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CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

May 14, 1999    
This Date's Issues: 3286 3287    



Johnson's Russia List
#3286
14 May 1999
davidjohnson@erols.com

[Note from David Johnson:
Personal query to recipients in San Francisco area: My son Keir,
age 19, will be spending the summer in San Francisco. He's interested
in finding inexpensive housing. Please contact me if you have any
information.
1. AP: Tycoon Behind Russia Dismissals. (Berezovsky).
2. Reuters: Russian liberals could end stagnation.
3. Moscow Times: Valeria Korchagina and David McHugh, Stepashin Met With 
Surprising Openness.

4. Interfax Gives Biography of Russian Premier Stepashin.
5. Komsomolskaya Pravda: Stepashin Interviewed as Vice Premier.
6. AP: Duma Hearings Are Boring, Orderly.
7. The Weekly Defense Monitor: David Johnson, Russia's America Problem.
8. Komsomolskaya Pravda: Yevgeniy Anisimov, Economic Impact of Primakov 
Ouster Viewed.

9. Moscow Times editorial: He'll Never Leave If Impeached.] 

*******

#1
Tycoon Behind Russia Dismissals
May 13, 1999
By JOHN IAMS

MOSCOW (AP) -- Whenever there is Kremlin political intrigue, the name of 
Russia's most prominent business tycoon is rarely far behind.

It happened again Thursday, when Gennady Seleznyov, speaker of parliament's 
lower house, said he saw the ``clear political intrigues of Boris Berezovsky 
behind the dismissal of Yevgeny Primakov.''

President Boris Yeltsin dismissed Primakov as prime minister on Wednesday and 
named Interior Minister Sergei Stepashin to replace him.

Berezovsky, a multimillionaire with holdings in oil, media and airlines, had 
been at odds with Primakov ever since he was named prime minister in 
September.

In the eyes of many Russians, Berezovsky is a sinister figure, a master 
manipulator who uses his Kremlin connections and wealth to run the country 
from behind the scenes. Berezovsky, who seeks the limelight, dismisses the 
allegations, insisting he's just a businessman.

He was named last year to oversee the Commonwealth of Independent States, a 
grouping of ex-Soviet republics, but was dismissed from the post in April.

In parliament on Thursday, Seleznyov said that although he had lost his 
official government job, Berezovsky continued ``to exert very serious 
political pressure on the processes in Russia,'' the Interfax news agency 
reported.

He said by getting rid of Primakov, Berezovsky stood to profit from the 
political chaos caused by the premier's dismissal.

Before he was fired by Yeltsin, Primakov publicly criticized Berezovsky for 
meddling in the Cabinet's work. His critics say Berezovsky epitomizes the 
modern Russian business mogul, having relied on close Kremlin contacts to 
build his fortune.

His ties to the Kremlin leadership and Yeltsin's family are so close that he 
was also rumored to have masterminded the ouster of two previous prime 
ministers, Viktor Chernomyrdin and Sergei Kiriyenko, to further his own 
business dealings.

Evidence of Berezovsky's manipulation, Seleznyov said, was the appointment of 
Railway Minister Nikolai Aksenenko to the post of acting deputy prime 
minister. Besides Stepashin, he was the only member of Primakov's Cabinet not 
to be dismissed along with the prime minister.

Aksenenko has been in charge of the nation's railroads since 1997, and is 
said to have close ties with Berezovsky and Yeltsin's family, according to 
some politicians.

Berezovsky also has reportedly cultivated close ties with Yeltsin's daughter 
and political adviser, Tatyana Dyachenko.

He spent freely to support Yeltsin's 1996 re-election victory, and shortly 
afterward, was named to the Security Council despite howls of protest over 
his lack of government and military experience.

Yeltsin later fired Berezovsky, but said he would welcome the chance to work 
with him again.

*******

#2
ANALYSIS-Russian liberals could end stagnation
By Peter Henderson

MOSCOW, May 13 (Reuters) - Russia may grapple better with economic stagnation 
if a new liberal government is formed than under sacked premier Yevgeny 
Primakov, economists said on Thursday. 

A team of liberals at the head of the government would not be able to work 
with parliament but may be able to hold off foreign creditors and take small 
crucial steps to growth ignored by Primakov, fired as prime minister on 
Wednesday. 

President Boris Yeltsin said that Russia needed to take urgent action to 
improve the economy and his nominee for premier, Sergei Stepashin, called for 
clear amd tough reforms. 

"It is difficult to get worse," said Pavel Teplukhin, president of asset 
management at Moscow brokerage Troika Dialog. 

"The economy is in a state of depression at the moment and the state of 
depression will continue, whatever is the government," he said. "It is very 
highly probable that the new government would shorten the depression period." 

Russia's economy improved under Primakov with signs of industrial growth, 
rising foreign reserves crucial for repaying foreign debt and markets 
recovering from crisis lows, but many economists say improvements beyond 
pre-August crisis levels will not happen without real reform. 

Expectations are low for any government in the half a year before a scheduled 
parliamentary poll -- which might be held earlier if a confrontation between 
Yeltsin and the lower house State Duma leads to the chamber's dissolution and 
crisis. 

But crucial financial matters remaining to be dealt with include selling 
banks that failed since the August crisis, fighting the battle to collect 
taxes in cash rather than in kind and forcing businesses to use foreign 
accounting standards, so it would be clear what Russian firms were 
profitable. 

Teplukhin said the legal basis to start campaigns such as banking reform had 
been established. "The legislation exists," he said, calling for the 
political will which Primakov lacked. 

Economists saw a more focused team than Primakov's coalition government as 
offering at least even chances of improvement. 

"I don't think it is worse," said Peter Boone, head of research at Moscow 
finance house Brunswick Warburg. 

Boone believed a new government would be loyal or at least ideologically 
similar to Yegor Gaidar, the market economist who ran Russia's first reform 
government. 

Gaidar advised the cabinet of Sergei Kiriyenko, Primakov's predecessor, and 
he and ally Anatoly Chubais have been among the few to comment positively on 
Wednesday's Kremlin announcement that Primakov was sacked for failing to 
improve the economy. 

The team could work under Stepashin, Yeltsin's nominee, or someone else, 
Boone said. 

Given respect in the West for the old reformers, analysts saw a new team 
making peace with the International Monetary Fund and creditors to whom 
Russia owes $17.5 billion this year. 

Primakov's key achievement of a draft agreement with the Fund, initialed in 
April, could buy a new government with better reform credentials time to act, 
economists said. 

"The very fact that Russia appears to have agreed an economic programme with 
the IMF will probably allow everybody to fudge things," said Christopher 
Granville, chief strategist at Fleming UCB, a Moscow investment bank. 

He said the exhausted country did not have much chance of major change before 
parliamentary polls due in December and presidential elections set for next 
year. 

"There is no political capital for going forward or backward, and that really 
is the case this side of elections." 

Of course Yeltsin may provoke crisis. He must stare down or dismiss a 
parliament scheduled to vote on impeaching him this weekend and then push 
through or appoint a new premier, but the analysts were optimistic Russia 
would muddle through. 

"My best bet is Yeltsin will win this," said Boone. He saw the liberal bloc's 
chances in parliamentary polls slightly improved if Communists were kicked 
out of the government and stripped of associated money and power. 

"It puts people in power now who are on the side of more liberal reforms and 
hence probably raises the odds for those type of people -- centrists -- doing 
better in the elections." 

*******

#3
Moscow Times
May 14, 1999 
Stepashin Met With Surprising Openness 
By Valeria Korchagina and David McHugh
Staff Writers

Even as they angrily prepared to impeach President Boris Yeltsin, several 
influential State Duma deputies said Thursday that Yeltsin's nominee for 
prime minister, Sergei Stepashin, had at least a chance to be confirmed in 
office. 

Stepashin, 47, won cautious expressions of respect throughout the lower house 
of parliament - even from leftists who were outraged by the firing Wednesday 
of Prime Minister Yevgeny Primakov. 

Duma Speaker Gennady Seleznyov has set the first of three possible votes on 
Stepashin's nomination for next Wednesday, and many deputies seem at least 
willing to give the former interior minister a hearing. 

Several deputies and observers advanced a scenario under which the Duma 
Communists satisfy their disgruntled electorate by approving impeachment 
charges against Yeltsin in a vote expected Saturday - and then approve 
Stepashin to avoid a full-blown constitutional crisis, or a less palatable 
nominee. 

Stepashin, as a law-and-order police official whose views on economic matters 
are murky, has much more in common with the Duma leftists than do young 
liberals like Sergei Kiriyenko, who was approved as prime minister after a 
fierce fight in April 1998 but lasted only five months before being replaced 
by Primakov. 

Duma Deputy Nikolai Kharitonov, head of the Communist-allied Agrarians, said 
that if the Duma gathers the 300 votes needed to advance impeachment 
proceedings against Yeltsin, Stepashin "will have better chances." 

And Viktor Ilyukhin, a prominent Communist deputy, said, "I could agree to 
any candidacy, because today any candidate for prime minister will discredit 
himself in two or three months under such leadership as Yeltsin's." 

Asked what Stepashin's chances were, Vladimir Prybylovsky, an expert on Duma 
politics at the Panorama research center, said, "If you had asked me an hour 
ago, I would have said he had no chance." 

But after hearing Kharitonov and Ilyukhin, Prybylovsky revised his estimate a 
bit: "Most likely, he won't - but a chance has now appeared." 

Prybylovsky noted that former prosecutor Ilyukhin, though a member of the 
Communist opposition, is an influential lobbyist for the so-called power 
structures - the police, military and intelligence agencies and ministries of 
which Stepashin is a prominent representative. 

Stepashin is still a good way from confirmation. The Duma factions, 
especially the dominant Communists, haveyet to take a definite position. 

"To make this decision, we must know what program he will bring, who will be 
his real deputy, and who will serve as key ministers," Communist chief 
Gennady Zyuganov said, in remarks reported by Interfax. 

On Thursday, Stepashin met with Duma faction leaders, including Zyuganov. 
Zyuganov later told Interfax that they had agreed Stepashin would address the 
entire Communist faction, as well as its leftist sputniks, the Agrarians and 
the Popular Rule factions, next Tuesday. 

One concern on the deputies' minds is that Stepashin may be Yeltsin's best 
offer. 

If the Duma turns down Yeltsin's nominee three times, the Duma is dissolved 
and new elections are held. But Yeltsin can submit different nominees on 
successive tries - and subsequent nominees might be much less acceptable. 
Prybylovsky pointed to the possibility that Yeltsin might name Railway 
Minister Nikolai Aksyonenko, an obscure bureaucrat who was appointed the No. 
2 man in Stepashin's Cabinet by Yeltsin, as his next choice. 

Aksyonenko is viewed as an ally of Kremlin-connected tycoon Boris Berezovsky, 
the financier most loathed by the left. Stepashin, on the other hand, is 
looked at primarily as Yeltsin's faithful servant, which is probably less of 
a crime in the eyes of the opposition. 

Sergei Yushenkov, a deputy from the Democratic Russia party, said that the 
left's mild reaction to Stepashin raised the chance he could make it through 
the Duma. "The first reactions of the opposition to the candidacy of 
Stepashin have surprised me," Yushenkov said. "Compared to how radical they 
were regarding Sergei Kiriyenko ... now they are very cautious." 

"Judging by this reaction one can conclude that at the second vote and, 
furthermore, on the third vote the Duma might approve Stepashin as the prime 
minister." 

There is also a constitutional wrinkle that surely gives Duma deputies pause. 
Once impeachment charges are approved, the Constitution says the Duma can not 
be dismissed; but if the Duma rejects a prime minister nominee three times, 
the Constitution says it ***must*** be dismissed. 

So which takes precedent? That's a flaw in the Constitution that Duma 
deputies might not want to confront right now. Yeltsin could respond by 
suspending the Duma indefinitely while the Constitutional Court ponders the 
issue at its leisure. 

Dissolution and new elections also hold risks. For instance, Viktor 
Chernomyrdin, head of the Our Home Is Russia party, said he advocated new 
elections - with a different set of rules.Chernomyrdin wants every one of the 
Duma's 450 deputies elected from a local voting district as occurs in, say, 
the United States, not by national voters backing an entire party as is done 
in, say, Germany. As it is now, half the Duma is elected by local voters and 
half by a national party list vote - and the Communists have done 
exceptionally well in the party list voting. 

*******

#4
Interfax Gives Biography of Russian Premier Stepashin 

MOSCOW, May 12 (Interfax) -- A new government will 
be formed in the time limits envisaged by the Russian Constitution, 
acting Russian Prime Minister Sergei Stepashin said in an exclusive 
interview with Interfax. "Everything will be done according to the 
Constitution," Stepashin said. "The Duma should discuss it first and 
until it does, the former government will execute its responsibilities," 
he said. Stepashin was born in Port-Artur (Lushun, China), on March 2, 1952. 
He 
graduated from the Russian Interior Ministry's Higher Polytechnic College 
in 1973 and from the Humanitarian Military Academy in 1981. He served in 
special Interior Ministry divisions and then taught at the Interior 
Ministry's Higher Polytechnic College in Leningrad (St Petersburg). 
>From 1973 till 1990, he served in the Interior Ministry troops and 
implemented tasks in hot spots such as Baku, Fergana, Nagorno-Karabakh 
and Sukhumi. 
In 1990, Stepashin was elected the lawmaker of the Supreme Council of 
the Russian Soviet Federal Socialist Republic (RSFSR) and was appointed 
the head of the Council's Committee for defense and security. In 1991, 
Stepashin was the deputy head of the General Director of the Federal 
Security Agency (AFB) of the RSFSR and the head of the AFB Department for 
St Petersburg and the Leningrad region. In 1992-1993, he was deputy 
security minister, then first deputy security minister. 
>From December 1993 to March 1994, Stepashin worked as the first deputy 
director of the Russian Federal Counter-Intelligence Service (FSK). From 
March 1994 to April 1995, he was the FSK director. From November 1995 to 
July 1997, Stepashin was the head of the administrative department of the 
Russian government staff. In 1996, he was appointed the executive 
secretary of the State Commission for settlement in Chechnya. In July 
1997, Stepashin was appointed to the post of minister of justice. Since 
March 1998, he has occupied the post of Russian interior minister. 
Stepashin's military rank is colonel general. He is a justice state adviser, 

Cand. Sc. (History), a Dr. Sc. (Law), and a professor. 
He is married and has one son.

*******

#5
Stepashin Interviewed as Vice Premier 

Komsomolskaya Pravda
May 12, 1999
[translation for personal use only]
Interview with "First Vice Premier and Internal Affairs Minister" 
Sergey Stepashin by Aleksandr Gamov; date, place not stated: "Sergey 
Stepashin: Political Witch-Hunt Does Not Threaten Russia. But We Shall 
Introduce Order!" -- first paragraph is introduction 

On the eve of the State Duma vote on the procedure 
for the president's impeachment the Russian first vice premier and 
internal affairs minister met with your Komsomolskaya Pravda 
correspondent. 

Why Did Yeltsin Move Stepashin? 

[Gamov] Sergey Vadimovich, the president has not only appointed you first 
vice premier but at the recent conference in the Kremlin he moved your 
seat closer to himself. There were immediately rumors that Yeltsin is 
preparing Stepashin to succeed as premier.... 
[Stepashin] I have not discussed the subject with the president. As for the 
fact 
that he moved me closer.... These are problems for the protocol service 
rather than for me. And then my life and career have taken shape in such 
a way that I have never been far from Boris Nikolayevich. 
[Gamov] But the conclusion does suggest itself.... 
[Stepashin] You journalists can draw conclusions. Right now I have other 
problems: The situation in the North Caucasus, in St. Petersburg (in 
connection with the revelation of economic crimes there) and then there 
is Nakhodka, Karachay-Cherkessia. There is a lot to do! So as for who is 
re-seating whom where -- you can leave me out of it.... 
[Gamov] Nevertheless, as first vice premier now, you can feel that the 
clouds are gathering over the White House and in particular over Premier 
Primakov? 
[Stepashin] Yesterday Yevgeniy Maksimovich and I discussed utterly
specific, 
everyday, very important matters: How to submit to the Duma the package 
of laws connected with the IMF tranche as regards paying foreign debts. 
There were tough polemics in relation to excise duty. And I am glad that 
the government chairman supported me. Because by increasing excise duty 
we shall not receive the expected addition to the budget. 
Why am I saying this? So that you know that I, as first vice premier, 
discuss and resolve with the president and the prime minister only these 
purely practical issues. If I should begin to respond nervously to the 
articles that are published, nothing will get done. 
[Gamov] But does it seem to you that the problem of the government's 
dismissal exists today? 
[Stepashin] Any government is always under threat of dismissal. Its 
motivation 
is another matter. But I think that both Yevgeniy Maksimovich and the 
cabinet members should be thinking about something else. That means above 
all preserving the trend toward the ruble's stability. The second thing 
is real movement in the economic sphere. 
Let's look into why the problem of Yugoslavia exists today. Because we are 
weak. Primarily through our economy and real results. The gross domestic 
product has declined to who knows where and it is very hard to penetrate 
the Western market. It is all very well if the market situation plays 
along and if there has been a rise in prices for oil and we can balance 
the ruble that way. But that can only work for a while. We have had 
enough of being an appendage. That is what should be predetermined in the 
government's plan of action. That is the first thing. 
And the second thing is that there is no denying that a serious 
political card is indeed being played. For instance, it is very hard for 
me to understand the position of the State Duma as regards the plan to 
impeach the president, particularly over Chechnya. Yes, Stepashin, 
Grachev, and Yerin should probably have been made to answer for the fact 
that the war in Chechnya ended in precisely that way. But today we have 
another problem there -- they are kidnapping people and killing them, 
there is total anarchy there! 
And now the NATOites are speaking of ethnic cleansing in Kosovo. Why do 
we forget that in the Chechen Republic there was a real and far more 
terrible ethnic cleansing? Before 1991 there was a majority of Russians 
living in Groznyy and now there are 27,000 old men left whom we shall 
quietly pull out. 
...The closer we come to the parliamentary and presidential elections, the 
more rumors and speculations of every kind there will be. 

Will Duma Launch Impeachment Procedure? [subhead] 

[Gamov] Nevertheless let us dwell on the procedure for impeaching the 
president which the Duma opposition is trying to launch 13 May. There has 
already been news that Stepashin is heading a staff which includes 
Tatyana Dyachenko, Valentin Yumashev, and others. It is as though a 
strong-arm scenario is being elaborated.... 
[Stepashin] Stepashin heads the Ministry of Internal Affairs. And as first 
vice 
premier I am in charge of the block connected with regional policy. That 
is all, I do not need any other staffs. The powers I have are enough for 
me. And there is no strong-arm scenario. You know who is thinking it up. 
[Gamov] And you have not discussed this scenario with the president? 
[Stepashin] Of course not. 
[Gamov] And how are you preparing for the forthcoming events? 
[Stepashin] We are not sitting idly by. I have had several meetings with
the 
leaders of several factions and a meeting with Gennadiy Nikolayevich 
Seleznev is planned. I am quite unable to understand the people who 
initiate these things. What is preventing them from preparing quietly for 
the elections? In Brezhnev's time would they really have allowed 
themselves to use in public such dirty words, unworthy of an 
intellectual, to describe the state's leader, where would they have ended 
up? Respect the president at least for the fact that he gives you the 
opportunity to "indulge in polemics" in this way. Although I am sorry 
this is happening. 
That is the first point. The second is that we shall not allow any strike 
committees or any subversive actions. There are laws, there is the 
Constitution, and it is within that framework that we shall act. We have 
intelligent policemen, they understand perfectly what must be done in 
this situation. Especially as no special measures, decisions, or 
reinforcements are planned. 
And against whom should force be used? On May Day (I saw this from my 
office window) 500-600 people converged on Kaluzhskaya Square. OK, people 
are walking about and holding meetings, why not.... 
But I do not want there to be the result that Zyuganov is trying to 
achieve. He should talk with Yanayev, Lukyanov, or any of the other 1991 
"sages...." 
[Gamov] What is your prediction right now -- will the Duma collect the 300 
votes to start impeachment? 
[Stepashin] I think not. But if the procedure does begin it will have no 
prospects. There is no complete legal mechanism. Although in any case 
this process will strike at the state's foundations. And that will be 
very sad. 
[Gamov] And how do you imagine work with the regions under the conditions
of 
the election campaigns? 
[Stepashin] The first is the equalization of interbudget relations. There 
should 
be no outcasts and no favorites. The second is the struggle against 
regional separatism. We must preserve Russia as a single state for our 
heirs. Third, there is joint work with the regions in the struggle 
against crime. We cannot allow criminals to enter power, including the 
executive and legislative branches. 
And fourth there is probably the strategic avenue. We must make bolder 
use of the regions' potential for elaborating the government's economic 
and even political decisions. There are many interesting proposals here. 
But we cannot extrapolate the experience of let us say Moscow and St. 
Petersburg to Maritime Kray or North Ossetia. It is from this premise 
that we must proceed today if we are speaking of regional policy, 
including nationalities policy. I would not emphasize a purely 
nationalities policy because it was, incidentally, the defects in that 
policy that led in the past to the collapse of the Soviet Union. 

How To Keep Criminals From Power? [subhead] 

[Gamov] And how do you intend to fight the criminals so that they do not 
enter power if some of them have already done so? 
[Stepashin] That is not a problem for local legislative assemblies.
Immunity 
does not extend to their deputies. As for the State Duma.... Last year 
Justice Minister Krasheninnikov and I, through the government, submitted 
to the lower chamber our suggestions for a kind of "clean sheet" for 
deputies. The State Duma supported these proposals. We must tell our 
voters in an absolutely official manner who is who. 
Moreover, a special administration for work with public organizations in
the 
runup to the election has been created in the MVD [Internal Affairs 
Ministry] structure. We shall simply check every State Duma candidate 
deputy within the procedure stipulated by the law. And if there are legal 
grounds for bringing someone to book with regard to specific criminal 
cases, for instance -- we shall take steps. 
And the third task is perhaps the hardest. We must think about how the 
new Duma will resolve problems connected with lobbying. I believe that a 
law on lobbying must be adopted, such laws operate in many Western 
countries. When the results of voting are linked to money, that is not a 
parliament. 
[Gamov] That is, as I understand it, politics, whether you want it or not, 
will be present in your work as first vice premier? 
[Stepashin] I also remain internal affairs minister. And the MVD is a very 
important political structure. But here we must consider one factor: A 
man who has donned police uniform must not belong to any party. 
[Gamov] As first vice premier in police uniform and as someone who also 
holds a ministerial portfolio, are you prepared to oppose the red 
revenge? 
[Stepashin] I am prepared to oppose extremism, and I do not hide the fact. 
[Gamov] How? 
[Stepashin] I have already said: Only by constitutional means. We will not 
allow 
anyone to smash windows. But here normal ideological work should also be 
set up. Not ideological deception but a normal explanation of where we 
are going and what we want to build. People cannot be constantly misled 
and strung along. After all, we have a remarkable people -- 
unpretentious, honest, and kind, although they are sometimes moved to 
anger. 
[Gamov] Of course you can explain to people where we are going. But they
can 
see what is happening. Take corruption in the top echelons of power.... 
[Stepashin] There is a great deal of talk about corruption in the top 
echelons 
but there are few specific facts. 
[Gamov] I can give you an example -- Smolenskiy. 
[Stepashin] What has Smolenskiy and corruption in the top echelons of power 
got 
to do with it? Let the court prove it was corruption. We have enormous 
holes in economic legislation which arose after 1991. Today we are living 
in two dimensions as it were -- the Soviet dimension and what is 
figuratively speaking our own Russian capitalism. And the more frequently 
we hear rhetoric to the effect that we shall put those people in prison, 
they are corrupt, the more rapidly money will fly out of our country. 
Yes, we must consistently struggle against economic crime. But where does 
the strength of any power and any government lie? No, not in changing 
everyone's seating. We have already had that: Some people would put 
people in prison, others would go to prison, and then they would change 
places. So the government and political system must create conditions 
whereby money does not flee the country. When wealthy people like Savva 
Morozov and the Ryabushinskiys invest money in their own economy, as was 
the case in Russia early this century. 
But what are we doing? Surely capital will not return to us with the 
radicals? Surely international investments will not arrive with them? 
Surely we will not be able to enter the normal world economic community 
with them? It is absurd.... We must not be indecisive. And we have had 
enough of the terms right-wing and left-wing. There are clever people and 
there are fools. 
[Gamov] So will you fight corruption or not? 
[Stepashin] We shall. What is corruption? It is when a state official uses 
his 
position and receives a direct or indirect bribe and implements 
particular decisions to the detriment of the interests of a particular 
sector or structure or the state as a whole. That is what corruption is. 
But when we speak of private entrepreneurs who have found themselves at 
odds with the law.... Here we must carefully investigate each specific 
instance. Incidentally, it is for precisely this purpose that a federal 
center for seizing, seeking, and returning so-called fugitive capital 
that has left Russia has already in fact been created under the MVD. 
But the most important thing is that conditions must be created for 
those who would like to invest their money in a civilized manner in our 
economy today. I am sure that a democratic president will come in 2000 
and the country will enter the channel which our incumbent president 
Boris Nikolayevich Yeltsin is setting up. 
And believe me, a large amount of money will start to work normally. I 
do not want to brand all those entrepreneurs who have indeed been 
compelled to hide their capital abroad, aware that tomorrow the 
commissars, figuratively speaking, could come and the expropriation of 
the expropriators would begin. It is the lack of political stability and 
political predictability in Russia which is a very serious deterrent now 
to normal investors. 

Who Will Become President of Russia? [subhead] 

[Gamov] Do you believe the new Russian president will be a democrat? 
[Stepashin] The next president will be a normal man with democratic 
positions, 
quite a tough man who loves his country and who will not allow it to be 
returned to a past which the entire civilized world said good-bye a long 
time ago. 
[Gamov] You describe this image so precisely it is as though you can see 
it.... 
[Stepashin] No, it is a composite image. 
[Gamov] One question regarding Chechnya remains unclear to us. Not long 
before you were appointed first vice premier you made very tough 
statements with regard to Groznyy. 
[Stepashin] Not with regard to Groznyy but with regard to the bandits. 
[Gamov] Do you not intend to soften your position now? 
[Stepashin] With regard to the bandits -- certainly not. Moreover, I
believe 
that Aslan Maskhadov should also be tougher. There has been enough 
flirting! And those State Duma deputies who intend to vote for 
impeachment should be more consistent. 
Before making the decision they would do well to take a trip to Kurskoy 
Rayon, Stavropol Kray. And meet with the Cossacks, women, and old ladies 
who are quaking as a result of the bandits' attacks. They would probably 
say to the deputies: "What are you doing, guys? You are prepared to stir 
up the whole world for the Serbs but here there is real genocide!" 
[Gamov] If you engage in work with the regions in earnest will you have
time 
left for the fight against crime, which so far has no intention of 
surrendering? 
[Stepashin] I hope so. Moreover, there will be more opportunities. In the 
past, 
as minister, I sometimes had to do the rounds of the White House with 
outstretched hand to argue elementary points. Now I believe there will be 
no problems with that. And then I now have the opportunity to resolve 
many problems, how shall I put it, through the MVD's "illumination." That 
is, we can see more clearly why a particular solution is not working and 
who is putting obstacles in its way -- corrupt people, criminals, or 
simply stupid officials. It will now be more convenient for us to tell 
the president and premier which decisions are appropriate and which are 
not. But of course that also imposes additional responsibility.... 

Will New Stolypin Come to Russia? [subhead] 

[Gamov] Sergey Vadimovich, I listen to you and I think: It is good that an 
intelligent man like Stepashin will be carrying this burden of problems. 
But, alas, you are in policeman's uniform. Will we not get something like 
the 1937 model political witch-hunt? 
[Stepashin] You would do better to take the start of the century, the
period 
of 
Stolypin, for instance. I like that comparison better. But do not think I 
am drawing any analogies here, god forbid! 
[Gamov] Nonetheless could there be a repetition of the situation where the 
internal affairs minister becomes government chairman? 
[Stepashin] You must ask the president. 
[Gamov] And if he offers you the post? 
[Stepashin] I consider the question to be incorrect. Both with regard to 
Boris 
Nikolayevich, because these decisions are within his competence, and with 
regard to Yevgeniy Maksimovich, with whom I am linked by close, friendly 
relations. I do not hide the fact.... 
At any rate, let's not spread rumors and gossip. We would do better to 
get down to work.... 

*******

#6
Duma Hearings Are Boring, Orderly
May 13, 1999
By SERGEI SHARGORODSKY

MOSCOW (AP) -- Russian ultranationalist leader Vladimir Zhirinovsky stormed 
into the State Duma, parliament's lower house, on Thursday, pausing in a 
corridor to argue with a Communist opponent.

``This red plague must come to an end,'' he shouted at the man, who tried to 
interrupt Zhirinovsky's diatribe. ``Who are you? I'm a lawmaker. Millions 
voted for me, for my purity. And you're a vagabond!''

Outside the Duma, hundreds of hard-liners waved red Soviet flags and chanted 
slogans as they waited for parliament to open its first day of hearings on 
impeaching President Boris Yeltsin.

There was a sharp contrast Thursday between the scene outside the Duma 
chamber -- where an odd assortment of party activists, cleaning ladies and 
lawmakers' aides milled around trading opinions on the proceedings -- and in 
the chamber itself. There, the machinery of parliament ground steadily 
through the business of impeachment, the atmosphere all business and order.

The morning debate ranged from tedious legal talk to passionate phrases, but 
there wasn't much drama.

It was a far cry from President Clinton's impeachment hearings, which were 
televised live, sometimes riveting the nation. Russian TV channels decided 
not to carry the debate live, prompting complaints from the legislators.

Speaker Gennady Seleznyov insisted on strict protocol. The session was 
interrupted only once or twice by outbursts from the floor when Alexander 
Kotenkov, Yeltsin's envoy to the Duma, defended the president.

Vadim Filimonov, head of the Duma's impeachment commission, set the tone with 
a long, monotone reading of a list of charges against Yeltsin. However, he 
ended his 90-minute speech on a passionate note, mentioning the ``blood of 
the dead and disfigured, the tears of the humiliated and offended beating 
into our hearts.''

Many lawmakers applauded. Others were less appreciative.

``The commission chairman put everybody to sleep, and from time to time it 
seemed that he was falling asleep himself,'' said Zhirinovsky's party 
colleague, Alexei Mitrofanov.

Reporters besieged passing lawmakers after Seleznyov announced a break.

There were the familiar faces -- Viktor Ilyukhin, who earlier delivered the 
hard-line charges against Yeltsin, the beaming and self-confident Communist 
Party boss Gennady Zyuganov and the liberal Sergei Yushchenkov, who flashed a 
``V'' sign for victory.

A secretary started to argue with the quiet, bespectacled Sergei Kovalyov, a 
Soviet-era political prisoner who is now one of the most outspoken liberals 
in the parliament. Kovalyov agreed with her that Yeltsin was a ``bad 
president,'' yet insisted that impeachment was not the right way to remove 
him.

Kotenkov, Yeltsin's envoy, opened the afternoon hearings with a sometimes 
rambling yet emotional speech. He became especially eloquent while defending 
Yeltsin from the charge of launching the botched and bloody 1994-96 war in 
Chechnya.

``The events in Chechnya were the greatest tragedy for Russia, but to say 
that the president was the only one responsible would not be true,'' said 
Kotenkov.

Legislators protested noisily when Kotenkov asked for an additional 20 
minutes to speak, but voted to grant his request. A new barrage of shouts 
greeted Kotenkov in the evening when he faced more that a dozen questions 
from legislators.

*******

#7
From
The Center for Defense Information
The Weekly Defense Monitor
779 Massachusetts Ave., NW * Washington, DC 20036
202)332-0600 * Fax (202)462-4559 * www.cdi.org
VOLUME 3, ISSUE #19 May 13, 1999

Russia's America Problem
By David Johnson, Senior Fellow

President Boris Yeltsin's firing of Prime Minister Yegeny Primakov
complicates even further prospects for both Russia and U.S.-Russian
relations. Primakov, the most popular political figure in Russia, had
restored some sense of public confidence in government and his abrupt
ouster by the autocratic and perhaps senile Yeltsin pushes Russia back into
another round of political divisiveness and turmoil. It will now be more
difficult for Russia to play a peacemaking role in Yugoslavia. Russian
attempts to secure additional loans from the IMF will likely grind to a
halt. Popular Russian suspicions of Yeltsin's ties with the West will be
increased. Arms control agreements, already in deep trouble, will languish
on the back burner. The long-hoped for (by Russians) transition to the
post-Yeltsin era may be further delayed.

Some blunt observations about Russian realities:

1. Most Russians, despite the difficulties and disappointments they have
been through, remain committed to modernizing and improving their society
and institutions on their own terms. This includes many of the "communists"
and "nationalists" often viewed with either dismissiveness or fear in the
West. So-called "anti-Western" views are mostly a logical reaction to the
concretely damaging policies of the West. These policies and attitudes,
one hopes, are correctable if the West really is interested in good
relations with Russia. We have great control over whether Russians are
"anti-Western." We should raise our expectations about Russia and stop
obsessing on the remote but familiar nightmare of the return of communists
or red-fascists.

2. The economic and social catastrophe that has befallen Russia in the past
decade is man-made, not a product of historical inevitability. The search
for a way out of the abyss, the learning of lessons, and the assignment of
responsibility is a natural process that will be accelerating in the next
few years. Western commentators and advisors, having played their role
already, have little to constructively offer in this regard. Unfortunately,
the lack of respect for Russian views has become almost second nature in
the West so it will be very hard for us to adapt to the appropriate humble
role.

3. President Yeltsin has in most respects been a disaster for Russia. The
United States, particularly in the view of Russians, shares responsibility
with Yeltsin for his failure. American money and American advise have
played a very important role in keeping the increasingly unpopular
Yeltsin in power. Yeltsin was anointed with the mantle of pro-Western
reformer in 1991 and U.S. policy remained singularly focused on providing
him with financial and political support for nearly all of the past eight
years. All other political figures and forces with either ignored or
attacked. Huge international loans, ostensible to promote reform and
economic development, were provided to Yeltsin largely to solidify his
power and protect him from rising popular opposition to his failed
policies.

4. There is a huge irony in the fact that the most important U.S. worry
about Russia, the loose nukes problem, is largely the consequence of the
economic collapse (again not inevitable) that accompanied the Yeltsin-U.S.
economic policies. These politically motivated policies of "shock
therapy," never of course fully implemented in the real world, should
never have been embarked upon in the first place. They were imported from
abroad without due consideration of Russian circumstances. Primakov's
attempt to create a moderate policy resembling Roosevelt's New Deal
response to the Depression was an appropriate course correction for
Russia. Primakov's was the first government that attempted to craft public
policies with the input of the freely elected Parliament. Whatever
derailing of the policy of democratic moderation takes place in the next
few months, Russia will in all likelihood return to this path once it is
freed of the burden of Boris Yeltsin.

5. The true interests of the United States lie in a frank recognition of
its failures and mistakes vis-a-vis Russia and a rapid engagement with
the vast majority of Russians who remain eager for a genuinely constructive
role in Russia on the part of the United States. Realistically, however, it
is unlikely that American policy makers will take this route. They will
drift even further into contemptuous disregard of Russia, leavened by the
continued demonizing of large segments of the Russian political spectrum.
For Russia, this means that the merits of a policy of self-reliance will
become increasingly clear. Fortunately, it is probable that Russians will
cope better with their America problem than Americans will cope with their
Russia problem. The weak and vulnerable are often more nimble on their feet
than the powerful and head-strong.

******

#8
Economic Impact of Primakov Ouster Viewed 

Komsomolskaya Pravda
13 May 1999
[translation for personal use only]
Article by Yevgeniy Anisimov: "After Nine Months the President Has 
Given Birth to a New Premier. The Birth Pains Were Short" 

Ye. Primakov's dismissal was expected. There was 
speculation over when B. Yeltsin would dismiss him -- now, or a bit 
later. It is believed that Primakov was given two main tasks: to persuade 
the State Duma to abandon impeachment, and to reach agreement with the 
IMF on the credit without which Russia cannot avoid default. Bankruptcy, 
in other words. Neither task, alas, has been completed. And that 
predetermined the fate of the Primakov government. 

"Excuse me!" -- people may object. "What do you mean: The accords with the 
IMF were virtually achieved, the fund's Managing Director Michel 
Camdessus had himself promised to help Russia to get credit..." He 
promised, indeed. But later, during the trip to the United States by the 
delegation headed by Yu. Maslyukov, preliminary conditions were set for 
our side. Five laws had to be adopted, in particular on increasing excise 
duties on vodka and gasoline. And the laws had to be fully legitimate, 
that is, to pass through the State Duma, the Federation Council, and the 
president. Not only was the time scale for passing the laws extremely 
tight, but there was almost no hope of a positive vote in the State Duma. 
After all, on the eve of parliamentary elections the State Duma cannot 
vote for laws that will immediately increase the prices of goods like 
gasoline and vodka. It just can't! So the IMF's conditions were simply 
not feasible. 

Primakov was not about to fight selflessly against impeachment -- that would 
have meant breaking with the left-wing majority in the Duma. And Yevgeniy 
Maksimovich had no other prop. So he tried sluggishly, solely in order to 
"score points," to convince deputies to abandon the idea, and when they 
stood their ground, the premier realized it was time to pack his bags. 

And what now? What will happen in the coming days and weeks? 

The situation is unclear as yet; not even the key figures in the new 
cabinet are known, with the exception of S. Stepashin and N. Aksenenko. 

Who will be responsible for the most important section of the government 
-- macroeconomics and finance? Aksenenko? Hardly. There should be a 
well-known figure in that post. Both in order to enable the country to 
get its bearings and for the international financial organizations. Let 
me remind you that the threat of default has not lessened, on the 
contrary, the country has never before been so close to bankruptcy. You 
can forget about the accords reached by Maslyukov and co. There is no 
time for new talks -- Russia must begin to pay its foreign debts in May, 
and the second chunk of debts must be handed over in June. Even Chubays, 
in his time, despite his links with the IMF and the extremely pragmatic 
program of S. Kiriyenko's cabinet, took about six weeks to resolve the 
question of credit. Now the situation is much worse -- the IMF simply 
will not trust us. 

I do not think that that aspect of the decision was considered 
carefully enough by Yeltsin; most likely he was much more worried about 
the impeachment problem. Now that the decision has been made, the 
president's advisers are forced to reckon with the situation and must 
look for a solution. What will it be? 

Let me put forward a hypothesis based on just one premise: A sovereign 
default must be avoided, and the president's advisers are aware of that. 
In that case, in theory, a plan for radical actions in the economic 
sphere is needed. There is such a plan, as we know. It was drawn up by 
Boris Fedorov, economist and politician. It consists of the strict tying 
of the ruble to the dollar (or to a "basket of currencies," or to the 
euro, it does not really matter which). Something similar was done in 
Argentina and -- this could convince the president -- in almost the same 
conditions that have arisen in Russia today: six months before the 
elections, a crisis, almost no investments, the population only trusts 
the dollar, and so forth. In Argentina the plan worked. 

The IMF would certainly give money in return for such a program. Last 
fall Camdessus, talking with Chernomyrdin and Fedorov, himself cautiously 
proposed that this option be considered. At that time it was decided that 
the time had not come for such radical steps. Even now it has not yet 
come. But: Who can say today what the ruble rate will be in two weeks' 
time, when the minute after the announcement of Primakov's dismissal the 
exchange offices either stopped selling foreign currency or increased the 
price of the dollar? In a couple of hours shares in the main companies on 
the Russian stock market had fallen by 10-15%, and no end to the fall was 
in sight. The government's dismissal reduced the exchange rate of the 
euro against the dollar on the world markets -- Europe, especially 
Germany, is financially linked to Russia. The euro is falling because 
investors believe that Russia will not pay its debts, and it is first and 
foremost the European banks that will suffer as a result. 

Incidentally, in his statement on the government's dismissal Yeltsin spoke 
directly of the need for more radical economic reforms. That can be 
assessed as rhetoric, but it can also be seen as a hint of dramatic 
changes in economic policy. 

*******

#9
Moscow Times
May 14, 1999 
EDITORIAL: He'll Never Leave If Impeached 

Boris Yeltsin must go. All of Russia's political energies should be focused 
on this one goal: Yeltsin must go. This ought to be a position taken by 
international media and Western governments. 

But moving straight to impeachment is not the answer. The answer is 2000. 
Yeltsin must go in 2000. The Duma, the West, everyone needs to be helping 
Yeltsin make the right decision to do that. 

The State Duma is making an enormous - perhaps a disastrous - tactical error 
in voting on impeachment this week. Impeachment should be a tool, a means to 
an end - the end being to remove Yeltsin in such a way as to preserve, 
perhaps even strengthen, democracy. The Duma deputies have been mocked for 
postponing impeachment so often, but that is exactly what they ought to do 
now: postpone it again. They may well need it. 

Yeltsin is flirting with a lifetime Russian presidency, la General Suharto. 
At best he wants to leave but is afraid; at worst he has no intention of ever 
leaving. 

If we assume the worst, impeachment plays into Yeltsin's hands: It gives him 
just the sort of constitutionally muddy Communist-provoked crisis he is 
looking for. He exploits it, moves to establish a dictatorship - and then 
what? 

In this case, the smart move is not to give him the opening. Instead, keep a 
hair-trigger impeachment in reserve - in case Yeltsin tries to unilaterally 
extend his term or assume broad new powers - and concentrate on making it 
absolutely clear that he must leave in 2000. 

If we assume the best - that Yeltsin wants to leave but is afraid to - then 
what does impeaching him accomplish? Nothing: Maybe he sighs in relief and 
leaves office a few months earlier than scheduled, setting the 
less-than-healthy precedent that presidents are elected by the people but 
driven from office by the parliament. More likely, he seizes upon impeachment 
as proof that he is in danger and surrenders to his darker impulses. If that 
happens, the only thing left to do will be to go in and drag him out from 
behind the Kremlin walls. 

The Duma should: 

Postpone impeachment. Brandish it as a weapon any time the Kremlin starts 
making noises about rewriting the Constitution to unify Russia and Belarus, 
or rumbles about emergency rule to push through economic reform or hold back 
the Chechen terrorists. 

Promise Yeltsin his safety upon retirement. Write it into law, talk about it 
publicly at demonstrations and on television, make it absolutely clear that 
Yeltsin has no excuses. And remind Yeltsin every single day that in June 2000 
he goes. 

Get rid of Yeltsin. It's all that matters now. 

*******


 

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