April 27, 1999    
This Date's Issues: 3260• 3261   • 

Johnson's Russia List
#3261
27 April 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: IMF seen giving Russia $1.7-2.5 bln - govt source.
2. Interfax: Official Says Satellites in Critical Condition. 
3. Bloomberg: Moscow Attracted Half the Foreign Investment in Russia 
in 1998.
4. Tim Louzonis: BP Amoco / Sidanko -victory for foreign shareholders?
5. NTV: 'Big Money' Says Political Crisis Hits Economy.
6. RFE/RL: Floriana Fossato, Moscow's Mayor Luzhkov Aims To Join Regional 
Leaders.
7. New York Times: Louis Uchitelle, Economist at Harvard Awarded Prize.
(Andrei Shleifer).
8. Moskovskiy Komsomolets: Yeltsin 'Scheme' To 'Revitalize Kremlin' Seen.
9. Voice of Russia Appeals to NATO Servicemen.
10. Moscow Times: Irina Yasina, INSIDE FINANCE: 'Communist' Government 
Wields Pension Reform Ax.
11. Harriman Institute/Associated Press Conference in New York:
How Can Russia Recover?
12. World Socialist Web Site: Larry Roberts, A sharp deterioration 
in the conditions facing Russian youth.
13. New York Times letter by Lise Stone, Russia's Wide Influence.
14. Ira Straus: Re media support/3259.
15. Nick Baron: A response to Andrew Miller/3256.]

*******

#1
IMF seen giving Russia $1.7-2.5 bln - govt source

MOSCOW, April 27 (Reuters) - Russia is likely to receive only $1.7 billion
to $2.5 billion from the International Monetary Fund this year, rather than
the $4.5 billion needed to cover maturing debts to the Fund, a government
source said on Tuesday. 

Foreign cash reserves could be skimmed down to a few billion dollars
because the first IMF tranche could arrive at the end of June, after major
Eurobond and other foreign debt payments are due, he told Reuters. 

"The possibility we shall get the money is really very high, but it may
arrive at the end of June," he said. "We are in a tough spot. 

"At that time (the end of June) the central bank will have had to pay from
its reserves about $2.5 billion. That means that the central bank will have
only about $2.5 billion to $3.0 billion of hard currency." 

The source said those figures assumed Russia would fully pay some $1.6
billion due May 14 on dollar-denominated MinFin bonds, although First
Deputy Finance Minister Mikhail Kasyanov has said Russia cannot pay at
least the main component, the $1.3 billion principal on tranche three. 

Nonpayment of the third tranche would not endanger Russia too much, the
source said. 

The cash component of central bank foreign and gold reserves, from which
the government has been borrowing to make foreign debt payments, was around
$5.0-$6.0 billion, he said. 

The central bank said total reserves on April 16 were $10.6 billion,
unchanged from April 1, when the cash component was $6.7 billion. 

"The most important thing is to conduct ourselves as correctly and as well
as possible, unlike on August 17," the source said, referring to Russia's
shock freeze of the domestic bond market. 

"Theoretically we should scrape by, if we act correctly and consistently,
but the risk of collapse is truthfully extremely high." 

*******

#2
Official Says Satellites in Critical Condition 

MOSCOW, April 22 (Interfax) -- Russian satellites 
are in critical technical condition, Yuriy Koptev, director general of 
the Russian Space Agency, said before the Russian State Duma Thursday. 
There are 127 Russian satellites orbiting the earth as compared with 325 
belonging to the U.S., Koptev said. The guaranteed 'lifespan' of 72% has 
ended, as has the service life of 50% of the Russian satellites, he 
reported. The failure of the Russian devices may come like an avalanche, 
he said. In 1999, less that 2% of the country's budget is earmarked for 
space activities, as compared with the 18.3% in 1989. This is less than 
the amount earmarked for space by India, he said. The rocket and space 
industry cannot be made completely cost-effective, Koptev went on, adding 
that it should receive state support. 

*******

#3
Moscow Attracted Half the Foreign Investment in Russia in 1998

Moscow, April 26 (Bloomberg)
-- Moscow attracted $5.8 billion in foreign investment in 1998 out of a 
total of $11.7 billion invested in the whole of Russia last year, Russian 
news agency Interfax reported, citing the State Statistics Committee. Moscow 
received more per capita foreign investment last year than any other Russian 
municipality or region. Per capita foreign investment in Moscow totaled 
$682.70 compared with $80.24 on average for the other 88 regions of Russia, 
the agency said. 

Moscow has a population of about 9 million and is one of the 10 Russian 
cities and regions which pays more money to the federal government that it 
receives. 

*******

#4
Date: Mon, 26 Apr 1999 
From: Tim Louzonis <TLouzonis@compuserve.com> 
Subject: BP Amoco / Sidanko -victory for foreign shareholders?

Today's WSJ carried a story on BP Amoco's attempts to "salvag[e] its $571
million investment in Russia." According to the story, BP Amoco and a
group of other foreign investors were able to win 7 of the 11 seats on
Sidanko's board. I was wondering if any DJ list readers/contributors know
anything else about this story, including the investigation into Sidanko's
bankruptcy.

Tim Louzonis
MCT of Russia, L.P.

*******

#5
'Big Money' Says Political Crisis Hits Economy 

NTV
23 April 1999

Presenter Igor Pototskiy devotes "'Big Money" on 23rd April 
to the implications for the Russian economy of the political turmoil 
caused by the upcoming elections. 
He starts by listing recent scandals and conflicts between Russian 
politicians, notably the prosecutor-general's case and the impeachment 
hearings. While those scandals were carrying on, foreign financial 
organizations issued reports predicting 50-60 per cent inflation in 
Russia by the end of the year and a considerable decrease in GDP. 
Anatoliy Golov, captioned as a member of the State Duma Yabloko faction
and 
the Committee on Labour and Social Policy, says that the IMF's and World 
Bank's forecasts are too optimistic. 
Vitaliy Linnik, captioned as a member of the State Duma Our Home is Russia 
faction and the same committee, says that the number of people who live 
below the poverty line by far exceeds 30 per cent. By paying off the 
salary and pension debts, the cabinet is trying to reduce that number to 
that level. 
Golov says that to improve the situation the cabinet should pay off all 
debts to citizens and encourage them to purchase home-produced goods. 
The presenter speaks about the gap between official statistics and 
people's real incomes, a gap which remains uncontrolled and untaxed. The 
World Bank says that the shadow part of the Russian economy is up to 43 
per cent of the total. 
Vladimir Preobrazhenskiy, no caption, says that the tax system should be 
changed to legalize the hidden income. 
The presenter speaks about contradictions in statements by Russian 
cabinet officials and about the State Duma impeding the cabinet's 
efforts. 
Golov says that the Duma will adopt more and more populist laws as the 
elections approach, laws which will disturb the work of the cabinet. 
The presenter says that instead of considering the much-needed laws 
proposed by the government, the Duma continues to argue over the 
impeachment issue. 
Golov says that populist drafts are being proposed en masse by left-wing 
deputies, while the cabinet's drafts are being neglected. 
The presenter finishes by saying that the political turmoil prevents the 
country from carrying out the necessary policy. 

*******

#6
Russia: Moscow's Mayor Luzhkov Aims To Join Regional Leaders
By Floriana Fossato

Moscow, 26 April 1999 (RFE/RL) -- Moscow Mayor Yuri Luzhkov seems to have
strengthened his political position in Russia as a result of two
significant developments this week.

On Wednesday, the Federation Council rebuffed for the second time the
Kremlin's request to replace Russia's prosecutor general. Luzhkov, a
presidential hopeful whose intervention reportedly influenced the house's
decision, thereby dealt a new blow to President Boris Yeltsin.

Not long after the vote in the Federation Council, Luzhkov again took the
initiative. He announced that the leadership of the party he founded last
year, "Fatherland," had approved his proposal to join a new political bloc,
called "All Russia," including 16 influential regional leaders.

For the moment, the bloc includes the presidents of a number of ethnic
republics, including Mintimer Shaimiyev of Tatarstan, Murtaza Rakhimov of
Bashkortostan and Ruslan Aushev of Ingushetia, as well as the governors of
Khabarovsk, Astrakhan, Perm and Khanty-Mansiisk and others. Another
politician aiming at playing a key role in the bloc is Oleg Morozov, the
leader of the "Russian regions" faction in the State Duma.

Luzhkov unexpectedly showed up at the first meeting of "All-Russia"
organizing committee on Thursday (April 22). The new bloc's founding
congress is tentatively scheduled for May 22. 

Luzhkov added that the political council of his party had taken the
decision to join the evening before. Officials close to Luzhkov told
Russian media that the fact that the decision had immediately followed the
vote in the Federation Council was a "pure coincidence," but few believed
that.

NTV commercial television commented that "the outcome of the vote on the
prosecutor general has clearly changed Luzhkov's tactics."

Samara Governor Konstantin Titov, the leader of another regional bloc,
"Voice of Russia," said he may also join "All Russia."

Sergei Markov, director of the Moscow Institute of Political Studies, says
regional leaders of centrist political orientation aim at funding broad
coalitions that would allow them increase their influence in the lower
house of parliament, so far dominated by the communists and their allies.

"It is absolutely clear why they join forces. They have enough of the fact
that the Duma is more and more under the influence of left forces and they
have very few ways to influence it. They would like to create a 'party of
power' from below, based on parties of power concretely existing, that they
have already built up in their regions. In this way they would consolidate
what they already have and get more."

For the regional leaders, an alliance with Luzhkov's "Fatherland," a party
that has admitted it wants to become Russia's future 'party of power,'
could help them build a strong faction in the next Duma.

For Luzhkov, the possible benefit of such an alliance are even more
evident. Luzhkov enjoys broad popularity in Moscow. However, his ability to
attract votes in the regions, where many people resent Moscow's higher
standard of living, has remained untested. 

Many observers have warned that resentment toward Moscow could hamper
Luzhkov's effort to obtain enough support for "Fatherland" in the
parliamentary election, as well as for himself in the presidential one.
Pooling efforts with powerful regional leaders would clearly help Luzhkov
expand his appeal in the provinces. Luzhkov and Shaimiyev, who is seen as
"All Russia's" most influential leader, so far have pledged to coordinate
efforts ahead of parliamentary election scheduled for December.

But some political analysts are rising doubts about whether the alliance
could achieve more. Markov is one of those expressing skepticism:

"If they [different blocs] manage to join forces all together, this will be
the political force that could win both parliamentary and presidential
elections. But for them to get together will be difficult, because there
are serious obstacles. One is the problem of leadership. It is not that
they will fight for leadership. The leader can clearly be only one: Yuri
Luzhkov. The problem is another: Luzhkov's style is such that he does not
tolerate beside himself collaborators and partners. He tolerates only
subordinates. And it is not a given fact that the other governors will want
to join forces with him on such a basis. This is the first problem. The
second is that Luzhkov and the presidents of ethnic republics have very
different approaches to what should be Russia's federal structure."

For the moment, "Fatherland" was set to hold a congress in the central
Russian region of Yaroslavl at the weekend and some have seen Luzhkov's
move also as a successful public-relations action ahead of the event. 

********

#7
New York Times
April 26, 1999
[for personal use only]
Economist at Harvard Awarded Prize
By LOUIS UCHITELLE

Andrei Shleifer, a Harvard University economist who immigrated to the
United States from Russia when he was a teen-ager, has won the John Bates
Clark Medal, the most prestigious prize in economics short of the Nobel.
The medal, awarded every two years by the American Economic Association,
goes to an outstanding economist under 40 years old. 

Shleifer, who is 38, was honored for his empirical research into the
workings of financial markets, commercial law and corporate securities,
particularly in countries making the transition from socialism to a market
economy. Some of his research has focused on Russia. 

"Mr. Shleifer represents a continuation of the empirical tradition that
really started with Lawrence Summers and continued through David Card and
Kevin Murphy," said Dale Jorgenson, a Harvard economist and president-elect
of the American Economic Association, which chose Shleifer at an executive
board meeting in Chicago on Friday. 

Summers, then of Harvard, Card at the University of California at
Berkeley, and Murphy, at the University of Chicago, are the three previous
Clark medalists -- Summers in 1993, Card in 1995 and Murphy in 1997. 

They are all prominent empiricists. Rather than focus on theory, they
focus on what amounts to experiments that elaborate on existing theory,
amend it or create new theory. 

Summers is now deputy director of the Treasury Department; Card and
Murphy are labor economists. Shleifer won out over four or five others who
had been considered by a selection committee, including Alan Krueger of
Princeton University, who was the most prominent on the list. 

Some of Shleifer's work elaborates on a theory developed by others that
holds that it is impossible to write a contract between two parties --
whether they are two individuals or a corporation and its shareholders --
that covers all contingencies in a binding fashion. As a result, a strong
court system is necessary to resolve disputes. 

Financial markets work best in countries with such a system, Shleifer
has found. They do not work well, he maintains, in countries where
parliaments have a bigger say, and politicians and powerful shareholders
can influence legislation. 

"This award to me is to some extent a recognition of how important
finance is to economics and vice versa," Shleifer said Sunday. 

In the discussion leading to Shleifer's selection, the economic
association's executive committee did not consider a conflict-of-interest
case in which Shleifer was involved in 1997. "It was not even mentioned,"
Jorgenson said. 

Shleifer had been a steward of a program financed by the U.S. government
to help Russia develop capital markets and new commercial and civil laws.
The Harvard Institute for International Development ran the program under a
$57 million contract from the U.S. Agency for International Development.
AID canceled the contract in May 1997, contending that Shleifer and another
official had benefited from private business dealings. 

Shleifer was said to have invested in Russian securities while advising
the Russian government. Shleifer has never been formally charged with a
misdeed, and he has denied any wrongdoing. He has separated, however, from
the Harvard Institute, whose director is Jeffrey Sachs, also a Harvard
economist. Asked about the announcement that Shleifer had won the Clark
award, Sachs declined to comment. 

Shleifer finished high school in Rochester, N.Y., where he had settled
with his parents after coming from Russia. He excelled in mathematics,
which was his major as an undergraduate at Harvard University, but he
became a research assistant to Summers, who drew him into economics.
Shleifer earned his Ph.D. at MIT in 1986 and five years later, at age 30,
he was a full professor at Harvard. 

******

#8 
Yeltsin 'Scheme' To 'Revitalize Kremlin' Seen 

Moskovskiy Komsomolets 
23 April 1999
[translation for personal use only]
Article by Leonid Krutakov: "Dollar's Impeachment Course. 'Citizens, 
Hand Over Your Currency!'" 

Yeltsin has emerged from his coma and regained 
consciousness. On coming to, the president realized that he no longer 
wields power in Russia. After a series of consultations a plan was drawn 
up to revitalize the Kremlin. 

The first, chief point of the plan is the government's resignation 
followed by the dissolution of the State Duma. Gerashchenko's plan to end 
ruble convertibility and ban the dollar's circulation in Russia is to 
come into force simultaneously with the government's resignation. Yeltsin 
has decided once again to act according to Napoleon's principle: "Start 
the battle, and then let us see how to win it." The date of the Duma vote 
on B.N.'s [Yeltsin's] removal from power has been chosen as the starting 
point of the battle. If they vote for impeachment, it will serve the Duma 
right; if they vote against, they will confirm the president's powers and 
the legitimacy of B.N.'s actions in 1993. 

It is not hard to predict what will happen next. Right after the 
government's resignation there will be panic on the currency market: The 
dollar will take off like a ballistic missile, and the ruble will plummet 
like a stone. Gerashchenko, who long ago prepared a scheme to ban the 
dollar's circulation in Russia, will implement it in an instant. 

The essence of the scheme is that the population will be able only to 
sell dollars, not buy them, while the banks will have the right to buy 
"greenbacks" only against confirmed contracts. Bulgakov's "Citizens, hand 
over your currency!" will be transferred from the category of classical 
literature to everyday life.... 

There is no disputing the fact that Gerashchenko is a professional, but he 
thinks according to strictly prescribed financial parameters. What worked 
in the Soviet Union under cover of the "iron curtain" is not viable under 
the present conditions. Given the transparent borders with the CIS 
countries, an attempt to ban the dollar will result in a flight of 
investments from Russian banks to foreign ones and in a huge black market 
for cash. That is, the state will lose far more than it gains. This means 
that pensioners and budget-paid workers will lose, while speculators will 
gain.... 

Yeltsin's plan was to have been approved in the Federation Council the day 
before yesterday. If the senators had voted for Skuratov's dismissal, 
this would have meant that the regional elites consented to the 
government's dismissal and the Duma's dissolution. This was the aim being 
sought by Boris Nikolayevich in meeting with Moscow's mayor and once 
again promising the governors as much sovereignty as they can stomach. 

The president seemed to have gotten his way. But the vote in the 
Federation Council overturned observers' forecasts. Luzhkov was "tempted" 
neither by the post of premier nor by the title of Yeltsin's successor. 

Yuriy Mikhaylovich certainly did not make a "feint," as one Moscow 
newspaper wrote: He is playing his own game. It is understandable that 
assuming the duties of premier under conditions of chaos on the currency 
and internal market would be tantamount to political suicide. The title 
of Yeltsin's successor is nothing more than a phantom, as Boris 
Nikolayevich has already demonstrated more than once. 

By voting for Skuratov the regional elite was essentially deciding not 
the general prosecutor's fate but its own future. In the situation that 
had taken shape the only correct solution was to freeze the situation at 
the present level. There can be no doubt that the State Duma will do 
exactly the same: It will once again postpone the vote on impeachment.... 

*******

#9
Voice of Russia Appeals to NATO Servicemen 
April 22, 1999
Voice of Russia World Service in English

We are appealing to NATO servicemen taking part in 
the aggression against independent Yugoslavia. 

Each war has its adversaries. And who are your adversaries in Serbia, 
Montenegro, Vojvodina and Kosovo? Who are the targets of your bombs and 
missiles? You have already carried out 6,000 air raids in Yugoslavia, 
dropped 5,000 bombs and fired 1,500 cruise missiles. Who have fallen 
victim to your deadly weapons? Over 500 people have already been killed 
and 4,000 wounded. These are not servicemen, these are civilians, among 
them women, elderly people and children. 

Your air strikes have destroyed 15 hospitals, about 200 schools and 
colleges lie in ruins. Even kindergartens were bombed. In the town of 
Batajnica a bomb splinter killed a three-year-old girl. Americans are 
mourning over the schoolchildren shot in Littletown, Colorado, earlier 
this week. The Yugoslav media called it a tragedy. The killing of 
children is a horrible crime, no matter where it is perpetrated, in 
America or Yugoslavia. 

The list of human casualties from your bombs and missiles being dropped 
on Yugoslavia continues to grow. How many children have you killed 
already? Your commanders will hardly tell you the truth. The Voice of 
Russia will keep you updated on the events in Yugoslavia. 

******

#10
Moscow Times
April 27, 1999 
INSIDE FINANCE: 'Communist' Government Wields Pension Reform Ax 
By Irina Yasina 

Russia inherited from the Soviet Union a vast system of a state pensions
security. The principle of its construction was a very simple one.
Enterprises invested their money in a Pension Fund, according to their
employees' average wages. 

On this platform, numerous systems of privileges and bonuses, depending on
industry or geographic location, piled up; like the famous benefits for
those in the far north. 

>From the very beginning of the market reforms, the Pension Fund lived
under the constant threat of bankruptcy. Frail enterprises were unable to
pay for the future pensions of their laborers and the fund's budget deficit
became a permanent fixture. That forced the Pension Fund leadership to
take credits from commercial banks, at hefty interest rates, rolling them
over again and again to make interest payments and to pay pensions -
building up a more sedate, not so sexy version of the treasury bill
pyramids that the Finance Ministry was busy building. 

Nevertheless, this debt pyramid was not the fund's riskiest endeavor as
matters turned out. That title went to another scheme. A considerable part
of the assets of state, as well as non-state, pension funds were invested
in stocks. And we all know what happened to the value of those assets. 

The government had begun to realize the need for changing the old system
for pensions during the early 1990s. But reforming this area was the most
dangerous step from the point of view of politicians. There are many
pensioners, they are politically active, they vote, as a rule, for the left. 

Most importantly - reform of the pension system would demand significant
investments, for which there was never enough cash. For all these reasons,
reforming pensions was always postponed. 

Fast forward to 1998 and the debt defaults. The still unreformed pension
funds lost not only their money but also their ability to invest any new
money in reliable instruments providing a positive yield. 

Worse was to come. In the almost nine months of the Primakov Cabinet's
work, there was no indexing of pensions, while the ruble plummeted to a
quarter of its value against the dollar. The most radical reform government
could never dream of taking such liberties. In reality, the communist
government has turned out to be tougher than the reformers with their
incessant compromises. 

As a result of the actions of Prime Minister Yevgeny Primakov and his
First Deputy Prime Minister Yury Maslyukov, the average pension in March
fell down to an unprecedented low - 65 percent of the minimum standard of
living for pensioners. This is the lowest level over the whole of the
post-1991 period. The average pension in May 1998 was 130 percent of the
minimum standard of living, a level that turned out to be the peak for now. 

Meanwhile, the results of the devaluation put the Pension Fund budget
suddenly into balance. Payments are collected in "new prices," but paid out
in "old prices." Nevertheless, the psychological phenomenon is that
pensioners prefer to get a much smaller pension that is paid on a regular
basis, than a bigger, but delayed payout. However, what today is acceptable
may come to grief tomorrow. 

In 1999, some specialists expect a further decrease of investments in the
Pension Fund, thanks to the continued decline in wage levels. 

So in the fourth quarter of 1998, the real average wage was 65 percent of
the level a year earlier, while for January 1999 it was 60 percent of the
level of January 1998. 

Is there a way out from this situation? Former deputy labor minister
Mikhail Dmitriev considers that a short-term fix could come through
eliminating the differentiation of pensions - presumably until the
resumption of some kind of economic growth. 

Again, this is beyond the wildest dreams of reformers, who had cogitated
about the need for eliminating the burden placed on the state by a
differentiated pensions system that handed out excessive benefits to huge
categories of people. But they had feared even to whisper such things in
the halls of the State Duma. And now, as a result of inflation and the
likely indexing of the minimum pensions, the liquidation of these
differentiations will take place "automatically." 

There is an unfortunate side to this. The Pension Fund is now wound down
tight. If it should uncoil of its own accord, then the communists will be
faced with a need for extremely difficult steps. For example, they may have
to increase the age of qualification for pensions. For Russia this is set
at 55 years for women and 60 years for men. Many feel this is already too
late. But then, unpopular decisions are usually the province of unpragmatic
politicians. 

Irina Yasina was a Central Bank spokeswoman under former Central Bank
chairman Sergei Dubinin. 

******

#11
Date: Mon, 26 Apr 1999 
From: Gordon N Bardos <gnb12@columbia.edu> 
Subject: 1999 Harriman/AP Conference

For Immediate Release

The Harriman Institute and the Associated Press are pleased to announce
the Sixth Annual Harriman Institute/Associated Press Conference, to be
held on Friday, May 7, 1999, in the Dag Hammarskjold Lounge, International
Affairs Building, Columbia University, 420 West 118th Street, New York,
New York, 10027. 

Each year, this conference brings together 75-100 journalists, academics
and policymakers working on Russia, the newly-independent states, and the
countries of East-Central Europe. This year the conference is entitled
"How Can Russia Recover?"

Conference Schedule

Friday, May 7, 1999
8:30 am -- Registration and Coffee
9:00 am -- Welcome and Introductory Remarks by Mark von Hagen, Director,
Harriman Institute, and Thomas Kent, International Editor, the Associated
Press
9:15-11:30 am -- Panel I: The Nature of the Crisis and Prospects for
Recovery
Chair: Ambassador Jack Matlock, Professor, Institute for Advanced Studies,
Princeton, and former US Ambassador to the Soviet Union and Czechoslovakia
Panelists: 
Padma Desai, Professor of Economics and Director of the Center
for Transition Economies, Columbia University
Marshall Goldman, Professor of Soviet Economics, Wellesley University, and
Associate Director of the Davis Center, Harvard University
Stephen Handleman, journalist and co-author of "Bio-Hazard."
Kim Zisk, Assistant Professor of Political Science, Barnard College
11:45-1:45 -- Luncheon. Keynote Address by R. James Woolsey, former
Director, Central Intelligence Agency
2:00 pm-3:15 -- Panel II -- Western Aid to Russia: What Went Wrong?
Chair: Jack Hennessy, Credit Suisse First Boston
Panelists:
Richard Ericson, Professor of Economics, Columbia University
Oleg Katufin, Moscow Legal Academy
Janine Wedel, Professor of Anthropology, George Washington University, and
author of "Collision and Collusion: The Strange Case of Western Aid to
Eastern Europe, 1989-1998."
3:30-4:45 -- Panel III -- Press Coverage of the Former Soviet Union
Chair: Thomas Kent, International Editor, the Associated Press
Panelists: 
Rose Brady, Business Week, author of "Kapitalizm: Russia's Struggle to
Free Its Economy"
Stephen Cohen, Professor of History, New York University
Vladimir Isachenkov, Moscow Bureau, Associated Press
5:00-7:00 -- Closing Remarks and Reception 

For more information or to register, please contact Gordon N. Bardos,
Program Officer, Harriman Institute, at (212) 854-8487, FAX (212)
666-3481, or by email at gnb12@columbia.edu.

*********

#12
>From World Socialist Web Site
http://www.wsws.org/
A sharp deterioration in the conditions facing Russian youth
By Larry Roberts
24 April 1999

Since the early 1990s, coinciding with the collapse of the former Soviet
Union, Russian children and teenagers experienced a devastating decline in
their social conditions, according to articles published in the Current
Digest of the Post-Soviet Press. 

The articles, translated from Noviye Izvestia, report information provided
by the State Statistic Committee and government agencies that follow the
plight of children. 

Aleksandr Baranov, a leading Russian pediatrician and chairman of the
Russian Union of Pediatricians, stated in an interview that there are
"almost no completely healthy children or teenagers" in Russia, whether
they are from high-risk or well-off homes. He called this phenomenon
"deceleration," the underdevelopment of children and teenagers, both
physically and mentally. 

Baranov said all indices of children's physical health worsened appreciably
during the 1990s, including the main categories--weight, height, chest size
and muscle strength. According to the central Military Medical
Administration, 300,000 boys conscripted into the military are clearly
underweight and unfit for service. Children in Russia are shorter, by 5 to
8 centimeters, than their counterparts of 10 or 15 years ago. Chest size
has shrunk 5 to 6 centimeters, and whereas 10 years ago conscripts could
easily perform 50 push-ups, today's Russian teenagers find it hard to do 10. 

One out of two boys finish secondary school with some chronic ailment, and
one out of four girls is biologically immature. According to the authors,
"Among all age groups the most unfavorable health trends were noted in
adolescents aged 15-17." General sickness in this age group increased to
over 33 percent during the 1990s, with drug addiction making a tenfold
growth between 1990 and 1997. The number of drug abusers is unknown since
only 10 percent of those with narcotic problems seek medical help. 

The intellectual potential of the younger generation has declined
substantially. Only one half of children in Russia are normal in their
mental development. A major factor is nutrition. Many children and
teenagers are practically starving, which is why many go into the army to
be fed. School meals have been all but eliminated: in the Soviet Union 75
percent of school children were fed in school. Today only 25 percent of
Russian students receive a meal. 

By 1994, 21 percent of school children aged 15 to 19 had not completed a
secondary education and were not attending school anywhere. According to
Baranov, school reform in Russia has resulted in 2 million children not
attending school. Those children are not only deprived of a school
education, but also miss the opportunity to receive school meals and
vaccinations to prevent various diseases. The lack of a family structure or
a stable environment lead many youth to get involved in "rackets" and
become easy prey to be drawn into the criminal world. 

The family structure for millions of people has all but collapsed. The
words "poverty" and "family" have now become inseparable, with 33.1 percent
of families with children under 16 years old living below the miserable
official government minimum standard of living. Of families with two
children, 36.9 percent were impoverished. And almost 50 percent of families
with three children, and nearly 75 percent of families with four or more
children live in poverty. 

According to the Russian authors, in present-day Russia to have a "large
family" and to be "poor" are virtually synonymous. State subsidies for the
unemployed and poor have been drastically cut, making them virtually
ineffective. In 1997 single parents and parents with several children made
up 45 percent of the unemployed. 

The other family pressures facing children are the growth of single-parent
families. The divorce rate has increased 22.6 percent, and the probability
that one or both parents will die has increased substantially, to 16.2
percent. Sixty-four percent of children born in 1997 could expect to lose a
parent before they reach adulthood. 

Between 1980 and 1987 Russia experienced a record 14 percent increase in
the birth rate, the highest in 35 years, followed by a continuous decline
between 1988 and 1997. The upsurge in the early 1980s provided a record
number of teenagers in the 1990s who might under other circumstances have
provided an influx of youth and energy to the society. The Russian authors
ask the pointed question, "Exactly what kind of living conditions have been
created for them?" 

An obvious expression of the growth of poverty has been the increase in the
number of orphans. At the beginning of 1998 600,000 children had either
become orphans or were not under parental supervision. While many become
adopted or have a legal guardian, over 25 percent live in children's homes
or boarding schools. Since 1994, the network of boarding schools for
children has doubled. 

Other indices stated in the article were: 
* Drug abusers among teenagers account for more than 75 percent of those
infected with AIDS.

* Alcohol and substance abuse remains a constant problem facing
teenagers, with alcoholism a longstanding problem within the Russian
national culture.

* In 1997, the number of teenagers with syphilis increased 70-fold
compared to 1990. The incidence of syphilis among girls 15 to 17 is twice
as common as among women as a whole.

* In most advanced capitalist countries the mortality rate for children
and teenagers is continuing to drop. In Russia the mortality rate has
climbed for a decade. According to the Noviye Izvestia article, "If the
current death rate in younger age groups continues, more than a quarter
of today's generation of 17-year-olds won't make it to the age of 60." 

*******

#13
New York Times
April 26, 1999
Letter 
Russia's Wide Influence
To the Editor: 
Though now unfashionable, watching Russia with an open mind to its
global role, as Jack F. Matlock does, is still necessary ("The One Place
NATO Could Turn for Help," Op-Ed, April 20). 
Too many think tanks, and perhaps Washington officials, act as if
moving beyond the cold war means ignoring the Slavic colossus, humbled
though it may be by economic and ideological failures. 
Now, however, we see that as Wilsonian instincts in foreign policy engage
us in Kosovo-like ventures, Russia remains a great power. Its greatness
lies not only in its nuclear power but also in its cultural sympathy in
some Slavic lands. Americans should learn to deal with Russia's
continuing influence carefully, strategically and without undue fear,
confidence or arrogance. The global community will demand it. 
LISE STONE
New York, April 20, 1999 

*******

#14
From: IRASTRAUS@aol.com (Ira Straus)
Date: Mon, 26 Apr 1999 
Subject: Re: media support/3259

You asked for comments on the evolving US program of $10m in support for 
Russian media (to which I believe another $10m are to be added from 
foundations, mainly Soros).

As someone who has been advocating such a program for a half dozen years, I 
am glad to see that, spurred by the Russian financial crisis, it has finally 
arrived. Among all the assistance programs, it's one of the most sorely 
needed. 

The financial crisis of Russian media following the end of Communism, and for 
that matter the financial crisis of all literary culture, is a devastating 
matter for the quality and integrity of the media and culture. It has meant 
in most cases either going under financially, or else selling out to a deep 
pocket. 

Nezavisimaya Gazeta was supposed to be the first Russian newspaper with true 
independence and integrity. Actually it got started with a subsidy from 
Gavril Popov's Supreme Soviet of Moscow. Not long after that subsidy ran out, 
it had to be salvaged financially by being bought up by Berezovsky. 
Amazingly, it has retained a lot of editorial independence and integrity on 
many issues (showing, by the way, that Berezovsky is not without virtues such 
as appreciation of intellectual freedom and willingness to put up money to 
support it), but there have been some pretty sad instances of the newspaper 
being used as the man's personal attack dog. I can't help but think that 
international funding, no matter how easily attacked by nationalists as proof 
of a sell-out to foreigners, would be preferable.

Eventually Russia may adjust to a Western-style cultural infrastructure in 
which some combination of advertising, subscription/user fees, and foundation 
support underwrite the media and culture. Meanwhile money -- plain money 
without political strings attached -- is the most sorely needed thing. Money 
often does come from the Russian state, but this tends to be more corrupting 
than, say, money from the British state for BBC. Thus again the virtue of 
outside funding.

As with all good programs, the present US program of media support has some 
limitations. Probably it could be done better. Herewith a few suggestions:

1. We're too shy about giving money outright to Russian media. Instead we 
feel it's safer (maybe less controversial) to give money to media-related 
non-profit organizations and exchange programs, which are asked to provide 
training for Russians in journalistic professionalism, advertising, etc. Once 
again, maybe, too much of the money goes to the Western "advisers" or 
middlemen. It would be better to give a lot of money directly. This would 
directly enhance the viability of Russian media and their independence of 
corrupting financial pressures.

2. While funding should go to help finance Russian media not just help train 
them, at the same time there should be a stronger intermediary institution 
between the US government and the recipients, so as to shield the recipients 
not only from any political pressure to toe a pro-Western line but also from 
any appearance of or possibility of such pressure. For this purpose, an 
International Media Fund could be set up, run by an international board of 
respected journalists with a charter assuring its absolute independence; this 
board would then be the one to select the media and non-profits to receive 
the funds. 
Selection is a complicated matter; presumably we're not going to subsidize 
journals which are already subsidized heavily by well-established 
deep-pocketed institutions inherited from the Soviet structure (like the 
journals of the labor unions and of the army); presumably we're not going to 
want to subsidize extremist publications; but we need to subsidize a broad 
ideological spectrum, and avoid any kind of favoritism on a basis of 
particular views expressed on particular subjects.

3. If the US wants to give specially to journals that follow ideological 
lines that the US likes, then let that be a completely separate program. Keep 
the main program untainted.

4. We're giving money only for Russian local media, not national. We should 
be giving money to national media as well. If this is because of any "small 
is beautiful" or decentralization philosophy, then it is being carried too 
far; Russia is already dangerously decentralized and is in danger of falling 
apart, it needs more glue such as effective national media to hold it 
together. The rumor is already dangerously widespread in Russia that we're 
trying to break their country apart; we need to start showing them that we 
want Russia to hold together. (In fact, I find there are far, far more 
Russians than Americans who want Russia to break apart. But as long as we 
don't know how to give any rhetoric except post-1960s "small is beautiful" 
rhetoric, or how to give any advice except decentralizing advice, we may 
encourage a break-up of Russia without intending it, and we certainly 
reinforce the impression among Russians that we're trying to break it up. 
What is valid in the present approach is that the local media are the hardest 
up for funds; lots of major national media have already found ways to get 
funds. But the cost of those "ways" of getting funds have been highly 
corrupting to the content and quality of major national media outlets. If we 
want to help Russia achieve a media system with both quality and diversity at 
the same time, the way to do it is by funding the national media.

*******

#15
From: "NICK BARON" <nbaron@ermine.ox.ac.uk>
Date: Tue, 27 Apr 1999 
Subject: A response to Mr. Miller/3256

(This is a shortened version. I've included elision marks in 
my text.) 

I should like to respond to Andrew Miller's facetious and nihilistic
anti-Russian tirade published in JRL 3256 under the title 
"Submission". 

Mr. Miller's portrayal of the Russian people as a herd of passive-
submissives [....] demonstrates little understanding of, and even less 
sympathy for, their current predicament. He writes: "[The] Russian 
population is .... violently contracting ... [a]nd they don't care. There is 
no popular or grass-roots political activity or mobilization of any kind 
.... " 

It is too easy for a foreign observer like Mr. Miller to criticise Russians 
at the moment for their apparent lack of political commitment and 
acceptance of suffering. [....] Firstly, he explains (though evidently 
does not readily excuse) this 'submissiveness' by reference to the 
Russians' poverty, deprivation and daily struggle to survive. This in 
itself is insufficient as an explanation - historically, poverty seems just 
as often to breed political activism, not passivity. 

Secondly, his arguments invoking Russian 'national character' are no 
more persuasive. [....] Mr Miller writes: "Russians have no intention of 
making any substantial change in their way of life, of calling their 
government to account for its failed policies - any more than they, as a 
people, actively brought down the institution of the Tsar at the 
opening of this century. " 

This Russian 'national character', presumably, has developed out of 
their 'historical experience'. A close study of Russian history indeed 
shows many examples of collective submissiveness, but also many 
instances of non-conformity, creativity, mass protest, individual 
initiative, intellectual innovation, entrepreneurship etc. etc.. [.....] I do 
not like the notion of 'national character' any more than I like the 
concept of 'racial character' or any resort to over-simplistic cultural 
explanations of historical change. 

Perhaps if the Russians are so weary of politics today it is because 
after many years of intensive and passionate political engagement and 
soaring hopes, the Russians are now intensively and passionately 
disillusioned. [....] In fact, I think the degree of political commitment 
demonstrated by Russians during long years of real systemic reform 
starkly contrasts with the western public's withdrawal from the 
democratic process. The 30% turnout for recent Petersburg municipals 
isn't all that bad in comparison with some of our local or European 
elections. 

However, I would question the extent to which Russians really do 
accept their current condition and have in fact withdrawn from public
life. Mr. Miller wrote: "Russians don't view any of these issues
[specifically, he refers to the crisis in education] as serious problems,
nor take any constructive steps to correct them...."

On the contrary, every Russian is aware how serious the present crisis 
is and many show a deep understanding of the complexity of their 
predicament. Indeed, most 'normal' Russians are striving with 
remarkable energy, persistence and ingenuity to improve their lives, 
and many even seek, if possible, to do so legally. Many 'normal' 
Russians also engage in active protest. The current wave of 
bewildered indignation at NATO's actions in Yugoslavia is surely 
proof of the Russian people's potential to become involved again in 
public affairs, given an issue which they think they may actually be 
able to influence (perhaps the naive 'Gorbachevian' assumption still 
lingers that, despite present appearances, the West both pays 
attention to public opinion and desires peace). 

It is not the political culture of the Russian population which inhibits 
its political engagement. The Russian post-Soviet tragedy, I believe, is 
that the population is highly-educated, highly-cultured, passionate 
and decent while their elites are boorish, corrupt, amoral and cynical. 
[....] What does democratic choice mean to a Russian when there seem 
to be no real choices? 

Mr. Miller discusses at some length the crisis in Russian education. I 
strongly dispute his claim fact that the teachers "who are paid nominal 
wages [are] therefore, much of the time, just pretending to teach." In 
fact, despite their undoubted individual and institutional poverty, 
most university and school teachers continue to display remarkable 
dedication and determination. Moreover, thousands of teachers and 
students have participated in peaceful demonstrations to protest 
against salary or stipend arrears, and against cuts in funding for 
education. There is still an universally ardent passion for education. 

Mr. Miller seems to have abandoned all hope for Russia. Why should 
"pragmatic economic policy" not help the country, if the policy is in 
reality and not just rhetorically 'pragmatic'? [....]

I do not understand how anyone can write: "I need only look around 
me to see that Russia is every day fading away into obsolescence." 
What does 'obsolescence' mean for a country, anyway? Especially 
one with such vast territory, huge potential resources and such a 
threatening military stockpile. Certainly I'd reject Mr. Miller's statement 
that the Russian nuclear threat "just isn't going to rattle the world's 
cage." As for his further comment " ... especially when the world 
realizes that, all things considered, most of those weapons probably 
don't even work - like the grenade launcher that failed to launch 
recently outside the U.S. Embassy in Moscow. " - well, probably the 
launcher was not meant to launch anything more than a powerful 
image onto the world's front covers, and anyway, does it matter when 
speaking of nuclear weapons if "most" don't work? 

Mr. Miller irresponsibly caricatures Russia's political institutions. His 
insinuation regarding the name of Luzhkov's "political party [sic] 
called 'Fatherland'" is unworthy. [....] He writes that the Duma "is 
carrying on a pogrom of words against Jews and other minorities". 
This is rhetorical hyperbole and distracts from what I see as a genuine 
danger in the long term from (mainly extra-parliamentary) right-wing 
ultra extremists. 

[....] Finally, perhaps one of the list members could tell me what 
"Reaganesque onomatomyopias" are? 

Yours 
Nick Baron
Centre for Russian and East European Studies
University of Birmingham
Edgbaston
Birmingham B15 2TT
Tel.: 0121-414-6359
Fax.: 0121-414-3423
e-mail: baronnp@css.bham.ac.uk

*******