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Johnson's Russia List
 

 

June 11, 1999    
This Date's Issues: 3335 3336 3337



Johnson's Russia List
#3335
11 June 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Interfax: Duma Urges Check Into US Influence on Economic Policy.
2. The Moscow Tribune: John Helmer, WHO'S IN THE BACK SEAT.
3. Baltimore Sun: Mark Matthews, Talbott champions Russia as an adult 
in world affairs.

4. AP: Russian Premier Warns Lawmakers.
5. Robert Coalson: legal reform.
6. Ustina Markus: a Big Dump.
7. AP: Russia Moves To Limit Smoking.
8. Carnegie Moscow Center Releases Three New Books. 
9. Moscow Times: Luzhkov Accuses Kremlin of Plotting.
10. Reuters: Russia's Gaidar Sees Little Reform from New gov't.
11. RFE/RL: Paul Goble, The Coming End Of The 'Party of Power'
12. Reuters: Russia's Fyodorov Doubts Govt Will Reform Economy.
13. AP: Man Wins $234M Suit Against Russia.
14. Argumenty i Fakty: Yeltsin's Daughter, Luzhkov's Wife Rivals.
15. Interfax: Poll: 33% of Russians say Stepashin can Solve Problems.] 

********

#1
Duma Urges Check Into US Influence on Economic Policy 

MOSCOW, June (Interfax) - The Russian State Duma 
on Wednesday requested the government and Prosecutor General to check the 
channels of U.S. influence on the Russian economic policy. The initiative 
of the request came from the left-wing opposition claiming that in 1992 
the U.S. Congress approved a program of assisting economic and political 
changes in former Soviet republics and assigned hundreds of millions of 
dollars for the purpose. Deputies said the program is financed bu U.S. 
AID which assists "privatization, the advancement of the capital market 
and legislation reform" in Russia. Deputies asked for the evaluation, 
including legal, of the impact of the program implementation beginning 
with 1992. They showed special interest in "presidential decrees prepared 
by specialists from the Harward institute of international development." 
According to them, over one hundred such decrees were drafted between 
1994 and 1996 alone. Besides, Duma hopes to get basic information about 
the financial operations of the Russian privatization center, the list of 
its board members and top executives. [

********

#2
Date: Thu, 10 Jun 1999 
From: helmer@glasnet.ru (John Helmer) 

>From The Moscow Tribune, June 11, 1999
WHO'S IN THE BACK SEAT
John Helmer

According to a fresh Moscow anecdote, President Boris Yeltsin comes out of 
the banya feeling energetic. Over the protests of his driver, he insists on 
taking the wheel of his limousine. 

But he drives too fast; and unable to stop in time for a red light, he crashes
into another limousine. That one is occupied by gangsters. They tell their
driver to get out, and go check who is driving the other car. "If we are
kruche [the tough guys]," they say, "we'll collect a lot of money for the 
damage. If they are kruche, we'll drive away."

The gangsters' driver goes over to the car; takes one look; runs back; and 
hits the accelerator. "Hey, what happened?" his pals ask. "I don't know 
who was in the back," he replies, "but Yeltsin is their driver."

It has been a month now since Yeltsin sacked his government, and there
has been no end of speculation about who is in the back seat.

What is missing from the public speeches, private comments, and
corridor gossip -- from Prime Minister Sergei Stepashin and his 
ministers, as well as from Yeltsin and his family -- is which way they
think the limousine of state is headed.

For a state on the edge of international default, facing trade war in the
United States, and shooting war in Yugoslavia, that silence is deafening.

Stepashin, and his economic policy deputies Nikolai Aksyonenko and Victor 
Khristenko, could have afforded to make a clean break with the tax
measures the International Monetary Fund (IMF) has demanded, especially the
gasoline station tax. That is because it was their predecessors, Prime
Minister Yevgeny Primakov and First Deputy Prime Minister Yury Maslyukov,
who accepted them, and pronounced them such a good idea. 

The stupidity of Primakov for proposing to tax ordinary Russians even harder
to pay debts to the IMF incurred by such hated figures as Anatoly
Chubais and Sergei Kirienko -- raising inflation and adding to corruption --
should have been a tempting target for the Kremlin. Instead, all 
Aksyonenko could say was that the IMF conditions must be accepted "because
the country is on the edge of default."

Khristenko offered an even lamer excuse. He said the gas tax should be
enacted because it aims to collect only what the vendors are already
evading in their tax payments.

These are cynical claims. They make plain that, like Primakov, their 
economic priorities are to protect the cashflows of the gas and fuel sector, 
what is left of the bank oligarchies, and their borrowing positions abroad. 
Reviving domestic food and industrial production, and boosting exports
from the non-energy sector aren't of real concern to Yeltsin's new 
government, or his old one.

This is also why Stepashin, Aksyonenko, and their new trade minister, 
Mikhail Fradkov, kept mum last week, when the American government declared
a new round of trade war against Russian steel. Primakov and his trade
minister did no better in defending Russian hot-rolled steel against
a trumped-up case for dumping duties staged by the U.S. steel industry and
the Clinton Administration. But when the American industry filed another
case last week, alleging dumping of Russian cold-rolled steel, not a squeak
came out of the Russian government. If Stepashin had wanted to score
a point against the erstwhile popularity of Primakov, and appeal
for support from Russia's metals exporters, he missed his big chance.
The fact is he didn't even see it passing by.

But more remarkable than the cowardice of Russia's economic policymakers
is the quiet, and effective rebellion of Russia's military command against
official cravenness in Yugoslavia.

According to the version of special emissary Victor Chernomyrdin's 
performance in the Yugoslav negotiations that has been leaked to the Anglo-
American press, Chernomyrdin blustered and delayed, but in the end gave
in to every demand the NATO side made. In return, he got no concessions
whatsoever.

What happened next is unprecedented. For the first time in
Yeltsin's term of office -- perhaps for the first time in half
a century -- the Russian military command audibly accused the Kremlin of 
betraying the national interest in war. 

In March 1993 the refusal of the Defence Ministry to implement Yeltsin's 
proposed emergency decree was an act of veto. The delay in ordering forces 
to attack the Supreme Soviet the following October was a dissent. But this 
month's attack on the terms which Yeltsin and Chernomyrdin agreed to with 
NATO was a revolt. 

It started with a discreet shaking of General Leonid Ivashov's head. It grew 
more voluble when the generals briefed the Duma in closed session. It has now
burst aloud. Chernomyrdin is publicly blaming the attack on the Communist 
Party, but he is not so foolish as to believe it.

There is a logic to rebellion which Yeltsin recognizes full well. He thought 
he detected it in Primakov, and that is why he got rid of him on May 12.
Yeltsin won't appreciate the irony, but the departed prime minister, now 
receiving therapy in Switzerland, never dared what Ivashov and his fellow 
generals did this month. There are too many of them for Yeltsin to
purge. The charge they have laid is too grave, and the evidence 
too obvious to everyone, for this challenge to be buried as meekly as
Primakov allowed himself to be.

*******

#3
Baltimore Sun
10 June 1999
[for personal use only]
Talbott champions Russia as an adult in world affairs
Moscow role in peace for Yugoslavia could vindicate his advice
By Mark Matthews 
Sun National Staff 

WASHINGTON -- For Strobe Talbott, who has spent the past six weeks shuttling 
from Washington to Moscow and European capitals trying to end the Kosovo war, 
more is at stake in his mission than peace in the Balkans.

Since his old friend Bill Clinton tapped him as an adviser on the former 
Soviet Union in 1993, Talbott has been a consistent -- and at times lonely -- 
proponent of the idea that Russia can be a responsible U.S. partner in world 
affairs.

Now, with Serbian troops poised to pull out of Kosovo after 11 weeks of NATO 
airstrikes, Talbott's idea is gaining renewed respect.

A good deal of the credit for Yugoslavia's apparent capitulation goes to 
Russia for showing President Slobodan Milosevic that he had no support 
internationally.

"People are going to have to start saying they were wrong all over the 
place," says Marshall I. Goldman, associate director of Harvard University's 
Davis Center for Russian Studies, who in the past has criticized Talbott's 
views.

Russia's key role in Balkan diplomacy began April 19 in a telephone call 
between Boris N. Yeltsin and President Clinton that combined cooperation and 
bluster.

After demanding an end to NATO bombing, Russia's president agreed to help end 
the Kosovo war. He had already tapped former Prime Minister Viktor S. 
Chernomyrdin as special envoy to the Balkans.

Clinton in turn said he would name Talbott to work with Chernomyrdin. Yeltsin 
approved.

"We trust Strobe," he told Clinton.

Six weeks later, with a big assist from Finland's President Martti Ahtisaari, 
the partners got Milosevic to agree to terms that met most of thegoals set by 
NATO. They have also brought U.S.-Russian relations back from their chilliest 
crisis since the Cold War.

A Hotchkiss- and Yale-educated Ohioan who became Clinton's friend when both 
were Rhodes scholars at Oxford, Talbott has had a fascination with Russia 
since his student days. As a Time magazine journalist and author of eight 
books, he was a leading chronicler of the Cold War and its aftermath.

Named ambassador at large for the former Soviet Union in 1993, Talbott 
quickly became identified with a U.S.-Russia policy that backed Yeltsin at 
every important juncture.

Unwavering in his view that Russia is on the path toward free-market 
democracy, Talbott urges Washington audiences to see Russia's lapses into 
economic chaos and Yeltsin's bouts of foggy disengagement as temporary 
detours.

Mindful of Russian fears, Talbott initially opposed the eastward expansion of 
NATO to include the three former Warsaw Pact nations of Hungary, Poland and 
the Czech Republic.

He has also brought the Russian viewpoint into administration debates on 
Yugoslavia.

In the spring of 1993, after listening to top Russian officials, Talbott 
weighed in against U.S. military intervention to support Bosnia's beleaguered 
Muslims. It took more than two years before NATO launched airstrikes against 
Bosnian Serbs.

As U.S. envoy Richard C. Holbrooke brokered an end to the Bosnian war in 
1995, Talbott, by then promoted to deputy secretary of state, met with 
Russian officials to work out the terms of Russian participation in a 
peacekeeping force.

The April 19 phone call came at a tough moment for both Clinton and Yeltsin.

Reeling from a mistaken attack on a civilian convoy in Kosovo just a few days 
before, the NATO alliance was showing signs of strain as its leaders prepared 
to arrive in Washington for a 50th-anniversary summit.

In Moscow, much of Russia's leadership was stewing in anger at Western 
airstrikes against their longtime friends in Serbia, convinced that their 
worst fears about the eastward expansion of NATO were coming true.

Speaking with journalists beforehand, Yeltsin laid down a hard line, saying 
he would demand that NATO stop the bombing. He warned that Milosevic would 
not surrender and said Russia couldn't allow Yugoslavia to become a NATO 
protectorate.

The following Sunday -- Talbott's 53rd birthday -- the NATO summit ended 
without any direction on a ground war but with the allies agreeing to 
intensify the bombing campaign against Yugoslavia. Clinton and Talbott had 
another phone call, this one lasting 90 minutes, and Talbott set off for 
Moscow on the first of five missions to end the war.

Clinton had come under strong pressure from Germany to enlist Russia in 
Balkan diplomacy.

The Germans believed "there would be no solution to the Kosovo crisis without 
getting Russia on board," said Claudius Fischbach, a German diplomat in 
Washington. Germany's foreign and defense ministers kept up a running 
dialogue with their counterparts in Moscow and Washington.

In early May, Chernomyrdin came to Washington, meeting at length with Clinton 
and Vice President Al Gore, National Security Adviser Samuel R. Berger, 
Talbott and Leon Fuerth, Gore's national security adviser.

But Chernomyrdin was hemmed in by then-Prime Minister Yevgeny M. Primakov and 
Foreign Minister Igor Ivanov, both of whom are seen in Western capitals as 
anti-NATO.

The day the bombing started, Primakov abruptly turned his plane around and 
canceled a visit to Washington. Both men demanded a halt to the airstrikes 
before negotiations could start.

Yeltsin, however, "did not want to side with a Balkan dictator," particularly 
one who had sided with Soviet generals in the coup against Mikhail Gorbachev 
in 1991, Fischbach said.

On May 12 -- while Talbott was in Moscow for talks on Kosovo -- Yeltsin 
abruptly fired Primakov.

With NATO unwilling to engage Milosevic in direct negotiations, Western 
officials reached out to neutral Finland and Ahtisaari, a longtime diplomat 
with experience in the Balkans. Talbott, Chernomyrdin and Ahtisaari formed a 
troika.

They delayed action to let the diplomatic dust settle after Milosevic's 
indictment by the Hague-based war crimes tribunal. Two weeks ago, they agreed 
to present the Serbs with NATO's take-it-or-leave-it offer two weeks ago.

Milosevic's rapid acceptance stunned many in Washington. Since then, his 
tactics have become clearer: He has used every possible occasion since to 
change the terms of the deal.

His first opportunity came in technical military talks between his generals 
and NATO. When that didn't work, he apparently hoped Russia would pressure 
other members of the Group of Eight industrial nations during a meeting 
Monday in Cologne, Germany.

That meeting won some concessions for Yugoslavia -- an earlier expected 
bombing halt -- but the G-8 backed a NATO-dominated peacekeeping force for 
Kosovo and a Serb pullout.

Talbott still faces a challenge.

In a new set of talks in Moscow, he must work out terms of Russia's 
participation in the peacekeeping force. Russia balks at subordinating its 
troops to NATO command. Getting Russia to cooperate didn't come without a 
price: Serbs won the right to at least a symbolic number of troops in Kosovo.

Moscow might still quietly encourage more Serb stalling in hopes of softening 
the West's terms even more. This would vindicate long-standing criticism of 
Talbott's attitude toward Russia, which skeptics have long dismissed as 
optimistic tunnel vision.

"Russians have a wonderful knack for seizing disaster from success," said 
Goldman.

But if Moscow continues to cooperate, it will not only have played a decisive 
role in Yugoslavia but shown that other major powers can't act on the world 
political scene without their help, Goldman said.

"We got out of it in a way that's good for us and that no one anticipated," 
said Harvard's Goldman. "I have to give Talbott credit. He just stuck it out."

*******

#4
Russian Premier Warns Lawmakers
June 10, 1999
By VLADIMIR ISACHENKOV

MOSCOW (AP) - Prime Minister Sergei Stepashin warned lawmakers today that he 
might threaten their jobs if they failed to approve a package of economic 
austerity bills.

Stepashin said he might call a confidence vote in his new Cabinet. If 
lawmakers vote no-confidence, then President Boris Yeltsin could disband the 
lower house, the State Duma, and call new elections - a prospect lawmakers 
want to avoid.

Communist and hard-line lawmakers, fearing a backlash from the public, have 
been resisting quick action on a series of bills that would introduce new 
taxes.

Stepashin argues the taxes are necessary to increase government revenues and 
meet the criteria for a new loan from the International Monetary Fund.

Russia expects to pay only half of its $17.5 billion in foreign debt due this 
year, and it will be hard pressed to meet even that target without an IMF 
loan.

Meanwhile, First Deputy Prime Minister Viktor Khristenko said today that 
Russia plans to pay $10 billion to foreign creditors next year - about 
two-thirds of what falls due.

Russia hopes to reschedule some debts, but creditors are waiting for the IMF 
to give Russia a new loan before starting talks.

The government wants the austerity bills passed this month before the Duma 
goes on a summer recess. Otherwise, it could be months before Russia receives 
a $4.5 billion IMF loan that the country needs to pay off some of its debts.

Stepashin was in the Duma on Wednesday trying to secure support for a pivotal 
part of the package - the bill imposing a new tax on gas stations. But 
Communist and hard-line lawmakers, fearing that the tax will be used as an 
excuse to raise prices and anger electorate, refused to take immediate action 
and postponed the vote for one week.

Without the loan, the government will have to pay out of its limited hard 
currency reserves from the Central Bank, putting more pressure on the 
country's currency and possibly triggering inflation.

If the Duma fails to approve the bills, Russia could end up ``losing its 
economic independence,'' Stepashin told a Cabinet session.

The battered ruble has been relatively stable in recent months trading at 
around 24 to the dollar.

Khristenko said that the government set the average ruble rate for next year 
at 32 to the dollar. However, the currency's movements have been difficult to 
predict since the economic crisis that hit last August.

Khristenko said an earlier forecast of 3 percent growth for next year 
appeared overly optimistic. In fact, it will be difficult to achieve a 1.5 
percent growth next year, he said.

********

#5
Date: Thu, 10 Jun 1999
From: Robert Coalson <rcoalson@snpi.org.ru> 
Subject: JRL submission?

Recently I was researching an article on the Larisa Yudina murder (Yudina
was the editor of the only opposition newspaper in Kalmykia and was
murdered one year ago this week) and stumbled across what seems to me to be
an interesting idea for Western assistance to Russia that I would like to
throw out for consideration - even though my area of work is freedom of the
press, not legal reform.

The investigation of the Yudina case was handled by the Russian General
Prosecutor's office because no one had any confidence that local
authorities in Kalmykia would be able to investigate fairly. Indeed, as it
turns out, the investigation has indicted three men, including one who
worked as a former aid to Kalmykian President Kirsan Ilyumzhinov. As is
usually the case, those who ordered the crime will certainly get away this
time as well.

The head of the investigation said this week that he would have been able
to pursue the investigation much further is Russia had a credible
witness-protection program. Without giving details, he said that there were
people in the extremely corrupt Ilyumzhinov administration who were ready
to cooperate with him. These comments got me thinking about the importance
of such a program in the fight against corruption in Russia.

Obviously, corruption here is so entrenched that it will not be possible to
create a credible program locally for a long time to come. However, it
does seem to me possible that Western governments, as a form of assistance,
could open their existing programs for special cases at the request of the
Russian General Prosecutor's office. If just ten or twenty such cases were
resolved through such an effort, much could be done to fight the corruption
problem and, obviously, much wasted money could be saved. Average citizens,
too, would be encouraged to believe that it is possible to establish law
and order here. It is more than conceivable that interesting information
would emerge about some political figures who, as things stand now, have a
very good chance of becoming Russia's next president - perhaps in time to
prevent that from happening. 

I realize that such a program would present logistical and other problems,
but it seems to be that they are hardly insurmountable. One of the key
advantages of such a program is that an offer of participation in a
witness-protection program would only be made to witnesses whose testimony
justifies the proposed expense. Another key advantage is, it seems to me,
such an offer could be extended immediately and be being used in the very
near future. 

I would be very interested to learn the opinions of other JRL readers with
more expertise on this subject.

best,
Robert Coalson
Business Development Service
National Press Institute
Telephone: +7 (812) 273-2851
Tel./Fax: +7 (812) 272-4672

*******

#6
From: ustina.markus@DTRA.MIL (Ustina Markus)
Date: Thu, 10 Jun 1999 
From: David Johnson <davidjohnson@erols.com>
Subject: a Big Dump.

Just a thought I wanted to share with other JRL readers who get disgusted
with Russia.
I've been following events in Russia and the NIS from the very beginning of
their independence and even before (I finished a PhD in Soviet studies in
1991). Initially, events seemed to move so fast and there were so many
unknowns as to what would happen in the area that it was genuinely
stimulating reading all the news on the place every day. The remarkable pace
of new developments continues if one looks at the political turnover. Yet
despite the continued political turnover, government reshuffles, newly
uncovered cases of corruption, etc., Russia-watching is just not that
interesting anymore. Basically, the problem with the area is that nothing
really changes. The only thing that could actually change would be for
Russia to get its act together and become an orderly and prosperous country.
There are absolutely no prospects for that on the horizon, and the
government reshuffles, political murders, and social woes that are
constantly written on are just more of the same. 
If one looks at the news from a year ago when Kirienko had to resign, the
ruble nose-dived, Primakov became prime minister, and the IMF could not
think of any reform program that would work in Russia, it seems that a lot
has changed. Today Primakov has been replaced with Stepashin, and the West
is more preoccupied with Russia's role in the Kosovo crisis rather than its
economic condition. The names and events may have changed, but what has
really changed about Russia? Essentially, it remains a big dump, just
brimming with vodka, corruption, and an incoherent state budget. And I bet
anything that next year there will again be new names and new events, but
Russia will remain exactly what it has been for decades-a Big Dump.

********

#7
Russia Moves To Limit Smoking
June 10, 1999

MOSCOW (AP) - Russia's lower house of parliament on Thursday gave tentative 
approval to a bill that would restrict cigarette smoking in one of the 
world's more smoker-friendly nations.

The bill, which the State Duma approved in the first reading by a 297-43 
vote, would ban selling cigarettes to people under 18 and limit tobacco 
advertising.

It would also ban people from smoking at their workplaces, in sports 
facilities, schools and universities, theaters, hospitals and government 
organizations.

As of now, smoking in Russia is only prohibited on public transportation, and 
the country has few effective controls on cigarette advertising.

At least 50 percent of Russians smoke. According to official statistics 
released last month, 74 percent of men aged 30 to 35 are smokers.

Russia has one of the world's highest smoking rates, which doctors cite as a 
reason for Russians' low life expectancy: The average man dies before his 
60th birthday.

The bill would have to undergo another two readings before it's passed by the 
Duma. It must also be approved by the upper house of parliament, the 
Federation Council, and President Boris Yeltsin to become law.

********

#8
Date: Thu, 10 Jun 1999 
From: KatyaSh@CARNEGIE.RU (Katya Shirley)
Subject: CMC Released Three New Books

I am pleased to inform you and your readers that at the Carnegie Moscow
Center three new publications have recently been released:

Alexander Lebed in the Krasnoyarsk Krai
by Nikolai Petrov

The monograph is published in Russian. The full Russian text can be accessed
at:
http://pubs.carnegie.ru/books/1999/04np/toc.asp

The English-language summary of the book is at:
http://pubs.carnegie.ru/english/books/1999/04np/summary.asp

Intolerance in Russia: Old and New Phobias
Ed. by Galina Vitkovskaya and Alexei Malashenko

The collection of essays is published in Russian. The full Russian text can
be accessed at:
http://pubs.carnegie.ru/books/1999/04am-gv/toc.asp

The English-language summary of the book is at:
http://pubs.carnegie.ru/english/books/1999/04am-gv/summary.asp

Russia's China Problem
By Dmitri Trenin

The brochure is published in English. The full English text can be accessed
at:
http://pubs.carnegie.ru/english/books/1999/04dt/toc.asp

********

#9
Moscow Times
June 11, 1999 
Luzhkov Accuses Kremlin of Plotting 
COMBINED REPORTS
MT, Interfax

The tension between Moscow Mayor Yury Luzhkov and the presidential 
administration erupted in a war of words Thursday, as Luzhkov accused the 
presidential administration of plotting against him behind the scenes. 

President Boris Yeltsin's chief of staff Alexander Voloshin replied that he 
didn't know what Luzhkov was talking about. 

"Relations are tense, they're very complicated," the Moscow mayor said on NTV 
television. "The president's team, while announcing that they're not upset by 
the mayor of Moscow, behind the scenes are calling him enemy No. 1." 

Luzhkov, a likely presidential contender in 2000, said that the 
administration "was giving all kinds of orders to search for various 
violations, that is, to collect kompromat," or incriminating evidence for 
political use. He said that "nothing intelligible will come of this. ... We 
are working honestly, although some blame us for dictatorship." 

Luzhkov's claims were dismissed by Voloshin. 

"If there is kompromat on Yury Mikhailovich [Luzhkov] and his entourage, I 
know nothing about it," Voloshin said. "That does not fall into the range of 
our duties." 

Voloshin offered to assist Luzhkov by asking the appropriate law enforcement 
agencies to investigate the matter. 

Relations between Luzhkov and the Kremlin have deteriorated in recent weeks. 
Many observers say that the president's advisers do not see Luzhkov as an 
acceptable successor to Yeltsin after his term ends in 2000. 

Former Prime Minister Sergei Kiriyenko said that he would likely run for the 
Moscow mayor's post. Though it's considered unlikely that Kiriyenko would 
win, a potential Kiriyenko candidacy was generally regarded as a 
Kremlin-backed attempt to damage Luzhkov's popularity using the election 
campaign. 

Yury Korgunyuk, an analyst for the INDEM political research center, said 
Luzhkov's attack on Voloshin was in character. 

"I don't remember a single conflict in which Luzhkov would not be the first 
attacker. For him, attack is always the best defense," Korgunyuk said. 

*******

#10
Russia's Gaidar Sees Little Reform from New gov't

STOCKHOLM, June 10 (Reuters) - Russian market reformer Yegor Gaidar said on 
Thursday he did not expect much from Russia's new government and that 
necessary economic reforms were unlikely to find political support in 
parliament. 

"I don't expect a strong reform-oriented agenda from this government... The 
problem I see is absolutely no chances of these reforms being implemented by 
the present parliament," Gaidar told reporters at a lunch in Stockholm. 

Gaidar, an economist who launched market reforms as acting prime minister in 
the early 1990s, said he was sceptical the State Duma could pass serious tax 
measures needed to meet conditions for loans from the International Monetary 
Fund. 

Gaidar expects the Paris and London Clubs would agree to temporary solutions 
for debt restructuring programmes covering 1999 and 2000 ahead of Russian 
parliamentary and presidental elections. 

"But then a more general solution will be possible after the presidential 
elections," he told Reuters. 

Inflation was likely to remain at around two percent per month over the next 
six months, Gaidar said. Russia's expected trade surplus for this year of $24 
billion did not mean the country would not need to restructure its foreign 
debt. 

"It's not a problem of a trade surplus. It's a problem of revenues of the 
federal budget which is in no way compatible with the present level of 
servicing the foreign debt." 

Gaidar said there would be no serious consequences for the rouble if the 
present dual foreign exchange trading sessions are scrapped as part of an 
IMF-backed programme. 

Gaidar said anti-West and anti-American feeling among young Russians had 
increased because of NATO's bombing of Kosovo. Before the campaign 95 percent 
of students at Moscow State University would have been pro-Western. 

"Now if you were addressing the same audience it would be something like 60 
to 40 -- 60 pro-Western, 40 anti-Western, even 50-50. Which is a very radical 
and negative change." 

*******

#11
The East: Analysis From Washington--The Coming End Of The 'Party of Power'
By Paul Goble

Washington, D.C., 9 June 1999 (RFE/RL) - Economic failures, geopolitical 
isolation, and electoral experience are combining to bring an end to the rule 
of the "party of power," one of the most characteristic features of the 
post-communist transition in the former Soviet republics.

An amorphous and non-ideological group consisting of a non-party president, a 
politicized bureaucracy and a depoliticized government closely linked to 
non-official groups, the "party of power" serves as a buffer between 
communists on the left and nationalists on the right in the Russian 
Federation, Ukraine, Moldova, and other post-Soviet states.

At the present time, the "party of power" both as a concept and a reality 
still dominates the political landscape. But as Vladimir Bruger writes in the 
May 26 issue of the Moscow newspaper "Nezavisimaya gazeta-Sodruzhestvo," its 
days may be numbered because of forces beyond its control. And he suggests 
that it is likely to be replaced by a politicized politics and a more 
pragmatic political style.

The first of these forces working against the continued dominance of the 
"party of power" in these countries is the continuing if not accelerating 
collapse of their economies. Because the parties of power have justified 
their remaining in office by pointing to the evils that either the 
nationalists or communists might bring, they have often escaped public attack 
even if they have not received much public support.

But as the economic situation in these countries has deteriorated, the 
parties of power no longer can make that argument work to their advantage. 
"In contrast to ideology or PR," Bruger writes, "economics demands an 
accounting for everything that is done and not done." And ever more people 
and politicians are deciding that the alternatives denounced by the party of 
power may in fact not be worse than the incumbents.

The second force undermining the continuation of this form of governance is 
the changing geopolitical position of these countries. Immediately after the 
collapse of communism, the first post-Soviet governments -- which included 
second-level party nomenklatura officials as well as a thing stratum of 
reformers -- expected that the West would not only provide substantial aid 
but work to integrate these countries into Western organizations.

Neither has happened, at least as far as the population can see, Bruger 
notes. And as a result, ever more people in these countries are prepared to 
consider supporting parties of the left or the right that advocate policies 
that can be variously described as committed to self-reliance or going it 
alone. 

And the third force is the growing electoral experience of both politicians 
and the populace in these states. In all these countries, the parties of 
power were able to coopt many politicians, and these ideologically based 
leaders were all too willing to be coopted -- because the party of power had 
all the power -- and all too willing not to challenge the bases of the party 
of power -- because they hoped eventually to use its levers themselves. 

One distinguishing charactreristic of this tendency, Bruger notes, is that in 
both Russia and Ukraine, the political parties who form the majorities in 
parliament have accepted the designation of opposition and have behaved as 
such. 

But that pattern is beginning to change as a result of the pressures of 
electoral politics. Some of those now aspiring to office were themselves 
earlier cast of the party of power and have changed their views. After being 
fired as Russian premier, Viktor Chernomyrdin's political party adopted a 
very different stand on the constitutional arrangements that have allowed the 
Russian party of power to control all decision making.

Even more important, as the populations of these countries gain experience 
with elections, those politicians who hope to win support are now being 
forced to distance themselves from the failings of those now in power. Thus, 
as Bruger points out, Moscow Mayor Yuri Luzhkov immediately declared that his 
new party "cannot be held responsible for everything that was done before us."

None of this necessarily sounds an immediate deathknell for the parties of 
power. On the one hand, the authoritarian traditions of these countries mean 
that many leaders, even those who head more ideologically based parties, 
prefer the informal and backroom dealings that the parties of power have 
practiced over the last few years.

And on the other, the parties of power in the past have shown their ability 
to manipulate the media and the political system during elections and 
successfully maintain themselves in power by portraying their opponents as 
more dangerous than themselves. 

But economic collapse, international isolation, and experience with elections 
have fragmented the parties of power in all these countries, Bruger notes, 
and thus reduced their ability to respond to challenges. And that makes it 
ever more likely that over the next decade, the current "party of power" 
system will give way to a more ideologically and interest-based politics.

That may produce bad things as well as good, Bruger concludes. But he adds 
that it will at least mean that the post-communist transition will shift into 
a new phase, one that will put still more distance between where these 
countries will be and where they were in the communist past. 

******

#12
Russia's Fyodorov Doubts Govt Will Reform Economy

MOSCOW, June 10 (Reuters) - Russia's new government is unlikely to reform the 
economy and fresh credits from the International Monetary Fund might not be 
available for months, former deputy prime minister Boris Fyodorov said on 
Thursday. 

Fyodorov, who was a fierce critic of the economic policy of the previous 
government of Yevgeny Primakov, denied leading liberals unanimously supported 
Prime Minister Sergei Stepashin, who took over last month. "This government 
is in no way better than that of Primakov. The top people have been changed, 
but no one else. The same economic team has effectively been maintained," 
Fyodorov, a member of liberal Right Cause political bloc, told a news 
conference. 

"To expect this government to take any steps in economic reform is out of the 
question," he said, adding that the IMF would wait on implementation of 
reform plans before it even considered new loans for Russia. 

"It is absolutely clear that we will move into September without an agreement 
with the IMF, and even if it is reached in September or October, it will not 
change the situation much." 

Fyodorov, who was responsible for taxation under Primakov's predecessor 
Sergei Kiriyenko, criticised Mikhail Zadornov, the ex-finance minister who 
has been named special representative in negotiations with international 
financial organisations. 

"He should have resigned long ago," Fyodorov said. 

The other key economic figures in Stepashin's government are First Deputy 
Prime Minister Nikolai Aksyonenko, previously railways minister, First Deputy 
Prime Minister Viktor Khristenko, and Finance Minister Mikhail Kasyanov. 

Khristenko and Kasyanov were previously first deputy finance ministers under 
Zadornov, who stayed in his post after last year's financial crisis brought 
down Kiriyenko's government. 

Fyodorov said, even if the State Duma lower house of parliament approved new 
laws required by the IMF, the Fund would still need about two months to see 
evidence of the measures being implemented. 

He said no major decisions could be made before a presidential election due 
in mid-2000, including on restructuring foreign debt. 

Fyodorov also criticised the draft budget for next year discussed by the 
government on Thursday, saying the parameters were just as unrealistic as 
those initially set for 1999. 

"In January next year we shall meet again and these parameters will be quite 
different," he said. ((Moscow Newsroom, +7 095 941 8520, 
moscow.newsroomreuters.com)) 

*******

#13
Man Wins $234M Suit Against Russia
June 10, 1999
By MARK BABINECK

HOUSTON (AP) - A family of Russian descent seeking return of property
seized after the 1917 Bolshevik Revolution won a $234 million judgment
against Russia. 

U.S. District Judge David Hittner awarded the damages Tuesday after Russia
failed to defend itself. 

Lee Magness' claim was based on his family's vast holdings in St.
Petersburg, Russia, including a piano factory, a shopping center and a
mansion. All were absorbed by the communists after the 1917 revolution. 

After the fall of communism, the Russian government prohibited the
nationalization or expropriation of foreign investments, prompting the
plaintiffs to travel to St. Petersburg in 1994 to reclaim the family
fortune once owned by Magness' maternal grandfather, Ivan Karlovitch
Schroder. 

``For whatever reason, the Russian Federation and Ministry of Culture
claimed the property was not (the Magness'),'' family attorney Daniel B.
Nelson. ``The expropriation we're really suing over occurred in 1994.'' 

The government claimed the Schroder properties, including two expensive
vintage pianos Magness tried to buy when he was there, were national
treasures, the lawsuit stated. 

In an attempt to get the Russians to take notice, the Magness family sued
here in 1997 to get the court to prevent a $100 million Romanov jewel
exhibit from leaving Houston. The family wanted the exhibit held as
collateral for its alleged debt. 

Russia objected, then stopped defending itself once the tour moved on to
San Diego. Hittner issued a default judgment Nov. 20 after hearing evidence
only from the plaintiffs. 

Russian Embassy spokesman Mikhail A. Shurgalin and the Russian Federation's
attorney on the case, Tim Dickinson, did not return calls by The Associated
Press. 

******

#14
Yeltsin's Daughter, Luzhkov's Wife Rival

Argumenty i Fakty, No. 971
8 June 1999
[translation for personal use only]

Article by Natalya Solovyeva 
in the "Politics" column: "Kremlin princess versus Moscow queen?" -- 
passage within slant lines is newspaper's introduction, published in 
italics; subheadings as published 

//The Kremlin has declared open war on Moscow mayor 
Yuriy Luzhkov. The official pretext is the possible success of Luzhkov's 
Fatherland movement in the parliamentary elections and of the mayor 
himself in the presidential race. The official reason is Luzhkov's 
"dictatorial" ways in politics and his "illiberal" approach in economics. 

However, it may turn out that the essence of the contradictions lies not 
in the conflict between the "Kremlin" and "Luzhkov" ideologies. Judging 
by all accounts, the ambitions of two women have boiled up as the 
presidential elections approach. The women in question are the 
president's daughter Tatyana Dyachenko and the mayor's wife, Yelena
Baturina.// 
Kremlin inconstancy 

In fact Boris Yeltsin and Yuriy Luzhkov have quite liked each other for 
some time. But relations between the mayor of Moscow and the presidential 
administration have always been built on the principle that "there is no 
distance between love and hatred". On several occasions Luzhkov has 
fallen foul of the scheming of Yeltsin's entourage (either in the shape 
of the former head of the presidential bodyguard, Aleksandr Korzhakov, or 
of the multifaceted Anatoliy Chubays). But because a calm Moscow provides 
security for any Russian government, on each occasion he has returned to 
favour with the Kremlin on grounds of "state order". 

The last love affair occurred during the struggle between the 
presidential administration and the government of Yevgeniy Primakov. 
Pampered by the president and "the family" the mayor kept his distance 
from the prime minister. As a result, no alliance between the political 
"heavyweights" ever got off the ground. Such an alliance could have 
resulted in the real consolidation of the Russian elite and made the 
country's political development predictable and relatively stable for at 
least the next 10 years. 

Furthermore, Luzhkov received no reward for his loyalty. Having delivered a 
victory salute in Washington over the dismissal of "the imperialist 
Primakov", the mayor promptly became the main target for the two White 
Houses (ours and the American one). All guns ordered to fire 

There is little that is particularly secret about the Kremlin's secret 
plan for the "political destruction" of Luzhkov. The first task is to 
prevent any alliance between Luzhkov's Fatherland movement and the 
governors' groups (primarily the All Russia movement and one of its 
leaders Mintimer Shaymiyev). On top of that, social democrats must be 
lured away from Luzhkov, for example by setting up a social-democratic 
movement like Kemerovo Region governor Aman Tuleyev's Revival and Unity 
movement. The second task is to cut election campaign finances by 
undermining Moscow's economic might. That could be done, for example, by 
ending the payment of subsidies to the city as capital, by stopping its 
tax income by reregistering Gazprom and the Unified Energy System and 
other major taxpayers somewhere outside Moscow. The third task is to 
debunk Luzhkov using the media under the Kremlin's control and to cause 
personal problems for him by using "competent bodies" and accusing him of 
corruption and links with the mafia. 

The question is -- will the Kremlin restrict itself to such 
old-fashioned methods in its struggle with Luzhkov? If it does then 
Luzhkov could have no better publicity. Such attacks will turn him in a 
flash from the ruler of Moscow into the darling of the whole country. 
Even people out in the remotest countryside will decide: if Yeltsin's 
loathsome henchmen are against him, then Luzhkov is the president for us. 

Don't foul your own nest 

When the Kremlin realizes that its war with Luzhkov is only making the 
mayor more popular it will probably switch to more radical actions. It 
will experiment by trying to use the courts to cancel the elections for 
mayor of Moscow which have been moved by the Moscow city duma from June 
2000 to December 1999 (incidentally this is perfectly in line with 
federal and Moscow legislation) and by unleashing former Prime Minister 
Sergey Kiriyenko as the main critic of Luzhkov's economic policy. On the 
other hand, the Kremlin strategists may be tempted to find a nice warm 
place in the cells in Lefortovo prison or send him into voluntary forced 
exile abroad, like the former mayor of St Petersburg Anatoliy Sobchak or 
the former Moscow city council deputy Sergey Stankevich. 

But they had better be careful not to overstep the mark. Just a month 
ago oligarchs Boris Berezovskiy and Aleksandr Smolenskiy as well as Pavel 
Borodin, the head of the president's administrative affairs who was close 
to them, who were in a tight corner and facing arrest not only "bit back" 
but also engineered the dismissal of Primakov. In just the same way, 
Luzhkov and his team, once cornered, could "bite back" and bring down the 
Kremlin. 

Suffice it to recall what happened in Moscow when there was no bread in the 
bakeries for a few days. Crowds on the streets of Moscow are a sure sign 
of a change at the country's helm. Cherchez la femme! 

One explanation for the illogical sharpness of the conflict between the 
Kremlin and Moscow could be a struggle between two women: the daughter of 
the president and the wife of the mayor. 

The political role of "image adviser" Tatyana Dyachenko is well known. 
But few are aware that behind the deliberate domesticity and apolitical 
behaviour of Yelena Baturina lurk ambitions which are just as great. In 
one interview she came straight out and said: "It's all in the genes. 
Either someone is a leader by nature or they aren't. I have always been 
like that." And now Yelena Baturina's leadership is indisputable. People 
close to the mayor's family and the corridors of power in the capital 
know that she is much better at handling mayor Luzhkov and his entourage 
than was the case with Raisa Gorbacheva when her husband was in charge. 

If presidential elections go ahead in Russia then the second round 
could pit the Kremlin princess against the Moscow queen. Time will tell 
who wins. But to be honest, the "domestic" politics of Baturina look 
preferable. 

*******

#15
Poll: 33% of Russians say Stepashin can Solve Problems 

MOSCOW, June 9 (Interfax) - Sergei Stepashin can 
effectively solve the problems facing Russia with the help of a good 
team, say 33% of Russians according to an opinion poll of 1836 
respondents conducted by the All-Russian Center for Public Opinion 
Studies. The representative poll involved residents of the administrative 
centers of the Russian regions, where about one- third of the total 
Russian population lives. However, 37% said that Stepashin is a (Russian 
President Boris) Yeltsin man, and that he is currently occupied with 
Yeltsin's problems and not with those of Russia. Fourteen percent of 
those polled said Stepashin is a weak politician and that someone else 
would have been be a better choice for prime minister. Asked about the 
formation of the new cabinet widely discussed in the Russian mass media, 
33% said that it has demonstrated that Yeltsin's staff is trying to 
centralize all financial flows to retain power after the upcoming 
presidential elections. Oligarches and bankers are ruining the authority 
structures with the help of Yeltsin's staff, said 24% of the respondents. 

There is a struggle around important government posts by unknown forces, 
said 23% of the respondents. Fourteen percent said that everything goes 
on as usual, but that the television and press are putting out mere 
rumors and gossip. However, only 26% would approve of the dismissal of 
Stepashin's cabinet in the case of emergency or of the surprize 
dissolution of the State Duma. Thirty-five percent of the respondents 
were undecided.

*******


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