This Date's Issues: 3226 •
Johnson's Russia List
5 April 1999
[Note from David Johnson:
1. Katherine Dolan: Sea Change on Itogi?
2. Christian Science Monitor: Andrei Zolotov Jr., First Yugoslavia,
3. Christian Science Monitor: Michael McFaul, NATO's collateral damage
4. The Times (UK): Anna Blundy, "Buy it and you have to obmyt it..."
5. Peter D. Ekman: Moscow MBAs.
6. AP: Government To Honor Cold War Vets.
7. Washington Post: David Hoffman, Attacks Stir Cold War Feelings in Russia.
8. New York Times: Floyd Norris, The Russian Way of Corporate Governance.
9. Baltimore Sun: In Moscow, kitchen-table surgery. (Veterinarians).
10. Inter Press Service: NEGLECTED BY MOSCOW, KHABAROVSK TURNS TO ASIA.]
Date: Mon, 5 Apr 1999
From: "Katherine H. Dolan" <email@example.com>
Subject: Sea Change on Itogi?
Last night on NTV's weekly news summary, Itogi, Evgenii Kiselov signalled
what could be a major change of direction in the country's reporting on the
war in Yugoslavia. Before switching to the live coverage from Belgrade, he
for the first time warned us that their reporter there was limited in the
kinds of material he could send back to Moscow, and we saw the burning
Interior Ministry building, and again the bombed out bridge at Novy Sad.
After Belgrade signed off, we saw for the first time detailed footage of
refugees arriving in Macedonia from Kosovo and were given some numbers to
put with it -- 200,000 was the approximate figure. We then heard from Pavel
Lapkov, the correspondent in Macedonia, that most of those fled not from the
NATO bombing nor the Kosovo Liberation Army but from the "ethnic
cleansing". The people he interviewed described Serbians coming to their
apartments and forcing them out. "They knew who we were and where we lived,"
one interviewee said. We were then shown a rather gruesome amateur video
that purported to be ethnic Albanian civilians shot by Serbian military
units. One man interviewed about the tape said that one of those shot was a
neighbor of his, not involved in any military activity. Then began perhaps
the most interesting part of the program -- a live interview with former
foreign minister Andrei Kozyrev and former vice President and current
governor of the Kursk region, Alexander Rutskoi. Rutskoi's comments were
predictably supportive of Milosevic and critical of NATO in general and the
U.S. in particular. It was Kozyrev who delivered the surprise. He suggested
that it was not in Russia's interest to support such an "odius" person as
Milosevic, whose policies included ethnic cleansing not only in Serbia, but
earlier in Bosnia as well. He emphasized that it was not just the U.S.
involved in Yugoslavia but 19 NATO countries, and that it was surely
ridiculous to consider countries like France and England as mere "colonies"
of the U.S., without independent interests and policies of their own. He
went on to point out that three former Warsaw Pact members, two of whom
were also Slavic, had hastened to join the "aggressor" NATO alliance as soon
as possible, suggesting that most of Europe was at least united in opposing
Milosevic's behavior. He then asked rhetorically why Russia considered its
friends to be Milosevic, Saddam Hussein and Colonel Kaddafi. Other points
were touched on as well, including the fact that the NATO attack had
produced few or no verifiable deaths, unlike the Serbian actions in Kosovo,
or the Russian war in Chechnya.
This is not meant to be an exhaustive summary of the program, a thorough
viewing of which I would say is de rigueur for American and other NATO
policy makers. For those of us who are simply observers it also raises an
interesting question. Who signalled this change and why?
Katherine H. Dolan
American Institute of Business and
Christian Science Monitor
5 April 1999
[for personal use only]
First Yugoslavia, tomorrow Russia?
By Andrei Zolotov Jr.
Andrei Zolotov Jr. is a staff writer at The Moscow Times, an
Why do russians like Serbs? Don't they think of Slobodan Milosevic as a
genocidal dictator deserving of all the firepower NATO can deliver? These are
the questions I'm peppered with by American friends and colleagues as my
fellow Russians go to the streets over NATO's bombing of Yugoslavia.
First, I say, listen to Russian nationalists' favorite slogan: "What is
happening to Serbia today will happen to Russia tomorrow."
At both emotional and practical levels, the pounding Yugoslavia is taking
reminds us of our cold war loss, and it's an uneasy feeling.
Serbia is an emotional touchstone because - just like Russia - it is a Slavic
nation of Orthodox Christian heritage, squeezed between West and East on the
border of European civilization. Both have large Muslim minorities with
various degrees of local nationalism. Both Serbian and Russian identities
were shaped over centuries of grueling defense against foreign aggression. In
this century, we were allies in two world wars, and Serbia was also home to
hundreds of thousands of Russian emigrés who fled the Bolshevik revolution.
With such a shared history, we understand very well why Serbs wouldn't accept
a foreign occupation to enforce "peace" in Kosovo.
On an emotional level, Russians can't help but sympathize with "brother"
So, during the past 10 years of civil wars in the former Yugoslavia, when
atrocities were committed on all sides, the Russian media have demonstrated
perhaps the same degree of slant in favor of Serbs as the Western media have
shown against them.
Russians who wanted to listen knew that Milosevic was a dictator and that he
has encouraged ethnic cleansing. But they also know that similar ethnic
cleansing was applied to Serb minorities in Croatia, Bosnia, and Kosovo.
Russian nationalists and Communists have trumpeted their support for
Milosevic because they envy his dictatorial powers and popular support. But
to secure the same position at home, they lacked two crucial things: a clear
enemy and a state of war. Now NATO has given them both. And this is where
emotion gives way to practical considerations.
Fear of NATO expansion takes shape in the form of military aggression against
Russia's traditional ally, Serbia. At the same time, Russia is so weak that
it can do nothing to prevent it.
It doesn't feel good. So anti-Western rhetoric falls on fertile ground in
For the last decade, Russians have seen a lot of arrogant apostles of Western
civilization who came to preach "democracy" and "market economy" with little
regard for Russia's 1,000-year history.
Economic policies, which were championed and bankrolled by the West, brought
poverty to the vast majority of Russians and a huge foreign debt. Openness to
global markets resulted in economic collapse last August. Young reformers,
the West's best bet in Russian politics, turned out to be corrupt builders of
And in geopolitical terms, the loss of the cold war meant we lost our empire
and all of our allies, while the widely hailed "partnership" with the West
feels like a deception. Even before NATO's action in Yugoslavia, it was clear
that both the expansion of the Western alliance and the establishment of
European Union are excluding Russia from, not integrating it into, the new
The implications churn up not just Communists, but Russian liberals,
centrists, and people of no political affiliation. Doubt swirls and we ask
ourselves: Would the US bomb Russia over Chechnya? Would NATO interfere in
the oil-rich Caspian basin, which Washington has declared within its sphere
of interests? Will NATO troops arrive in the Baltics, a one-hour flight from
The answers, shadowed by the NATO bombing in Serbia, are not consoling.
Russia is indirectly being bombed back into its old isolationism and
This is a victory for nationalists and Communists and proponents of a strong
state, who already have an upper hand in Prime Minister Yevgeny Primakov's
government and control parliament, which is shelving Start II and talking
about putting nuclear missiles back in Belarus and Ukraine.
Washington policymakers rightly calculated that present-day Russia is too
weak, too preoccupied with internal problems, and too dependent on Western
money to go to war over Serbia. But in the long run, the policies of a global
policeman are certain to backfire.
Christian Science Monitor
5 April 1999
[for personal use only]
NATO's collateral damage in Russia
Bombing of Serbs strengthens militant anti-Western forces and threatens
By Michael McFaul
Michael McFaul is a senior associate at the Carnegie Endowment for
International Peace, in Washington, and a professor of political science at
Stanford University in California.
Although few in washington have noticed, US-Russian relations have entered a
new era with the NATO bombing of Serbia.
Before Serbia, anti-Americanism in Russia was an elite sentiment. After
Serbia, anti-Americanism is rapidly becoming a populist cause that penetrates
every segment of Russian society, including most ominously, young people. The
Clinton administration should not be lured into complacency by official
Russian statements pledging continued cooperation with the West. While
Russia's rulers may adhere to the pragmatism of continued engagement with the
US, they could quickly become prisoners of popular anti-American hysteria.
After all, Russia will elect a new parliament this year and a new president
next year. Before permanent damage is done, US officials must rethink
engagement strategy with Russia.
Anti-American sentiment in Russia is nothing new. What is new about this
crisis is who is now joining the anti-American chorus. Traditionally,
Russia's foreign policy elite rant about US hegemony while Russian
grandmothers show up at anti-American demonstrations. But last week it was
young people throwing beer bottles at the US embassy in Moscow and organizing
university teach-ins. In a first, Russian yuppies have joined skinheads in
protesting against US "hegemony." Burned by the financial meltdown last
August, Russia's young elite may no longer believe their future is best
served by Western integration.
Communist and nationalist leaders, of course, couldn't be more pleased. NATO
bombs dropping on their Serbian brothers give them great footage for their
campaign clips for the upcoming parliamentary election. Every Russian
pollster and campaign consultant I've talked to predicts that the NATO
bombing will enhance the electoral prospects of communists and openly fascist
groups and revive the waning career of neonationalist Vladimir Zhirinovsky.
President Boris Yeltsin also welcomes this new burst of anti-Americanism as
it diverts attention from impeachment proceedings and corruption charges
levied against his administration and family.
This new situation within Russia is dire. If militant anti-Western forces
sweep into power after the next elections, Russian democracy may falter,
economic reform will halt, and US-Russian relations will take a dramatic turn
for the worse. To limit the damage, the administration must rethink its
strategy of engagement with Russia. The battle for Russia has moved from the
diplomatic hallways to the streets of Moscow. The US strategy for engagement
must respond to this new battlefield terrain.
In the short run, US officials must articulate clearly and often the
reasoning behind NATO actions in Yugoslavia. Western officials (preferably
from European NATO members) should appear on Russian TV, write articles for
Russian papers, and meet frequently with Russian leaders to explain NATO's
mission in Serbia. Of course, the immediate reaction will be overwhelmingly
negative. Saying nothing, however, fuels the belief that the US has a secret,
sinister plot to destroy Serbia today and Russia tomorrow. If US officials
don't explain their policy, Russian fascists will do it for them.
In the medium run, US officials must take very seriously the Russian mission
to mediate between NATO and Serbia. Although Prime Minister Yevgeny
Primakov's attempt to broker peace with Iraq in 1991 was a disaster, this is
a different kind of war and a different Primakov. As prime minister of a
country on the verge of economic collapse, he knows he can't defy the West
for the simple pleasure of defying the West. He has real financial interests
in maintaining engagement with the West.
If a new round of peace negotiations begins, the Russians must be given a
higher profile in the process. Russia or Ukraine should be the location of
the next set of peace negotiations. NATO officials should even consider
working with Russian troops in a peacekeeping mission in Kosovo if a peace
settlement is reached.
In the long run, the US must reinvigorate its training and exchange programs
targeted at Russia's youth. The US should fund thousands - not hundreds - of
Russian students to study at American universities. Likewise short-term youth
exchanges should be increased dramatically and immediately - our best
propaganda for Western values is the American system and the American people.
If Russia's 18-year-olds turn against the US, then the NATO campaign in
Serbia will truly have undermined the most important US strategic interest of
this decade - Russian reintegration into the West.
The Times (UK)
April 5 1999
[for personal use only]
'If you buy anything of value, you drink to it. This applies to cars, fur
coats . . . anything the purchaser feels he can't afford, if the truth be
Buy it and you have to obmyt it. Russians are very superstitious people and
any purchase that has not been satisfactorily obmyted is liable to find
itself lost, stolen, vandalised or otherwise rendered useless to the owner.
This superstitious attitude to life is highly infectious, and it takes only a
month or two of residence to find oneself forbidding people from whistling
indoors (you will be penniless for ever), refusing to sit at the corner of a
table (you will never marry), avoiding shaking hands across the threshold (a
bad omen for friendship) and always putting empty bottles on the floor (not
sure about this one, but it is probably something to do with avoiding
confusion in your drunken stupor over which bottles are still of use and
which are not).
The obmytiye, however, is a different issue entirely. As much a tradition as
a mere superstition. A part of national heritage and a process considered to
be a cheap alternative to expensive, and anyway hugely unreliable, insurance.
To the Westerner it can be the cause of great confusion. The first time I
ever came across it (I realised in retrospect) was ten years ago when I was
forced to participate in a vile, drunken evening at a Korean restaurant that
served only mushrooms in soy sauce, and sliced cucumber (there were shortages
in Moscow back then). The entertainment was a strip show that began at 6pm
and involved some bored teenagers in yellow leotards writhing round the
largely empty tables.
Sasha, a terrifying thug, spent the whole evening toasting his new car, which
seemed to me the height of vulgarity and bad taste. It brought out the worst
in me, and, as a kind of anti-materialistic backlash, had me up on my feet
every few minutes making toasts to world peace, the love of my neighbour and
the spirituality in all of us.
It seemed depressing that people who only a year or so earlier had amazed me
with their apparent absence of consumer psychosis and their heightened
appreciation for the finer things in life had so quickly transformed into the
worst kind of suburban American property enthusiasts. Not only was property
suddenly not theft, it seemed to be a human right. Little did I know.
Years later I got off a boat in the Volga town of Togliatti and bought a
ceramic blue and gold fish-shaped decanter with some charming little shot
glasses to match. As I re-embarked, a trumpeter told me I should obmyt the
set later. Since obmyt comes from the words "to wash", I thought: "He's
right. I must give it a rinse," and I wandered off back to my cabin. I had no
idea that he was in fact inviting me for a drink.
It all became clear when a friend recounted a fur-coat-buying trip to Greece.
Olga and her husband had taken a cruise around the Mediterranean with the
object of buying this coat (they are apparently cheaper there than in Russia
and are obligatory winter wear for women here). Safely back en route for
Russia, Olga's husband spent three days obmyting the coat with some friends
he had made at the bar. I imagined him hanging over the side of this ship
washing it in the sea for three days. When she explained what he was actually
doing, it was even stupider.
Basically, if you buy anything of value you have to drink to it. This is
similar in concept to wetting the baby's head, but in Russia it applies to
cars, fur coats, televisions and anything else that the purchaser feels he
cannot really afford, if the truth be known.
Obmytiye is taken very seriously indeed here. Another friend of mine recently
had her car stolen and called the police to report the crime. "Did you obmyt
the vehicle, madam?" they asked, as though asking whether or not it was
legally insured. "Actually, no," she replied. "We had to go away the day
after we bought it and we never got round to it."
The policemen rolled their eyes, tutted and shrugged their shoulders. They
seemed to be saying: "Why should we investigate the theft of this car when
its very owners cannot be bothered to look after it properly?" Everybody has
proof of the obmytiye - stories about the appalling disasters that befell
items they stupidly neglected.
Now your Western cynic might think that this is just another Russian excuse
for drinking as much as possible, but I attended a fur-coat obmytiye last
week, and sitting around it, drinking champagne and discussing its virtues,
one did feel that even if it did get stolen or lost in the near future, at
least it had been fully appreciated first.
From: "Peter D. Ekman" <firstname.lastname@example.org>
Subject: Moscow MBAs
Date: Sun, 4 Apr 1999
Moscow MBA Case Competition
Six of Moscow's top business schools will compete head-to-head
in the Moscow MBA Case Competition, organized by the American Chamber
of Commerce's Human Resource Committee. Groups of four students will
have one night to prepare a case on international business, and then make
a 30 minute presentation in the Harvard case format the following day to a
of distinguished judges. The presentations are open to the public from 1:30
to 4:30 p.m., Saturday, April 10 at the Renaissance Hotel (18/1 Olympisky
Prospect - nearest Metro, Prospect Mira). Admission is free. An awards
ceremony will follow and scholarships will be presented.
The students will be on the firing line, forced to
test their business knowledge, and analytical techniques in proposing
solutions for real-world business problems to demanding business
executives. The short preparation time will give them a perspective on
meeting business deadlines while engaging in teamwork with their peers.
Business people can learn about the business education alternatives
in Moscow, evaluate Moscow's MBA programs, and, perhaps, even find and
recruit a future star employee. Prospective students should find the
program helpful in choosing a business school.
The competition will feature MBA students from the American Institute
of Business and Economics, the Higher School of Economics, the Institute of
Business Studies, California State University - Hayward, Moscow State
and Moscow University Touro. McKinsey and Company will provide the cases -
one for the English-language competition and one for the Russian-language
and several of the judges. Other judges will be prominent members of AmCham
Russian business community. American Express, Coca-Cola Export Corporation,
Kapital, and Pratt & Whitney are sponsoring the event.
Government To Honor Cold War Vets
April 4, 1999
By SHANNON McCAFFREY
WASHINGTON (AP) -- It was a different kind of conflict, a 46-year face-down
between adversaries with enough weapons to destroy the world but never
willing to use them against each other. Its end brought no peace treaty, no
parade of heroes.
But the Cold War was a war, the United States won, and the victors were
ignored, Army veteran Mark Vogl insisted.
So Vogl began a letter-writing, signature-gathering crusade in 1994 from his
Bay Shore home on New York's Long Island to get recognition for the men and
women who served.
On Monday, his efforts are being rewarded.
The Defense Department will begin taking applications from those who served
during the Cold War for a ``Cold War Recognition Certificate.''
``All members of the armed forces and federal government civilian personnel
who faithfully served the United States during the Cold War era'' are
eligible, a Pentagon Web site said.
It also specifies the dates: Sept. 2, 1945, the date Japan surrendered after
World War II, to Dec. 26, 1991, when Mikhail Gorbachev resigned as Soviet
president and the Soviet Union was disbanded.
An estimated 22 million people meet the eligibility requirements. An
application letter with a document proving service during the period is
enough to show the applicant served honorably, the Pentagon Web site said.
The certificate is symbolic. No financial reward is involved.
But Vogl, 43, said it goes a long way toward showing the role of those who
fought to keep the protagonists at bay as the United States and the Soviet
Union raced to pump up their nuclear arsenals.
``This is probably the most significant human event since we've been alive,''
Vogl said of the Cold War. ``There was no nuclear war, Germany was reunited,
the possibility of a European confederation all of a sudden becomes a real
possibility. The whole world is different now because of what happened then.
``But it just sort of went away.''
Vogl began his lobbying effort with a Cold War recognition resolution to his
county's chapter of the veterans' group AMVETS. The resolution passed and
sailed through national AMVET ratification at the group's annual convention
Vogl, whose wife worked for Rep. Rick Lazio, R-N.Y., approached the
congressman about sponsoring legislation. Lazio jumped on board, and the
recognition gesture was written into the 1997 defense budget to take effect
``America's victory in the Cold War was too much like winning the World
Series in an empty stadium,'' Lazio said. ``There was no ticker tape parade,
... yet the people who represented our country's military during this period
are responsible for a huge victory over the Soviet Union that saved mankind
from nuclear holocaust.''
Jack Smith, New York commander for the Veterans of Foreign Wars, which
represents combat veterans, said Vogl's campaign was a good idea and would
not demean combat veterans' position. ``It's a fine thing,'' Smith said. ``It
would be nice to have them recognized in some form.''
Those who serve in combat receive campaign medals.
Information about the Cold War Recognition Certificate is at
http://coldwar.army.mil/ or by mail at Cold War Recognition, 4035 Ridge
Top Road, Fairfax, Va. 22030.
April 4, 1999
[for personal use only
Attacks Stir Cold War Feelings in Russia
Balkans Conflict Compounds Heightened Suspicions of the West
By David Hoffman
MOSCOW, April 3—Foreign Minister Igor Ivanov was asked in the lower house of
parliament last weekend whether Russia should send a few warships to the
Mediterranean as a show of force against the NATO bombardment of Yugoslavia.
Ivanov quickly rejected the idea. "Just sending ships from Murmansk to Greece
is not going to stop the aggression," he said.
But four days later, Defense Minister Igor Sergeyev announced that Russia was
sending a reconnaissance ship to the Mediterranean, and was preparing to send
as many as six more. "We must ensure the security of Russia," he insisted.
The abrupt turnabout speaks volumes about the whirlwind of anti-Western
feeling that the NATO attack on Yugoslavia has stirred here. For Russia, the
airstrikes have been a moment of truth, revealing a vein of unease and
suspicion about the West -- especially the United States -- that analysts say
is stronger than at any time since the collapse of the Soviet Union.
The doubts are the results of various factors and perceived betrayals -- from
pledges that an expanded NATO would be purely defensive to the U.S. decision
to move ahead on an anti-ballistic missile system to Russia's economic
meltdown last August, which discredited Western economic ideas here.
"It's a full-blown crisis, the first real crisis since the end of the Cold
War" in Russian-U.S. relations, said Sergei Rogov, director of the Institute
for the Study of the U.S. and Canada here. "It covers economic relations,
foreign credits, debts, sanctions, arms control, START II, the ABM treaty
and, I am afraid, a few others.
"It's a bad crisis which could have very long-term implications for
Russian-American relations, producing something between disengagement, 'cold
peace' and maybe even something more serious."
In recent days, President Boris Yeltsin and Prime Minister Yevgeny Primakov
have been buffeted by the anti-American sentiment. They have responded with
selective withdrawal from military agreements while holding back from far
more serious measures demanded by nationalists and Communists in parliament.
The rhetoric has been white-hot, with Russians accusing the United States and
NATO of "genocide" in Yugoslavia, of supporting Kosovo Albanian separatists
with "narco money," of seeking world diktat and of using the Balkans as a
proving ground for new, high-technology weapons.
In its actions, however, Russia has been more restrained. Russia canceled
meetings with Western military experts, ousted NATO military attaches,
rejected plans for sharing early warning missile launch data with the United
States, and shelved, once again, parliamentary ratification of the strategic
arms treaty. The first ship that Russia is sending to the battle zone is the
Liman, a 27-year-old, 60-man electronic spying vessel from the Black Sea
Fleet that carries eavesdropping gear but no rockets.
Russia so far has not announced plans to break the United Nations arms
embargo and ship weapons to Yugoslavia, and there has not been a major
disruption of U.S.-Russian cooperation on nuclear and chemical arms
dismantlement. However, Col. Gen. Leonid Ivashov, head of the military's
international department, told reporters today that the Russian Defense
Ministry has severed all contacts for the next few months with countries in
the "criminal organization" of NATO.
And some analysts worry that sentiments are so strong that anti-Western
reactions could spin out of control.
"I'm afraid that now it is serious; we see some sort of consensus in society
which we haven't seen since 1991," said Alexander Pikayev, a nonproliferation
specialist at the Carnegie Endowment for International Peace Center here.
"Then, it was a broad anti-communist consensus. Now, unfortunately, we face a
strong anti-NATO consensus, which could have a very dramatic impact on the
overall U.S.-Russian relationship.
"In August, we saw the collapse of Yeltsin's market-reform policy and in
March, we saw the collapse of Yeltsin's foreign and security policy."
Analysts have predicted that economic hardship and humiliation could trigger
a retreat from market democracy here. But until recently, the economic woes
of post-Soviet Russia seemed to have created a benign isolationism. Russians
were too preoccupied with survival to be outraged about their weakening
But the Yugoslav crisis is changing that. "What you have today is, the
anti-American sentiment is enormous," said Rogov, of the U.S.-Canada
institute. "This is very bad. It is something that can be used against
economic reform, especially since the people who are blamed for the economic
collapse are also the people who are friends of the United States . . . It
was coming to the surface before. Now, it is a sea change.
"There is something personal in the attitude of Russian leaders," he added,
recalling earlier claims of a friendship between President Clinton and
Yeltsin. "The president feels that his friend Bill is not such a friend at
all, who simply does not pay attention. 'What friend?' Boris is saying."
[In Washington Friday, Clinton said he believes the Russians "are looking for
ways to continue to oppose what NATO is doing, but to leave open the prospect
that they could play a very constructive role in making peace. I don't think
anyone wants to see this conflict escalate, and I certainly don't believe the
Russian government does."]
In a nationwide survey last week, the Public Opinion Foundation, one of
Russia's leading polling organizations, found overwhelming opposition to the
NATO attacks. The group reported that 92 percent of those surveyed were
against the NATO bombing and only 2 percent supported it. The poll found an
unusually high level of awareness about the NATO strikes; fewer than once
percent said they knew nothing about it.
Andrei Kortunov, a political analyst, said that Russia has lost confidence in
the West in the wake of the ruble's devaluation and debt crisis last August.
"One of the problems today is that we had a narrow but vocal stratum which
favored better relations with the West," he said. "It is nearly nonexistent
right now. The middle class was a major social base for better relations with
the West, and it is now disintegrating. There is very little to replace this.
. . ."
There are still some checks and balances. One is Russia's continuing
dependence on Western financial aid, underscored by the ongoing negotiations
with the International Monetary Fund for new loans. But this dependence is
increasingly unpopular. According to the Public Opinion Foundation poll, when
asked last year whether the IMF brings benefit or harm to Russia, 17 percent
said benefit and 19 percent said harm and 46 didn't know. But today there is
a major shift: 14 percent say benefit, 43 percent say harm, and 28 percent
However, one small contrary sign appeared in a call-in survey by Echo of
Moscow, a popular radio station. When listeners were asked if they were
prepared to give up using American dollars to protest the airstrikes, the
answer was unequivocal: 77 percent said no, and 23 percent said yes.
New York Times
5 April 1999
[for personal use only]
Editorial Observer: The Russian Way of Corporate Governance
By FLOYD NORRIS
As Russia pleads with the International Monetary Fund for money to keep
it from defaulting on its international debts, the country's Government
seems to believe that an I.M.F. seal of approval will lead to a resumption
of the flow of private capital into the country. Don't bet on it.
To understand why private investors should be hesitant, consider the case
of Yukos, Russia's second-largest oil producer, which is run by Mikhail
Khodorkovsky, a well-connected Russian oligarch.
The tale is a complex one, in which paper is shuffled as rapidly as aces
in a game of three-card monte, in which judges with no apparent
jurisdiction issue rulings, and in which oil is sold for absurdly low prices.
The losers are investors in the three oil companies that Yukos controls,
known as Yuganskneftegaz, Samaraneftegaz and Tomskneft. Once those were hot
stocks; now they are all but unsaleable. An investment of $3,000 at the end
of 1996, divided equally among the three, would have grown to more than
$11,000 by the following August. Now it is worth about $150, down 98 percent.
World oil prices are depressed, and Russia's economy is in crisis. But
those factors are not enough to account for the decline in share prices, in
which one subsidiary that produces oil worth $2 billion a year now is
valued at about $22 million. The price has tumbled as it became clear that
the shareholders would not benefit from the sale of that oil.
This has happened despite Russian laws that purport to provide protection
for minority investors by giving them representation on corporate boards
and the right to veto deals smacking of conflict of interest.
At shareholder meetings of the three subsidiaries last month, plans were
approved to allow Yukos to buy oil from the subsidiaries for three years at
$1.50 a barrel, about a tenth of the world oil price. Those meetings also
approved issuing huge quantities of shares to unnamed investors in return
for promissory notes issued by other Yukos subsidiaries. That will dilute
the rights of other shareholders.
What happened to the Russian laws giving rights to minority holders?
Groups of such owners had vowed to defeat the proposals, but they were
barred from voting. A judge had ruled that since the minority holders all
planned to vote the same way, they must be in league with one another and
therefore in violation of antitrust laws because they had not registered as
such. The minority shareholders were not invited to the hearing that led to
The shareholders managed to get another judge to rule that they could
vote at one of the meetings. But his ruling was simply ignored.
Khodorkovsky claims the whole fight is about Western investors who have
illegally acted in concert and are trying to block good management, but the
investors say that the Yukos actions are appalling even by Russia's low
standards. "No one can believe that anyone would be so blatantly crude,"
complains Michael Hunter, the president of Dart Management and a director
of one of the subsidiaries, adding that Dart underestimated the level of
corruption when it made its investments.
John Papesh of Misoli Enterprises, an affiliate of Dart, argues that
"This brazen asset grab takes the violation of Russian law and
international standards of corporate governance to a new low."
If the Russian Government does nothing to protect the shareholders, it
will send a clear message. But even an honest government cannot protect
investors without help.
The Yukos tactics are reminiscent of the fight for control of the Erie
Railroad in 1867 and 1868. Cornelius Vanderbilt tried to buy a majority of
the stock, only to find that directors led by Jay Gould were printing more
shares. Both sides got judges to issue rulings, amid suspicions of bribery.
For a time, Gould could not enter New York except on Sunday, when the
custom of the time barred people from being arrested. The minority
shareholders, most of them from England, were treated badly.
None of that kept the United States from becoming the world's premier
economy. Along the way such abuses led to the rise of J. P. Morgan, whose
early power came from the fact that English investors trusted him.
If Russia is ever to become an economic success story, its oil will play
an important role. But before that happens, a Russian Morgan -- someone who
understands Russian capitalism and earns the trust of overseas investors --
will have to come along to assure that a dollar invested is not sure to
become a dollar stolen. The Yukos affair shows Russia is a long way from
April 2, 1999
[for personal use only
In Moscow, kitchen-table surgery
Veterinarians: Two doctors raised their incomes by treating sick animals at
home instead of at clinics.
MOSCOW -- While Igor and Tatyana Myshkin were taking off their boots and
putting on their hosts' slippers, the family was clearing the supper dishes
from the kitchen table, making way for the operation.
The family's two children went into a bedroom and turned their music up loud.
They said they didn't want to hear the cat's screams.
There was only one scream. It came from Tatyana. A moment before the little
gray cat succumbed to the anesthetic, terror descended and she tried
desperately to escape, badly clawing Tatyana, who had been gently holding and
An hour later, the cat had been spayed and the Myshkins were packing up their
instruments, heading for their next appointment. Igor and Tatyana are
veterinarians who make house calls. They have no office -- their examining
and operating tables are in the kitchens of their clients.
They are emblematic of the many Russians who have found imaginative ways to
survive in a country where incomes are steadily dropping and where
regulations and bureaucrats are often hostile to the small business owner.
"It's because of our poverty," Tatyana begins, talking about why they stopped
working at a clinic and went on the road.
"Our universal poverty," Igor says.
Prices in veterinary clinics are too high for many impoverished Russians,
Tatyana says, and clinics don't pay veterinarians very well. So she and Igor
decided to cut out the overhead and go directly to their patients. Though
they find themselves working late into the night and going without vacations,
they can earn more money being self-employed.
"All you need is anesthetic and a car," says Igor.
Because they usually have to work in the evenings when their clients are
home, they have given up most hopes of free time, but they have been able to
buy a pleasant three-room apartment in a remote if bleak corner of
southeastern Moscow. They even have a coffee machine and a dishwasher, rare
luxuries for most Russians.
"This year we tried very hard to take off on New Year's Eve," Tatyana says,
"but we weren't successful. We had to do an emergency Caesarean for a
"We delivered 17 bulldog puppies," Igor says.
"And the mother didn't have a drop of milk," says Tatyana.
A visitor to their 13th-floor apartment arrived on a recent afternoon to a
huge clamor of singing and shouting in the kitchen. The Myshkins' two large
green parrots, Bolik and Lolita, were in loud conversation. The family also
has a horse named Red (kept at a veterinary college's stable not too far
away), a 5-year-old pug and an 8-month-old Himalayan cat. Their Rottweiler
died not long ago.
Igor, 38, and Tatyana, 35, met when they attended veterinary school together
-- a five-year course in Russia. They have a 13-year-old son, cared for by
grandparents in the evenings.
On a typical day, they go out to their first call about 4 p.m. and don't
return home until 2 a.m. or later. Throughout the morning, their beeper goes
off incessantly. They get about 40 calls a day, sending them rushing off to
one part of Moscow to stitch up a dog that has cut its leg and to the other
end of the city to a cat declining from cancer. They put the cat to sleep.
Vaccinations, putting stitches in, taking them out, operating on tumors.
About midnight, a family calls seeking urgent help. Their cat is in heat,
yowling so loud they can't sleep.
The Myshkins drive to the other side of Moscow to give the cat a hormone shot.
"It would be cheaper to have the cat spayed than to keep calling us to give
her shots," Igor says.
Spaying a cat at home ($14) is a great convenience in a country where the
clinics are crowded and where pet owners are expected to take the animal home
immediately after surgery.
Much animal care here is do-it-yourself anyway. Pet owners are expected to
know how to administer shots, so they can give their animals drugs or
vitamins or other treatment after a visit to the clinic.
And Russians love their pets so deeply that even though they're often willing
to put up with slow and sullen clinic care for themselves, they want
something better for their animals.
"If we are both ill, I take care of my dog first," says Alexander Sidorin,
whose family owns a German shepherd named Dick, "because he is like a very
close relative. He takes part in everything. He understands our mood. He
speaks to us, sings with us, dances with us.
"For me, my dog is a friend who will never betray or cheat me. None of the
human beings around me can be that faithful."
The Myshkins concentrate on cats and dogs. "Birds are very difficult to
treat," Igor says, "and all we can do is give advice over the phone."
Lately, they've developed a busy pig castration season. Impoverished
Muscovites have started buying baby piglets in the spring and raising them in
their apartments, taking them to the countryside in the summer. If the pigs
aren't castrated, the meat, they say, smells of urine.
"Then in the fall they kill the pigs, crying over it," Igor says, "and eat
They put about 50,000 miles on their car every year. Six months ago, they
bought a new little Zhiguli, the boxy piece of tin most popular among
Russians that cost about $8,000 then. Like most Russians, they have no
insurance. A month ago, another driver ran into them, destroying their car.
The other driver has no insurance, and no money for recompense.
So the couple bought a Moskvich, made in Moscow with a Renault engine and
costing less than $4,000. "It would be a good car if it hadn't been assembled
by drunkards," Igor says.
They carry their instruments in a small metal case. "Boiling water, please,"
they tell the owner of the little gray cat about to be spayed. They take the
water and pour it into the case, putting the case onto a burner until the
instruments are sterilized.
"The hands are most important," Tatyana says. "They have to be clean."
They ask for a trash bag. And for soap and a towel. They push the tablecloth
aside and put the anesthetized cat on her back, using long white cotton
straps to tie her down, tying the straps to the table legs. At this point,
the owners leave the room.
When they return, the cat's midsection is wrapped in gauze. Tatyana asks for
a clean dish towel, expertly snips four holes in it, cuts off material for
ties and slides what now looks like a miniature hospital gown onto the cat,
so it won't tear off the gauze. She tells the owner to buy a children's
antibiotic -- available here without a prescription -- and give an eighth of
a tablet to the cat every day for 10 days.
Now the beeper is calling -- "My cat is itching at the place next to his ears
where there is no hair" -- the message reads. Igor is studying his map,
preparing to head off to the next destination.
They love their work. They were born to it.
Translate their last name into English.
It means mouse.
Inter Press Service
DEVELOPMENT-RUSSIA: NEGLECTED BY MOSCOW, KHABAROVSK TURNS TO ASIA
MOSCOW, (Apr. 2) IPS - The people in the vast regions of the
Russian Far East feel somewhat abandoned by distant Moscow, and are
hurrying to forge closer ties with Asia-Pacific nations.
Not everyone is comfortable with the idea and many perceive some
threat from the south. But regional leaders like those in
Khabarovsk, bordering China, say economics dictates little choice.
"In the wake of market reforms in Russia we have a clear feeling
that Far Eastern regions are getting pushed off the country's
economic system, notably due to exorbitant transportation tariffs,"
Viktor Ishayev, governor of Khabarovsk region, said in an
So, it is no big wonder these days that the Khabarovsk region in
the Russian Far East is pursuing relations with Asian countries
like China, Japan and Korea.
During the Soviet era some nine-tenths of the region's output was
consumed domestically, but these days some 85 percent of
Khabarovsk's output is exported, Ishayev argues.
"Our region is getting integrated into the Asia-Pacific, there is
no alternative to that process," said Ishayev who is also member
of the Federation Council, the upper house of Russian parliament.
The Khabarovsk region is the rich but sparsely populated area in
the basin of the lower Amur River, and a vast mountainous zone
along the coastline of the Sea of Okhotsk north of Japan.
Just 1.6 million or about one percent of Russia's population live
in this area of 825,000 sq km stretching from Siberia to the
Khabarovsk, the second largest city in the Russian Far East of
nearly 700,000, has international seaports, specializing in log
handling and containers.
Natural resources like timber, mineral deposits, and fish, are the
cornerstone of the regional economy. Taiga in the north, and swampy
forest in the south are the region's biggest natural treasures.
But last fall timber resources dealt a heavy blow from forest
fires. More than 1.5 million hectares of taiga have been destroyed
since in Russian Far East, much of that in Khabarovsk region.
The region has been prioritizing investments in mining and
development of natural resources. More than 500 enterprises in the
region have some degree of foreign investment, totalling 120
million dollars, of which 105 are 100 percent foreign-owned.
Economic problems prompted the setting up of the Association of
Economic Co-Operation of the Far East and the Trans-Baikal area in
The association groups 13 Russian regions, stretching over 40
percent of Russia's territory and possessing huge natural wealth
-- virtually all of the country's diamonds, two-thirds of gold <BR>
deposits, timber and fishery resources, Ishayev argues.
Ishayev is also lobbying for the implementation of a long- promised
federal programme to develop the Far East and the Trans- Baikal
Khabarovsk region has more than 100 major industrial outlets,
including the only steel-making plant and oil refinery in the
Russian Far East.
The city of Komsomolsk-on-Amur is a major hub of the military-
industrial complex with shipyards and a plant producing Sukhoi-27
jet fighters -- now for export to China and Vietnam. It is also
steel-producing center, while a pipeline from an island of Sakhalin
supplies the refinery in Khabarovsk city.
In past decades the economy of the Khabarovsk region was developed
as a source of natural resources and a hub of defense industry. But
in recent years much of Russian defense sector came to a
standstill, and whole cities are getting unemployed.
Not surprisingly, within the past decade some 700,000 people have
moved from the Far Eastern regions to European Russia.
However, Ishayev is credited with keeping the economic and
political situation in the region relatively stable, unlike the
adjacent Primorie region plagued by endless turmoil.
"Compared with many other regions, we are much better off," said
Vera, a small trader of consumer goods from Khabarovsk city.
"Unlike our neighbours, we are yet to suffer power cuts in winter,
and our elderly people are getting their pensions in time."
Ishayev, in power since 1991, has sought close cooperation with
central authorities. But he says power-sharing agreements between
Moscow and regional authorities would enable local governments to
keep a larger share of tax revenues.
After settling on the banks of the Amur river in 1649, Yerofei
Khabarov, one of the first Russian pioneers in Siberia for whom the
Khabarovsk region and city are named, said: "This will be a place
of greater plenty."
But these days the pride of early settlers is being replaced by
fear of expansion and migration from the south.
"The Chinese could just come and drive all of us out of our homes,"
Vera said in a typical reaction.
Such fears are fueled by the sense of isolation often felt by
Russia's Far Eastern population, who number some 10 million people,
while hundreds of million live within China's northern provinces.
Even Ishayev says Beijing aims to settle its surplus population in
the Russian Far East and is waiting for Russia to allow the sale
of land. Chinese officials deny the charge.
While it is tricky to come up with concrete figures of Chinese
immigration, Khabarovsk officials say up to one million people,
mostly Chinese, cross the region's border in both directions every
There has also been past suspicion of other Asians among Russians
in the Far East. There were once hundreds of thousands of ethnic
Koreans in the Russian Far East, until the Soviet dictator Stalin
deported them to Kazakhstan.
There has been migration back and now there are some 8,000 Koreans
in Khabarovsk region, but the recent influx of South Korean
investment here has not been universally welcomed.
Still, Ishayev says: "We are not choosing our neighbors and we have
to maintain friendly relations with China."
Besides, he remarks: "In the wake of NATO's air strikes against
Yugoslavia, I think we need a new military bloc that could include
Russia, China, India and probably some other Asian nations like
Indonesia to counterbalance NATO's might."
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