June 2, 1999    
This Date's Issues: 3319 •3320•

Johnson's Russia List
#3320
2 June 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Itar-Tass: 21st Century an Age of Reformed Russia, Lennart Meri Says.
2. Boston Globe: David Filipov, The poet of the people. Russia honors 
literary giant Pushkin.
3. AFP: Mysterious Abramovich emerges as new Kremlin eminence grise.
4. Moscow Times editorial: Yeltsin Lines Cabinet Up For Collapse.
5. News items and press summaries from www.polit.ru
6. The Guardian (UK): Tom Whitehouse, Mir left to find its own way home as 
astronauts finally abandon ship.
7. St. Petersburg Times: Yevgenia Borisova, Poll: 88% of Russians Say
Economy 
in Dire Straits.
8. St. Petersburg Times: Eduard Gismatullin, 'Secret' Tycoon Next Kremlin 
Puppet Master? (Abramovich).
9. Novye Izvestiya: Zhirinovsky Has Won the Title "People's Actor of the 
Belgorod Region"
10. Moscow Times: Yulia Latynina, INSIDE RUSSIA: Making Sure To Keep Spoils 
'In the Family' 
11. Reuters: Russia should abolish the death penalty-commission.
12. Reuters: ANALYSIS-Armenia seen holding course after poll.]

******

#1
21st Century an Age of Reformed Russia, Lennart Meri Says.

RIGA, June 2 (Itar-Tass) - "The twenty-first century will be the age of a
splendid and reformed Russia," Estonian President Lennart Meri told the
Riga newspaper, Diena, on Wednesday, sharing his views on the future. 

Speaking about the future of neighbouring Russia, Meri noted that he was
"far from being pessimistic" about that country. "Russia is now living
through a very difficult period," the Estonian president admitted. "Its
difficulties have probably come to a head today and their number may even
grow. However, the twenty-first century will be the age of a splendid and
reformed Russia. I am absolutely sure of this. This is not only politically
evident, but, even more so, a law of nature. It will be a Russia that we
have never seen before." 

******

#2
Boston Globe
2 June 1999
[for personal use only]
The poet of the people 
Russia honors literary giant Pushkin
By David Filipov

MOSCOW - Never mind the war in the Balkans and the crisis in the Kremlin.
Forget about those election-year campaign posters. The face gazing out from
ubiquitous billboards and massive wall posters, from vodka labels and
matchbook covers, is not that of some contemporary politician, but of
Alexander Pushkin, Russia's most celebrated poet.

Ignoring economic woes - if just for a day - Moscow's cash-poor government
has shelled out $4 million to celebrate Pushkin's gala bicentennial
birthday on Sunday.

A poet in Russia is more than just a poet, and Pushkin is the single
greatest literary figure in a culture renowned for its writers; a hero of
his time whose lofty status has been recognized by the czars, the
Communists, and the leaders of post-Soviet Russia.

Like William Shakespeare and English, Pushkin is the father of Russian
literature, a writer of ingenious verse who paved the way for the Russian
novelists whose names are more familiar to American readers - Leo Tolstoy,
Ivan Turgenev, and Feodor Dostoyevsky.

Unlike Shakespeare, Pushkin did not need a hit movie to get his career back
on track, not in a land where the exotic details of his life - his
carousing youth in St. Petersburg, his clashes with the czar's authority
and periods of exile, his death in 1837 in a duel with his wife's French
suitor - are common knowledge.

While many Americans struggle to read the Bard's English without a
glossary, many Russians easily recite from memory the works of Pushkin.
Pushkin is popular in Russia today not just because of his dazzling
technical innovations in an array of genres, from odes and epistles to
fairy tales and satiric prose, but because many Russians believe he is
still their best national spokesman. 

''He speaks a simple language we can understand,'' said Pyotr Paliyevsky, a
professor at Moscow's Institute of World Literature. ''Pushkin says many
different, contradictory things, but they are all right and we can
understand them.''

Scholars say that Pushkin in the early 19th century was able to articulate
the main conflicts of Russian society to this day: Russia's relationship
with the West and the tension between religious and secular life, between
the powerless and the powerful, between individuals and the state. The 19th
century novelist Nikolai Gogol, himself a keen observer of the Russian
Zeitgeist, once hailed Pushkin as the ''Russian man of 200 years from now.''

''People talk about the mystery of the Russian soul,'' said Andrei Chernov,
a Moscow poet and Pushkin specialist. ''Pushkin holds the secret to that
mystery. He is the one who wrote the code of our soul.''

Or as President Boris N. Yeltsin put it, in an awkward formulation that
earned jeers for clashing with the poet's rule of pristine syntax,
''Pushkin is our everything.''

As Sunday's 200th birthday bash approaches, Russian cultural life has been
dominated by events dedicated to Pushkin: theater festivals, academic
conferences, poetry readings, stamp-collecting conventions, jewelers'
competitions, all of it culminating this week in a gala of parties,
parades, and balls.

Newspapers and magazines have run front-page stories about the exact
location of Pushkin's birth in Moscow in 1799, and the details surrounding
his death after his duel with the French nobleman d'Antes in 1837 in St.
Petersburg.

One radio station plays ''interviews'' with characters from Pushkin short
stories, fairy tales, and plays. Russian Public Television shows people on
the street reciting from Pushkin's most famous work, his novel-in-verse
''Eugene Onegin.'' 

The station also has a TV quiz show ''Oh, That Pushkin,'' where contestants
send in answers to questions found on the wrappers of Pushkin candy bars.

Unlike the prose of Gogol, Tolstoy, and Dostoyevsky, Pushkin's best poetic
work is not easy to translate (perhaps fitting for a man who denigrated
translators as ''the postal horses of enlightenment.'') Pushkin is better
known in the West as the author whose ''Boris Godunov'' became a famous
opera, and whose ''Mozart and Salieri'' formed the nucleus of the Hollywood
film ''Amadeus.''

But Pushkin remains accessible to Russians, something that threatens to
turn him into the country's first victim of corporate exploitation.
Coca-Cola is running an ad that uses verses from one of Pushkin's famous
romantic lyrics, ''I remember the moment.'' British Airways quotes the
poet's comments on shopping in London. Moscow casinos are playing up
Pushkin's short story on gambling, ''The Queen of Spades.''

Politicians have rushed to get in on the act. Former prime minister and
current Balkans envoy Viktor S. Chernomyrdin, not known as a literary
critic, wrote a preface to the latest edition of Pushkin's complete works.

Moscow's populist mayor, Yury Luzhkov, has hung patriotic Pushkin slogans
all over town and has made sure that every storefront displays the poet's
portrait.

The trouble when politicians try to embrace Pushkin is that Pushkin
contradicts himself. Was he the fiery patriot who exhorted, ''Not for
anything would I like to change fatherlands, or have another history than
the one God gave us.''

Or was Pushkin's real attitude more ambivalent?

''I, of course, regard my country with the utmost contempt, from top to
bottom, but I don't like it when a foreigner shares this feeling with me,''
Pushkin wrote, in words mirroring the attitude of many Russians today.

The inability to attach an ideology to Pushkin is a problem the Soviet
regime ran into in the 1930s, when it tried to turn the poet into a ''tool
for further cultural growth and development.'' Pushkin, with his frequent
digressions into fantasy, farce, and parody, refuses to be cast solely in
such a utilitarian light.

''Try as they might, the Communists couldn't make Pushkin a Soviet poet,''
said Nikolai Alexandrov, who runs a show called the Pushkin Project on Ekho
Moskvy radio. ''No matter how much the authorities try to co-opt Pushkin
now, as the symbol of democracy, or nationalism, or orthodoxy, they cannot.
Pushkin is still alive and he's still a good writer. You can't pigeonhole
him, because he speaks for all of us.''

Pushkin, like any literary figure in the 1990s, risks being made obsolete
by growing indifference to poetry in the face of pop culture, video games,
and the Internet.

''But whenever a new Pushkin volume is released, it sells out
immediately,'' Alexandrov countered.

Some scholars fear that Pushkinmania is detracting from the poet's value.

''As a Pushkinist, I am disgusted by this anniversary,'' Chernov said. He
said the resources devoted to the holiday could have been better spent
upgrading fire safety at the 150-year wood hut where Pushkin's original
manuscripts are kept.

Others are more charitable.

''There is no such thing as too many holidays,'' writer Lev Rubenshtein
commented in a cover story in last week's issue of the news magazine Itogi.
''So let's sit down at the table. Pour a drink. Raise a toast. To what? Who
cares? To everything. To our everything.''

Pushkin could not have said it better.

******

#3
Mysterious Abramovich emerges as new Kremlin eminence grise

MOSCOW, June 2 (AFP) - Roman Abramovich rarely appears in public and has a
price out on his photo, but the mysterious tycoon has emerged in Russian
media as a new Rasputin with secret influence over the Kremlin.

A 33-year-old director of Russian oil company Sibneft's Moscow office,
Abramovich shies away from the public eye.

Nevertheless several newspapers are speculating that Abramovich was "the de
facto architect" of a new cabinet which President Boris Yeltsin and Prime
Minister Sergei Stepashin announced complete on Monday.

The weekly Versiya has already promised a prize to anyone who can find a
mug shot of the elusive magnate.

"Roman Abramovich has become a key figure in Boris Yeltsin's entourage,
where he pushed away the shadow of Boris Berezovsky himself," an
influential billionaire considered until recently as the Kremlin's eminence
grise, NTV television reported on Sunday.

The television station is financed by another powerful magnate, media mogul
and former banker Vladimir Gusinsky, who is battling with Berezovsky for
influence.

Russian media often spot "Rasputins" lurking behind those in power.

The legendary monk Grigory Rasputin wielded tremendous behind-the-scenes
influence over Nicholas II, Russia's last tsar.

Newspapers have already identified numerous "Rasputins" during Yeltsin's
more than eight years in office.

There was "secretary of state" Gennady Burbulis in 1991-92, then the shady
General Alexander Korzhakov who reportedly controlled access to Yeltsin
until 1996.

Then reformer Anatoly Chubais gained influence over the president, being
described by his Communist foes as the Kremlin chief's gate-keeper.

In more recent months, Berezovsky was reported to fill this role.

"The new government: a team of those who share the ideas of Abramovich and
Berezovsky," said Tuesday's headline in the well-respected business daily
Kommersant.

"The principal financial flows are controlled from now on by (First Deputy
Prime Minister) Nikolai Aksyonenko and Roman Abramovich, the two Kremlin
favorites," the newspaper said.

"Many of the people who were invited recently to the Kremlin said that they
needed to almost take an oath to Abramovich" to obtain a ministry post, the
daily Izvestia said.

The Kremlin has tried to downplay Abramovich's role, saying "no Abramovich
has ever had anything to do with the formation of the government," the
daily Vremya reported Tuesday.

But its protest comes too late: the media campaign to denounce the latest
Rasputin had already begun.

The Kremlin counts on Abramovich to "mobilise all the necessary resources,
so that the result of the next presidential elections guarantees the
personal security of Boris Yeltsin and of his entourage," said NTV, hinting
that the Yeltsin family fears being mistreated by those who next come to
power.

Abramovich's role as the "banker of the presidential family" was publicised
once in 1996 by Korzhakov, who was later sacked.

Gennady Seleznyov, head of the opposition-led State Duma lower house of
parliament, also joined those who are wondering about Abramovich's role,
asking, "Who is this Abramovich? What does he do?"

The businessman was accused of selling 25 fuel tanks from a Russian
military unit to a Latvian enterprise in 1992, but the investigation was
lost between the two countries' prosecutors' offices.

Abramovich reportedly owes his career to Berezovsky, who proposed him for
the position at Sibneft.

Abramovich runs enterprises which combined control 85 percent of Sibneft's
shares, according to The Moscow News.

He also, according to press reports, did his best to break down a
since-failed merger between Sibneft and fellow oil giant Yukos.

Reports then accused him of trying to bury the project because he refused
to share his powers with Yukos' director. 

*******

#4
Moscow Times
June 2, 1999 
EDITORIAL: Yeltsin Lines Cabinet Up For Collapse 

President Boris Yeltsin wasted no time with this Cabinet. He began harassing 
and humiliating his own prime minister even before the Cabinet was set, 
spurning his top Cabinet choices and leaving him twisting in the wind for a 
week while everyone - not least of all financial markets and creditors - 
wondered who the finance minister was. 

At least Yeltsin waited a month or two before he started trying to upstage 
his last prime minister, Yevgeny Primakov. His negligent attitude toward a 
prime minister of his own choosing is startling, even when one takes into 
account his usual habit of regarding subordinates as disposable goods. 

Even more distressing is the growing sense that one faction among Russia's 
warring clans - the so-called "family" - has triumphed over all the other 
ones. Before, their mutual greed and jealousy for power served as rough 
checks and balances on their overweening ambition. 

One needs to look skeptically at the news media reports that the country has 
been turned over to the family - Yeltsin's kitchen cabinet, including 
presidential daughter Tatyana, Sibneft oil executive Roman Abramovich, former 
chief of staff Valentin Yumashev, and perhaps Boris Berezovsky. 

All the overheated speculation in the oligarch-owned news media recalls 
earlier information wars triggered when one set of financial barons felt 
someone else was getting a better seat at the trough. 

But it's also hard to believe that there's no fire at all in all the smoke. 
If the oligarchs are howling, then it must be over something. And the more 
the new Cabinet ministers are found to have links to Sibneft oil company or 
Abramovich or Berezovsky or Kremlin insider Anatoly Chubais, who seems to 
have returned to the fold recently, the harder it is to perceive the 
government as an independent entity. 

Perhaps most astonishing is the behavior of First Deputy Prime Minister 
Nikolai Aksyonenko, who proclaims that he will control pretty much everything 
in the new government. These statements are a sign either of recklessness or 
the confidence that comes from knowing one's position is unassailable. Maybe 
a little of both. 

The left opposition in parliament has greeted the new Cabinet with a great 
big yawn, expecting little but a new shake-up in a couple of months. After 
four prime ministers in 14 months, getting worked up at the Cabinet is like 
worrying about the weather - after all, it'll change in a bit, so why fuss? 

The result of Yeltsin's love of turmoil is a government that has little 
credibility anywhere but inside the Kremlin - which, the way things have been 
going guarantees not its survival, but, ironically, its probably swift 
destruction. 

******

#5
>From 
www.polit.ru
June 1, 1999

11:07 Interfax has circulated information received from Goskomstat on the 
size of foreign investment in Russia. In the first quarter of 1999, $1,556 
million flowed in, while the outflow stood at $1,578 million. The volume of 
investment registered a 70.8% reduction in comparison with the first quarter 
of 1998. Accumulated foreign capital in the Russian economy was $26,019 
million at the end of March of 1999. First-quarter investment in industry 
stood at $716 million (46.0%), and equaled $276 million (17.7%) for retail 
trade and public catering, and $215 million (13.8%) for management. The food 
industry remains the biggest draw for foreign investors ($271 million in 
January-March), followed by ferrous metals, $138 million, and fuel, $94 
million. The largest amounts of investment have come from Germany - $6.344 
billion, the United States $5.058 billion, Great Britain $3.446 billion, 
France $3.237 billion, Cyprus $3.022 billion, Italy $616 million and the 
Netherlands $469 million. Moscow accounts for the largest volume of 
accumulated investment - $3.3 billion, or 51% of the total. 

12:20 Deputy Vengerovsky told Interfax that the Duma Council had confirmed 
the intention of deputies to hear Aksyonenko at their June 4 plenary session. 
The theme of hearings: the notorious relations of the Railways Ministry with 
- of course - the Swiss firm Transrail. The decision was taken by the Duma on 
May 12 at Vengerovsky's initiative. The problem is that Aksyonenko's son is 
on the board of Transrail and the firm itself is the authorized agent of the 
ministry for international transportation. Vengerovsky drew attention to the 
fact that the alliance recalls Aeroflot's infamous link with the Swiss firm 
Andava. Deputy told Interfax that at today's meeting of the Duma Council 
Vladimir Zhirinovsky "very energetically" demanded that this item be excluded 
from the agenda, arguing that "Aksyonenko is an exceptionally honest man and 
there is nothing to hear on this question." But Vengerovsky drew 
Zhirinovsky's attention to the fact that summoning Aksyonenko was not an 
initiative of a faction, but his personal, and so it was decided after all to 
hear Aksyonenko on Friday. 

13:54 Viktor Ilyukhin told journalists that the KPRF is ready for "a 
confidence vote," because further conciliation is turning into betrayal." He 
is extremely pessimistic towards the bills for the IMF; in Ilyukhin's 
opinion, their passage will be one more blow to the taxpayers. Also the head 
of the Duma Security Committee is certain that Grigory Yavlinsky's charges of 
corruption against the government of Primakov can be repeated with respect to 
the present Cabinet and "this will be 100 hundred times more correct." 
Another communist, faction deputy leader Valentin Kuptsov's tone was much 
softer. He said the KPRF is ready to "work with these laws, the faction is 
ready to consider them." In Kuptsov's opinion, "as of now, the passage of the 
IMF-related laws is the most important question in relations between the 
Government and the State Duma," RBK reported. 

16:42 "Absolutely capable of work" was how Chubais described the new 
government team as he talked to an Interfax correspondent at Yekaterinburg 
airport. "I very well know all of these people, and in the new government 
they're just where they must be. The challenge now is to unite them and start 
teamwork," said Chubais. Of his influence on the President, Chubais said: "I 
never was a part of any family, except my own, and am not going to be." The 
UES chief is in Yekaterinburg as part of his Ural tour. He has visited the 
Novo-Sverdlovskaya Heat and Power Plant, and had a meeting with Governor 
Eduard Rossel. On Wednesday Chubais will hold a conference with the 
management of Sverdlovskenergo. 

Press summaries
1 June 1999

Izvestia (A. Bovin, "The President's Comeback: A Chance for Russia?")
commenting on rumors that Yeltsin may enter another presidential race
writes: "It's hard to believe that he will make that step which would be
madness for him and for Russia. Not because he is ailing and aging. Or
because he has exhausted all his political resources. The point is that
Yeltsin's time is coming to an end." The paper stresses that "a new Russia
can only be created by a new generation of politicians. It is in this
context that one should view the congress of the Right Cause." 

Segodnya (D. Babichev, "Alexander Voloshin Doesn't Want to Be in a
Situation") notes that "all the signs are that Alexander Voloshin broke the
Statute on the President's staff by taking part in the formation of the
government and thus exceeding his powers. The paper suggests that Voloshin
has to deny "the role of the personality in history," the personality of
Roman Abramovich. The author notes that the Voloshin-Stepashin axis,
much-publicized by the media, will give way to an intricate system of
relations "between two staffs and a group of lobbyists." 

Versia ("Court Case No. 1") carries documents which confirm that top
Kremlin officials have accounts in Swiss banks. According to the paper, in
March 1995 an account was opened with the Gotthard bank in the names of
three persons -- Pavel Borodin, Yekaterina Seletskaya (who lives at the
same address as Borodin and is probably his daughter) and the head of the
MABETEX Project Eng. SA Lugano. All the three persons could use the account
effecting transactions in all directions. All in all, about 3.5 million
dollars passed through the account. The paper suggests that this is "most
probably a personal account of Pavel Pavlovich Borodin" and the fact that
it is owned jointly with Bejet Paccoli shows that the manager of the
President's affairs and the boss of MABETEX had not only business but also
financial relations. 
The article also gives the numbers of the accounts which the two first
deputies of Borodin had with the same bank. "The accounts were shut down
when the Prosecutor General's Office became particularly active on the
MABETEX case. 
Clearly, secret overseas accounts were opened not only for personal
benefit, but to cater to top officials, the paper notes. "Borodin is
reported as saying in private, 'Do you think I am doing this for my own
sake?'" 

Nezavisimaya Gazeta publishes a list of Russia's top 20 out of 100
politicians who have had the biggest influence on the country's foreign and
domestic policy. It indicates their rating and average score. 
The newspaper says that Boris Yeltsin "has shown once again 'who the boss
is' by not only topping the list for the second time in a row but also by
leaving his immediate opponent 1.5 scores behind. The top three politicians
include Sergei Stepashin (up from 13the place in April) and Boris
Berezovsky (up from 12th place). Moscow mayor Yuri Luzhkov went down from
third place to fifth and Communist Party leader Gennady Zyuganov moved up
from ninth place to sixth. The newspaper noted Nikolai Aksyonenko's
ascension to 11th place. He has made to the top 100 only once when he
ranked 92nd in March 1999. 

The weekly Vlast (I. Klochkov, "Luzhkov Surrounded by the Family") says
that "after the resignation of Yevgeny Primakov, the place of the Kremlin's
main enemy became vacant but it did not remain so long -- Moscow mayor Yuri
Luzhkov has taken it again". The weekly says that "the Kremlin will not
just hate Luzhkov quietly, it will try to destroy him as a mayor, as the
leader of Otechestvo and as a politician." The Kremlin "believes that
Luzhkov, as a politician, should not live to take part in the presidential
elections in 2000." The author notes that Luzhkov no longer has his people
either in the Kremlin or in the Bely Dom. He is rapidly losing the remains
of what little influence he had in the Primakov government". 

Delovoi Vtornik under the caption "Sooner or Later They Will Have to Give
Account" publishes an interview with Yuri Skuratov on the problem of
corruption in the highest echelons of power. The Prosecutor General noted,
in particular, the danger of the processes in the law enforcement agencies
in recent months. According to him, "the key figures are being removed from
the law enforcement system. People of principle are being removed from
investigation" and are being replaced "by more controllable and pliant
people". Commenting on the dismissal of the head of the Committee for
Investigations in the Interior Ministry General Kozhevnikov, Skuratov noted
that "Kozhevnikov was recommended many times to stop the case" against
Alexander Smolensky. "The Kremlin, apparently, had reason to fear for
Smolensky. If he were not rescued, he could have told how the 1996 election
campaign was financed..." 
At present, Skuratov continued, there are no grounds for dropping the case
against Boris Berezovsky as well. "On the contrary, the number of questions
to be put to Berezovsky is constantly increasing. If the case of Boris
Abramovich is dropped now, this will be a crime of office". The Prosecutor
General noted that using his connections Boris Berezovsky "not only pushes
his people into government, but also removes those who pose a danger to
him". Yuri Skuratov expressed the conviction that Boris Berezovsky was
directly involved in the dismissals of the former Interior Minister Anatoly
Kulikov and the head of the Federal Security Service Nikolai Kovalyov. 

******

#6
The Guardian (UK)
2 June 1999
[for personal use only]
Mir left to find its own way home as astronauts finally abandon ship 
Tom Whitehouse in Moscow 

Russia's space agency finally bowed to the inevitable yesterday, ordering
its cosmomauts aboard the accident-prone Mir space station to abandon ship
this summer and prepare it for a watery grave on earth. 
'We can't keep the station aloft, because we have no money,' said Sergei
Gorbunov, a space agency spokesman. 

But even in death, Mir could cause problems. 

Its three man crew, the Russians Viktor Afansayev and Sergei Avdeyev, and
the Frenchman Jean-Pierre Haignere, will return to earth in August, leaving
an empty cosmic lighthouse in the sky. 

Early next year, Mir's burning carcass will be guided down to sea by
mission control in Moscow, which hopes to ensure it does not land on any
populated areas. The heat of re-entry into the earth's atmosphere should
destroy most of Mir's 130 tonne bulk. 

'Prior to the crew's departure, they will install and test new equipment
allowing ground controllers to ensure a trouble-free flight,' said
Vyacheslav Mikhailichenko, a space agency official. 

That, at least is the theory. The record of Mir's predecessor, Salyut-7,
raises serious doubts about the safety of an unmanned operation. 

Soviet ground controllers lost control of the unmanned, 40-ton space
station in February 1991. 

Pieces fell on a sparsely populated area in Argentina's Andes mountains,
near the Chilean border, but caused no injuries or damage. 

Mir has already gone well beyond its life expectancy. After suffering a
series of potentially disastrous accidents in 1997, including a fire, a
collision with a cargo spacecraft and repeated failures of its computers,
its retirement was announced for June 1998. 

But encouraged by romantics and nationalists in the space agency and
parliament, who clung to Mir as the the symbol of Russia's once heroic
space endeavour, the government decided it could remain in orbit until
August this year and could stay longer if private funds were found. 

Even as it admitted defeat yesterday, the space agency insisted that money
rather than old age was the problem. 'If funds are found, then a new
mission could be sent up,' said Mr Gorbunov. But putative saviours for Mir
have come and gone and the market for a second hand space station with a
130-tonnes of famously dodgy parts is not good. 

Mir's demise marks the end of Russia's colonial space ambitions and leaves
the field open for the American space agency Nasa and smaller joint projects. 

The United States has long pressed Moscow to retire Mir and focus its
resources on the new international space station, whose construction is two
years behind schedule because of Russia's problems. 

However, a Nasa spokesman said the closure decision had been taken by
Moscow alone. 

*****

#7
St. Petersburg Times
June 1, 1999
Poll: 88% of Russians Say Economy in Dire Straits
By Yevgenia Borisova
STAFF WRITER

MOSCOW - Almost 90 percent of all Russians believe the economy is in
desperate straits and most think it will only get worse, a number of recent
surveys found, showing that many people have all but given up hope of a
stable economy in the near future.

According to an opinion poll by the All-Russian Central Institute of Public
Opinion Research, or VTsIOM, this week, 88.4 percent of 1,581 people
surveyed across Russia assessed the state of the economy as "bad" or "very
bad," while a year ago only 71.3 percent thought so.

Twenty percent of the 1,500 respondents of a survey held in Moscow and St.
Petersburg in the beginning of 1999 by ACNielsen, the leading U.S.
marketing research company, said the economic situation will become "much
worse" for the country in 1999.

Yet another survey of 400 people, run by the Public Opinion Fund at the end
of May, found that 53 percent of Russians believe that the worst of the
economic turmoil is yet to come. In 1993, only 37 percent shared that
sentiment while 41 percent thought that the worst times have already passed.

A fund survey conducted in January showed that well over half of all
Russians believe prices will more than double on consumer goods by the end
of 1999. Some 22 percent said prices will jump 350 to 400 percent while 38
percent said the increase will be about 250 percent. 

Margins of error were not given for all surveys.

However, the expectations of Russians in the two largest cities, Moscow and
St. Petersburg, appear to differ drastically from those living in the rest
of Russia. "Personal expectations [of the Muscovites and St. Petersburgers]
are ... more positive than for the country as a whole," ACNielsen said in
its report.

Although more than half of the residents of St. Petersburg and Mos cow are
pessimistic about their personal prospects for this year, the number nears
90 percent in the regions.

Young- to middle-aged adults expressed the most positive expectations about
their futures, ACNielsen said. "Young Russians don't believe that a country
so rich in physical and human resources can remain for long in this current
state," said Eugene Kazakov, a senior consumer research executive at
ACNielsen in Moscow.

The situation in the large cities is indeed very different from the rest of
Russia. 

Apparently the hardest times are being seen by those in small towns and
villages: While only 14 percent of residents in Moscow and St. Petersburg
said they were frustrated about wage, pension or stipend arrears, the lost
cash was a sore point for 57 percent of small town residents and 54 percent
of villagers, the Opinion Public Fund found.

Some 62 to 67 percent of rural Russians said they were upset about not
having enough money for food, compared to 57 percent of those living in the
large cities.

The most distressing factor that caused the biggest personal or household
frustration was the shortage of money to buy basic food items and to pay
bills, said 63 percent of Russians responding to a Public Opinion Fund
survey at the end of February.

But Russians are showing signs of adapting to even the worst economic
upheavals. 

VTsIOM's results show that in September 1998, a month after the economic
crisis of Aug. 17 swallowed two-thirds of Russians' savings, 44 percent
thought most Russians would never be able to adapt to the changes that have
taken place over the past decade. Eight months later, only 38 percent felt
the same way. "People understood that a global crisis did not take place,
that Russia was not bankrupted," said VTsIOM Deputy Director Alexei
Grazhdankin. "[Some] people are now looking into the future with less
pessimism."

*****

#8
St. Petersburg Times
June 1, 1999
'Secret' Tycoon Next Kremlin Puppet Master?
By Eduard Gismatullin
STAFF WRITER

MOSCOW - As the latest Russian government is shuffled and reshuffled,
attention has focused on a burning question: Who is pulling the strings?

While no one has found a definitive answer to this question, the extreme
difficulties in finding an answer have focused attention on the shadowy but
powerful figure of Roman Abramovich and his links to the presidential
family and to the Sibneft oil company. 

As archtycoon Boris Berezovsky keeps a low profile - or is pushed out of
the picture depending on which Russian media commentator is talking -
Abramovich has emerged as one of the media's prime candidates for the role
of puppet master. 

At 32, Abramovich has certainly enjoyed a spectacular rise, one that can
rival any of his fellow Russian tycoons in its meteoric nature. But unlike
even the most modest of the oligarchs, he has remained very much in the
shadows. 

Not only does he rarely appear in public, but the sources of his wealth
remain obscure - as does his very appearance. There are apparently no
photographs of Abramovich in the public domain. 

Scandal sheet Versiya was so frustrated that it organized a competition,
offering prizes to readers who could furnish the paper with photos of the
man who is said to run the Sibneft oil major. NTV's Itogi current affairs
program had to rely on a few seconds of footage from the January 1998 press
conference held in honor of the agreement to combine Sibneft with Yukos in
the ill-fated Yuksi joint venture. 

Abramovich's role at the top of Russia's political and business scene began
at least as far back as 1996. Around that time, Abramovich was working as
the head of the Moscow representative office of Runicom S.A., a Swiss-based
firm. 

After Runicom bought a 12.2 percent stake in Sibneft at a cash auction in
1996, Abramovich became the head of Moscow's Sibneft office. 

These days he is listed by Sibneft as one of "the people behind Sibneft" on
the company's Web site (www.sibneftoao.ru), which provides no further
information about him. Neither would Sibneft's press office, other than to
confirm that he is still the head of the firm's Moscow office and that he
is listed on Sibneft's board of directors. 

The press office also insisted that he is not the man who runs Sibneft.

However, according to the monthly Oil and Capital magazine, Abramovich
stands behind four front firms - Sins, Rifain Oil, Runicom and Financial
Oil Corp. - which between them held 91.6 percent of Sibneft as of mid April.

Through an extremely complicated web of relationships, these four firms
also connect Abramovich with Berezovsky and with SBS-Agro bank, part of the
empire of Alexander Smolensky.

Abramovich has also been listed as one of the people behind the Yeltsin
family by numerous sources, including most noticeably, former presidential
intimate Alexander Korzhakov. 

In his memoirs, Korzhakov called Abramovich "the cashier" for the family,
tying him to Berezovsky and to the latter's friendship with President Boris
Yeltsin, the president's daughter Tatyana Dyachenko, and her husband,
Alexei Dyachenko. 

And Alexei Dyachenko also has strong ties to Sibneft. Boris Yeltsin's
son-in-law heads an oil products trading company, East Coast Petroleum,
according to Energy Compass oil newsletter. This firm lifts oil products
from the Sibneft-affiliated Omsk refinery in Siberia.

But the Abramovich-Dyachenko-Yeltsin axis does not stop there. 

East Coast Petroleum has a Moscow-based affiliate called Belka Trading
Corporation, which published the second volume of Yeltsin's memoirs in
1994. Those memoirs - Zapiski Presidenta in Russian - were published in
English by Belka in conjunction with Times Books, a Random House
subsidiary, as "The Struggle for Russia."

According to Korzhakov, Berezovsky associate Valentin Yumashev - the
ghost-writer for the memoirs - used to turn up every month with $16,000 in
cash for Yeltsin that represented "royalties" for the book. 

Abramovich has seemingly escaped the president's reported wrath over the
accusations that Sibneft had been somehow connected with spying on the
Yeltsin family. Investigators raided Sibneft's headquarters in Moscow in
February, and reported finding evidence of some intelligence-gathering
activities. 

Although media reports at the time speculated that both Sibneft and
security firm Atol had been linked in an effort by Berezovsky to collect
compromising material on the Yeltsin family, no evidence of any such
conspiracy has ever emerged. 

Meanwhile, for all the talk of Abramovich as the new puppet master at the
Kremlin - in some versions pushing aside his old mate Berezovsky - there is
no evidence that Abramovich has branched out to involve himself in
activities outside of Sibneft.

Instead, mostly through oil trading firm Runicom, he has been busy
consolidating Sibneft's hold on its subsidiaries. 

In addition to marketing Sibneft's crude and refined oil products, Runicom
has also helped the oil company to consolidate holdings by a share swap. 

Runicom was registered in Gibraltar by its major shareholder Valnut
Nominees, which holds a 99.8 percent stake in Runicom, according to Oil and
Capital magazine. Runicom currently holds a 10.62 percent stake in Sibneft.
The trading firm has helped the oil holding to build up its share to 94.5
percent in Noyabr sk neftegaz, a Sibneft producing subsidiary. Sibneft also
increased its share to a 66.7 percent stake in the exploration unit
Noyabrskneftegazgeofizika, according to Sibneft's press service.

On Monday, Runicom had closed its offer to shareholders in the Omsk
refinery, retail firm Omsknefteprodukt and the Noyabrsk-based exploration
outfit to swap their shares in the subsidiaries for shares in the Sibneft
holding company. 

Runicom has managed to swap up to 5 percent of Sibneft shares for the
refinery securities, building the oil holding's control over the utility to
about 43 percent, Sibneft's press service reported Monday.

******

#9
Russia Today press summaries
Novye Izvestiya
June 1, 1999
Zhirinovsky Has Won the Title "People's Actor of the Belgorod Region"
Summary
The daily commented on the results of the gubernatorial elections in the 
Belgorod region.

Incumbent Governor Yevgeny Savchenko will serve a second term, having won 
more than half of the votes, according to preliminary data. The rest of the 
votes were divided between the two other contenders, chief auditor 
Beshmelnitsyn and Liberal Democratic party leader Vladimir Zhirinovsky. 
Turnout was rather high - about 70 percent.

Zhirinovsky was by far the most popular candidate before the election. None 
of Russia's stars have ever had such success with the Belgorod public. Crowds 
of thousands met Zhirinovsky and his team everywhere they appeared, and 
people traded Zhirinovsky quotes when they met. But it turned out that an 
audience is one thing, and an electorate another, the daily noted.

The governor's team ran the slogan "Belgorod is in danger! Everyone to the 
struggle with Zhirinovsky!". In the end, people feared Zhirinovsky's rule 
even more than a continuation of the region's poor economic policy.

The daily wrote that the techniques used in the Belgorod election will likely 
be copied in the upcoming gubernatorial and parliamentary elections in 
Russia. State services will work in favor of one candidate preferred by those 
in power - as all the state services suddenly started to persecute 
Zhirinovsky during the race in Belgorod.

******

#10
Moscow Times
June 2, 1999 
INSIDE RUSSIA: Making Sure To Keep Spoils 'In the Family' 
By Yulia Latynina 
Yulia Latynina is a staff writer for Segodnya. 

Last week an amazed public observed an instructive spectacle. A united 
coalition of oligarchs that had just ousted Yevgeny Primakov and brilliantly 
overcome the impeachment crisis almost instantaneously began to fight over 
the division of the spoils. Like a gang of thieves who, after robbing a bank, 
fight over the loot. 

The party of Boris Berezovsky-Roman Abramovich won a decisive victory. The 
losing team of Vladimir Gusinsky and Yury Luzhkov could only respond by 
hollering in the press that "The Family" had made off with the sources of 
financing that the victors in the Primakov battle had agreed to divide 
jointly. 

The outsiders bitterly complained that with the natural monopolies in the 
hands of Nikolai Aksyonenko, the Pension Fund with "Family" friend Mikhail 
Zurabov and the customs services with Mikhail Vanin, the winning group has 
been left with the lion's share of the most opaque and tasty budget flows. 

What is more, the above-mentioned agencies are not stuck with only the funds 
they oversee. The Pension Fund, for example, is owed money by practically all 
Russian enterprises. This means it has the right to block the accounts of and 
start bankruptcy proceedings against a given enterprise. And the Fund has 
often done this: In the summer of 1997, as part of the drive to pay off 
pension arrears, the Fund on a mass scale blocked the accounts of defense 
plants, whose arrears to the Fund occurred because they were not paying 
salaries. The salaries, in turn, were not being paid because the state had 
not paid the defense enterprises. "But we're not responsible for the 
arrears," cried the defense plant heads, "and there is even a presidential 
decree stating that if a factory is in debt to the budget as a result of the 
budget being in debt to it, then the government has no right to punish the 
factory!" "But we are not the budget," the Pension Fund answered. "We are an 
extra-budgetary fund, and the decree doesn't apply to us." 

The Pension Fund is a lever you can use to force any factory director to 
dance to your tune. As is customs. There is not one importer, even the 
largest, that pays the legally-constituted duties. "It is not even a question 
of not wanting to pay them," one of the major Russian importers explained to 
me. "The fact is that if we pay the duties, then small companies that bring 
in contraband merchandise will squeeze us out of the market." 

"From the money we pay a customs broker for each shipping container, $1,000 
goes upstairs," continued the importer. "This is huge money, which goes to 
the electoral 'needs' of this or that broker's krysha [roof]. The krysha can 
be anything ranging from the presidential administration to the power 
structures to the Moscow government." 

But is the money collected used for electoral campaigns, as is claimed in the 
media? Itis doubtful. It is hard to imagine that in 2000, as in 1996, the 
oligarchs will close ranks around one candidate. It is even more difficult to 
imagine that the successor named by The Family will win. Thus it is likely 
that the people placed by The Family to oversee the financial flows, rather 
than trying to protect an obviously losing position, will privatize budget 
and quasi-budget funds under the guise of electoral expenditures. 

*******

#11
Russia should abolish the death penalty-commission
By Elizabeth Piper

MOSCOW, June 1 (Reuters) - Russia must step up its efforts to enshrine a 
moratorium on the death sentence into law ahead of presidential elections in 
2000 or face the prospect of executions under a new leader, an official body 
said on Tuesday. 

Officials have said President Boris Yeltsin will sign decrees this week 
commuting all of Russia's outstanding death sentences to lengthy prison 
terms, but capital punishment remains on the books. 

Anatoly Pristavkin, head of the Presidential Pardons Commission, urged 
reluctant Russian deputies to do away once and for all with capital 
punishment, traditionally meted out in Russia with a single bullet to the 
back of the head. 

``The situation now is that the issue of capital punishment is decided by the 
president's constitutional right to grant a pardon or send people to their 
deaths,'' Pristavkin told a news conference. 

``The absence of a law may lead to the resumption of executions.'' 

Yeltsin placed a moratorium on executions in 1996 and the Constitutional 
Court has ruled that new death sentences may not be handed down in the 80 of 
Russia's 89 regions which do not have jury trials. 

But with crime rising rapidly, parliament has been reluctant to repeal laws 
which call for the death penalty for serious crimes such as murder. Officials 
who oppose the death penalty acknowledge that their position is unpopular. 

A presidential election is due in mid-2000 and Pristavkin said he believed 
most candidates support capital punishment as a measure against rising crime. 

But he said Russia should also honour its pledge to drop the death penalty 
which it made to the Council of Europe, a 40-state human rights body which 
bars members from executing prisoners in peacetime. 

``We have our commitments to the Council of Europe and we have not fulfilled 
all of them. We suspended executions three years ago but we have not passed a 
law (repealing capital punishment),'' Pristavkin said. 

Robert Tsivilev, who heads the department of the presidential administration 
that works with Pristavkin's commission, said on Monday that Russian 
President Boris Yeltsin would commute all sentences for those on death row to 
life imprisonment or 25-year prison terms. 

Tsivilev said Yeltsin has already commuted the sentences of about 400 of the 
716 prisoners who were on death row at the beginning of the year. The decrees 
commuting the rest are written and awaiting the president's signature. 

The commission also urged Russia to improve prison conditions because life 
sentences were often seen to be as bad as facing execution. 

``Expectation of death is even greater punishment than death,'' Pristavkin 
said. 

******

#12
ANALYSIS-Armenia seen holding course after poll
By Lawrence Sheets

YEREVAN, June 2 (Reuters) - Armenia is unlikely to make big policy changes
after the election victory of ex-Soviet chief Karen Demirchyan and Defence
Minister Vazgen Sargsyan, political analysts said on Tuesday. 

But tensions were likely between their Unity bloc alliance and President
Robert Kocharyan after Unity won more than 40 percent of the votes in
Sunday's parliamentary election and incomplete returns put the Communists
second with 12.5 percent, they said. 

``Kocharyan could have problems with the Unity bloc. He must always now
take them into account,'' said Hagob Avedikian, editor-in-chief of the Azg
daily newspaper. 

But Avedikian said Kocharyan, who is a solid backer of market reforms in
the former Soviet republic, was not likely to seek open confrontation with
Unity. 

Demirchyan, who leads the Unity bloc with Defence Minister Vazgen Sargsyan,
was defeated by Kocharyan in a presidential election in 1998. He has in the
past suggested that free market economic reforms be eased and funds
redirected to social needs. 

The shape of the new government is unlikely to be known for more than a
week but Sargysyan, the defence minister and joint Unity bloc chief, is
considered a strong candidate for prime minister. 

A Western diplomat said cosmetic policy changes might be made by the new
government but a turn away from reforms would be difficult given the
impoverished country's heavy reliance on International Monetary Fund (IMF)
and World Bank loans. 

``They have few internal resources, and they are already squeezing as much
as possible from domestic sources to keep the budget in order,'' the
diplomat said. ``Some say Demirchyan is a socialist, but for socialism you
need money. They don't have it.'' 

Living standards in Armenia have crashed since the break-up of the Soviet
Union in 1991. Gross Domestic Product is just $600 per capita annually in
the country of 3.8 million people on the southern rim of the former Soviet
Union. 

Avedikian said Unity might seek expanded economic help from Russia, already
Armenia's close strategic partner. 

``Russia has its own problems, but Armenia is a small country and a little
help would mean a lot. Russia's influence here could increase,'' he said. 

Conflict with potentially oil-wealthy Azerbaijan over the disputed Karabakh
region is still the top issue facing the Caucasus country. 

Political anlaysts expect little movement because of a well-developed
consensus between major Armenian political groups on Karabakh, ruling out
Azerbaijan's main demands on the region's future status. 

``The Armenian position is clear. The Azeri position is unacceptable,''
said the diplomat. 

Karabakh, populated mostly by ethnic Armenians but internationally
recognised as part of Azerbaijan, broke from Baku's rule in the 1980s as
the Soviet Union fell apart. 

Six years of armed conflict ended in 1994 with a ceasefire and big
territorial gains by ethnic Armenian forces. But no political solution is
in sight. 

Sporadic shooting is common. The conflict has hampered Armenia's economic
development by closing trade routes, and all sides fear a resumption of
full-scale war. 

Kocharyan came to power on a wave of anger over compromises which
predecessor Levon Ter-Petrosyan advocated to end the conflict, including
accepting Baku's demand that Karabakh have autonomy inside Azerbaijan. 

Since Ter-Petrosyan resigned in 1998, Armenia and the leadership of the
Karabakh region have said they will accept only a complicated ``common
state'' idea involving a type of confederation between Azerbaijan and
Nagorno-Karabakh. 

Two parties with a firm line on Karabakh, Dashnaktsutiun and the Rights and
Unity group backed by Karabakh defence chief Samvel Babayan, could have a
representation in Armenia's parliament and this could complicate matters,
analysts said. 

Babayan suggests some Azeri territory such as the Kelbajar region, which is
occupied by ethnic Armenian forces, should not be given back to Azerbaijan. 

This is considered unacceptable by foreign countries and the Armenian
government, which says the ``occupied territories'' will be returned only
after a final peace settlement is reached. ******

******