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Johnson's Russia List


May 28, 1999    
This Date's Issues: 3309 3310    

Johnson's Russia List
28 May 1999

[Note from David Johnson:
1. Argumenty i Fakty: Russian Paper Counts Cost of Having President.
2. Moscow Times: Jonas Bernstein, NEWS ANALYSIS: Is Belarus Union Yeltsin's 
'Milosevic Model'? 

3. Itar-Tass: 28,000 Homeless Children Walk Moscow Streets.
4. Yuri Luryi: New book "Sparks of Liberty: An Insider's Memoir of Radio 
Liberty" by Gene Sosin.

5. Argumenty i Fakty: Nemtsov Writes About "The Seven" Russian Oligarchs.
6. AP: Russia Blasts US on Missile Defense.
7. Financial Times (UK): John Thornhill, Aksyenenko has much to play for.
8. The Economist: A Russian shuffle.
9. Argumenty i Fakty: Chubays Views Primakov Premiership.
10. Ira Straus: Chernomyrdin vs. Clinton.]


Russian Paper Counts Cost of Having President 

Argumenty i Fakty, No. 970
25 May 1999
[translation for personal use only]
Unattributed article in the "Details" column: "How 
Much Does The President Cost"; first paragraph is a reader's letter 

I read in your newspaper recently about how much 
the State Duma deputies cost. But why don't you write how much money from 
the budget is spent on the president? Or is it safer to write about 
deputies? Oleg Ivanovich, from Vladivostok. 

The budget earmarks R657,328,300 a year for the "functioning" of the 
president, which is about R55 million a month. "The functioning" consists 
of "the upkeep of the president" (his salary and representation and 
hospitality costs), "support of his activity" (that is, the maintenance 
of his residences), "the upkeep of the presidential administration" (the 
costs of keeping the head and his deputies, the costs of the office and 
its expenses) "the upkeep of the administrative office" and other expenses. 

The Russian president's official salary is R12,000 a month. The budget 
plans for nearly R14,000, apparently if he earns a bonus. But hospitality 
costs are 10 times higher than the salary. This is only natural: the 
president must look impressive (like nowadays). Also, Boris Nikolayevich 
has his guard, of course. There are at least 44 bodyguards around him at 
any time. 

Yeltsin's residences cost R16 million annually. The main residence is, 
naturally, in the Kremlin. There are 75 staff to serve the premises of 
the state of head. In addition, Yeltsin has two out-of-town dachas, 
Gorki-9 and Rus. The staff there is not as numerous, only 37 people. 
Apart from this, state dachas in Sochi and on Valday are used by the 
country's top officials for work and holidays. 

The presidential administration, which employs about 2,000 people, is 
allocated R471 million a year. Its management costs the taxpayers R1.5 
million a year. 

The administrative office (300 staff) gets R167,320,000. According to 
the Audit Chamber, however, over R7 billion pass through the 
administrative office in a year. But this is money they "earn 
independently". And R1,342,000 from the budget are allocated to "other 
expenses not included in the listed expenses".


Moscow Times
May 28, 1999 
NEWS ANALYSIS: Is Belarus Union Yeltsin's 'Milosevic Model'? 
By Jonas Bernstein
Staff Writer

In the wake of the Duma's failed impeachment vote, NTV television's "Itogi" 
politics program gathered the leaders of the parliamentary factions for a 
post-mortem. Anchorman Yevgeny Kiselyov challenged and cross-examined each 
party leader's assertions, and party leaders argued hotly with each other. 

At least, such was the case until Yabloko leader Grigory Yavlinsky started 
talking about the need for a peaceful transfer of power to a new president in 
2000, comments he concluded with a warning against any political "adventure" 
involving union with Belarus. Neither NTV's Kiselyov nor anyone else touched 
those cryptic comments f but all knew what Yavlinsky meant. 

Russia and Belarus have been flirting for years with reunification as a 
single nation. The idea is broadly popular in both countries. But 
increasingly, media and politicians are warning that unification may be the 
Trojan horse intended to carry President Boris Yeltsin into the Kremlin 
beyond 2000. 

The idea is simple: As the 2000 election approaches, Yeltsin f who is 
constitutionally prohibited from a third term f pushes through unification 
with Belarus. The resulting new country will have a new constitution f and 
Yeltsin as the new head of state. 

"I think there are good grounds to think this could happen," said Sergei 
Markov, head of the Institute of Political Studies. "Yeltsin would like to 
use [unification] to keep power. It would also be in [Belarussian President 
Alexander] Lukashenko's interests, because it would allow him to enter the 
Russian political scene." 

Markov refers to this as the "Milosevic model." 

In 1997, Slobodan Milosevic had served two terms as Serbian president and was 
constitutionally proscribed from seeking a third. Instead, he was elected 
president of the Federal Republic of Yugoslavia f made up of Serbia and 
Montenegro f by the Yugoslav parliament. Previously, this had been a 
ceremonial role. But Milosevic, thanks to his Socialist Party's domination of 
Serbia, was able to siphon power out of Serbia and into the federation. 

For months now, Russian media and politicians have been saying the Kremlin is 
studying this very scenario. 

"Yeltsin will make a sudden change in his policy," Vladimir Zhirinovsky told 
the Spanish newspaper El Pais in February. "In the summer, we will unite with 
Belarus, and by January 2000 he will carry out a referendum with the 
question: 'Do you again want to live in a great nation?' The people, 
naturally, will answer, 'Yes!' A new country, a new constitution and the 
right for Yeltsin to rule for another four years f given such a scenario, the 
people will support him." 

The nationalist leader of the Liberal Democratic Party suffers from an 
obvious credibility gap. But Zhirinovsky also plays an excellent fool to 
Yeltsin's Macbeth f few have had better accuracy at predicting the 
president's actions. Weeks before Yevgeny Primakov was ousted, for example, 
Zhirinovsky stated flatly that the prime minister would be sacked in mid-May. 

Alarms are being raised not just by Zhirinovsky and Yavlinsky (who both say 
they support the idea of a Russia-Belarus union, just not necessarily the 
Kremlin's execution of it). 

"Our president views only himself in the capacity of his successor. He will 
under no circumstances relinquish power voluntarily," wrote 

Anton Surikov, the outspoken press secretary of former First Deputy Prime 
Minister Yury Maslyukov, in the newspaper Versiya last week. "Attempts to 
unite Russia and Belarus before the presidential elections in 2000 should be 
watched closely." 

Pavel Voshchanov, a former Kremlin press secretary, says the Kremlin inner 
circle f which faces corruption allegations in the parliament, the media and 
the Prosecutor General's Office f might not even have a choice in the matter. 

"Power cannot be allowed to slip from their hands," Voshchanov wrote last 
week in Delovoi Vtornik. "Moscow will force the creation of a single state 
with Belarus. Lukashenko is still not a competitor for Yeltsin, and thus is 
fully suitable for the role of the 'right hand,' who does all the dirty work. 
And this also suits Yeltsin and his inner circle: They need formal power, 
because that is the guarantee of safety." 

Lukashenko and Yeltsin first signed an agreement on uniting their two 
countries in April 1997. Then, this December, they committed to having a 
complete treaty ready for signing by the summer of 1999. 

Similar commitments have been made and ignored. But on May 2, Vladimir Putin 
f head of the Federal Security Service, the main KGB successor agency, and 
also secretary of the Kremlin Security Council f announced in a television 
interview that both Yeltsin and Lukashenko want "maximum unification." 

Putin went further, saying that Russia's president would head the new state 
and the Belarus president would be its vice president. "There are very few 
opponents of a unified state here," Putin said, just "different opinions" on 
the precise means and "phases" of unification. 

Lukashenko has said he agrees the Russian president should be the senior 
partner. According to Yavlinsky, the younger Lukashenko believes he can 
"outplay" the doddering Yeltsin and end up tsar of the Kremlin.Another who 
may see a Russia-Belarus Union as a way of staying in power is tycoon Boris 
Berezovsky. Last Friday, the newspaper Kommersant wrote that Berezovsky, 
whose clout is tied to his insider status at Yeltsin's Kremlin, might be 
looking for "exotic variants for prolonging Yeltsin's authority f by means, 
for example, of a union of Russia with Belarus." 

The devil, of course, is in the details. Andrei Kortunov, director of the 
Russian Science Foundation, a political think tank, doubts the Kremlin is 
strong and united enough to pull it off. 

"If Yeltsin is healthy, the economy is on the rise, the State Duma is 
appeased, the parliamentary December elections go as they should, there is a 
functioning team in the Kremlin and Belarus is ready to be absorbed, then 
maybe it will happen," Kortunov said. 

Impending union with Belarus could be a pretext for postponing Russian 
elections. Or the Russian presidential vote could go forward, provided the 
Kremlin can plug in a weak and loyal underling f someone who, as in the 
Milosevic model, will sit docile as real power is transferred from Russia to 

More exotically, the Kremlin and Lukashenko could hold a joint 
Russian-Belarussian referendum to adopt a new supranational constitution, 
perhaps with the two leaders as caretakers. They could even set up and staff 
their own supranational election commission to count the votes. In a narrow, 
technical sense, this might even be "legal." 

Any of these scenarios would appear less malign, both at home and abroad, 
than simply canceling the presidential vote, or declaring a state of 


28,000 Homeless Children Walk Moscow Streets.

MOSCOW, May 27 (Itar-Tass) -- There are 28,000 homeless children in Moscow 
with 9,000 of them drug addicts, deputy of the Moscow city Duma Yevgeny 
Balashov told here a press conference on Thursday. The press conference was 
devoted to "Prevention of Juvenile Delinquency." 

According to statistics, the homeless children mainly come to Moscow from 
Ukraine, Moldavia and Azerbaijan. There is a steady upward tendency in the 
number of HIV-infected homeless children and teenagers. Head of the 
Reformatory Center for under-age law- breakers Yuri Lapshin said that almost 
all the incoming children had health problems. Many of them have to be 
treated for infectious diseases. 

Many of the homeless children are intellectually gifted, and leave the 
well-off children of the same age behind in maturity. Lapshin explained it by 
the fact that those children had to adapt themselves to the difficult life 
circumstances, and therefore grew up ahead of time. There are many 
outstanding personalities among them, Lapshin noted. 


Date: Thu, 27 May 1999 
From: Yuri Luryi <> 
Subject: To "The David Johnson's Review of Books":-)

Dear David,

I 'd like to call your attention and that of all the subscribers
to your very popular, informative and useful List to a new book:
"Sparks of Liberty: An Insider's Memoir of Radio Liberty" by Gene Sosin,
whom some of you must know.

He was a key executive for 33 years at Radio Liberty (Svoboda) and
Radio Free Europe/RL when the two stations merged. The book has just been
published by Penn State University Press.

I remember, as if it were yesterday, how enthusiastic many of
us were. In a state where all information was subjected to heavy
censorship, we consumed SVOBODA broadcasts like oxygen in a room with
no air.

It wasn't easy to listen because of the special jamming
machines which were activated during the Cold War. It was
also dangerous, because the KGB considered listening to Radio SVOBODA a
crime, as anti-soviet propaganda, under Article 70 of the Soviet Criminal

The book covers the entire spectrum of RL's activity from the time
Gene Sosin joined a few months before Stalin's death up to the present day,
when they are broadcasting from Prague.

The book combines documentary material, some of it never before
published, which he preserved over the years, plus his perspective as an
insider who worked both in New York and Munich.

When I phoned Gene and praised the book, it turned out that I was
in good company. "Sparks" has been praised by Zbignew Brzezinski,
Robert V. Daniels, Maurice Friedberg and Marshall Shulman as an
important contribution to the history of the Cold War as well as
entertaining and readable.

For lovers of Soviet era anekdoty, Gene Sosin has included some of his
favorites as epigraphs to each chapter: Like the guy in Moscow who calls
up the KGB to inform them that he lost his pet parrot and swears that he does
not share the bird's opinions.

I strongly recommend this book to your subscribers.
Best wishes to you!
Yuri Luryi


Nemtsov Writes About "The Seven" Russian Oligarchs 

Argumenty i Fakty, No. 970
25 May 1999
[translation for personal use only]
Report by Boris Nemtsov, 
former Russian deputy prime minister, from the "Under the Carpet" column: 
"Against Whom Are the Oligarchs United?"; first paragraph is a letter 
from a reader 

A group of rich Russian businessmen helped Boris 
Yeltsin greatly during the 1996 presidential elections. Later [Communist 
leader] Gennadiy Zyuganov called them "the rule of seven bankers". They 
were Boris Berezovskiy, Vladimir Potanin, Aleksandr Smolenskiy, Mikhail 
Khodorkovskiy, Vladimir Gusinskiy, Vagit Alekperov and Mikhail Fridman. 
At the time they were united against the Communist Party. What are they 
doing now? (V.Bykov, Samara) 

Boris Nemtsov, former first deputy prime minister in the governments of 
Viktor Chernomyrdin and Sergey Kiriyenko, writes: 
All the above people have retained their influence in politics and 
business, except Aleksandr Smolenskiy (SBS-Agro), Vladimir Potanin 
(Oneksimbank) and Mikhail Khodorkovskiy (Menatep). Last year's financial 
crisis had crushing consequences for them. 

However, early this year "the seven" again joined forces against Prime 
Minister Yevgeniy Primakov. His pro-Communist views were at odds with 
their interests. We know the outcome. But intestine strife among 
oligarchs is a common occurrence too. For instance, vendetta is raging 
now between Vladimir Gusinskiy (the Most group) and Boris Berezovskiy 
over influence on the formation of the new government. Relations are 
quite strained between Boris Berezovskiy and Vagit Alekperov over oil 

Meanwhile, there is the eighth oligarch and the most influential one - the 
of Gazprom, Rem Vyakhirev. He took part in almost all behind-the-scenes 
wars and has become very close with Vladimir Gusinskiy over information 
business. They are co-owners of the NTV company, both are friends with 
[Moscow mayor] Yuriy Luzhkov and both are lobbying for keeping Deputy 
Prime Minister Vladimir Bulgak in government. 

The oligarchs are unlikely to join forces again before next year's 
presidential elections. More likely, each of them will be backing his own 


Russia Blasts US on Missile Defense
May 27, 1999

MOSCOW (AP) -- Russia today accused the U.S. Congress of threatening world 
stability and encouraging another nuclear arms race with its efforts to 
develop an anti-ballistic missile system.

``This step is a direct challenge to strategic stability and international 
safety,'' the Foreign Ministry said in a statement.

On May 21, the U.S. House of Representatives sent President Bill Clinton a 
Senate-modified bill that would commit the United States to a limited 
anti-ballistic missile defense system. Clinton is expected to sign it.

Moscow is fiercely against the plan, which it says would violate the 
U.S.-Soviet 1972 Anti-Ballistic Missile treaty. That agreement blocks either 
country from developing an anti-missile defense system.

Though the United States says the latest proposal is aimed at defending U.S. 
soil from rogue states like North Korea, the Russian Foreign Ministry said 
Congress' move ``cannot be judged as anything but another step aimed at 
undermining the ABM treaty.''

``The United States, with its actions concerning ABM, is stimulating the 
creation and proliferation in the world of more sophisticated rockets, 
capable of starting a new arms race,'' the ministry said.

China has expressed similar concerns about the U.S. proposal.


Financial Times (UK)
May 28 1999 
[for personal use only]
RUSSIA: Aksyenenko has much to play for
By John Thornhill in Moscow

Russia's newspapers have given a rough reception to Nikolai Aksyenenko, the 
former railway boss who has been appointed first deputy prime minister. But 
some politicians are already suggesting that if Mr Aksyenenko does well in 
his current position he could emerge as a possible presidential contender.

The tall, grey-haired, 50-year-old railway engineer was little known before 
his appointment to the second most senior job in the government earlier this 
month, and he appears ill at ease with the media.

His gruff insistence that he will take responsibility for running the economy 
has antagonised other members of the cabinet. He already appears to have 
soured relations with Mikhail Zadornov, the respected acting finance 
minister, who has still not confirmed whether he will accept a government 
post as the other first deputy prime minister.

After graduating from the Novosibirsk Institute of Railways, Mr Aksyenenko 
spent most of his working life in the transport system, rising to become 
communications minister in 1997. In that role he shook up railway management 
and increased the network's cash flow by slashing the level of barter.

Boris Fyodorov, the former finance minister, said that Mr Aksyenenko had 
proved to be a relatively efficient manager by current Russian standards and 
could play a useful role in government.

"You need one person at the top level who is a Soviet-type businessman able 
to deal with the governors, the miners and the managers of huge companies," 
he said.

"But it is absolutely clear that this government is a compromise between 
different forces who do not want anything radical to happen. They want a 
holding pattern until the parliamentary elections when [President Boris] 
Yeltsin will decide who is the inheritor of the throne."

Some political observers suggest that Mr Aksyenenko may be selected by the 
presidential entourage to be that candidate. Local newspapers have already 
started referring to the Yeltsin Family, with a capital F, as the prime force 
behind Mr Aksyenenko's rapid rise to power.

This family includes Tatyana Dyachenko, Mr Yeltsin's daughter, Boris 
Berezovsky, the head of the Logovaz business empire, and Valentin Yumashev, a 
trusted presidential aide who was the ghost writer for the president's 

But behind them all stands Roman Abramovich, the secretive head of the 
Sibneft oil group, who is thought to control the family's finances. No 
Russian newspaper has yet been able to publish his photograph, let alone 
interview him.

Parts of the Russian media have grown almost hysterical in their attacks on 
Mr Aksyenenko, highlighting his close connections with Mr Abramovich in 
particular. They have also exposed some of the obscure financial transactions 
between the railway network and various offshore companies.

But some politicians suggest the influence of the oligarchs, and especially 
that of Mr Berezovsky, has been wildly overstated. The media associated with 
Mr Berezovsky have been keen to emphasise his involvement in affairs to 
highlight his influence. The Communist press has also exaggerated his role to 
drum up political support for the opposition. 


The Economist
May 29, 1999
[for personal use only]
A Russian shuffle 
M O S C O W 

FOR all the fuss surrounding its birth, Russia’s new government, under the 
prime ministership of Sergei Stepashin, looks depressingly like its previous 
one, led by Yevgeny Primakov. There is little new blood, just a few drops
of the old sort. It is a bit younger, perhaps a bit more coherent. The 
biggest difference is not its composition, but its allegiance. The Primakov 
government was forced on President Boris Yeltsin by his opponents. This one 
is rather more his own work. 

That offers a little hope, but not much. The big test will be the economy. 
Here, the good news is that Yuri Maslyukov, a throwback to the days of Soviet 
central planning, is out. His replacement as chief economics minister is one 
of the most financially literate members of the previous government, Mikhail 
Zadornov. That should help keep Russia from bankruptcy in the coming months: 
as finance minister, Mr Zadornov had the job of sweet-talking international 
lenders, with some success, into bailing Russia out again. 

But this means less in practice than on paper. Mr Maslyukov’s malign 
influence had largely waned this year. And Russia’s biggest economic problems 
are about corruption, monopolies and lawlessness rather than the niceties of 
loan agreements. Here Mr Zadornov will be matched, and probably outgunned, by 
Nikolai Aksyonenko, who has been made a first-deputy prime minister, having 
previously run the railways ministry. In most countries that would be a 
backwater, but in Russia it is a near-monopoly and thus a river of lucrative, 
even lethal, intrigue; Mr Aksyonenko’s chauffeur was recently shot. Now Mr 
Aksyonenko, who almost secured the prime ministership, will be in charge of 
Russia’s industry, which he tellingly describes as the “real” economy. 

Mild causes of cheer are the sacking of Gennady Kulik from the notoriously 
ill-run agriculture ministry, of the erratic Sergei Generalov from fuel and 
energy, and of Georgy Boos, the head of the tax service, which combines 
ruthlessness and unfairness in equal measure. But getting rid of bad 
ministers is one thing; giving their replacements the backing they need to do 
the right thing is another. 

This is likely to be the new government’s greatest weakness. Mr Yeltsin’s 
presidential court, despite its surge of new confidence, has two factions. 
One is headed by Boris Berezovsky, a tycoon with a cavalier attitude to 
constitutional proprieties and a close relationship with the president’s 
daughter. The other looks to Anatoly Chubais, an ambitious and able reformer, 
much hated because of his past links with big money. 

This does not look like a strong, clear-headed government. Its early days 
have been marked by confusion, as its two camps battled over jobs and turf. 
Mr Stepashin’s limited authority was humiliatingly exposed when he failed to 
block Mr Aksyonenko’s appointment. His first choice for Mr Zadornov’s job, an 
influential parliamentarian called Alexander Zhukov, was also rejected. So 
the government is messy, Mr Yeltsin’s health is still shaky, and Russia is 
about to default on another chunk of debt. In short, it is business as usual. 


Chubays Views Primakov Premiership 

Argumenty i Fakty, No. 20
May 1999
[translation for personal use only]
Interview with Anatoliy Chubays by Argumenty I Fakty editor in chief; 
place and date not given: "I Am Starting To Live" 

[Argumenty i Fakty] Leaving the government and finding a new 
job has obviously been good for your health. The last time we met, 
you looked very tired. 
[Chubays] Things are much easier now. I am beginning to 
live... I have time to spend with the people close to me. My 
father was in the military and throughout their life my parents 
(they are very old now) moved from city to city 19 times. I 
recently took them to the region where they were born and spent 
their youth. It is in the Moscow region of Sokol. We spent a long 
time looking for their old house but never found it. But they did 
find the school, which by some miracle had survived and is still in 
operation. Mama did not recognize anything, but suddenly she saw a 
store: "Oy, I bought myself a blue dress here!" 

There Are No Alternatives to the Reforms 

[Argumenty i Fakty] How do you assess the situation in the 
country today? 
[Chubays] I would begin with an assessment of what has 
happened since 17 August. The crisis has fundamentally changed the 
economic and political situation in the country. Representatives of 
the opposition came to the government at that time. But how did 
this actually turn out? 
The first obvious plus is that the political situation in the 
country has stabilized for a certain amount of time. Everyone will 
recall that the standoff in the society at the end of August 
threatened to turn critical. And the fact is that the government 
managed to avoid this aggravation. On the large scale, this 
pertains not only to politics but also to economics. After all, 
what did everyone expect from the Communist Maslyukov and the 
Agrarian Kulik and what were they discussing in complete seriousness 
during August-September? Universal nationalization, the 
introduction of state price control, mass pumping of money into the 
economy--the entire list of blatant nonsense. None of these big 
mistakes were made. 
Hence follows the second conclusion, which is perhaps even 
more important than the first. The type of economic of policy in 
the country has not changed radically because it is PREDETERMINED. 
A clear confirmation of my words is what Gennadiy Andreyevich 
Zyuganov said about the results of the negotiations between 
Maslyukov and the IMF. He said approximately this: It is very 
important that the agreement has been reached and international 
institutions support the course of the reforms. 
If the government, relying on different political forces than 
it did before 17 August, has not accomplished any revolution--it 
means that there is no alternative course! All discussion of 
support for the real sector is absolute nonsense. The RAO [Russian 
Joint Stock Company] YeES is in the real sector, and I know that in 
the first quarter it was to have received R2.5 billion from the 
approved budget to pay for products produced. But in fact we 
received R676 million. 
Yes, the government has changed, but in essence the direction 
in which it was going has remained the same. But now Zyuganov and 
his party support it. Something very important lies behind this 
fact. Paradoxical as it may seem, with all of our mistakes, flaws, 
and blunders during the course of the reforms, nonetheless a 
framework has been created in the country which predetermines the 
only healthy type of economic policy. 
Russia has one fundamental difference from the Poles, 
Bulgarians, Czechs, Slovaks, Balts, and our other former comrades in 
the socialist camp. In their countries in recent years the systems 
have turned several times, first in one direction and then another 
while things were getting straightened out. For us, the first such 
turn did not take place until August 1998. With gigantic risks and 
trepidation in the society, we have now taken a turn from which we 
will never be able to turn back. And we have not turned back. It 
is now apparent to the country's entire political class, and not 
just the "vile antipopular reformers," Gaydar and Chubays, that the 
"alternative policy" with nationalization and price control is 
simply not effective, it is stupidity which we cannot allow 
Apparently the second big test of the system for durability 
will be the year 2000. What will happen to the country under a new 
president? Will he risk turning Russia once again? I think that 
the experience of the past half year will be another serious 
argument and another degree of protection from backsliding. 
[Argumenty i Fakty] The huge and heavy ship that is called 
Russia has been turning with difficulty for almost 10 years now, 
feeling its way toward a true course. Has it now finally entered 
the main channel? 
[Chubays] That is all correct. Even those forces whose 
banners contained an appeal to turn our ship in the opposite 
direction had enough sense not to do so. In this respect we must 
give their due to the former vice premiers Maslyukov and Kulik, 
although I do not have good relations with them. 
There were undoubtedly negative aspects in the activity of 
Primakov's government as well. Precisely because of the 
peculiarities of the way it was formed, it was unable to do anything 
fundamentally new, anything distinct. Name even one government 
decision during the past seven to eight months that appreciably 
advanced the economy. We have not even experienced impulses for 
forward motion. 

On Primakov's Merits 

[Argumenty i Fakty] Primakov deliberately preserved the 
situation. He himself admitted that he considered the main thing to 
be to prevent stupid things like nationalization. 
[Chubays] Yes, but in addition the government had to give the 
economy a new push. Under Primakov and his left-wing deputies, this 
could not happen by definition. 
We have passed through the most important stage. We have 
escaped the risk of a catastrophe, but that is not enough. Can we 
go on like this until the next elections? I am not sure. Fatigue 
is accumulating in the economy. The same characteristics that three 
or four months ago were considered an achievement are a minus today. 
For example, inflation. What were we all afraid of? They would 
start pumping out money and there would be hyperinflation... That 
did not happen. The March inflation was 2.8 percent, and April--3 
percent. If we compare these figures with the figures from the 
fourth quarter, it is the classical situation. But if we compare 
them with March (0.6 percent) and April (0.4 percent) of last year, 
then an inflation rate of 3 percent per month is fantastically high! 
This means that everyday every citizen in the country, from the old 
lady in the Siberian village to the minister, loses money out of his 
pocket and his standard of living decreases. For at one time we 
managed to reduce the annual inflation to 11 percent. And now we 
have 3 percent per month! 
[Argumenty i Fakty] Primakov has been praised for the fact 
that production increased while he was in office. 
[Chubays] That is true. To be more precise, the increase 
during the first quarter of this year as compared to the fourth 
quarter of last year was 2 percent. You might accuse me of 
subjectivism, but that is a completely inevitable, powerful positive 
result of the collapse of 17 August. The crisis brought about a 
threefold devaluation of the ruble. The first consequence was a 
gigantic additional impetus for exporters. As far as I am 
concerned, I feel that the RAO YeES is receiving three times as much 
for the same kilowatt-hour without doing anything and without 
additional costs. All of our oil workers, gas workers, and 
metallurgists, all of our raw material exporters receive three times 
as much for the same products. 
The second consequence is a drop in imports. During the first 
quarter their volume decreased by 49 percent as compared to the 
first quarter of last year! What did this do? The gigantic 
released demand for domestic goods, according to estimates, went 
from $10 billion to $15 billion. This demand affected various 
sectors but above all the food industry, processing, and 
agriculture. They received fantastic additional resources. Moscow, 
St. Petersburg, Yekaterinburg, and other large cities had covered up 
to 60 percent of their food market with imports. Suddenly they were 
sharply decreased. But the demand remained. 
The beneficial consequences of the crisis are not to 
Primakov's credit. This is to the "credit" of the devaluation of 
the ruble. Yes, we paid for it with a severe blow to our banking 
system, from which we have still not recovered. But this blow 
became a gigantic plus for production. It received positive stimuli 
for development. Not because the government had pursued a policy in 
support of the real sector. Nothing serious happened on that 
[Argumenty i Fakty] In your opinion, had the time of the 
economic reforms actually come by the time of Primakov's 
[Chubays] If nothing had happened for three more months or a 
half year, of course, there would have been no catastrophe. 
Moreover, now it is quite impossible to carry out any revolution in 
economic policy. Yes, it is possible, for example, to reach another 
agreement with the IMF and try to get $7 billion instead of $3.7 
billion. But no radical changes have been made. We have the 
presidential elections just ahead. 
[Argumenty i Fakty] Do you feel that the government's 
resignation is inevitable? 
[Chubays] My position on that score was more restrained than 
that of people in the President's Administration with whom I 
communicated. I was not enthusiastic about that decision. 
[Argumenty i Fakty] Why? 
[Chubays] Perhaps because I have a good idea of the mechanism 
for the functioning of the government and the consequences of its 
resignation. It is not simply changing names--Ivanov to Sidorov. 
It entails many difficult organizational ruptures. No matter how 
you look at it, for two or three months--at best--there actually is 
no government in the country. Hundreds of necessary daily decisions 
are put off until later. 

What Started the President? 

[Argumenty i Fakty] What was the root of the constant friction 
between the President and Primakov? 
[Chubays] Primakov achieved a certain stabilization in the 
country. But at what cost? At the cost of reconciliation with the 
Communists. And this was something the President could not do. 
Therein lies our dramatic dilemma. It is impossible really to move 
forward--the Communists stand in the way. This means that we must 
overcome their resistance and take them on. But the CPRF [Communist 
Party of the Russian Federation] has millions of people behind it 
and they vote. Hence this constant standoff that is splitting the 
[Argumenty i Fakty] The presidential side is not beyond 
reproach either. Yeltsin has almost no strong aides left. The head 
of the administration could not even speak distinctly at the 
Federation Council. 
[Chubays] With regard to your evaluation of Voloshin, I do not 
agree with you. The mistake was that he is not a master of public 
speaking, especially to such an audience as the Federation Council. 
That is not his, Voloshin's, genre. 
But essentially the policy pursued by the head of the 
administration is absolutely correct. It is consistent and clear. 
Voloshin is a stern person. Those same governors are beginning to 
perceive him, as it were, under "working" conditions. But when he 
is in a crowd surrounded by television cameras and journalists--he 
gets lost. 
[Argumenty i Fakty] You have to have the ability to speak in 
[Chubays] Every person has his strong points and weak 


Date: Thu, 27 May 1999 
From: (Ira Straus)
Subject: Chernomyrdin vs. Clinton

Chernomyrdin: I won't let America use me
By Ira Straus

Bill Clinton has carelessly boasted that we are succeeding in using Russia 
for our purposes in Kosovo. Inevitably, Russia, in the person of Viktor 
Chernomyrdin, has responded that it is not going to let itself be used. 

A more foolish approach could hardly be imagined. Using our friends in a 
former enemy country for purposes contrary to what had been thought of as 
their own national interest - and doing this prior to the consolidation of 
better relations -- amounts to abusing them, leaving them hanging out to dry, 
and driving the country back in the arms of those who see us as enemies. We 
are losing Russia, for the sake of trying to get too much from it too soon.

Clinton wrote carelessly in the New York Times (May 16) - no doubt trying to 
satisfy some domestic critics, without realizing that he was endangering a 
far more important constituency abroad - that "Russia is now helping to work 
out a way for Belgrade to meet our conditions". Inevitably Chernomyrdin 
responded - he had no other choice - that Russia does not share, indeed it 
opposes, the goal of "a NATO protectorate over Kosovo," which is what he, 
like most people, sees as the meaning of NATO's conditions. (Washington Post, 
May 27) The unavoidable effect was to emphasize the element of opposition 
between NATO's goals and Russia's - something that is damaging both to 
NATO-Russia relations and to the immediate prospects for getting help from 
Russia in ending the war.

When Chernomyrdin was named Russia's special envoy on the Balkans, it was 
first and foremost for the purpose of ending this war, and thereby beginning 
to repair the damage that the war was doing to Russian-American relations and 
to Russian attitudes toward Americans. Yeltsin and Chernomyrdin pushed aside 
the main Russian hardliner, Yevgeniy Primakov, even though Primakov expressed 
the mainstream Russian reaction to NATO's war. Chernomyrdin laid the ground 
for a joint Russia-West statement on basic terms for ending the war, issued 
by the G-8. His hardline critics warned that NATO was going to use him as a 
mere messenger-boy for Western ultimatums to Serbia. If Chernomyrdin is now 
simply used for the sake of Western war aims - and if meanwhile his country's 
signature on the G-8 statement is used for moral cover for the West to 
continue the war without a serious push to reach a diplomatic settlement - 
then we will not only undermine what little political standing he has to help 
us; we will re-empower our enemies in Moscow. 

Western policy is already validating the argument of the Russian nationalists 
whom Chernomyrdin has been trying to stem - the argument that the only way 
that Russia can get us to pay attention to its concerns and to moderate our 
policy is by being nasty to us; and that it does not work to be nice to the 
West, since the West simply pockets the friendly words and then ignores 
Russia as a country that it does not have to worry about. The policy of 
getting taken seriously by being nasty includes a number of serious elements: 
developing a geostrategic doctrine based on adversarial struggle vis-à-vis 
the West, supporting the strengthening of powers hostile to the West, 
propagating the belief that the West is a threat against which countries must 
unite, whipping up sentiment against America with language that is not only 
angry and ugly but which also supports the theory of America as a threat and 
enemy to the rest of the world, and rebuilding the Russian military. Since 
Russian cannot afford a good military, this last point has some dangerous 
corollaries: careless Russian arms and nuclear sales as a military 
fund-raiser, increased dependence on nuclear weapons, and increased reliance 
on hair-trigger nuclear postures and first-strike threats at a time when 
nuclear control structures are already in trouble. All of these ominous 
policies follow inexorably from one simple assumption: that the West is once 
again a geopolitical and military adversary. These policies are already 
underway, fortunately most of them only in fledgling form. As yet we are 
reinforcing them, although, if we use a lot of wisdom, we might still be able 
to head them off.

Chernomyrdin, in his response to Clinton, did not just object to being used; 
he attacked the complacency that is allowing the West to feel that it has 
Russia in its pocket and can from now on just continue the war and ignore 
Russian objections: "So I deem it necessary to say that, unless the raids 
stop soon, I shall advise Russia's president to suspend Russian participation 
in the negotiation process … and use Russia's veto as the United Nations 
debates a resolution on Yugoslavia." (Washington Post, May 27) He added that: 
"On this, we shall find understanding from great powers such as China and 
India. Of this, I am sure." His recent visit to Beijing gives him every 
reason to be sure of it; in fact, it is the Chinese strategy of an 
anti-hegemonic coalition which he, like his more eager predecessor Primakov, 
would be serving.

Primakov had aimed to do real damage to our global interests, by organizing a 
balancing alliance with China and India against America. China was 
interested, even if India was not at first. His threats were taken seriously 
for a time, since people knew that these were his deeply-held views, based on 
his attacks on the Westernizers for the previous half-dozen years. The West, 
sad to say, paid more attention to this than to any of the warnings from its 
friends in those previous half-dozen years; NATO proceeded to negotiate a 
consultative Joint Council with Russia in 1997 which, at least on the 
surface, was far stronger than anyone expected. Yeltsin made sure that 
Primakov finally signed the agreement with NATO, and the threats of an 
anti-Western triangle receded. However, NATO policies, ever more responsive 
to the anxieties of a handful of anti-Russian critics within the West than to 
the anxieties of 150 million Russians inside Russia, served to downgrade the 
Joint Council. The war in Yugoslavia, which was started in a way that broke 
in several ways the agreement that set up the Joint Council with Russia, and 
which followed close on the heels of NATO expansion, revived the idea of the 
Russia-China-India triangle with a vengeance. Primakov was making real 
progress on the triangle before his firing; our actions had validated the 
feelings on all sides that America/NATO was becoming too arrogant and 
careless in its use of power. 

Chernomyrdin has now threatened to use the Russia-China-India triangle for 
specific damage against the West in its plans on Yugoslavia. Once again, it 
is a threat from a moderate who does not really want to carry out such a 
policy the way Primakov did. Will we take it seriously, as we did with 
Primakov, finding the wisdom to defuse the situation somewhat as in 1997? If 
we do not, we may pocket a few minor gains, but nothing of any substance or 
any lasting value; while we will have a lasting effect in convincing Russians 
that we will never take their assertions of interest or even threats 
seriously as long as they are not being made by a leader hostile enough to 
sound convincing.

With the appointment of Chernomyrdin and then Stepashin, Russia has, for the 
third time in this decade, thrown out its hardliners and replaced them with 
essentially Westernistic figures; albeit this time under conditions in which 
no Russian politician can afford to express unqualifiedly pro-Western 
sentiments any longer. And for the third time in this decade, the West is 
responding by asking, not what can it do to solidify Russia in a pro-Western 
regime, but rather, what can it get out of the pro-Western leadership. It has 
been more interested in pocketing the limited, temporary advantages that it 
can get out of pro-Western leaders than in gaining a sustainably pro-Western 
Russia, which itself would be worth several times more than all the other 
gains combined. 

"How can they help us in Yugoslavia? What can they give us? What are they 
worth to us?" These are the questions we have been asking, as if an ally is 
to be judged for its worth solely on a day-by-day basis, not bothering to 
count the value of having the country as an ally for the long run. The entire 
idea of a "honeymoon" is that first partners should experience good times 
together, and after that they will be able to count on one another for help 
through hard times. American policy has approached Russia in the exact 
opposite way since 1991: it judges Russia by how much Russia can give to the 
West now, not by its intention of becoming a Western country and partner and 
its need for validation in that course. Russia in fact sailed off on a 
unilateral honeymoon with the West in 1991, only to find that the West did 
not come along and was watching from the shore while Russia went through the 
painful throes of shock therapy and truncation of empire.

>From 1989 to 1994, Russia gave us tremendous gifts: The abandonment of its 
entire former empire, most of it immediately falling into the Western sphere 
of infuence. A military withdrawal from its previously unchallenged forward 
positions in Central Europe, in Eastern Europe, and even in the western 
former Soviet Union. An abandonment of most of its longstanding anti-Western 
clients around the world. It gave us all of this essentially for free; no 
concessions were given from our side, and none were demanded. It did this, in 
the name of assuming that we are longer its enemy, so that advantages for us 
would no longer have to be viewed as concessions, losses, or sources of 
danger for Russia. We pocketed the advantages without finding anything 
significant to do for Russia's vital interests in return. We did give some 
money, but we did not realize that money was not enough: if anything it was 
an adding insult to injury, suggesting that Russia was simply being bought 
off and that its leaders were simply selling out to the enemy. We kept on 
asking what more Russia might do for us, to prove its worth as a partner and 
ally, not realizing that it was our turn to prove our worth to Russia as a 
partner and ally.

The West has not bothered to make a significant effort to change the 
fundamental structures of adversarial relations, inherited from the Cold War 
-- the stand-off of nuclear arsenals that are built and maintained for mutual 
deterrence through mutual annihilation; the conventional militaries that are 
essentially separate and measures themselves against one another (a situation 
that was moderated by the end of the Cold War and the belated beginning of 
the Partnership for Peace, but has revived to a dangerous extent with the 
expansion of NATO while keeping Russia out of doors, followed in rapid-fire 
succession by the attack of NATO on Yugoslavia); the Western seeking of 
geopolitical positions all around the borders of the former Soviet Union, and 
now coming in closer toward the borders of Russia itself, and too too 
frequently doing this in a form and with a purpose (often clearly implicit, 
sometimes even explicit) that is at Russia's expense. The continuation of 
these structures and behaviors has meant that Russians have belatedly come to 
realize that their enormous concessions to the West from 1989 to 1994 really 
were strategic concessions -- losses of positions of advantage and interest 
for Russia, and enhancement of risks to Russia. 

In these conditions, for the West to use its friends in Russia for the sake 
of getting even more Western advantages means simply to destroy its friends 
politically and drive Russia back into an adversarial relation.

At this late date, the West needs to validate the moderates in Russia by 
meeting them halfway. We are back in a situation where we need détente. If we 
do some wise détente and end the war in Yugoslavia, we might next find some 
things to do for Russian vital interests (such as joining Russia's side in 
supporting the moderates in northern Afghanistan against Taliban, supporting 
the relatively democratic Armenia against the dictatorial Azerbaijan, 
supporting the more democratic regimes in Central Asia rather than the more 
authoritarian and dictatorial ones which happen to be anti-Russian). On this 
basis, we could still find a way to rebuilt a spirit of partnership. And then 
we might have a restrained honeymoon, not as enthusiastic as the Russian one 
of 1991, but more sustainable because based finally on a two-way street.



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