May 22, 1999    
This Date's Issues: 3299 • 3300  • 

Johnson's Russia List
#3299
22 May 1999
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Yeltsin Makes Cabinet Appointments.
2. Reuters: Russia rail boss takes charge of economy.
3. Interfax: Poll Shows Russian Public Opinion on Impeachment.
4. Anthony D'Agostino: Notes on the Legacy of Primakov.
5. Gordon Hahn: on Breslauer/3297, Hough/3288, and McFaul.
6. Walter Uhler: Re Edward Spannaus on 7 May Harriman Institute Conference.
7. THE JAMESTOWN FOUNDATION PRISM: Brian Whitmore, WHO EXACTLY IS SERGEI 
STEPASHIN?
8. Moskovskiy Komsomolets: Marina Ozerova and Mariya Markina, Dish of the 
Day With Salmon Sauce; Sergey Stepashin: 'I Am Not Pinochet!'" (Deputies Seen 'Indifferent' to Premier).
9. Interfax: Two-Thirds of Russian Intend To Vote in Duma Elections.
10. Moscow Times: Igor Semenenko, Economy Loses Forward Momentum.
11. The Electronic Telegraph (UK): Marcus Warren, KLA kills 'Russian volunteer'
12. Interfax: Russia: Flight of Capital Decreases] 

*******

#1
Yeltsin Makes Cabinet Appointments
May 21, 1999
By VLADIMIR ISACHENKOV

MOSCOW (AP) -- President Boris Yeltsin has reappointed several key members of 
the previous government to a new Cabinet and named a controversial police 
official as Russia's new interior minister, Yeltsin's office said Friday.

The appointments came in the wake of a political crisis that erupted last 
week when Yeltsin ousted the entire Cabinet. The president then faced down an 
impeachment vote, and on Wednesday again triumphed over the hostile 
parliament when lawmakers approved his nominee for prime minister, Sergei 
Stepashin.

Before leaving for a vacation in southern Russia on Friday, Yeltsin signed 
decrees reappointing Defense Minister Igor Sergeyev, Foreign Minister Igor 
Ivanov, Emergency Situations Minister Sergei Shoigu and Justice Minister 
Pavel Krasheninnikov to their posts, the presidential press service said.

Yeltsin also promoted Nikolai Aksyonenko, a former railways minister, to the 
post of first deputy prime minister. And he named Vladimir Rushailo as 
Russia's new interior minister. Rushailo previously worked as deputy to 
Stepashin, who was interior minister in the previous Cabinet.

Russian media described both Aksyonenko and Rushailo as tools of 
controversial business tycoon Boris Berezovsky, who allegedly had his hand in 
the ouster of the previous prime minister, Yevgeny Primakov.

Primakov and Berezovsky, who has close links with Yeltsin's family, have long 
been at odds.

``Boris Berezovsky is the coach of a team that has taken the helm,'' the 
business daily Kommersant said Friday.

Rushailo, who is widely known for his efforts to combat organized crime and 
release hostages from captivity in breakaway Chechnya, has denied having 
links with Berezovsky.

Aksyonenko has overseen the huge web of Russian railways, one of the nation's 
giant state monopolies, but has no experience in economic management. Most 
analysts describe him as a Soviet-style technocrat with little understanding 
of free-market reforms.

Aksyonenko's field of responsibility wasn't immediately clear, but media 
reports said he would be given broad powers over the economy and finance.

Alexander Zhukov, the head of the Duma's budget affairs committee, has also 
been invited by Stepashin to join the Cabinet, but demanded an equal rank 
with Aksyonenko.

Zhukov said he could oversee the economy and finance and leave Aksyonenko to 
handle the Cabinet's industrial policies.

Stepashin met Friday with Viktor Chernomyrdin, a former prime minister who 
now serves as Yeltsin's special envoy for the Yugoslavia crisis. They 
discussed forming the new Cabinet and Russia's efforts to end the Kosovo 
conflict.

Yeltsin spokesman Dmitry Yakushkin said the Cabinet's formation would likely 
be completed next week. He said Stepashin may visit Yeltsin at his residence 
in the Black Sea resort of Sochi to discuss the Cabinet appointments.

Yakushkin said Yeltsin would vacation until next Friday, when he will return 
to Moscow for a meeting with South Korean President Kim Dae-jung. Yakushkin 
didn't say whether the president would return to the resort after the meeting.

The president was reportedly sick with bronchitis earlier this week, but 
Yakushkin insisted Friday that Yeltsin was in good health and his vacation 
hadn't been prompted by illness.

The vacation ``has become possible because of a political lull that followed 
the storm,'' Yakushkin said on Russia's NTV television.

*********

#2
NEWSMAKER-Russia rail boss takes charge of economy

MOSCOW, May 21 (Reuters) - Nikolai Aksyonenko, the former Russian railways 
minister who was confirmed as first deputy prime minister on Friday, is a 
career rail worker never before involved in top-level politics. 

Since being plucked from obscurity and elevated to his new post last week 
moments before the government of Prime Minister Yevgeny Primakov was sacked, 
Aksyonenko has announced plans to take control of the entire economy. 

"A first deputy prime minister cannot stay away from taking any decision in 
the state. I want to be involved in everything," he told Itar-Tass news 
agency. 

The sudden and unexpected rise to power of such an obscure figure has led 
Russia's media to speculate that Aksyonenko must have a powerful patron 
lobbying for him behind the scenes. 

When reports first surfaced last week that Aksyonenko might even be named 
prime minister, the daily Sevodnya wrote: "The career path of the head of the 
railways is well understood, but Nikolai Aksyonenko's economic and political 
views -- if they exist at all -- are not known to anybody." 

The respected business daily Kommersant called him "Berezovsky's man," a 
protege of controversial financier Boris Berezovsky who clashed with the 
Primakov government. 

Liberal former Acting Prime Minister Yegor Gaidar gave Aksyonenko credit for 
putting the railways in order but said he doubted Aksyonenko's experience 
gave him the know-how to run the whole economy. 

"He built up the railways very well," he said. "The problem is that those 
measures and those managers who are very qualified in a centralised 
system...are absolutely unacceptable, are life-threatening for running a 
market economy as a whole." 

"We'll see how capable he is of understanding that." 

After completing studies as a railway engineer in Novosibirsk in 1972, 
Aksyonenko went on to a steady career managing rail lines in eastern Siberia, 
the southeast of the Soviet Union and between Moscow and St Petersburg. 

He became deputy railways minister in 1994, first deputy in 1996 and minister 
in 1997. 

Aksyonenko, 50, found himself in the spotlight briefly last year, urging calm 
when striking coal miners blocked a stretch of the Trans-Siberian railway 
demanding back wages. He took a decidedly middle-of-the-road stance. 

"It's wrong not to pay wages and it's wrong to block the rails, but it would 
be even more wrong to solve this by violent means," he said. 

His appointment to first deputy premier was not the first time Yeltsin has 
plucked somebody from near-total obscurity for a top post. Last March, he 
appointed little-known 35-year-old Energy Minister Sergei Kiriyenko to be 
prime minister. He lasted only five months in the job. 

But even Kiriyenko, clearly a member of the liberal camp, was seen as less 
obscure than Aksyonenko. 

"However unexpected the appointment of Sergei Kiriyenko last year, he had a 
clearly defined economic reputation. The only similarity between this 
recommended candidate (Aksyonenko) and last year's is that both are a 
surprise," Sevodnya wrote. 

Aksyonenko was born on March 15, 1949. He is married with two children. 

********

#3
Poll Shows Russian Public Opinion on Impeachment 

MOSCOW, May 20 (Interfax) - The vote to impeach 
President Boris Yeltsin and a poll to establish whether in the public's 
opinion the charges brought against Yeltsin were fair were held almost 
simultaneously. The poll was held by the Public Opinion fund among 1,500 
respondents on May 15. It turned out that ordinary citizens were even 
more radical- minded than the Duma deputies in that 87% of the 
respondents said that Yeltsin was guilty of unleashing the Chechen war. 

Eighty percent of those polled said that Yeltsin was at fault for the 
diminished strength of the armed forces and for the weakening of the 
country's defense capability. The count on confrontation with and the use 
of force against the parliament in October 1993 was supported by 73% of 
the respondents. Seventy-two percent said Yeltsin was guilty of the 
Soviet Union's breakup in 1991, and 67% supported the genocide charges. 

The most radical views were expressed by supporters of the Russian 
Communist party led by Gennady Zyuganov. Supporters of Moscow Mayor Yuri 
Luzhkov held a softer position. 

********

#4
Date: Fri, 21 May 1999 
From: "Anthony D'Agostino" <dagostin@sfsu.edu>
Subject: Notes on the Legacy of Primakov

What can be said about the legacy of Evgeny Primakov and his very brief
attempt to steer Russia through uncharted international waters? American
commentary will see his fall only through the lens of its own
pre-occupation, the project of micro-managing the growth of a Russian civil
society in a country that is falling apart. And Russian commentary must
feed this. But not all Russian commentary. The Migranyans, Arbatovs, and
Kortunovs who try to see a bigger picture will be bound to come to
alarming-- but at least fresh-- conclusions about the new positions of
Russia and the west. Let us try to anticipate them.

Primakov's appointment, in the circumstances of the Russian and world crash
of August 1998, represented Boris Yeltsin's turn away from the Atlanticism
that began with Kozyrev to an orientation that Primakov thought of as
recueillement in the style of Prince Gorchakov in the 1850s. Since Tsarist
Russia had been defeated by confrontation with an artificially united west,
Gorchakov thought that she should turn away from Europe, cultivate her own
garden, perhaps expand her contacts with the east, waiting for the day when
the western powers would fall out over issues other than the Russian
threat. Gorchakov's Russia used the breathing space to introduce the
great reforms of the 1860s; Primakov's would introduce a Russian New Deal.
Gorchakov had flirted with the enemies of the Vienna System; Primakov would
cultivate a grouping of Russia, India, China, Iran and others. 

But this was Yeltsin's turn and not Primakov's. According to the 1993
constitution, Yeltsin is not bound by any force under heaven. Primakov
could only await the day when the physical laws or the electoral ones would
remove Yeltsin from the path of Russian recovery. Well, Yeltsin has turned
again and the Primakov rebirth is now just an episode.

It is easy to see that Primakov could not last. He was from the first an
imposition on Yeltsin by Zyuganov and the Duma opposition. He could not
mind too much if the Duma were somehow to remove Yeltsin and make him the
successor. Of course Yeltsin could not help noticing this. The Kosovo war
sharpened the rivalry. Yeltsin, at first reacting emotionally as a
Russian, joined Primakov in encouraging Milosevic to resist the NATO
demands. Then he quickly realized that Russia had no cards to play and
could only salvage the appearance of enhanced influence by playing the
Honest Broker between NATO and Milosevic. In practice that only meant
putting pressure on Milosevic. The idea that Russia has gained enormously
by its centrist foreign policy is the worst nonsense. Russia may be in
line to participate in a protectorate in Kosovo as she has in Bosnia, but
that will not stop NATO from enrolling the Baltic states, Georgia,
Azerbaijan, Ukraine, and anyone else that it pleases. This will only
sharpen the focus on Russian nuclear weapons as the great remaining threat
to stability. The phasing out of this threat will be seen as the only
durable proof, to be offered in negotiations for financial aid, that Russia
is in fact becoming a good international citizen. The campaign to
rehabilitate Russia will no doubt be parallel to the renunciation by
Germany of her nuclear abstinence, last agreed in the Kohl-Gorbachev
meeting at Stavropol in 1990, but soon to become a dead letter. 

How can Russia's foreign policy intellectuals view this? To them, it must
seem another reprise, the third this century, of the Drang nach Osten.
NATO's air war against Yugoslavia has awakened all the traditional European
national ambitions, including those of East Central European states.
Hungary is now likely to consider changes in the status of Hungarian
minorities in Slovakia, Serbia, and Transylvania. Bulgaria cannot fail to
notice that if NATO puts the KLA in business in Kosovo, Macedonia will soon
fall apart, and Bulgaria has thought Macedonia to be rightfully hers since
at least 1912. Croatia linked to Greater Albania will have the upper hand
over the Serbs. It will seem very much like 1941--or 1914-16.

The Russians can reassure themselves with the thought that Germany is
necessary for Revisionism in East Central Europe and that a red-green
German government will stop before it goes too far. But how much comfort
can they take in that when the anglo-saxons are pressing along this
traditional German vector more enthusiastically than the Germans
themselves? I blame the excesses of the Blair Doctrine at least partly on
the British Revisionist historians who have been providing an intellectual
underpinning for the present international Revisionism. This has happened
before. In the twenties Revisionist historians of the origins of the Great
War helped cause the British to reconsider a community of interest with
Germany and thus provided an argument for Appeasement. Nowadays historians
like John Charmley make an eloquent retrospective case for Chamberlain
coming to terms with Hitler. Niall Ferguson, a current enthusiast of war
against Yugoslavia, has argued that Britain should have come to terms with
Imperial Germany before 1914. 

Why has the United States fallen in with the general Revisionist mood?
Perhaps because its intellectuals have argued for it without any
counterpoint. No sooner had the USSR fallen in 1991 than Michael Lind
began to suggest a Prussian line of Revisionism, noting with apparent
approval that the new Germany, "like its predecessors," was "intent on
reshaping Europe," having interests in the Balkans that "go beyond revising
European institutions, to revising European borders." We should not be
alarmed by this, Lind thought, because "the US too is a Revisionist power."

Neither Gorbachev nor Yeltsin have ever properly considered the idea that
the USA was a Revisionist power. But Russian intellectuals are now bound
to conclude that it is so. Reasoning thus, they might make more out of the
Primakov moment than is really warranted and might make him a semi-mystical
personification of Russian resurgence. 

Nevertheless I view his legacy without alarm. I think there is advantage,
from the standpoint of American national interest, as traditionally
conceived, that is, as viewed in terms of the relative power of states and
the idea of the balance of power, in a Russia that is not falling apart as
the present one is. And I wish that this question were an acceptable
subject of discussion among American intellectuals who frame the debate.
Otherwise, we will all be in the thrall (as Keynes might have put it) of
the ideas of some defunct historian.

********

#5
Date: Fri, 21 May 1999 
From: Gordon Hahn <hahn@hoover.stanford.edu>
Subject: Hahn on Breslauer/3297, Hough/3288, and McFaul

I wholeheartedly agree with George Breslauer's comments on the failure of
the field to foresee that Yeltsin would back down. Since Prof. Breslauer
invited comments on his thoughts, I will try to fulfill that request (Even
though no JRL readers have seen it fit to correspond to my invitation to
discuss RFE/RL Newsline's anti-Russian bias or ever my inquiry as to
whether Holbrooke has ever denied Vorontsov's charge that Holbrooke
responded to Vorontson's query in 1992 about Russia joining NATO with a
comment similar to: "Never. No way."):

Breslauer hints that in his comments lay a clue to his thoughts about why
Rusologists got it wrong. Among Breslauer's comments, one finds the
following sentence: "What this suggests is that neither ideology nor
loyalty nor emotions were determinants of deputies' behavior in this
particular case."

Most likely, it is the field's failure to grasp the diminishing role of
ideology and the growing role of democratic contestation in Russian
politics. While Russia's political spectrum remains more polarized than
most Western democracies, it is now less than polarized than in the
immediate post-revolution period. Indeed, almost all Russian debates and
political competition -- from the communists' impeachment drive, to
Luzhkov's opposition to the Russian-Ukrainian friendship and cooperation
treaty, to the clamp down on Barkashov's RNE, etc. -- occur within the
framework of the constititon and laws, which are discussed and referred to
in the argumentation of all, but the most extreme political parties. Should
this trend -- one which began with statements by the KPRF's leaders to
honor the constitution in the wake of the 1995 Duma elections -- continue
through the upcoming presidential and parliamentary elections and there is
no economic meltdown (a real challenge) we can begin to speak about the
consolidation of democracy in Russia. 

>From the Nixon Center's Dmitiri Simes to Carnegie's Thomas Graham among
many others a constitutional crisis and October 1993 Two were predicted.
The preponderance of this view (not the individul opinions and predictions)
suggests a certain bias in the field. What kind of bias? There is the view
that Russians by their 'national character' and 'political culture' cannot
live long in conditions of democracy. This view is widespread among
Russians as well. While I would be the last to discount the influence of
culture (I leave that to the ideologists of rational choice theory), I do
believe that institutions change behavior over time and that Russians are
sick and tired of conflict. The latter is another important cultural factor
that is overlooked. 

Certainly, emotion seems to have played little role in the behavior on
both sides. Yeltsin seems to have calculated his move to fire Primakov well
in advance (He signed the order on 10 April, but did not fire him until a
month later. he laid the groundwork and signaled the political elite in the
tried and true partocratic style by positioning successors in posts just
behind the doomed bureaucrat (Stepashin and Chernomyrdin) and removing the
to-be-fird bureaucrat's supporters (Gustov) on the eve of the cadre change.
Not to mention Yeltsin's calculated statements about Primakov in the weks
before the firing.

On Hough: He claimed in JRL 3288 that no pro-Western force in Russia is
beholden to the IMF and US. It seems to me that Yabloko is a sufficiently
pro-Western force, and it is certainly not beholden to anyone. It
(especially an acquaintance of mine and likely Russian Foreign Minister
should Yabloko ever get power, Vladimir Lukin) has criticized American
foreign policy numerous times. That is not something you do if you are
beholden to American interests. In this regard, it is of interest that
Michael McFaul in his testimony at the congressional hearing put Yabloko in
the category of pro-Western idealists and not pro-Western pragmatics, where
they belong, in my view. Otherwise, I thought McFaul's comments were good.
However, I disagreed with his recent editorials on Russia's role in the
Kosova crisis. It seems to me that if NATO, had not been expanded without
Russia, that this problem would never have arisen or would be easier to
resolve. Can anyone imagine Russian defying an embargo of Yugoslavia by the
West before NATO expansion? It seems to me that an
American-European-Russian alliance founded in 1992-3 would have been a
better way to guarantee international security in the 21st century, than
the expansion of NATO and its logical extension -- the Kosovo debacle. 

*******

#6
From: WaltUhler@aol.com (Walter C. Uhler) 
Date: Fri, 21 May 1999 
Subject: Re; Edward Spannaus on 7 May Harriman Institute Conference

Although the coverage of the 7 May conference by Mr. Spannaus is incomplete 
and anecdotal, he is quite correct emphasize the impressive presentations of 
Janine Wedel and Stephen Cohen. After the latter completed his blistering 
indictment of American scholarship concerning Russia (especially in the field 
of economics) and of our "journalistic malpractice," one could hear a pin 
drop. What Mr. Spannaus did not include in his review, however, was the 
critical reason Cohen cited for such poor professional performance.

For Cohen, the most important reason for our scholarly and journalistic 
shortcomings is our continuing failure to adequately address the demise of 
the Soviet Union. Substituting American triumphalism for this gap in 
scholarship, most scholars and journalists simply have accepted the 
ostensible striving for the democracy and markets (with a dose of concern for 
controlling weapons of mass destruction), in emulation of the cold-war 
victor, as the appropriate framework for evaluating events in Russia. 

I encountered this triumphalism during a discussion with our political and 
economic experts at the American Embassy in Moscow last September. Upon 
hearing them respectively prescribe more democracy and markets, I asked them 
to identify the Russian component in their prescriptions. Their responses 
were not at all reassuring. 

>From the triumphalist perspective, Gaidar's "shock therapy" was a necessary 
evil and not the approach of a Bolshevik who was willing to "crack a few 
eggs" (court untold economic suffering) in order to achieve the political 
objective of assuring that the Communists could never regain power. And here 
were planted some of the seeds of the unending catastrophe which many 
scholars and journalists call "reform." 

Granted, many of the seeds were planted during the Soviet period. But much 
genuine reform (things actually changing for the better) occurred under the 
rule of Mikhail Gorbachev and it is to that period that we must return if we 
are to supplant triumphalism with scholarship. The leads provided by Raymond 
Garthoff (The Great Transition) and Archie Brown (The Gorbachev Factor), for 
example, support such an assessment and merit further scholarly exploration 
and development.

*******

#7
THE JAMESTOWN FOUNDATION
PRISM
A BI-WEEKLY ON THE POST-SOVIET STATES
5/21/99 No.10 Part 2

WHO EXACTLY IS SERGEI STEPASHIN?
By Brian Whitmore
Brian Whitmore is a political reporter and columnist who covers city
politics for the "St. Petersburg Times." He is also a doctoral candidate in
the Department of Government and International Studies at the University of
South Carolina. 

An enigmatic figure, Russia's new prime minister has displayed various
contradictory faces in his brief and meteoric political career. A
tough-talking law enforcement officer, in the early 1990s Stepashin joined
the budding pro-democracy movement in Leningrad--now St.
Petersburg--eventually winning a seat in the Russian parliament. Later, as
head of the KGB's successor agency, he infuriated his old liberal allies by
joining Kremlin hawks in leading the country into war in Chechnya. More
recently, as justice minister, Stepashin launched reforms in Russia's prison
system and as interior minister he began an aggressive campaign against
official corruption--a campaign that did not, however, extend to allies of
President Boris Yeltsin, to whom Stepashin is fiercely loyal.

Now, with Stepashin occupying center stage in Russia's political three ring
circus, officials in the city where his career began are divided over what
kind of prime minister he will be.

Former Deputy Prime Minister Anatoly Chubais, a St. Petersburg native who
has known Stepashin since the late 1980s, called him "a St. Petersburg
intellectual" and "a highly educated and cultured person." Others aren't so
sure. "When the interior minister becomes prime minister it is not quite a
junta yet, but I can't say that it bodes well for democracy," said Anatoly
Golov, a member of the liberal Yabloko party, who represents northern St.
Petersburg in the State Duma.

CHECHNYA: STEPASHIN'S ALBATROSS
Prior to his nomination as prime minister, Stepashin was best known for
masterminding a horribly botched an attempt to rescue 1,500 hostages taken
by Chechen warlord Shamil Basaev in the southern Russian town of Budennovsk
in the summer of 1995. A raid organized by Stepashin--who was then director
of the Federal Security Service, the successor to the Soviet-era KGB--on the
hospital where the hostages were being held left over 100 civilians dead.

Federal lawmaker Yuli Rybakov, a Soviet-era dissident artist who represents
downtown St. Petersburg in the State Duma, said that Stepashin displayed an
alarming lack of leadership--and competence--in that crisis. Rybakov and
fellow Duma deputy and human rights advocate Sergei Kovalev traveled to
Budennovsk to help negotiate the hostages' release. When the two arrived,
they were told by Stepashin's deputies that their services were not needed.

"When Kovalev and I arrived, Stepashin's people told us to relax, to go to
bed," said Rybakov. "They said that they had the situation under control and
that negotiations were proceeding." Early the next morning, Stepashin's FSB
forces stormed the hospital, killing several of their own men as well as
dozens of hostages. Only the next day, after an angry Kovalev spoke to then
Prime Minister Viktor Chernomyrdin on the telephone, were the lawmakers
given authority to negotiate. The two eventually secured the hostages'
release after Rybakov and Kovalev agreed to exchange themselves for hundreds
of women and children while negotiations continued. "Stepashin betrayed us,"
said Rybakov. "He showed a dangerous lack of leadership in Budennovsk. We
could have resolved that crisis without bloodshed."

The Budennovsk hostage crisis came in the midst of Russia's disastrous war
against the breakaway republic of Chechnya--a war which has become
Stepashin's albatross.

As head of Russia's security services, Stepashin initially tried to secretly
arm the local opposition to Chechen President Dzhokhar Dudaev. In November
1994 a covert operation to topple Dudaev was bungled, and fifty-eight
Russian soldiers ended up as Chechen hostages--with Stepashin and other
Kremlin officials disavowing them. Together with other top security and
military officials--including former Defense Minister Pavel Grachev and
former chief of Kremlin security Aleksandr Korzhakov--Stepashin later
persuaded Yeltsin to launch a full-scale war, which ultimately claimed tens
of thousands of civilian lives and left that republic devastated.

But while Russian liberals are quick to tag Grachev and Korzhakov as members
of the odious "party of war," many tend to let Stepashin off the hook.
"Stepashin will never be able to erase or escape the shame of his role in
the war in Chechnya," said Ruslan Linkov, press secretary to slain federal
lawmaker Galina Starovoitova and chairman of the St. Petersburg branch of
Democratic Russia. "But if you look at his entire career, the positives
outweigh the negatives."

A YELTSIN LOYALIST
The one constant in Stepashin's career over the past decade is a fierce
loyalty to President Boris Yeltsin. Many suspect that the president plans to
use his newly anointed favorite general to spearhead a crackdown against the
Kremlin's communist opponents--with hard-won civil liberties and the
niceties of the democratic process also falling victim. "Stepashin is
definitely not a Communist, but I also can't say he is a democrat," said
local lawmaker Mikhail Amosov, leader of the Yabloko faction in the
Legislative Assembly.

In a televised address following Stepashin's appointment on May 12, Yeltsin
spoke vaguely of "harsh" and "unpopular" measures Stepashin would be
carrying out to deal with the "unstable" situation. On the same day,
Stepashin said at a government meeting, "We have only one goal today: to
advance with clear and tough market reforms." Such talk has politicians
wondering if Yeltsin isn't planning to sacrifice democracy to push through
economic reforms with authoritarian methods, along the lines of former
Chilean president Augusto Pinochet. "Stepashin is no Pinochet," said
Rybakov. "Yeltsin may want him to be but this isn't Stepashin's style."

Born to a military family at the Soviet military base of Port Arthur--which
is today Lushun, China--Stepashin joined the Soviet Interior Ministry in the
1970s, working first as a political officer and later teaching at the
Leningrad police academy, eventually earning a doctorate in history. During
perestroika, Stepashin entered politics, aligning himself with Leningrad's
ascendant new democrats. In 1990, he won a seat in the Russian Supreme
Soviet, taking advantage of the same anticommunist wave that propelled such
first-generation democrats as Starovoitova and former St. Petersburg Mayor
Anatoly Sobchak into the national spotlight. In the legislature, Stepashin
joined Yeltsin and Starovoitova in the Democratic Russia faction, a loose
grouping of Soviet-era liberals which eventually elected Yeltsin
parliamentary speaker.

Stepashin was tapped to head the parliament's national security committee,
and during the attempted coup of August 1991--which ultimately landed
Yeltsin in the Kremlin--Stepashin played a major role in organizing the
parliament's defense. Two years later, in October 1993, Stepashin
enthusiastically backed Yeltsin's bloody dissolution of that same
parliament--of which he was still a member--which had by then turned on the
president. In 1994, Yeltsin awarded Stepashin for his loyalty, naming him
head of the Federal Counterintelligence Service (FSK), which in 1995 was
renamed Federal Security Service (FSB). At Stepashin's request, Yeltsin,
rather than reforming and downsizing that organization, instead restored
many of its KGB-era powers.

Stepashin was sacked as FSB chief in 1995 after the Budyonnovsk debacle. He
returned to government in 1997 as justice minister and oversaw the transfer
of the prisons system from the Interior Ministry to the Justice Ministry--a
practice in keeping with European human rights standards.

A CONDITIONAL CORRUPTION FIGHTER
In April 1998, Stepashin was named interior minister, earning a reputation
as a tough talker, vowing to "destroy" bandits running kidnapping rackets in
the North Caucuses. He also initiated a crackdown against corrupt regional
leaders. Across Russia's far-flung provinces, over the past year teams of
Interior Ministry "untouchables" loyal to Stepashin--and independent of
local law enforcement bodies--have been raiding regional governments, with
prominent officials being arrested in Voronezh, Magadan, Perm, Sverdlovsk
and Kursk. Late last year, Stepashin also launched a high-profile campaign,
called "Operation Whirlwind" in St. Petersburg, which won the moniker
"Russia's criminal capital" following the assassination of Duma deputy
Starovoitova on November 20. In February, Stepashin's campaign in his
hometown met with some success when local lawmaker Yuri Shutov, an close
ally of St. Petersburg Governor Vladimir Yakovlev, was arrested and charged
with a series of contract murders.

As interior minister, Stepashin's crime fighting zeal stopped at the Kremlin
walls. When Prosecutor General Yury Skuratov announced he had incriminating
evidence against members of Yeltsin's inner circle--some of it apparently
corroborated by Swiss Prosecutor General Carla del Ponte--Stepashin publicly
cast doubt on the allegations. When Skuratov issued a warrant for the arrest
of financier and Kremlin insider Boris Berezovsky, Stepashin announced that
he would ignore it.

Nevertheless, in a speech on May 17 to regional leaders in the Federation
Council, the upper house of the Russian parliament, Stepashin vowed to make
anticorruption a cornerstone of his cabinet's policy. "We must step up our
fight against crime in Russian business affairs, both in the state and
private sectors. The biggest brake on our development is theft," said
Stepashin. "Crime and corruption reduce to nothing our most noble
aspirations." However, given the hot seat he has now occupied, it is an open
question whether his anticorruption drive will get off the ground. 

*******

#8
Deputies Seen 'Indifferent' to Premier 

Moskovskiy Komsomolets
20 May 1999
[translation for personal use only]
Report by Marina Ozerova and Mariya Markina: "Dish of the Day With 
Salmon Sauce; Sergey Stepashin: 'I Am Not Pinochet!'" 

Yesterday the country got its latest prime minister 
and the Duma the opportunity to forget for at least a little while the 
threat of early dissolution. At 1320 hours Moscow time 297 deputies voted 
for Sergey Stepashin's candidacy. 

Through Yeltsin's capriciousness the procedure of confirming a premier has 
become a common business: As CPRF [Communist Party of the Russian 
Federation] leader Gennadiy Zyuganov stressed, this is the seventh time 
this year the deputies have done it. Three Kiriyenkos, two Chernomyrdins, 
one Primakov, and now Stepashin. In April the deputies swallowed 
Kiriyenko with enormous difficulty, choking and screwing up their eyes. 

In August they chewed on Chernomyrdin and spat him out. They ate Primakov 
in September with great appetite. They took Stepashin calmly, as the dish 
of the day: After all, you have to eat, don't you? 

>From the morning it was boringly clear to everyone that he would get in. 
Sergey Vadimovich once again brought with him the vice premier for social 
affairs, Valentina Matviyenko, and she instilled optimism in the people's 
representatives with her white-toothed smile and salmon-colored suit. 

Sergey Vadimovich himself did not say much. He said he would not allow 
extremism and made it clear: "I am not Pinochet, my name is Stepashin." 
He said he would be strict but fair with regard to violators of executive 
discipline, corrupt officials, and those who take capital abroad. With 
the skilled hand of a healer he touched all the deputies' "sores:" He 
promised the Communists not to overlook the military-industrial complex 
and to agree with the Agrarian Party members on the candidate for the 
post of agricultural vice premier. He interrupted the applause, repeating 
in a resolute voice the ritual phrase of the Duma supporters of a strong 
state about how "NATO has struck not so much Yugoslavia as Russia" and 
that some conclusions or other should unfailingly be drawn from this. It 
was all the way it should be in speeches of this kind when you have to 
please as many deputies as possible. 

In the process Stepashin suddenly became hoarse -- perhaps it was even 
from emotion, and that was touching. 

The deputies were calm and self-confident. From the questions put to the 
candidate for the post of premier it was very obvious that for them what 
was happening in the auditorium was not the resolution of a question of 
fundamental importance. "Stepashin? OK, Stepashin. There could be worse. 
And it doesn't really matter who it is as long as we can live in peace 
until the elections...." 

Without waiting for the speeches by the faction leaders, the deputies 
clustered like flies around the government box -- each wanted personally 
to tell the acting premier of his needs. "They're really swarming," 
speaker Seleznev muttered: He realized that this was one more good sign 
for Stepashin -- they recognized the new White House incumbent in him. 
The leaders spoke with no particular enthusiasm. The majority proceeded 
from the thesis formulated by Vladimir Ryzhkov: "The candidates' personal 
qualities and their programs come up against the absurdity of our 
political system" which is headed by a president with super-powers, poor 
morals, and poor health, so why bother? Only Vladimir Volfovich 
[Zhirinovskiy] dwelled on Sergey Vadimovich's personal qualities, 
discovering several positive ones all at once: First, he is not from the 
countryside, second his wife is a psychiatrist, third he himself is a 
teacher and a political worker.... Only the Liberal Democratic Party 
leader and Oleg Morozov, leader of the "Russia's Regions" group, 
announced en bloc voting for him.What next? Both from the rostrum and in 
the corridors Stepashin's new government was called a "provisional" one. 

But what time exactly it will be given is an open question. The main 
thing the deputies expect from Stepashin is a breathing space. The 
opportunity to engage peacefully in preparing for the elections and so 
their sole wish is that Stepashin should stay at least until the New 
Year. 

On the street outside the entrance to the State Duma unprecedented 
security measures had been in place since the morning: You could only 
approach the building by presenting a special pass and closer to lunch 
officials cleared "extraneous" cars from Okhotnyy Ryad. "That's a police 
state for you," some deputies grumbled. But deep inside their hearts, 
grown incredibly tired over the past week, they were almost indifferent 
to it. Even the composition of the new government does not perturb them 
as greatly as it used to. 

The president's representative in the Duma assessed the results of the 
vote on Stepashin's candidacy as "one more victory for the president." 
Only does the president need such a victory when the overwhelming 
majority of deputies representing their own voters are almost indifferent 
to who becomes prime minister? 

*******

#9
Two-Thirds of Russian Intend To Vote in Duma Elections 

MOSCOW, May 20 (Interfax) - Two thirds of Russians 
- 66% - intend to vote in the State Duma elections next December. One 
fifth - 21% - will not vote, and 13% have still not decided whether they 
will vote or not. The Public Opinion Fund told Interfax on Thursday that 
these are the findings of a poll of 1,500 respondents held on May 8 in 
Russia's urban and rural areas. Even though intentions are not deeds, the 
poll provides an insight into the plans of various population groups. 

Respondents who said they will vote in the elections include most of the 
supporters of Communist Party leader Gennady Zyuganov (83%), of Yabloko 
party leader Grigory Yavlinsky (79%), and of former Russian prime 
minister Yevgeny Primakov (79%); respondents having higher education 
(76%); Moscow and St. Petersburg residents (75%); and citizens older than 
50 (73%). 

*******

#10
Moscow Times
May 22, 1999 
Economy Loses Forward Momentum 
By Igor Semenenko
Staff Writer

Russia's surprising if mild recovery earlier this year has already started to 
run out of steam. 

With the stimulatory effects of the ruble devaluation gradually evaporating, 
a brief improvement of industrial growth has ground to a halt after cresting 
in March, when output finally returned to 1997 levels. 

In April, industrial output edged up 1.5 percent on a yearly basis, but this 
was flat month-on-month seasonally adjusted. 

Gross domestic product contracted 4 percent in the first quarter of the year, 
the State Statistics Committee reported at the beginning of May. 

Even short-term prospects look poor, economists said. Aggregate output could 
decline in response to weak domestic demand and the stimulus provided by a 
weak ruble will wear off. 

"Devaluation effects will dwindle down to nothing by June," said Mikhail 
Delyagin, director of the Institute of Globalization, a left-leaning economic 
think tank. 

Real household incomes dropped 30 percent on average, the Higher School for 
Economics recently warned in a report to the government. 

Although output grew earlier this year, it did so mostly in response to the 
drop in demand for imported goods, priced out of the market by devaluation. 
Without any increase in aggregate demand, the feeble initial burst of life in 
February and March, was not sustainable. 

Even the growth that did occur was scattered and confined to a few sectors. 

"More than 50 percent of growth related to semi-finished products," said 
Vladimir Mau, head of the government's Working Center for Economic Reform. 
"Investment demand made up for 20 percent and end consumption accounted for 
only 30 percent of output growth." 

These figures underline the lack of progress Russia has made in its attempted 
transition toward a market economy, where satisfying consumer demand is a 
major goal. Instead, the quasi-Soviet policies of some members of former 
Prime Minister Yevgeny Primakov's Cabinet wrenched the nation's economy back 
toward the past. 

"Growth in recent months centered on preferential support to agriculture and 
heavy industry," said Yevgeny Gavrilenkov, deputy director of the Bureau of 
Economic Analysis. 

However, such a supply side emphasis cannot provide the basis for sustainable 
economic revival. 

"Only an increase in demand can give impetus to long-term growth," 
Gavrilenkov said. 

For example, the automobile industry was almost flat on a yearly basis 
despite the competitive edge local carmakers were gifted by the drop in the 
ruble against the dollar, he added. 

Even though Russia's automobile industry increased output by 4.2 percent in 
April, those figures masked a turn away from production aimed at satisfying 
market demand. 

Production of buses, for which governments are the biggest customers, jumped 
a hefty 40.7 percent. Meanwhile, trucks edged up 6.1 percent while production 
of sedans declined 6.3 percent. 

"This is a typical example of Primakov's set of economic choices," 
Gavrilenkov said. 

Those priorities had done little to inspire confidence on the ground. 

Some 49 percent of top-level managers expected output to stay flat through 
August, while 38 percent of them hoped production would rise, according to a 
recent report by the State Statistics Committee. 

The political turmoil that has followed Primakov's ouster is unlikely to 
improve output or expectations. 

"This is already in the past," said Delyagin regarding the State Statistics 
Committee report. "Positive expectations were ruined by the dismissal of 
Primakov's government." 

Little change for the better is expected from new Prime Minister Sergei 
Stepashin. Confirmed in office Wednesday, Stepashin possesses neither an 
economic background nor practical managerial experience. 

"To expect reforms from this Cabinet is hopeless," Yegor Gaidar said. 

Speaking at a Thursday evening meeting of Russia's Democratic Choice 
political party, Gaidar - acting prime minister in 1991 and 1992 - said that 
the Stepashin government will be "a caretaker government," to some extent. 

The one major benefit the new government inherited from the old is higher oil 
prices, which have helped boost Russia's exports and foreign exchange 
reserves. 

Russia's trade surplus amounted to $6.2 billion in the first quarter of 1999, 
sharply up from $200 million for the same period last year. 

Russia's exports were down 15.5 percent but imports declined sharply 48.9 
percent. 

In first quarter of 1999, Russia's net imports of hard currency amounted to 
$1.82 billion, up 30 percent from fourth quarter of 1998. 

*******

#11
The Electronic Telegraph (UK)
22 May 1999
[for personal use only] 
KLA kills 'Russian volunteer'
By Marcus Warren in Moscow 

THE parading of a body the Kosovo Liberation Army claimed was a Russian 
officer killed in Kosovo provided a fresh clue yesterday to the fate of 
hundreds of Russians who volunteered to fight in the Balkans.

Russian television showed pictures of KLA guerrillas rifling the pockets of 
the soldier and finding ID papers belonging to Lt Vitaly Bulakh in addition 
to a wad of 100-rouble notes. The dead man, allegedly one of a group of 13 
Serbs killed in fighting in the forests of Kosovo last week, was dressed in 
Yugoslav uniform and carried Yugoslav call-up papers.

Russia's Ministry for Emergencies admitted that a Lt Vitaly Bulakh had served 
as one of its unit commanders but said he had been discharged two years ago. 
The Foreign Ministry dismissed KLA claims that its forces had killed a 
Russian officer as a "provocation" aimed at undermining Moscow's efforts at 
mediating an end to the conflict.

A KLA officer, speaking on Russian television, hailed the officer's death as 
evidence that Russian volunteers or mercenaries were carrying out atrocities 
against civilians in Kosovo. He said: "We now have documents which prove what 
we were saying a year ago - the Russian military is taking part in ethnic 
cleansing and the war against the Albanian civil population." 

Hundreds of young Russians volunteered to fight alongside their "Serb 
brothers" when Nato launched its air strikes against Yugoslavia two months 
ago. But until yesterday there had been few confirmed sightings of Russians 
in the Balkans and no reports of any being killed in action.

According to one veteran many of those who have reached Yugoslavia will end 
up committing war crimes. His experience of the battlefields of Bosnia and 
Croatia in 1993 left Georgy Kokunko convinced that any Russians deployed with 
the Serbs would probably be used as paramilitaries to terrorise civilians.

*******

#12
Russia: Flight of Capital Decreases 

MOSCOW, May 20 (Interfax-FIA) - The unfounded 
transfer of funds by Russian companies to offshore zones in April 
decreased by more than $700 million compared to March, a top Central Bank 
official told Interfax Thursday. Viktor Melnikov, the deputy Central Bank 
chairman in charge of currency regulation and control, said that 
transfers of foreign exchange to offshore zones increased from $800 
million in January to $1 billion in March. This trend was halted by 
Central Bank measures taken at the end of March and beginning of April, 
he said. "I think that our actions in regulating the currency market 
resulted in a limited demand for hard currency, which made it possible to 
keep the ruble relatively firm," Melnikov said. He said that the Central 
Bank has succeeded in disproving in theory and practice the view that 
currency controls "stifle the market economy." "In our concrete 
circumstances this assertion does not correspond to reality at all. 

According to statistics, purchases of forex to import goods in April 
decreased by 14% compared to March, while imports decreased by only 2%. 

This shows that we succeeded in cutting off fraudulent imports, which are 
in essence simply theft of forex," Melnikov said. The Central Bank's 
currency regulations do not contradict article eight of the International 
Monetary Fund charter, which regulates convertibility of currency on 
current payments, Melnikov said. "The IMF allows violations of this 
article if the violation is temporary and forced, and does not create 
advantages for some forex market participants over others," Melnikov 
said. 

*******