Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


May 31, 1999    
This Date's Issues: 3314    

Johnson's Russia List
31 May 1999

[Note from David Johnson:
1. Itar-Tass: Russia to Observe International Day without Smoking.
2. AP: Yeltsin Fills Cabinet Seats.
3. Reuters: Gorbachev denounces Yeltsin as a spent force.
4. AP: Early Results: Zhirinovsky Losing.
5. Financial Times (UK): John Lloyd, Liberals band together for Just Cause.
6. David Woodruff: RE: 3312-Richmond/Barter.
7. Mark Jones: Re: Hough/3313 (Menatep).
8. Arch Getty: Re: 3312-Wheeler/Visas.
9. Patrick van de Coevering: coverage of SORM. (FSB and internet).
10. Anthony D'Agostino: On Revisionism. (Warren/3300).
11. Edwin Dolan: Moscow Seminar Invitation.
12. AFP: Russia's oldest town, Novgorod, gears up for 1,140th birthday.
13. Reuters: Russia Says To Scrap Latvian Radar Site By Autumn.
14. Moskovskiy Komsomolets: Economist Martin Shakkum on Danger of 
Economy's Collapse.

15. The Onion: Society For Creative Anachronism Seizes Control Of 

16. The Times (UK): Anna Blundy, "They are the cheery marketplace 


Russia to Observe International Day without Smoking.

MOSCOW, May 30 (Itar-Tass) - Russia will observe the International Day
without Smoking on May 31. 

A total of 47 percent of the world's men and 12 percent of women are
smokers, according to information of the World Health Organization (WHO).
Over 30 percent of European adults smoke every day. The smoking rate is on
the rise in 15 out of the 36 countries of Europe, mostly in Central and
Eastern Europe. The rate is on decline in Western and Northern Europe. 

Smoking is a real epidemics in Russia. A total of 74 percent of males aging
30-35 and 14 percent of women of the same age smoke. The index is 30-47
percent (for men) and 25-27 percent (for women) in the age group younger
than 30. Men start smoking five years earlier than women do. 

In the words of experts, the number of male smokers with higher education
is ten percent less than the number of male smokers with secondary
education. The main factor for women is the income. The number of smoking
women is twice higher in families with a high or low income as compared to
families with a medium income. The geographic position is another catalyst.
There are more smokers in the east and the north as compared to the west
and the south. 

According to the Russian Sanitary-Epidemiological Service, 36 percent of
male death cases and 7 percent of female death cases have the smoking
reason. The number of people who die of lung diseases and cancer is on the
rise in Russia. 


Yeltsin Fills Cabinet Seats
May 31, 1999

MOSCOW (AP) -- President Boris Yeltsin and his prime minister filled
several key seats today in Russia's new Cabinet after days of political

Yeltsin named Viktor Khristenko to be first deputy prime minister and made
Ilya Klebanov a deputy prime minister. Khristenko, a former deputy finance
minister, is expected to have broad economic responsibilities. Klebanov is
a relative unknown who has served as a regional political leader.

Mikhail Zadornov, who quit last week as first deputy prime minister after
only a few days on the job, was named Russia's liaison with the
International Monetary Fund and other foreign lenders.

Yeltsin dismissed the previous government earlier this month, and faced
down an impeachment vote in the Communist-dominated parliament. But the
political turmoil didn't end with Sergei Stepashin's appointment as the new
prime minister.

The quarrels began anew last week when the president turned down several of
the prime minister's Cabinet nominees.

Russian media said today that the latest political disputes were the
handiwork of a small group of Yeltsin's advisers, including his daughter
Tatiana Dyachenko, controversial business mogul Boris Berezovsky and
Berezovsky's close associate Roman Abramovich, who heads one of Russia's
largest oil companies, Sibneft.

The group has reportedly sought to place loyalists to key positions.

Zadornov's resignation last week was attributed to the feuding over Cabinet
positions. Zadornov's decision to quit was seen as a blow to the new prime

``The Kremlin has flicked the prime minister on the nose so many times
during the last week that anyone else in his place would have already
slammed the door,'' the daily Moskovsky Komsomolets said today.

Stepashin's inability to form the Cabinet of his choosing has already
raised questions about how much authority he will have. Russian politicians
and the media have seen the political battles as an attempt by Yeltsin's
inner circle to maintain tight control.

``You can't win confidence in Russia's democracy if everyone understands
that the government controls nothing and is being manipulated by
string-pullers from behind the scenes,'' former acting Prime Minister Yegor
Gaidar was quoted today as saying by the liberal daily Vremya.

After meeting with Yeltsin today in the Kremlin, Stepashin said on
television that the new Cabinet had been formed and ``there won't be any
more abrupt resignations.''

Stepashin said that he and Yeltsin also discussed prospects for getting new
loans from the International Monetary Fund, which has set out conditions
that must be approved by parliament. Stepashin said he was optimistic, but
the lower house is reluctant to approve the bills.


Gorbachev denounces Yeltsin as a spent force

CANBERRA, May 31 (Reuters) - Former Soviet president Mikhail Gorbachev on
Monday denounced Russian leader Boris Yeltsin as a spent force. 

``The president is a spent force, politically, physically, intellectually,
and he still rules despite the fact that he doesn't have any support to
speak of,'' Gorbachev, in Australia on a speaking tour, said through an

``Protesters in the street of Russia carry the portrait of Josef Stalin.
Well, we probably have a Stalin -- a Stalin of a different kind.'' 

Yeltsin, who stared down impeachment proceedings earlier this month, has
been heavily criticised for sacking Prime Minister Yevgeny Primakov and his

Gorbachev was critical of a system which he said saw all the political
power vested in the president and made the parliament ``virtually impotent.'' 

``The cabinet that had the support, that had a lot of popularity and trust
of the people, that cabinet and that prime minister were fired,'' he said
during his keynote speech to Australia's Centre for Democratic Institutions. 

Gorbachev, leader of the Soviet Union from 1985 until its collapse in 1991,
is credited with restructuring socialism and helping end four decades of
tension with the United States. 

He said the what was happening now was a backwards step from the progress
made under his policy of perestroika (restructuring). 

``Governments are replaced at the whim of the president and they come and
go, one after another, becoming scapegoats. This is how the Primakov
government was dismissed,'' Gorbachev said. 

He said opinion polls showed most Russians did not support Yeltsin and
wanted him to step down. 

However, for the sake of democratic process, Gorbachev said he would prefer
to see Yeltsin stay as president until the presidential election next year. 

``It is very important for us, for the first time in Russian history, to
have a change in government, a change of Russia's rulers, in a democratic
and constitutional way,'' he said. 


Early Results: Zhirinovsky Losing
May 31, 1999

MOSCOW (AP) -- Controversial lawmaker Vladimir Zhirinovsky was trounced in
his bid for the governorship of the southwestern Russian province of
Belgorod, preliminary election results showed Monday.

Zhirinovsky, whose popularity has been in decline, was a distant third
behind incumbent Gov. Yevgeny Savchenko and chief regional auditor Mikhail
Beskhmelnitsyn, the Interfax news agency said.

The report said Savchenko won an outright majority with 53 percent of the
vote, making a second-round runoff unnecessary.

Zhirinovsky -- who took just 17 percent -- was one of five candidates in an
election that had been scheduled for December, but was moved up to May by
Russia's Supreme Court in a ruling last Wednesday.

Savchenko asked for the early vote, a move that Zhirinovsky supporters
claimed was designed to deny their candidate enough time to build popular

Zhirinovsky announced Monday he would challenge the results, claiming that
the vote was riddled with irregularities, the ITAR-Tass news agency reported.

``Pre-election meetings were wrecked, unequal conditions were set up on
television,'' Zhirinovsky was quoted as saying. Several party members
planned to stay behind in Belgorod to challenge the election results
``first in the region and then, if there are no results, in the Supreme

Zhirinovsky, leader of the ultranationalist Liberal Democratic Party, is
famous for his outrageous performances in the State Duma, parliament's
lower house, and his scraps with opponents.

The regional election drew national attention because of Zhirinovsky's
campaign for the governorship, which also brings a place in the upper house
of parliament, the Federation Council.

If Zhirinovsky had won the governor's chair, it would have secured him a
political platform regardless of whether his party gets enough votes to
hold seats in the coming parliamentary elections, scheduled for December.

Zhirinovsky's popularity has waned since the 1995 parliamentary election.
Despite his harsh criticism of President Boris Yeltsin, Zhirinovsky and his
party consistently support the president in key votes in parliament. Most
people who have supported Zhirinovsky are staunch Yeltsin opponents.

The southwestern Belgorod region of 1.4 million is part of the so-called
Red Belt, dominated by Communist sympathizers.

Zhirinovsky's campaign was seen as a dry-run for future races, including a
possible presidential bid in 2000. But his poor showing does not augur well
for his party's chances in the December parliamentary elections or his
chances in next year's presidential poll.


Financial Times (UK)
31 May 1999
[for personal use only]
RUSSIA: Liberals band together for Just Cause
'Don't blame us for troubles', say founders of new political party launched 
in Moscow at the weekend. John Lloyd reports

The battered forces of Russian liberalism came together at the weekend in 
Moscow to prepare for the parliamentary elections at the end of this year and 
the presidential elections in the middle of the next.

The people who had formed the basis of Russia's ruling class for much of the 
1990s, were worrying that they might not clear the necessary 5 per cent of 
the vote to have a presence in parliament.

On the platform of Moscow's stately Hall of Columns next to the Bolshoi 
Theatre was Yegor Gaidar, former prime minister; Anatoly Chubais, one-time 
head of privatisation and closest adviser to President Boris Yeltsin; and the 
former deputy prime ministers Boris Nemtsov and Boris Fyodorov.

But, on the admission of Mr Nemtsov, leader of the new party "Just Cause", 
"Many people in this country believe still in two myths: that everything was 
wonderful before the collapse of the Soviet Union and that the people to 
blame for all the troubles since are mainly on this platform."

This epitomises the struggle the party will have to re-establish itself as a 
new force in the country.

Though conscious that they had been the sacrificial lambs for the first, 
painful period of reform, the Just Cause leaders reflected with satisfaction 
that the movement itself had now merged a dozen parties and movements 
including Mr Gaidar's Democratic Choice of Russia, Mr Fyodorov's Forward 
Russia and the Common Cause movement of Irina Khakamada, the only prominent 
woman among the liberal politicians.

They were boosted after their launch congress by a statement from Sergei 
Kiriyenko, also a former prime minister, that his New Force movement would be 
happy to be a partner, though not a full member, of Just Cause.

Beyond that, Mr Nemtsov said that alliances could be made with the Our Home 
is Russia movement led in parliament by Vladimir Ryzhkov and even with the 
Yabloko party of Grigory Yavlinsky - the most powerful of the liberal groups, 
though also the vehicle of Mr Yavlinsky's presidential ambitions and one 
traditionally wary of liberals when they were in government.

In a sign that they were prepared to be innovative in their campaigning, Ms 
Khakamada said in her speech to the Congress that it was "important for us to 
work closely with people and to listen to them" - a tactic largely unknown so 
far, and a sign that Just Cause is prepared to do anything to claw its way 
back from the wilderness.

Whatever their ambitions in parliament however, the new movement was careful 
to steer away from presenting its own presidential candidate, preferring to 
throw its weight behind Sergei Stepashin, the new prime minister.

Mr Chubais - who had told senior officials in the US government that he had 
been instrumental in persuading Mr Yeltsin to appoint Mr Stepashin with a 
view to his becoming the next president - said that the prime minister was 
"presidential material, and that would soon become clear to everyone". 


Date: Sun, 30 May 1999
From: David Woodruff <>
Subject: RE: 3312-Richmond/Barter

Thanks to Yale Richmond for his engaging description of informal trade
between Soviet enterprises. He is right to note that Soviet industry, like
Russian industry today, did a lot of barter. However, it is wrong to
suggest that there is a continuity between these practices. Russian barter
today has entirely different causes and an entirely different organization
than that characteristic of the Soviet economy. In fact, the share of
barter in Russian inter-industrial trade was lower in 1992 than it has been
at any point since. The discontinuity is easy to see sociologically--the
people organizing the barter trade today are not Soviet-era tolkachi, but
young people who were barely in college, if that, when Mikhail Gorbachev
took power. Anyone interested in contrasts between Soviet-era and
contemporary barter might want to take a look at my new book: Money Unmade:
Barter and the Fate of Russian Capitalism, just out from Cornell University
Press, which has extensive discussions of both topics.


From: "Mark Jones" <>
Subject: Re: Hough/3313
Date: Sun, 30 May 1999

Hough and others are right to focus on the role of Menatep. Misha
Khodorkovsky (I know him well) is the most interesting of the oligarchs. I
devote nearly a chapter to him in my book, <Russia in the Emergent World
System> (forthcoming, Pluto Press). Menatep was a polyphagous entity in
whose evolution was inscribed not just the dynamics of transition, but their
decay and eventual dismissal from history. Menatep stands as a concrete
historical palindrome signifying a movement which returns to its origin the
more it accelerates away (this idea is Kohodorkovsky's own, and was conveyed
to me at a smoked-fish supper at a private supper in a particularly
mosquito-infested stretch of forest north of Moscow, in 1991. The way he put
it was: "Sometimes I worry that ripping off the dark forces is like tying a
brick to an elastic band: the further you throw it, the harder it smashes
you back in the face.").

Not a single one of the versions presented so far in JRL come anywhere near
the truth, although the Komsomol-Likud connection is the closest isomorphic

I have asked my publisher if I may transmit the relevant chapter to JRL, the
Russia list of record. I may have to take a raincheck: the book isn't due
out until September. But never mind. This story has plenty of mileage left
in it.


Date: Sun, 30 May 1999
Subject: Re: 3312-Wheeler/Visas
From: "Arch Getty" <>

I was surprised to read Mrs. Wheeler's assertion that the visa situation at
our embassy in Moscow had not changed. It is perfectly obvious to recent
Russian applicants that it has.

And it is obvious to me as well. Beginning this past fall, individual
Russian applicants to the University of California at Riverside's Intensive
English program were routinely rejected. This has never happened before.
Over the years, dozens of individual Russians had been admitted for
short-term English courses at this university.

As always, the applicants had all the necessary paperwork, including I-20
forms and financial guarantees. They had solid jobs in Russia (one works
for the Moscow Duma) and ties to stable families there. All were given
identical, word-for-word non-explanations of their rejections:

1. Better for you to study English in Russia [!];
2. You do not have solid ties to Russia that would lead us to believe you
will return home.

In two cases, I had provided letters of recommendation on University
letterhead, and in one case (for a family friend) had provided a personal
financial guarantee. I was thus nonplussed to discover that a Moscow
consulate official had said that I did not exist and that my financial
guarantee was a fake.

J. Arch Getty
Professor, UC Riverside


Date: Sun, 31 May 1998 10:54:33 +0400
From: "Patrick van de Coevering" <>
Organization: Modern University for the Humanities
Subject: coverage of SORM

After the appearance of two articles on the Volgograd Internet provider
refusing to give the FSB access to his clients, this seems the right
place to ask reporters covering Russia:

If this company/man was the first to stand against the FSB, does this
mean that all other internetproviders in Russia, especially Moscow, are
already 'infected'?
Isn't the only way to have any influence on this, to report it, in
Russia and especially in the West? Shouldn't this scare the last
foreigners out of Russia, leave alone prevent new ones from entering? Or
maybe i am wrong and is it maybe not all bad??

I hope this message reaches everybody intact.

kind regards,
Patrick van de Coevering
International Department
Modern University for the Humanities


Date: Sun, 30 May 1999 
From: "Anthony D'Agostino" <>
Subject: On Revisionism

In the course of my speculations on what the Russian intellectuals will
make of the legacy of Primakov [JRL3299], I noted the existence of a mood
of international Revisionism (dissatisfaction with the current map). I
quoted Michael Lind's thought that "Germany is intent on reshaping Europe"
and his observation that "the US too is a revisionist power." I also
suggested that British Revisionist (dissatisfied with the current
orthodoxy) historians had "provided an intellectual underpinning" for this
outlook. Tony Blair's intensely Revisionist Chicago speech struck me as at
least in part a product of this mood. 

Marcus Warren [JRL 3300] insists that the Blair government is "profoundly
ahistorical" and believes that history began in 1997. Well, I will take
his word for it, since I really did not mean to suggest that historians
were whispering in his ear. 

In fact ideas do not work that way. Unfortunately, leaders' intellectual
formation is usually complete before they exercise power, and their ideas
affect their actions in ways not easily measured. Ramsay MacDonald read
G.P. Gooch on the origins of the Great War and took with him the conviction
that Germany had been wronged by the peace and therefore deserved to be
Revisionist. This may have had some influence on his foreign policy.
Lately the Churchillian orthodoxy about Appeasement has been challenged by
Revisionist historians to the point where, as some say, Revisionism has
become the new orthodoxy. These controversial interpretations have been
reported in the press and thinking people are aware of a widespread view
that Britain made a terrible mistake to have opposed Germany in two world
wars. Some have even said that this bears on current attitudes toward the

Has Tony Blair breathed some of this air? I could not convince the skeptic
that he has. Yet I would not be surprised if Russian intellectuals should
consider him a champion of a new Revisionist Europe advancing up to the
limits of the Treaty of Brest Litovsk of 1918. 

AJP Taylor said that "men see the past when they peer into the future." It
is true enough that Cromwell never cared for balance in Europe. Maybe it
is a stupid idea that has to be revised. But I don't think so. 


Date: Mon, 31 May 1999
From: Edwin Dolan <>
Subject: Moscow Seminar Invitation


JUNE 8, AND 10.

Members of the Moscow business and academic communities are cordially invited 
to attend a two-day seminar, "The Economic Crises of Russia and Latin
American Emerging Markets: A comparative View." Admission is free, 
reservations are required.

The seminar is sponsored by the United States Information Agency (USIA),
the International Researches & Exchanges Board (IREX), and
the American Institute of Business and Economics (AIBEc) The seminar 
has been organized by joint efforts of Mikhail Noussinov and Timur
Turgenbaev, USIA alumni and small grants recipients, and IREX staff members.

The public portion of the seminar will consist of two joint presentations by
Dr. Werner Baer of University of Illinois and Dr. Edwin Dolan of American
Institute of
Business and Economics. The presentations will be given in English and will
take place in the National Hotel in Moscow, St. Petersburg Hall.

Dr. Baer is a world-renowned expert on emerging market economies,
especially Latin America. He holds Ph.D. in Economics from Harvard
University (1958). Dr. Baer is currently a Professor at the University of
Illinois, and has previously taught at Vanderbilt, Yale, and Harvard. At
the University of Illinois, Dr. Baer teaches courses in international
economics, the economics of Latin America, economic development, and
macroeconomics. His research focuses on the industrialization of Latin
America and its consequences, and, most recently, on the process of
privatization in Latin America and other emerging market economies. He has
served as a consultant to the World Bank, Ford Foundation, Brazilian
Planning Ministry, U.S. Information Agency, and U.S. State Department.
Prof. Baer has numerous honorary degrees and awards from Latin American
universities and governments. Prof. Baer is an outstanding lecturer; he
also holds campus-wide awards from students, recognizing his excellence in

Dr. Edwin G. Dolan is a recognized authority on Russian economy and an
influential member of the Moscow business community. He is President of
American Institute of Business and Economics, one of the top-rated
business schools in Moscow. Dr. Dolan holds Ph.D. in Economics
from Yale University. He has previously taught at Dartmouth College, the
University of Chicago, George Mason University, and Gettysburg College, in
the United States, and also at Moscow State University and the State
Financial Academy, in Russia. At AIBEc he teaches courses on
Macroeconomics and Money and Banking. Dr. Dolan
has also served as a regulatory economist at the U.S. Department of Justice
and the Interstate Commerce Commission, and has 
served as a senior economic advisor to the National Bank of Kazakhstan.
Dr. Dolan is the author of 3 best-seller economics textbooks. He is a frequent
editorial contributor to the Moscow Times.

The schedule of the seminar is as follows:

June 8, Tuesday
19:00 - 21:00 Presentation: Crisis and recovery in Brazil and Russia,
1998-1999. Origins of the crises: Budgetary policy, exchange rate policy,
foreign debt, Asian contagion, and other influences. Fixed exchange rates:
A stabilizing or destablizing factor for crisis-prone economies?
Relationship between domestic politics and macroeconomic policy. The role
of the IMF. Comparison of post-crisis recovery in the two countries.
21:00 - 21:30 Questions & Answers

June 10, Thursday
19:00 - 21:00 Presentation: What is Globalization? Globalization and
financial stability. Banking systems in Latin America and Russia:
structural weaknesses, vulnerability to global crises, methods of
restructuring. Positive and negative effects of Globalization in Latin
America and Russia.
21:00 - 21:30 Questions & Answers

The number of spaces is limited, so please register to attend the seminar
by sending your name, e-mail address, and your business or education
to Please indicate which seminar or seminars you plan to attend.

How to get there: The National Hotel is located at ul.Mokhovaya 15/1.
By Metro, go to Okhothy Ryad and exit to Tverskaya Ul.
The seminar will take place in the St.Petersburg Hall of the Hotel.


Russia's oldest town, Novgorod, gears up for 1,140th birthday

NOVGOROD, Russia, May 31 (AFP) - Novgorod, Russia's most ancient town and a
major centre of European civilisation in the Middle Ages, is busily
preparing to celebrate in style its 1,140th anniversary next month.

Renowned for its beautiful architecture and a school of fresco and icon
painting, officials hope the June 12-14 anniversary celebrations will boost
Novgorod's reputation as a tourist attraction.

Situated between Russia's most famous tourist destinations, Moscow and
Saint Petersburg, the northwestern region is visited annually by some
30,000 foreigners, mostly Spaniards, Italians, Germans and Americans, said
Yury Shubin, a local tourism official.

The celebrations will take place in a town that has been painstakingly
restored, notably around 40 churches and cathedrals some of which date back
to the 10th and 11th centuries and the Kremlin (fortress) built in 1044 on
the banks of the Volkhov River.

The leader of the Russian Orthodox Church, Patriarch Alexy II, is expected
to attend the festivities as well as Russia's new Prime Minister Sergei
Stepashin, cabinet ministers, Moscow mayor Yury Luzhkov, Russia's Kosovo
envoy Viktor Chernomyrdin and former Soviet leader Mikhail Gorbachev.

Novgorod, which the Russian parliament decided to rechristen with its
historical name Veliky Novgorod (Novgorod the Great in Russian), does not
only base its appeal on its historic status, its golden church cupolas and
the rustic charms of wooden-built homes.

Regional tourist officials also intend to develop hunting in the taiga
forests that cover around half of the Novgorod region. Hunters come here
each year from Italy and Germany to track lynx, bear, fox, elk, wolves and
wild boar.

Low hunting charges of around a hundred dollars a day make the region more
affordable than the West; the traditional end of day shot (or several) of
ice cold vodka and trip to a traditional Russian bath house are additional

Another of Novgorod's assets is that the town is home to one of the few
luxury hotels in Russia outside Moscow and Saint Petersburg, thanks to
Austrian investors attracted by the local authorities' policies.

Hit by last summer's economic crisis when the ruble lost 70 percent of its
value against the dollar, Russians are going abroad less and less -- 20
percent fewer travelling abroad in 1998 compared to 1997.

Like tourist agencies in the capital, Novgorod has sought to attract the
middle class which can no longer afford the luxury of expensive overseas


Russia Says To Scrap Latvian Radar Site By Autumn

RIGA, May 31, 1999 -- (Reuters) The remaining Russian soldiers in the
Baltic states may leave earlier than planned as work to close the
Soviet-era Skrunda early warning radar system looks set to end ahead of
schedule, a Russian army official said on Friday.

Skrunda is the last vestige of nearly 50 years of Soviet rule over the
three Baltic states, which began in 1940 when the Red Army marched across
the Latvian, Lithuanian and Estonian borders.

It was closed in September under an agreement between Moscow and Riga that
set a dismantling deadline of February 2000.

"The Russian Defense Ministry is putting in an effort to cut the
dismantling time short. We plan to have the work complete this autumn, I
would say October," Col. Alexandr Nikitin, a member of the joint commission
overseeing dismantling, told a news conference.

Latvia has had foreign soldiers -- Soviet, German or Russian -- on its soil
since the outbreak of World War II, when Moscow started sending troops to
the Baltics under agreements it forced on their governments.

The Red Army subsequently invaded the three states in 1940 and turned them
into Soviet republics. They were later overrun by Hitler's armies advancing
on Moscow only to fall back into the Soviet hands at the end of the war.

Russian troops formally withdrew from Latvia in 1994, three years after the
three Baltic states regained independence, but Moscow worked out a special
deal to lease the Skrunda radar station, one of three on its western flank,
for $5 million per year until August 31 1998.

Less than 100 Russian military personnel remain at Skrunda now from a
presence of around 400 prior to its closure. 


Economist on Danger of Economy's Collapse 

Moskovskiy Komsomolets
24 May 1999
[translation for personal use only]
Interview with Martin Shakkum, Doctor of Economic Sciences and 
President of Reform Fund, by Natalya Shipitsyna; place and date not 
given: "Martin Shakkum: Russia Is Living on Quasi-Money" 

The official reason for the dismissal of the 
Primakov Government was its...lack of economic foresight. The President 
accused Yevgeniy Maksimovich of solving minor tactical problems as they 
came up instead of acting in accordance with a comprehensive strategy. 
Now the ill-starred IMF loan is the main topic of discussion by 
economists and politicians of every persuasion. This suggests that our 
future is wholly dependent on the mood of Western financiers. If they 
give us the loan, we can stay afloat a little longer; if not, we might as 
well give up.... 
Clinical dependence always ends badly. Does Russia have a chance and a 
miracle cure? We asked Doctor of Economic Sciences Martin Shakkum, 
President of the Reform Fund, that question: 
[Shakkum] An effectively operating economy requires an economic policy that 
fits into a broader economic strategy. China has been undergoing reform 
for 21 years, and the end is not in sight. They have not started 
privatizing the enterprises yet: The state still controls all of the 
biggest monopolies. It is still too early to say whether this is good or 
bad, but the annual GDP growth rate in China is 10 percent, whereas the 
American rate is 3-4 percent. 
Russia does not have that kind of strategy yet. Yeltsin's original 
strategy--of building the market in a year by means of shock 
therapy--failed. We cannot hope for a miracle to improve our economic 
indicators at this time, but this could happen in the future. Of course, 
it can only happen in the absence of Yeltsin, responsible for the failed 
policy line--the policy line of self-destructive economics. 
[Shipitsyna] Are you saying that the country was and is being driven to
by Primakov and by Stepashin? 
[Shakkum] Primakov made a heroic effort, but he could not change the 
situation. The problem was the ideology of so-called democratic reform, 
suggesting that there was no need to build the market; it was enough to 
simply make that choice. It was as if it would spring up all by itself 
and start regulating itself: It would start consuming only what it needed 
and producing only what was needed. It would take care of the social 
sphere and science. The main thing was that it must not be disturbed, 
because the idea of regulation was a communist delusion. 
[Shipitsyna] Are you saying the market never worked? 
[Shakkum] Paradoxically, the transition to the market from an authoritarian 
economy managed by directives requires authoritarian directives. That is 
how it was done in China. In Russia, on the other hand, there was another 
revolution, a neo-Bolshevik revolution. All economic theories were 
secondary, and ideology became the main consideration. We have a 
quasi-market economy. The laws of the market do not work here. 
The network of commodity and stock exchanges--an essential attribute of 
any market--collapsed. The banking system failed. There is virtually no 
hard currency in the country: Quasi-money is being circulated--promissory 
notes and other surrogates. It is a complete mystery how we have managed 
to stay afloat for 10 years (since 1988). 
[Shipitsyna] Andrey Illarionov recently said that our chances are
Oil prices are creeping up, and this means that the government could pay its 
old debts without help from the West and even start investing earnings in 
the economy.... 
[Shakkum] That is simply naive. The choice of the raw material model as the 
strategic pattern of development for Russia is misguided and stupid. This 
is a genuine crime. Oil prices are extremely inconstant. World oil prices 
are set by OPEC, and we cannot expect anyone else to start playing by our 
rules. Besides this, we have to admit that the state does not have enough 
control over the operations of oil companies here. The income from the 
oil business ultimately belongs to the oil companies. 
[Shipitsyna] Still, you have to admit that the Primakov Government did 
stabilization, and even growth--expert estimates put the rate at 1-2 
[Shakkum] I have never said that the government accomplished nothing. Its 
actions were completely sound, but they were not part of a specific 
economic policy and could not lead anywhere over the long run. The 
government was taking care of current matters. It may have been better 
that the previous government. It may have been more national, more 
patriotic, and more receptive to public opinion, but it could not beat 
the oligarchs and was defeated by them. Any government serving the 
national interest, after all, is not on the side of oligarchy. We can 
only hope for a new economic policy after the replacement of the current 
President, the guarantor of the current policy. Yeltsin is unlikely to 
change the policy line he has been pursuing for eight years. This is not 
the time to expect major improvements, therefore. We can only hope to 
stay afloat. 
[Shipitsyna] Do you believe things could be even worse? 
[Shakkum] We are on the threshold of a chain reaction of economic collapse. 
According to the laws of economics, if the GDP declines by more than 
half, the economy is doomed. In Russia the GDP has decreased by 60 
percent during the years of reform. No country has ever experienced that 
kind of decline in the standard of living and in production at a time of 
reform. There is only one similar case--Germany in 1945, when its GDP 
decreased by 60 percent. The disaster there occurred after four years of 
war, but here it has taken place over eight years of peacetime reform. 
We are surviving only on the strength of our long-suffering population. 
It is also gradually entering the self-destructive phase too, however: 
When things get bad enough, our people spend the last of their money on 
vodka and sink into a drunken stupor. 
[Shipitsyna] Is it true that many cures for this syndrome have been
[Shakkum] Yes, but far from all of them are cure-alls. 
Only targeted federal programs can help us revive the economy and the 
agroindustrial complex today. No amount of private investment can save 
us, although it would help. Our fund has drawn up some "first-aid" 
programs, which essentially could serve as regional socioeconomic 
development programs (adapted to meet the needs of each specific region). 
We have even calculated the cost of the programs. They could be financed 
through the budget, the development budget, or funds under the 
government's special control. This is the strategy we propose. 
The programs focus on the need for the quick establishment of a huge 
number of small enterprises and the manufacture of equipment for them by 
our own machine-building complex (which would also mean guaranteed jobs). 
These enterprises would produce the consumer goods we have to import now. 
Furthermore--and this is the market element!--the enterprises will be 
leased to citizens--i.e., the property rights will be transferred for 
three years. This, I have to stress, is not a return to the authoritarian 
economy, but the state-aided construction of a market. 
State programs would have to be drawn up for the production of 
science-intensive products--requiring kopecks in materials and rubles in 
intellect. Russia is still the main producer of intellectual capital. The 
whole world is using our brains. 
There is nothing, therefore, to keep us from producing fundamentally new 
products of fundamentally new quality. 
[Shipitsyna] Do we already have a head start in this field? 
[Shakkum] We have a substantial head start--in genetic engineering, 
microbiology, pharmaceuticals, alternative sources of energy, 
fundamentally new materials, etc. More than 700 discoveries are expected 
in the world in the next 50 years. Each will bring the birthplace of the 
inventions hundreds of millions or hundreds of billions of dollars. This, 
however, is the strategy. The tactic is the first-aid program, which will 
create a favorable social climate in the regions and supply the 
population with food and consumer goods. This program is feasible even at 
our present level of budget income. It will have an explosive impact. In 
the absence of "real money" in the economy, it can be financed painlessly 
with newly printed rubles: The program will produce enough goods to 
absorb this supply of money. 
[Shipitsyna] What would keep the new government from launching this kind of 
[Shakkum] It would not work. It would not serve the President's interests. 
Today he is concentrating on holding onto his power until the elections 
and finding a worthy successor, who will be concerned about the welfare 
of the Yeltsin family in the future. The concept of collective 
responsibility is regrettably lacking in Russia. An analysis of all of 
our past experience indicates that every advance has always been 
connected with a leader. Theoretically, the deputies could put forth this 
kind of legislative initiative, of course, but I do not think that this 
Duma, except for isolated individuals, has the necessary drive.... 
[Shipitsyna] Are you saying that all Russia can do until the elections is 
live from Western loan to loan and just wait? 
[Shakkum] This is the illusion of temporary salvation. Another year and two 
months of the President's policy could ruin the country. Calculations 
indicate that Russia has essentially exhausted its capacity for 
revitalization. I am not a pessimist, however, and I believe that a new 
team could come along and do the impossible: put our country among the 
leading powers in 10 years and move it up to first place in 20. 


Society For Creative Anachronism Seizes Control Of Russia 
The Onion
May 26, 1999

MOSCOW--Official reports from the Kremlin Tuesday confirmed that the
Society for Creative Anachronism, a group of medieval-wargames hobbyists,
seized control of Russia in a bloodless coup over the weekend. 

"Weakened by food shortages, political instability and widespread economic
chaos, our military's combined forces proved no match for the enemy's
rattan-and-duct-tape broadswords and homemade weaponry," said deposed
Russian president Boris Yeltsin during a national radio address in which he
relinquished rulership to the "Principality Of The Mists," one of several
dozen SCA "kingdoms." 

"I can't tell you how humiliating this is," he added. 

The SCA, founded in 1966 by a group of Berkeley science-fiction and fantasy
fans, is a non-profit organization dedicated to fun and learning through
such medieval activities as metalwork, calligraphy, lute-playing and
brewing. Boasting more than 20,000 dues-paying members in 14 countries, the
club is also known for holding elaborately staged mock battles, followed by
feasting and merrymaking amid the revelry of troubadours and jesters. 

The seizure of over 70% of Russia's land mass marks the first time the SCA
has ventured into the arena of international politics. 

"I can't believe how easy it was to claim Kiev for the Kingdom Of
Ealdormere," said Royal Peer Gawain Falconsfyre, a 44-year-old tech-support
assistant from a suburb of Toronto. "It was a piece of cake. Haven't any of
these Russians ever heard of a moving-shield-wall offense?" 

Falconsfire and an SCA faction armed only with rubber maces successfully
captured two Russian tank divisions outside Moscow Saturday when fuel
shortages immobilized the armored vehicles. 

Due to the disarray of communications within Russia, information regarding
the actual invasion is sketchy. It was confirmed, however, that St.
Petersburg was taken without a shot being fired late Saturday morning,
after thousands of Russian soldiers deserted their posts, joining
approximately 70 SCA knights advancing on the city in hopes of being issued
new boots and coats. 

The SCA also overtook vast areas at the borders of former Russian republics
Ukraine and Belarus simply by trading several sacks of potatoes for enemy
guns. Above: Former president Boris Yeltsin transferring control of
Russia to Grand Seneschal Ulf Silverhawk. 

"Forsooth, mine legions of brave warmakers hath conquered the Lands West O'
the Urals! Let there be great rejoicing in our noble victory!" exclaimed
Cedric, Bard of the House of thelmearc, 36, hoisting a flagon of ale.
"What, ho! Bring on the serving wenches!" 

Cedric, known as Harold Freed when among non-SCA members, is credited with
capturing two military air bases and a string of missile installations
throughout the north Caucasus region along the Georgian border--an area
rendered vulnerable by ethnic infighting, corruption and military anarchy. 

SCA leaders, who have called the weekend's campaign "a really good time,"
were said to be especially pleased with the invasion's early wrap-up, as it
left the remainder of the weekend free for social recreation in the form of
mead-drinking, archery contests, and the singing of bawdy madrigals. 

Even captured Russian soldiers were invited to join in the fun and campfire
dancing. Such "good sportsmanship" has some analysts arguing that the SCA's
power base in Russia may even benefit the troubled land in the long run. 

"Though civilian rioting and widespread starvation still rock the major
population centers, Russia is actually more stable right now than it has
been for the last 18 months," Harvard political science professor F. Horace
Gunderson said. "Candle-dipping seminars are addressing the problems posed
by energy shortages, and the booths selling roasted turkey legs represent,
in many regions, the first source of food in weeks." 

"This could be the best thing to happen to Russia in years," agreed State
Department foreign-affairs analyst Howard Plum. "The sale of jewelry,
driftwood art and other medieval handcrafting at concession tables
throughout Russia has boosted local economies, and SCA presence has even
created new jobs in the custodial and campground-rental fields." 

The U.N. security council is drafting a proposal urging SCA forces to
remain in Russia, at least until a more viable interim government can be

"Under the current political system, the Russian people face Mafia
domination of the black market and a deteriorating national
infrastructure," U.N. Ambassador Thomas R. Pickering said. "With an
elaborately networked consortium of amateur gamers in charge, however,
there will at least be some semblance of order." 

Members of SCA nobility, however, say the group has no interest in running
Russia for any great length of time, especially with the members' need to
prepare for their next major event, this summer's Pennsic War between the
East and Middle Kingdoms, to be held in Pennsylvania. Insiders expect the
occupying forces to return power to the Russian government "on the honor
system" and return to their day jobs by the end of the week. 

"We're doing this for fun, not the vulgar acquisition of personal political
power," said insurance actuary and Arizona native Willownook Pendragon, of
the Kingdom of Atenveldt. "We're here to celebrate our mutual interest in
the ways and customs of pre-1600 feudal Europe, and to bedeck ourselves in
the heraldic regalia of our fictional medieval personas, not to get mixed
up in politics." 

Pendragon added that "anyone who wants to have a fun time and make new
friends" should check out the SCA home page or contact the group's
California headquarters directly at its toll-free number for more
information on an SCA chapter in their area. 

"We're really just friendly folks who welcome outsiders," Pendragon said.
"Plus, now is a great time to get involved, because there's lots of super
events coming up this summer, and you'll want time to prepare the correct
blazon for your heraldry." 


The Times (UK)
May 31 1999
[for personal use only]
Anna Blundy 
'They are the cheery marketplace saleswomen of the kind you find the world 
over. Always a joke and a smile, always an attempt to rip you off'

Where are the Russian men? Granted, policemen, traffic cops and politicians 
do largely seem to be male here, but everybody else is female. Everybody who 
works at any rate. You rarely see women slumped comatose in bus shelters, 
fighting outside a cigarette kiosk or harassing watermelon sellers in the 
middle of the night. 

But you do see them working as shop assistants, market traders, doctors, 
nurses, dentists, swimming-pool attendants, bureaucrats, night-watchwomen, 
waitresses, and pretty much everything else. Impressive though this is, one 
mustn't give the impression that they are all working with astonishing zeal. 

In fact, so notoriously surly is your average shop assistant that a whole 
business has evolved around what used to be state stores. Either you go into 
the shop and queue for a sullen girl in turquoise eye-shadow to show you the 
item you wish to purchase, queue to pay for it and queue to receive it, or 
you buy the same item outside for twice the price from someone who will say: 
"For you, sweetheart, only 45 roubles. For your husband, is it?" 

It is a peculiar system. On the pavement in front of every shop are stalls 
offering exactly what the shop behind them sells. Their goods are all off the 
back of a lorry and they are in business for themselves (protection money 
aside). This makes them cheery marketplace saleswomen of the kind you find 
the world over. Always a joke and a smile, always an attempt to rip you off 
with the scales or the change, always the assurance that you won't find 
better elsewhere. 

Inside, behind the heavy double doors, the poor and the misers are forced to 
suffer the rudeness of the still Soviet salesgirl. You stand there while she 
picks dirt out of her nails and you point at the thing you want. Shlomping 
herself over to the green washing-up bowl, and reaching for it as though with 
her expiring breath, she throws it in front of you without meeting your eye 
and continues picking her nails. 

Then off you go to pay for it, waiting an hour to do so and then having eyes 
rolled at you when you nervously apologise for not having a two-rouble coin. 
Then back to first girl, only she has disappeared. Her colleague, standing 
only two feet away in the loo-brush section, is scratching her elbow. She 
can't pass you your bowl (which is on the counter behind her) because it 
isn't her department. 

Rude woman, cheap washing-up bowl. Friendly woman, expensive washing-up bowl. 
That's the deal. It is the same outside the flower shops, the stationery 
shops, clothes shops and grocery stores. Wherever you go an old woman will be 
sitting on a cardboard box desperate to sell you three daffodils, an old 
notebook, a pair of tights, a rocking horse or a bunch of bananas. 

Exactly what their husbands are doing while they crouch in the snow or the 
dust, depending on the time of year, is unclear. 

Even at Gorbushka, the pirate CD and video market where, because of the 
manliness of the goods on offer, there are admittedly young men trading, many 
of the vendors are women. Certainly all the people dragging urns of tea and 
trays of bread and caviare about are female. This, incidentally, is the place 
where for 3 you can buy tapes of films only just released in the American 
cinema - perfect quality and they even have the FBI warning about piracy at 
the beginning. 

Anyway, the point is, Russian women seem to work very hard and suffer a lot. 
Not only was equality in the Soviet Union so important that every woman had 
to have a back-breaking job, but she was also equal enough to do all the 
cooking and cleaning. This tradition continues while the men, on the whole, 
drink. Oh, and tell jokes about their women. 

"A Chechen man is dying and he gathers his three sons around him. 'Sons,' he 
says, 'I am happy to have seen you grow up. I am only sad that I never saw 
you married. But let me give you some advice. Don't marry Chechen girls. 
Marry Russian girls.' The sons are aghast. This goes against everything they 
had been told. 'But father, why?' they ask. 'You are young and inexperienced. 
But I know that women get old, grow ugly and eventually die,' their father 
replies. 'But surely Russian women get old, ugly and die too, father?' say 
the sons, confused. 'Well, I know, but that doesn't matter so much,' the 
father explains." 



Return to CDI's Home Page  I  Return to CDI's Library