and stains on the paper-thin mattresses. Still, the
night offers a respite from the incessant hunger they know will return
in the morning when they gulp down a glass of water for breakfast and
head off to school.
"I try, but they are hungry all the time," said the 44-year-old
woman, whose husband, a plumber, has been working without pay for
months. "Potatoes, potatoes, most of all they eat potatoes. It is
potatoes all the time. I am just trying to feed them."
Contrary to predictions from the West, Russia did not go hungry this
winter for lack of food. But many families like Shurmanova's did go
hungry because people simply can't afford to buy food. About 40 percent
of those recently surveyed said they do not have money to buy sufficient
amounts of food, mainly because they have not been paid owed wages.
So it was with little surprise that many Russians were angry about
the package of food aid that the United States began shipping last month
and see the program as self-congratulatory fanfare and backslapping by
the West. Three-fourths of the package, or 2.4 million tons of grain,
meat and other products will be sold at market prices, leaving many to
wonder how this can be called humanitarian aid.
Critics go further, saying that the 3.1 million-ton, $950 million
package was not designed to help the poor, but to enrich corrupt Russian
officials and prop up economically troubled American farmers. "I am
convinced that the European Union and America are first solving their
own problems of oversaturation in the food market and the desire to
renew strategic reserves," said Mikhail Berger, editor in chief of the
daily newspaper Sevodnya and an expert on the Russian economy. "We don't
have starvation in Russia, and we don't need this help."
A U.S. government official involved in setting up the program, who
insisted on anonymity, said the intent is to improve the supply of food
to Russians living in the far east and northern regions. He said the
American aid represents such a small percentage of the nation's overall
need that there is no likelihood it will cut into the market for locally
produced goods. And he said that an elaborate monitoring system has been
set up to try to head off corruption and ensure the food gets to those
who need it.
But U.S. officials also acknowledged that the chaos and corruption
in Russia's institutions are so pervasive that it is impossible to
assure the program will be free of corruption; that those without money
will get little help from the package; and that, yes, the program will
provide a boost to American farmers with sales in excess of $650
"This understanding is good news for the Russian people," U.S.
Agriculture Secretary Dan Glickman said in November after announcing the
program. "And it is good news for America's farmers and ranchers, who
are facing economic hardships related to large supplies and low
The United States and the European Union have said despite their
disagreement with Russia over NATO military action in Yugoslavia, they
plan to proceed with providing food aid.
After Russia's August financial crisis, there were predictions that
the nation would go hungry because of a poor harvest and reductions in
food imports; but now there are markets and warehouses in many areas
loaded over with chicken, pork and other domestically produced foods. In
fact, compared with Soviet times, when 60 percent of the population
reported suffering from inadequate supplies, just 15 percent said in the
recent national survey that they experienced shortages because of
limited supply.
"Our only shortage is for money," said Yuri Levada, director of the
Russian Center for Public Opinion, which conducted the survey. "That is
our universal problem."
As the U.S. ambassador to Russia, James Collins, traveled north of
Moscow to the port city of St. Petersburg to greet the first shipment of
pea seeds last month, the deputy administrator for the town of Kungur
sat behind his desk pleading with a Red Cross representative to channel
some of the anticipated free food to his community of 76,000 residents.
"We still have massive impoverishment of the population, it is
impossible to deny this fact," said the deputy administrator, Alexander
Khokhlyavin. "The crisis is not with the supply of food, but with the
ability to buy it. Go to our markets, and you will see you can buy most
anything. The problem is money."
Kungur is a ramshackle town, where plaster and bricks flake or pop
off the buildings, the factories are silent and the food markets are
empty of customers. The list of decay and wreckage outlined by
Khokhlyavin is unnerving, but his real concern is that more than half of
the 20,000 children in the town cannot afford the 1.5 rubles - about 15
cents - it costs to buy lunch each day and at least 40,000 other
residents of the town are not getting paid, or are paid late.
The only help has come from the Red Cross and Red Crescent Society,
which shipped in several hundred boxes of food packages for distribution
to those who ask. Pasta, canned meat, flour, yeast, oil, tea and sugar
have given a few families something to eat for a time.
But Kungur's troubles, while exasperated by its geographic
isolation, are far from unique. The town is located within an oblast, or
state, known as Perm, where 3 million people live in a territory about
half the size of Italy, with rolling hills, evergreen forests,
medieval-looking villages, and a city of the same name. The region was
best known outside of Russia for its gulag prison camp, where prominent
dissidents were once held and tortured under the Soviet regime.
In Perm, 1 million people live in a metropolis stunningly similar to
most every other former Soviet city, with large block buildings, broad
streets and rusted-out factories. Closed to foreigners until the 1980s,
the city became a military industrial center during World War II, when
factories were moved east to safeguard them from the Nazis.
Though it once benefited from its favored status as part of the
Soviet Union's formidable war machine, Perm's industries and economy are
battered, and its experience with unpaid wages, unsold food and hungry
children is similar to other regions, prompting the International Red
Cross and Red Crescent to include Perm as one of 12 regions in danger of
going hungry and therefore eligible for free food deliveries.
The regional Red Cross office in Perm, which organized the
operation, is located in a state-owned building, with a leaking roof, no
electricity and buckled floors. There, Angelina Solovyova, the rail-thin
regional Red Cross chief, has coordinated the purchase and distribution
of 19,000 boxes of food to families and 24,000 free hot lunches for
schools. Last month, the 270 children of school 58 in a neighborhood on
the outskirts of the city of Perm were treated to a week of free hot
"We have very many children with no money," said Tatyana
Gorushkova, who cooks in the school cafeteria and normally looks out
onto a half-empty lunchroom. "But when we had free lunch, as soon as the
bell rang, we had a crowd here. The children were so happy. When we told
them it would end, all they wanted to know was why."
For Azat Shaikhutdinov, 13, that week of free lunches meant a week
free of headaches. Like many of his classmates, his parents cannot
afford to buy much food. He has two brothers and a sister, and he said
they begin their days with a cup of tea, if it is available. After a
full day of school, they eat their only real meal at around 3 p.m.,
usually potatoes from their own garden and sometimes meat. Azat has the
long, lanky legs of a teen and the soft freckled cheeks of a child. His
gaze is almost empty and his shoulders are sharp and square.
"How do you sit through school without eating all day?" he was
"Sometimes, it's hard," he replied. "Sometimes, when we have a lot
of subjects, I get headaches. But I can go without lunch."
For her work, Solovyova of the Red Cross generally operates without
a budget, relying instead on the kindness of a few benefactors. But she
said all of the food that has been distributed was produced and
purchased in Russia, underscoring, she said, the notion that Russia is
suffering primarily from a money shortage, not a food shortage. "If the
West wants to help us, it would be much better for the region to buy our
local foodstuff," she said.
Vladimir Bykov, the deputy governor of Perm, agreed. He said that
with 400 tons of chicken and 5 million eggs stockpiled in a state-owned
warehouse, cheap food from the West is not the answer to their problems.
He said what they need is investment to spur development of their own
industry, creating jobs and taxes and goods to sell.
"This matter of humanitarian aid is more political than an urgent
matter of day-to-day life." he said. "We are ready, willing and able to
supply poultry, eggs and pork to the United States. That would really
help us."


Gorbachev says NATO strikes will ignite arms race

WASHINGTON, April 3 (Reuters) - NATO air strikes against Yugoslavia are a 
mistake that will lead to a new arms race, former Soviet president Mikhail 
Gorbachev said on Saturday. 

Gorbachev, the last president of the Soviet Union, said on CNN's ``Larry King 
Live'' programme that Russia was being humiliated by the strikes, which 
started on March 24. CNN released a transcript of the interview in advance. 

Countries should step up their efforts to find a political solution to the 
crisis in Yugoslavia's rebel province of Kosovo and the air strikes should be 
stopped, he said. 

``I think NATO has made a mistake and now this mistake must be corrected,'' 
Gorbachev said through an interpreter. 

``Those air strikes were done without authorisation from the United Nations 
... This has placed the world in a very, very difficult situation.'' 

He added: ``The position of the U.N. Security Council has been undermined, 
and now Europe has been shown who is the boss -- and I know this because I 
hear it from the Europeans. Russia is being humiliated.'' 

Russia, traditionally sympathetic to its Orthodox, Slav brethren in 
Yugoslavia, has spoken out bitterly against the air strikes and sent a 
reconnaissance ship to the Mediterranean. 

The Russian foreign ministry said on Saturday that the NATO strikes were ``a 
ruthless war of extermination against the peoples of Yugoslavia.'' 

Gorbachev, who presided over a period of rapid political reform in the 
tightly controlled Soviet Union, warned that the air strikes were increasing 
the risk of a new arms race. He said Russia and the United States should work 
together with the U.N. Security Council to resolve the Kosovo problems. 

``This will push an arms race in every country in the world,'' he said. 
``There is a real threat that in many countries there may be an effort to get 
... weapons of mass destruction. I believe this will also give impetus to 

NATO has destroyed military facilities, bridges and other key targets in days 
of mounting air strikes against Yugoslavia. Hundreds of thousands of ethnic 
Albanians have fled Kosovo, and neighbouring countries are struggling to cope 
with the tidal wave of refugees. 


Date: Sat, 03 Apr 1999 
From: Gordon Humphrey <>
Subject: Yugoslovia/KLA/NATO cease-fire 

Dear David,

Would you consider posting this urgently? I ask, in hope the suggestion
will fall upon fertile ground among your readers, some of whom
undoubtedly are policy makers in Washington, Moscow and elsewhere.. For
my part, I shall try to plant the concept in Washington.

To end the bloodshed, suffering and the danger of a wider war in the
Balkans, the following:

NATO and Russia jointly call for a cease-fire under the following

1) Simultaneously, Belgrade withdraws troops and police from
Kosovo; NATO suspends military operations; KLA suspends
military operations.

2) A fully integrated NATO-Russian monitoring team is fielded
immediately in Kosovo.

3) Refugees are assisted in returning to their homes.

4) Belgrade and Kosovars resume political negotiations with no

What this accomplishes:

1) Ethnic cleansing stops.

2) Attacks on Yugoslavia stop.

3) Refugees return.

4) At the least, there is a hiatus in hostilities, while parties
negotiate. At the most, some accommodation is worked out over time.

5) Belgrade is restrained, since it cannot resume ethnic cleansing in
Kosovar without offending and perhaps
endangering Russians who are full participants in the monitoring force
in Kosovo.

6) The KLA is restrained, since it cannot resume attacks on government
forces without offending an perhaps endangering NATO personnel who are
full participants in the monitoring force in Kosovo.

7) The dangerous confrontation between NATO-US and Russia is replaced by
constructive cooperation. NATO gains a valuable ally in dealing with
the Serbs. Russia's bitterness at being left our of important matters
is reduced, and she can return to the all-important reforms at home.
The US and the West are at liberty once again to assist Russia in her

8) None of the above precludes bringing war criminals to justice in due


Washington Post
April 4, 1999
[for personal use only]
A Role For The Russians
By Mary McGrory

Even before the bombs started falling, the timing of the State Department's 
symposium on arms control last week was slightly off.

The Easter season, with its miracles and renewal, is always an appropriate 
time for talk of peace. But the occasion of the gathering was daunting. It 
was to "celebrate" the end of the Arms Control and Disarmament Agency as a 
separate entity. Its job was to argue, without regard to politics, the 
virtues of stopping the arms race. Its people were being swallowed up by the 
State Department bureaucracy--perhaps never to be heard 

from again.

Panel speaker Richard Butler, the Australian diplomat who ran the U.N. 
special commission that went to Iraq to hunt down killer weapons, said glumly 
that he did not feel "celebratory" --a sentiment shared by other serious arms 
control advocates.

Arms control is not a priority concern with Bill Clinton. He has talked a 
good game, but acted like Ronald Reagan. It isn't just that arms sales have 
reached astronomical highs. (As another symposium speaker, former senator 
Dale Bumpers, pointed out, deals up to $14 million are unrestricted. And it 
isn't just that the president has gone along with Republican demands to up 
the military budget. The killer event for arms controllers is Clinton's 
backing of a national missile defense system, Reagan's fantasy of a nuclear 
umbrella. His support also has sent the Russians into paroxysms of fury and 
dismay. That used to be a goal of our foreign policy during the Cold War, 
which is officially over but lives on in the hearts and minds of 

Nobody on the panel was rude enough to say any of this. Butler, a pleasant, 
dignified man, did not even mention the terrible blow dealt to U.N. arms 
inspection by the discovery of a U.S. spy in his entourage. The episode could 
spell the death of U.N. inspection tours in recalcitrant countries that are 
suspected of secretly manufacturing biological and chemical weapons, as well 
as other means of sickening or killing large segments of civilian populations.

Nor did anyone--not even Susan Eisenhower, president of the Eisenhower Group, 
who devotes herself to improving relations with Russia--speak of our 
lamentable policy of kicking Russia when it is down. If we are ever going to 
reduce the nuclear threat, it is Russia we have to deal with. Russia, after 
all, is the only other country with 7,000 nuclear warheads.

Economically, the Russians are on their knees. We take the attitude that our 
former enemies have only the bottom line in mind--that they are desperate for 
an IMF loan to bail them out of their near-destitution. Their wounded pride, 
their shattered egos will mend with cash, we seem to think.

Boris Yeltsin implored us not to expand NATO. We did it anyway. He told us 
that the expansion would strengthen the hand of the hard-liners in Moscow who 
want to return to communism, and we said he was being paranoid. It was the 
same with missile defense. We ignored the Russian president again. That is no 
way to foster cooperation. Everybody understands that the Russians can be 
difficult, often impossible, to deal with, that they can be arrogant, rude 
and intransigent. But the key fact is that they have the nukes.

And now, with a hot war raging in Kosovo and the hordes of tragic refugees 
increasing daily, we are continuing to ignore Moscow. Russia is the only 
nation on the scene that has, as Bumpers observed, historical and religious 
ties with the Serbs. "They have shown a great deal of restraint," said 
Bumpers. "They have condemned the bombing, but Yeltsin made it clear they do 
not intend to send arms to Milosevic." 

Eisenhower said the administration had better come up with some creative 
options after its bad guess about the Serb reaction to the bombing--she noted 
that "bombing can often have reverse effects." The Russians could be 
middlemen, a role they would love. Milosevic might find it easier to tell his 
comrades in Russia that he had had enough of our B-1 bombers than to say 
"uncle" to Uncle Sam.

Milosevic will do anything rather than accept NATO troops to monitor any 
agreement that might be made about Kosovo. Would he accept a Russian 
occupying force? Nobody seems to know what to do with the Russian army. It 
could be a mutually rewarding arrangement. What harm would there be in 
finding out? It beats bombing Belgrade, last week's macho act. As Susan 
Eisenhower said, the Russians seek out unsuitable company among nations like 
Iran because they are so consistently and emphatically snubbed by the West. 
Bill Clinton has no idea what to do. Maybe the Russians don't have any ideas 
either, but we should at least ask. If we're ever going to end this war--and 
the arms race--they are essential, and we might let them know we know it. 


The Independent (UK)
4 April 1999
[for personal use only]
Cold War spectre at the Nato table
By Phil Reeves 

When President Clinton decided it was time to bomb Yugoslavia, he knew that 
it would infuriate many, especially the Russians. He gambled that Moscow 
would huff and puff, but do nothing because it needs the West more than the 
West needs it. 

Poignant evidence of its weakness came last week: no sooner had a Russian 
reconnaissance ship from the Black Sea fleet steamed indignantly to the 
trouble zone than news came in that a consignment of EU food aid was awaiting 
clearance in St Petersburg. What does it matter if the penniless Russians 
object to bombs falling on fellow Slavs? 

It is not that simple. Russia's reaction to Nato's bombing should not be 
judged by the gestures of defiance on news bulletins. These have had a 
theatrical air. Protest in Russia still tends to be stage-managed by the 
state. Being spontaneous doesn't come easily; that doesn't mean Russia 
doesn't care. 

Certainly, Russian news editors have had plenty of cameos with which to 
project the nation's outrage. A masked gunman, blazing away at the US embassy 
in Moscow; three thugs urinating on its doorstep. An electronics firm in 
Rostov, mopping floors with the Stars and Stripes. 

These are the scattered stunts and tantrums. At bottom, there is a deeper, 
wider anger produced by the failure of the West to grasp - or its decision to 
ignore - the extent to which the image of Nato as The Enemy is rooted in the 
Russian psyche. The question is how long will the resentment last, and what 
effect will it have. It is true that Moscow is keen to keep its US 
relationship alive, not least because it needs IMF and World Bank money. But 
Russia is also exploiting the West's desire to mollify it with payoffs, and 
to recoup earlier loans. Warmth and vision have drained from the 
relationship. For the US, it is about containment, and reducing the threat of 
the Soviet legacy - thousands of nuclear warheads, atomic scientists, and 
chemical weapons. For Russia, it is fundamentally about cash. 

But Moscow does not need to be wealthy to make trouble. The pride of its 
military and security services is injured by what they see as a betrayal by 
Nato. Embittered generals cannot be trusted to follow the government's 
pragmatism. They know how to sow havoc, particularly in their backyard - the 
unstable Caucasus and Central Asia, where the West has vast oil interests. 

Convinced that the dynamics of the Cold War have returned, the diehards will 
feel tempted to breathe life into some of the limbs of their broken empire. 
They are already suspects in assassination attempts (such as Eduard 
Shevardnadze of Georgia). The same elements appear to be behind a 1994 
consignment of $1bn of free weapons to Armenia, infuriating Azerbaijan - 
which is demanding a Nato base on its soil. Now Nato risks making this 
geopolitically crucial part of the world more volatile. Nor could the 
alliance have thought of a more effective way, short of bombing Russian 
territory, of encouraging Moscow to weave anti-Western alliances to counter 
American "unipolarity". 

Perhaps, before sending in the cruises, the US calculated that Russia was 
already too chummy with the West's pariahs - especially Iran and Iraq - so it 
wouldn't make much difference. Doubtful. When it slapped sanctions on Russian 
institutes, accusing them of sending missile technology to Iran, Russia - 
though irritated - conceded it might have a point. As US and British missiles 
arc across the Balkans, that kind of co-operation is unlikely. 

Russia can be expected to tighten its ties with China, a weapons client, 
which shares its annoyance over the lack of regard by Nato for the UN 
Security Council. Both have good reason to view the spectacle of Nato using 
missiles to settle an autonomy issue within a sovereign state with 
discomfort. The Chinese see parallels with Taiwan; the Russians with 
Chechnya. There will be tighter bonds nearer to home - the unsavoury Belarus 
can expect attention from Moscow. 

None of this is a pretty picture for the West. Add a chronic disillusion with 
the latter and its dismal contribution to Russia over the past eight years. 
The billions of IMF dollars did nothing for the impoverished millions, but 
fuelled a pyramid scheme in which a tiny elite made enormous profits from 
government bonds, dispatching the proceeds overseas before the currency 
collapsed. Direct foreign investment remains pitiful. Economic reforms are 
associated with corruption and misery. So we have reached the point where 
Americans visiting Moscow have been advised by their embassy not to speak 

Is there any ray of hope in all this? One or two. Though the far right and 
left are romping on to the centre stage, ushered there by Nato, predictions 
that Russian politics will be driven to extremism are overblown - issues of 
survival matter more. 

One optimistic school of thought is evolving. This holds that Nato will be 
greatly weakened by this disastrous operation, as will the US's desire for 
further European involvement. Russia will shift its focus towards building 
relations with its neighbours - notably Germany - to becoming a partner in 
Europe. But it will be a while yet. For now, the chips are down. The stakes 
are high, and the wheel is spinning. 


Russia-IMF show to resume as concerns deepen over Bank reserves

MOSCOW, April 4 (AFP) - Moscow and the IMF will strive this week to build on 
a vague but crucial agreement on aid for Russia, fully aware that the storm 
clouds are gathering again over the country's wretched public finances.
For the eighth time in as many months since the August crisis, the 
International Monetary Fund (IMF) is to send experts to Moscow to discuss 
what role the Fund will play in helping Russia out of an economic abyss.

Only this time, the Fund team that is due to arrive on Wednesday has 
something concrete to work on, following last Monday's broad agreement 
between the two sides. That breakthrough is expected to pave the way for a 
resumption of IMF financial support for Russia.

But no sooner was Moscow rubbing its hands at the prospect of a new 
multibillion dollar bailout than it was sounding the alarm bell again over 
its highly precarious financial situation, and in particular over Central 
Bank reserves which have dipped to near-critical levels.

The warning is likely to remind the IMF that Russia has often proved to be a 
bottomless pit, a sieve through which a flood of aid, loans and investment 
has leaked out of the country at an estimated rate of more than two billion 
dollars every month.

This has left the government staring at a mountain of foreign obligations 
with nothing in the public purse to redeem it. Moscow called last week for up 
to 75 billion dollars of Soviet-era debt to be written off, hardly an 
auspicious backdrop for wringing further loans out of the IMF.

Not surprisingly, the IMF wants to see some signs of ability to repay former 
loans before it pumps in new money. Deputy managing director Stanley Fischer 
warned last week that loan talks could still drag on for more than a month.

But Moscow countered by indicating that it needs the funds soon, particularly 
as Central Bank reserves are now being earmarked to pay off foreign debt and 
as such are contracting at an alarming rate.

The bank paid 2.1 billion dollars in the first three months of 1999 alone to 
meet debt obligations, reducing gold and hard currency reserves to three-year 
lows of little more than 10.5 billion dollars, Bank chairman Viktor 
Gerashchenko warned last week. In mid-1997 they stood at well over 20 billion 

With gold taking up at least 40 percent of the sum in the vaults, the bank is 
now left with less than seven billion dollars in cash to cover some six 
billion dollars of foreign debt payments which mature in the next three 

The ruble has taken fright at this, losing eight percent in a month after 
holding firm for much of this year at around 23 to the dollar. This has 
merely heaped extra pressure on the bank to use the dwindling reserves to 
defend its currency.

The sorry state of affairs presents the IMF experts packing their bags in 
Washington with an extra headache. Analysts say the Fund has no interest in 
seeing a country at which it has thrown money go bankrupt. But the IMF has 
lent almost 20 billion dollars to Russia and recouped virtually none of it.

The government originally promised that any new IMF financial support for 
Russia would merely be transferred from one account to another in Washington 
to pay off the 4.6 billion dollars which Moscow owes the institution this 

But Gerashchenko said that given the dire state of hard currency reserves, he 
wanted to see any newly pledged funds transferred directly to Central Bank 

This would be controversial given the fact that the last IMF bailout 
disbursed to Russia shortly before the economy's elastic snapped on August 17 
quickly evaporated amid an ultimately futile defence of the ruble.

The size of an eventual IMF credit has in any case yet to be decided, and 
will comprise an element of the talks in Moscow this week. 


St Petersburg Times
April 2, 1999 
What Russians Don't Know About Kosovo 
By Fyodor Gavrilov
Fyodor Gavrilov is the editor of Kariera-Kapital.

THERE'S no getting away from the Yugoslavian crisis: Russians are up in
arms, and the ensuing arguments have literally divided even families. To
the dismay of some (and the good fortune of all) Russians, we aren't
actively involved in the conflict. Nevertheless, our reaction tells the
dispassionate onlooker a good deal about Russia itself, revealing sore
spots that anyone who lives and works here should not ignore. 

For now I'll limit myself to two observations. The first is rather
disturbing: "New" Russians can be easily hoodwinked, and the "objective"
Western-style mass media are the best tool for this job. I'm not sure what
to make of my second observation, but here goes: Russians have a common
religion after all, and it has nothing to do with blood or creed. 

Talking heads have been telling us all week that the Serbs are our Slavic
and Orthodox Christian brothers. Before the crisis, I'd heard this sort of
thing either from professional philologists, who are fonder of the Cyrillic
alphabet than of Serbia or Bulgaria, or from professional politicians, who
aren't fond of anyone. Whatever may be said about our ethnic and
confessional ties to the Serbs, television pundits completely ignore the
fact that Romanians, Macedonians, Bulgarians (who'd like to join NATO), and
Greeks (who are already in) are also Orthodox Christians. Yesterday, a
marketing consultant who reads the newspaper I edit called to express his
surprise: He'd learned from our editorial that the Serbian's arch-enemies,
the Croats, are Slavs as well, and therefore can lay claim to "brother"

In the last week, our mass media have shown that they're more than able to
gull the public. The truth is a complicated thing, and explaining it is an
endless process. The most bald-faced lie, though, is lightweight and
requires no proof. Russians don't have credible information about the
world, and few of us know enough about the horrors of the war in Bosnia.
There's nothing miraculous about the fault lines that have formed: Like
Europeans and Americans, Russians root for the underdog. It's just that in
the current conflict, NATO sees the Kosovars as the downtrodden, while
Russians sympathize with the unfortunate Serbs. 

But let's get back to my second observation. An ignorance of history is
not, in the end, the main sticking point. In the ideological Antarctica we
found ourselves in after the overthrow of official Marxism, a love of
justice is the only thing we Russians have left - it is, if you like, our
secular religion (with newspapers and TV news programs serving as our often
apocryphal bible). Pollsters have discovered a curious thing: While nearly
75 percent of Russians condemn the bombing of Yugoslavia, so far only 9
percent think that the campaign is directed against Russia. That means that
our disapproval has little to do with nationalism or a nostalgia for our
lost empire. It is our native sense of fairness that has been wounded. Why
are NATO planes bombing Belgrade, and not Ankara or London? Russians ask.
No answer has been forthcoming, but I'm sure that Russians would like to
understand you in the West. Please find the means to answer our questions. 


Constructive Period of Russia-NATO Relations Over General.

MOSCOW, April 3 (Itar-Tass) - The initial constructive period of relations 
between Russia and NATO is drawing to an end, a high-ranking official said. 

Colonel-General Leonid Ivashov, head of the Defence Ministry's Main 
Directorate for International Military Cooperation, said at a briefing at 
Itar-Tass on Saturday that "NATO has negated the fundamental principles upon 
which Russia's relations with this bloc were based." 

He noted that one of these principles requires the parties to refrain from 
use or threat of force against other countries, except by a U.N. Security 
Council resolution. 

"I feel ashamed when I look at the signatures in the Founding Act put by the 
heads of state who have spat at them now," Ivashov said. 

He stressed that "there is no guarantee that the NATO countries will comply 
with the agreements to be reached in the future." 

Ivashov described Russia's policy as "clear, fair and honest". But "as 
regards the policy of our partners -- we have great doubts," he added. 

He made it clear that it is "hard to say when a constructive period in 
relations with NATO will be resumed." 


Date: Sat, 3 Apr 1999 
From: Laura Belin <>
Subject: Skuratov the fraud crusader

Dear David,

In some of the press commentaries you have posted lately,
Procurator-General Yurii Skuratov is portrayed as the last great hope for
fighting Russian corruption. For instance, The Guardian dubbed him the
"fraud crusader" (JRL 3224).

Although he has held his current post for three and a half years, Skuratov
has only recently begun to receive wide attention outside Russia, and I
think it is worth remembering that he is a new convert to the crusade
against corruption in Kremlin circles.

Some JRL readers may not recall that Skuratov played an important role in
helping cover up the infamous "money in a box" scandal in between the
first and second rounds of the 1996 presidential election. When members of
the Presidential Security Service detained two Yeltsin campaign aides
carrying $538,000 out of government headquarters, the episode was
potentially a huge embarrassment to the president, but sympathetic media
instead spun the story as an attempt by the security service to plant
money on the two men and undermine the election.

Two days after the scandal broke, Anatolii Chubais and Viktor
Ilyushin--among the most senior Yeltsin campaign officials--discussed at
length how to avoid adverse publicity. The transcript of their
conversation was published in Moskovskii komsomolets in November 1996.
Among other things, the transcript revealed that Chubais and Ilyushin had
sent the two men into the government building to pick up the cash, and
that financial transactions involving large bags of cash were routine
operating procedure for the Yeltsin campaign. 

The transcript also showed that Chubais and Ilyushin decided Skuratov was
the key to keeping the scandal out of public view. They knew that the
security service was due to submit documents relating to the case to the
Procurator-General's Office, and they were worried that someone in the
procuracy would leak the information to Viktor Ilyukhin, the Communist
chairman of the Duma's Security Committee. Ilyushin phoned Skuratov to
impress upon him the importance of holding onto the documents himself. The
transcript only reveals Ilyushin's side of the conversation, but
Ilyushin's comments strongly suggest that Skuratov agreed not to pass the
documents along to anyone else without first consulting Yeltsin.

The authenticity of the transcript published in Moskovskii komsomolets was
never challenged in court. It would seem to implicate Skuratov in
obstruction of justice, although I do not recall any journalist pressing
Skuratov on his 22 June 1996 telephone conversation with Ilyushin.

After the presidential election, Skuratov showed little inclination toward
getting to the bottom of the "money in a box" scandal. In April 1997, the
Procurator-General's Office closed its criminal investigation of the case,
on the grounds that there was no proof the money came from state coffers.
Foot-dragging by the investigators helped, since the new Criminal Code
(which came into effect in January 1997) decriminalized certain
hard-currency transactions that had been illegal in 1996. Conveniently for
those involved in the scandal, no one reported the $538,000 missing, so
the procuracy could not press charges for theft.

I applaud the current attempts to investigate corruption, and in no way
mean to condone Yeltsin's clumsy attempts to get rid of Skuratov, which
are like a bad imitation of Nixon's dirty tricks campaigns and "Saturday
night massacre." Still, I do not consider Skuratov a crusader against
corruption. Only now, when Yeltsin is weaker than at any other time in his
presidency, is Skuratov looking into serious allegations against the

Laura Belin
St. Antony's College, Oxford


64% of Russians Think Economic Crisis Worse Than '98 

MOSCOW, 1 Apr (Interfax) -- Almost two thirds of 
the Russian citizens (64%) think that the economic situation in Russia is 
worse now than it was in the autumn of 1998 and that it continues to 
deteriorate. One quarter (25%) does not think the situation has changed 
either for the better or for the worse, and only 6% see economic 
improvement. This information was obtained in a poll of 1,500 rural and 
urban residents carried out by the Public Opinion Foundation on March 20. 
The predominant majority of Russian citizens have a negative attitude 
toward Russia's dependence on Western creditors and think that Russia 
must rely only on itself. This position is shared by an increasing number 
of people. In July 1998 a rigorous economic regime was favored by 65% of 
the respondents, and borrowing was favored by 7%. Now, three quarters of 
those polled (73%), not two thirds like during last summer, said that 
economic recovery may be ensured by using internal resources. Nine 
percent of the respondents still favor Western loans. 


White House in No Hurry to Back YELTSIN'S Initiative.

WASHINGTON, April 4 (Itar-Tass) - The White House is in no hurry to express 
support for the proposal of Russian President Boris Yeltsin to call a G-8 
meeting on Kosovo. However, President Bill Clinton's special assistant Greg 
Schulte said on Saturday in reply to Itar-Tass that this proposal is being 
attentively studied. 

He could not confirmed agreement on holding such a meeting, but did not deny 
flatly such a possibility. Earlier, the United States bluntly stated that it 
did not see great necessity for calling a G-8 conference. 

According to some data, Yeltsin's proposal was discussed at a White House 
meeting on Saturday under the chair of Clinton, which dealt with the Kosovo 
situation and progress in the NATO military operation. 

Schulte came to a meeting with foreign reporters right after the meeting 
where he was present among other president's advisers. 

On the eve, Yeltsin's call was approved by France and Italy. A statement by 
Italian Foreign Minister Lamberto Dini noted that a decision was taken during 
phone talks with the U.S. state secretary, as well as the British, German and 
French foreign ministers to support the proposal by Yeltsin on holding a G-8 
meeting in order to continue a search for a political settlement of the 
Kosovo conflict. 

According to this statement, the G-8 session at the foreign ministers' level 
will follow a meeting by the Contact Group on the Kosovo situation, scheduled 
for the next week. However, it is clear from Schulte's words, that the White 
House has not determined as yet whether to back this initiative. 

Asked whether Clinton intends to discuss the Russian president's proposal in 
a personal phone talk with Yeltsin, Schulte said that he knew nothing about 
such plans. However, he added that the U.S. makes regular contacts with the 
Russian side through many other channels. 

The assistant for instance called attention to frequent calls between U.S. 
State Secretary Madeleine Albright and Russian Foreign Minister Igor Ivanov. 
Schulte said that during these contacts with the Russian side as well as with 
other states, the state secretary discusses possibilities of using various 
diplomatic initiatives to settle the crisis. 

As for Yeltsin's proposal, according to the assistant, discussions are 
underway how to integrate this initiative into the general diplomatic 

The assistant also confirmed the administration's firm intention to continue 
aerial bombing of Yugoslavia. According to Schulte, the administration's 
strategy is the same, and it has no plans for launching a ground operation. 



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