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Johnson's Russia List


July 9, 1999    
This Date's Issues: 3384 3385 

Johnson's Russia List
9 July 1999

[Note from David Johnson:
1. AP: Russia Looks to Old Soviet Allies for New Friends.
5. The Economist: Could Ukraine revert to Russia?
6. Grzegorz W. Kolodko: The Russian Malaise and the Polish Success.
7. Obshchaya Gazeta: Sociologist on Russian 'New Poor. (Interview with 
Irina Shurygina, scientific associate at the Russian Academy of Sciences
Sociology Institute).

8. Komsomolskaya Pravda: Interview with Anatoliy Chubays, Unified Energy 
System of Russia CEO, "Anatoliy Chubays: I Will Be Wiped off the Face of the 
Earth For Saying This, But There Is Economic Growth in Russia."]


Russia Looks to Old Soviet Allies for New Friends
June 8, 1999

MOSCOW (AP) - It was like a scene from the Cold War, President Hafez Assad
of Syria being greeted with bear hugs in the Kremlin and lavished with
promises of aid and friendship.

That's the welcome Assad got this week on his first Russian visit in nine
years. His host was President Boris Yeltsin, who played a major role in
ending the Soviet Union but is now hoping to make friends of some old
Soviet allies.

Wanting to reassert itself as a great power, Russia is reviving ties with
old partners while at the same time seeking new markets for its weapons.
Moscow and some of its Soviet-era allies want to rebuild traditional links
to counter what they see as U.S. global domination.

``Both presidents favor the idea of a multi-polar world and stated that no
diktat, whether by one or several nations, is possible,'' Russian Foreign
Minister Igor Ivanov said during Assad's visit this week, in a dig at the
United States and NATO.

Russia's embrace of Syria and other states that have poor relations with
the United States reflects Moscow's disillusionment with the West. Although
Yeltsin says close ties with the West are indispensable, the post-Cold War
honeymoon is over.

Moscow wants to be treated as a major power even if its economy and
military are in tatters, and it believes it should be given more respect by

``It's partly disillusionment with the West and an attempt to diversify
Russian foreign policy. There is a frustration about not being treated as a
great power,'' said Margo Light, a Russia analyst at the London School of

In the Middle East and other areas, ex-Soviet allies or clients that have
poor or hostile relations with Washington are also eager to revive old ties
with Moscow.

Syria, in particular, wants Moscow's support to offset or limit U.S.
influence in the Middle East. The Syrians used to count on the Soviet Union
to provide some kind of strategic counterbalance to U.S. support for Israel.

``In Russia, there is generally a growing desire to play the traditional
game of the balance of powers in the Middle East. The Soviet Union was
deeply engaged in this game, and I see signs of a return to that,'' said
Dmitry Trenin, military analyst at Moscow's Carnegie Endowment for Peace.

Moscow sees peace-brokering as its best hope of carving out an important
international role. It wants to mediate in the Middle East, just as it
mediated between NATO and Yugoslavia over Kosovo.

Yeltsin and Assad praised the election of Israeli Prime Minister Ehud Barak
and called for new talks on a Middle East settlement. Barak's electoral
victory over Benjamin Netanyahu, who was less conciliatory, helped
determine the timing of Assad's visit.

The prospect of Russia again playing a role in the Middle East has been
hailed by some in the region. Assad's visit marked ``the beginning of the
return of Russia to the role that was missing and missed,'' Beirut's
Al-Kifah Al-Arabi newspaper commented Thursday.

Assad brought with him a $2 billion shopping list of Russian weapons,
including the advanced Su-29 fighter jet and the S-300 anti-aircraft
missile, Russian officials said. While no deals were announced, both
leaders promised close military and technical cooperation.

Syria, with its own economy in trouble, owes Moscow some $12 billion for
Soviet-era arms shipments. With little hope of the debt being paid soon,
Russian officials indicated that new arms sales were still possible.

While a major arms deal may not materialize, Syria sees it as a way to
worry Israel and the United States and strengthen Damascus' hand in peace
negotiations with Israel.

The U.S. government has warned Moscow not to sell arms to states like Syria
and Libya, but Russian officials say they will go ahead.

Interest in buying Russian weapons has jumped since NATO's airstrikes on
Yugoslavia because several nations with anti-Western policies fear they
could face attack, Russian officials said. Russian weapons are far cheaper
than comparable Western arms and many nations already depend on Soviet and
Russian armaments.

One of the few economic bright spots in Russia, arms exports are expected
to hit $3 billion this year, up from $2.7 billion last year, according to
government figures.



MOSCOW, July 8 (Itar-Tass) - President Boris Yeltsin called on the law 
enforcement bodies here on Thursday to "promptly cut short any 
encroachment on the constitutional system, on the rights and liberties 
of citizens". 
Addressing the top-ranking officers, who were presented to the head of 
state in the Kremlin, Yeltsin stressed the importance of this task and 
blamed the justice ministry for "frequently not knowing who is working 
against the authorities in our country". 
Receiving Justice Minister Pavel Krasheninnikov a few days ago, the 
president called his attention to the need to effectively disclose all 
the violations of the legislation by public organisations and political 
parties, including the Communist Party of Russia, in light of the 
upcoming elections to the State Duma. 
The president pinpointed one more important task facing the law 
enforcement bodies, namely, struggle against corruption and terrorism. 
He urged them to make it more resultative. 
"Our law enforcement bodies are duty-bound to inflict a crushing defeat 
on criminals, must not allow them to infiltrate the governing bodies," 
Yeltsin said. "I am looking forward to your unconventional decisions 
and awaiting prompt and concrete results. You are vested with broad 
powers and must be up to them." 



MOSCOW, July 8 (Itar-Tass) - The Russian Federal Security Service will 
not adopt the experience practiced in a number of countries where prior 
to the elections secret services directly fulfill instructions issued 
by the authorities "to neutralize the opposition," Vladimir Putin, 
Director of the Federal Security Service and Secretary of the Russian 
Security Council, said in an interview the "Komsomolskaya Pravda" 
daily's issue as of Thursday. 
Putin said that after he had studied operational reports he told 
President Yeltsin about "methods of conducting an election campaign in 
one of the neighboring countries where bodies of state security 
received direct instructions on measures against the opposition and 
achieved success." 
"The president listened to me and said: "We shall not do that," the 
newspaper quoted Putin as saying. 
Putin admitted that a department for constitutional security had been 
created at the FSB, but the activities of this department are aimed not 
against parties and movements of the opposition, but rather against 
extremist formations which might be both of left-wing and right-wing 
orientation," Putin said. 



MOSCOW, July 8 (Itar-Tass) - The Moslem movements of Russia will come 
out in one single bloc, the Mejlis, during the parliamentary elections 
that are to be held in Russia at the end of December. This bloc was 
formed on the basis of four movements -- "Nur" (Light), "The All-Russia 
Islamic Congress", "The Moslems of Russia", and "Refah" (Prosperity). 
Today, there are more than twenty million Moslems in Russia and the 
Mejlis, its leader Leonard Rafikov said, is called upon to be "a worthy 
instrument in the elections to the State Duma. It will rally all the 
like-minded political and public movements". Rafikov deems it to be the 
civic duty of the bloc's leaders to "sustain and promote the creative 
energy of the Moslem peoples of Russia". 
Addressing a press conference here on Wednesday, he also stressed that 
the "bloc highly respects all the religions and confessions that exist 
on the territory of the Russian Federation". "Irrespective of whether 
one is a Moslem or an Orthodox Christian, an Israelite or a Catholic, 
an Old-believer or Buddhist, we are all citizens of one country, we are 
all concerned about Russia, and all our thoughts are aimed at reviving 
our great homeland," Rafikov said. He noted that the Mejlis was ready 
to offer "a constructive programme to surmount the current system 
crisis and to revive the country". 


The Economist
July 10, 1999
[for personal use only]
Could Ukraine revert to Russia?
Grim choices 
K I E V 

NEARLY eight years after independence from the Soviet Union, many of the 
candidates in Ukraine’s presidential election, due in October, say they want 
to go back, more or less, to the old days. And at least three out of the 
seven most serious say they want to recreate the Soviet Union in one guise or 
another—with Ukraine inside it. 

Even candidates who claim to want reform, President Leonid Kuchma included, 
hark back to the Soviet Union in other respects. Mr Kuchma’s heavy-handed 
tactics smack of the era when a vote of 99% in favour of the incumbent was 
pretty average. “Ukraine must follow the European road,” he said recently. 
“Changing the president would mean changing the political course: I have no 
right to let that happen.” Hardly the spirit of democracy. 

Certainly, if various of the proclamations by other candidates are to be 
believed, Ukraine would veer sharply in another direction under several of Mr 
Kuchma’s rivals. Parliament’s speaker, for instance, Oleksandr Tkachenko, has 
been full of enthusiasm for the (so far mainly theoretical) reunion of Russia 
and Belarus, clearly implying that Ukraine should join it. Piotr Simonenko, 
head of Ukraine’s Communist Party and another candidate for president, 
favours that three-country link too. Natalia Vitrenko, running for the 
Progressive Socialist Party, wants the entire Soviet Union put back together. 
Each of these three old-guard candidates is well up with Mr Kuchma in the 
opinion polls. An analyst at the East-West Centre, a think-tank in Kiev, 
says—with some justification—that the forthcoming election could decide 
whether Ukraine has a future as an independent state. 

The “back-to-the-Soviet Union” candidates certainly have supporters, 
especially in Ukraine’s east and south, where ethnic Russians (numbering 
about 10m out of Ukraine’s 50m people) and Ukrainians with old-left 
sympathies are most numerous. In 1991, even they voted for independence, 
thinking that Ukraine was being exploited by the rest of the Soviet Union and 
that independence would bring prosperity. Eight years on, GDP has fallen by 
two-thirds. Easterners are particularly despondent. 

NATO’s war over Kosovo has also helped set Ukrainian minds against the West. 
Though the Socialist Party’s Oleksandr Moroz, a former speaker of parliament, 
is casting himself as a Scandinavian type of social democrat (albeit with the 
expectation of winning a lot of communist votes), the prevailing mood may 
also prod him into pandering to nostalgia for the Soviet Union. Of the wily 
old operators, Mr Kuchma apart, only Yevhen Marchuk, a former KGB boss for 
Ukraine, is still clearly pro-western. 

In his determination to fight back, Mr Kuchma is playing dirty. Last month 
the Organisation for Security and Co-operation in Europe (OSCE), which tries, 
among other things, to encourage democratic habits, said his tactics could 
harm Ukraine’s relations with western institutions. Some of the president’s 
men have told television bosses that, if they give presidential challengers 
air-time, they may lose their licences or find that advertisers withdraw 
their business. 

The electoral commission has been helping the president, too. For example, it 
made life hard for Mr Moroz by stalling for a month over whether it would 
hand his party the forms it needed to get the minimum 1m voters’ signatures 
entitling him to run. “We’re facing a deliberate, planned campaign to stop me 
taking part in the election,” complains Mr Moroz, who says some of his 
party’s buildings have been set on fire and his supporters attacked. 

Recent events in Donetsk, the coal-mining area in the east that is a hotbed 
of anti-Kuchma feeling and happens also to be the country’s most populous 
region, have been particularly murky. Ivan Ponomarev, the head of the 
region’s assembly and an enemy of Mr Kuchma’s, mysteriously resigned in May. 
The chief beneficiary has been Viktor Yanukovich, the region’s governor and 
one of the president’s friends. Despite a constitutional bar against one 
person being both governor and head of the regional assembly, Mr Yanukovich 
now has both jobs. More important, his new one should give him unimpeded 
oversight of the conduct of the election. The regional assembly is in charge 
of electoral procedure and, among other things, vote-counting. 

The outlook for the West (and particularly for the United States, which has 
set great store on Ukraine’s independence and future prosperity) is bleak. 
Not only do several presidential candidates with a chance of winning want to 
rebuild the Soviet Union, but the man most determined to point Ukraine 
westwards, Mr Kuchma, looks like resorting to highly undemocratic tactics to 
achieve the aim which the West, broadly, endorses. Bodies such as the OSCE 
are, to put it mildly, embarrassed. The Council of Europe, which monitors 
human rights across the continent and has among its members all but the very 
nastiest countries in Europe, has recently implied that Ukraine will be 
booted out if its presidential election is dirty. 


Moscow Times
July 9, 1999 
PARTY LINES: Yeltsin Is More Statesman-like After Editing 
By Jonas Bernstein
Staff Writer

Given the mass of rumors that President Boris Yeltsin and his inner circle 
are planning extra-constitutional measures to maintain the status quo into 
the next millennium, the head of state's interview, published earlier this 
week in Izvestia, was not unexpected. 

The interview was exactly what a majority of Russians and, more importantly, 
what the Kremlin's Western patrons wanted to hear. Yeltsin was the voice of 
reason. He promised not to ban the Communists, but only to prosecute them 
legally if they "heat up hysteria" and break the law. Asked about rumors that 
he plans to rebury Lenin, Yeltsin approvingly cited Patriarch Alexy II saying 
this should be done, but promised to appoint a state commission to look into 
the matter. All very judicious and statesman-like. 

The fact that the interview's publication was delayed for a few days 
triggered speculation. But a reassuring explanation for the delay was put 
forward f that the Kremlin simply wanted Yeltsin saying that he would have 
time to write his memoirs next year. Most would approve this correction f 
particularly those desperately wanting to believe that Yeltsin will, at the 
end of the day, do the right thing and yield power according to democratic 

The only problem is that the interview was, apparently, a fake. According to 
Yelena Dikun, Obshchaya Gazeta's plugged-in Kremlin correspondent, first 
daughter Tatyana Dyachenko and Kremlin chief of staff Alexander Voloshin 
spent last weekend re-writing whole sections of it. The reason is that 
Yeltsin had in fact spoken in "very harsh" terms about the fate of the 
Communist Party of the Russian Federation and Lenin's body. Dikun quotes 
Kremlin sources as saying that banning the Communists and moving the mummy of 
their spiritual leader off Red Square have been Yeltsin's idÎe fixe for 
years, and that he will not leave office until he has seen it through. 

According to Dikun, Yeltsin has been thwarted several times from acting on 
his idÎe fixe by those Kremlin insiders f including, surprisingly, Dyachenko 
and former presidential administration chief Valentin Yumashev f who believe 
it would only strengthen support for the Communists. Among those egging the 
president on to fulfill his dream are, not surprisingly, Anatoly Chubais and 
Boris Berezovsky. 

Dikun even quotes one anonymous presidential administration official as 
saying that several Kremlin "scenario writers" have come up with a plan to 
"help the Communists in creating disorder" if Lenin's body is moved, thus 
providing the pretext for a Communist Party ban. The plan envisions a 
Kristallnacht-like smashing of shop windows in Moscow and elsewhere, complete 
with graffiti proclaiming it as the Communists' "answer" and urging one and 
all to "beat the Yids." (These strategists, according to Dikun, have so far 
been kept away from Yeltsin.) 

It is not surprising Western observers would assume that Yeltsin wants to be 
remembered for presiding over a democratic transfer of power. This, however, 
may simply be another instance of the mirror-imaging that has hung up 
Russia-watchers so often in the past. Maybe Yeltsin wants to be remembered as 
the man who buried Lenin and communism, literally. Maybe he also wants to be 
remembered for reuniting fraternal Slavic nations, like Russia and Belarus. 



Date: Thu, 08 Jul 1999
Subject: Ref. JRL #3382 - Piontkovsky
From: Professor Grzegorz W. Kolodko (
[former Polish finance minister]

The Russian Malaise and the Polish Success.

There is always a good season to discuss the Russian syndrome. In "Moscow
Times" (July 8th - JRL 3382) Andrei Piontkovsky refers to the lively and
extremely interesting and honest discussion during the recent conference on
Russia continuing crisis organized in Washington, DC, by the Jamestown
Foundation in June. Indeed, during this event the criticism vis-a-vis the
American policy towards Russia - as A. Piontkovsky claims - was enormous.
And he
is right that it was somehow too much, since the real influence of the US, the
American policies and a lot of advisers and semi-advisers sent to Russia over
the 1990s is largely exaggerated.

Yet while referring to my opinions why the transition in Poland works and
in Russia it definitely does not, A. Piontkovsky has oversimplified the
presented way of arguments. It is not exactly true that, while explaining "the
secret of the Polish reforms' success", I said that: "The Poles always very
carefully listened to the IMF's recommendations, but never followed them". In
fact, the issue is much more complex than that. Sometimes we listened, and
sometimes we did not.

First, the countries and their political elite -- and not the foreigners,
advisers and international organizations -- are to be given the credit for the
policies' successes and to be blamed for their failures. The outsiders are
playing an important role in the whole postcommunist transition process,
yet it
is mixed; there is a positive as well as negative outcome of their
in the whole endeavor.

Second, in the case of Poland there where different periods during the last
ten years of transition. After initial "shock without therapy" in 1989-1992 --
with deep recession, spreading poverty and growing inequality, meager progress
with macroeconomic stabilization and delay of institution-building -- there
the period of therapy without shocks. During the implementation of development
program combined with gradual yet determined structural reforms, "Strategy for
Poland' -- i.e. since 1994 until 1997 -- the GDP expanded by 28 percent,
inflation was brought down to 13 percent, unemployment fell by one third, and
there was significant progress with new institutional arrangements and
integration of Poland into the world economy (accession to the OECD in July
1996). Then, in 1998-99, the economy has lost momentum again; the GDP grew in
1998 by only 4,8 percent (after average rate of growth during preceding 4
of 6,4 percent) and in the first quarter of 1999 by barely 1,5 percent,
inequality is rising again as does unemployment, and the social tensions are
mounting one more time. All these three consecutive episodes are the
results of
three different, not identical policies. Both -- the credit for the success of
the policies carried in 1994-97 as well as the blame for the failures of the
policies in 1989-92 and 1998-99 -- are due to the Polish policymakers, and not
to the IMF or any other foreign partner, with all the respect due to them.

Third, the problem is that being involved in policymaking -- as I've been
all the time in different capacities, but most actively in 1994-97 as Deputy
Premier and Finance Minister of three subsequent Polsih governments -- one
listen to the IMF suggestions, but not necessary to follow always all of them.
The IMF has helped a lot, but (as I said at the Jamestown Foundation's
conference) sometimes it was (or still is) wrong. Thus while dealing with the
IMF one must be able to comply when the Fund is right and to disagree when
it is
wrong. I'm afraid that during the early stage of Polish transition the
advice of
the Fund was listen too often, even then when it was incorrect. I did listen
when the IMF was right, but I didn't when it was wrong. In Russia, too
often the
governments tried to listen when the Fund was not necessary right (for
insistence for premature liberalization of the GKO market and the free access
for foreign investors , or insistence on cutting the budget expenditure at the
cost of the arrears growing beyond sustainability, what had destabilized the
fiscal position of the government even more), and they didn't follow the Fund
arguments, when they were abolutely correct (for instance, widening the tax

Therefore, the Russian debate must continue, but the lessons that should
indeed be learned by now both in Moscow and in Washington are at least the
- first, neither for the Russian malaise, nor for the Polish success the blame
or the credit goes to the USA or the IMF; that is mainly the domestic matter;
- second, the outside world can help as much as it can harm. It depends
both of
the wisdom of international players and countries' policymakers, and their
ability to meet the challenges. In the case of Russia -- unlike in that of
Poland -- it has happened that too many mistakes for too long have been
committed on the both sides.


Sociologist on Russian 'New Poor

Obshchaya Gazeta, No. 26
1-7 July 1999 
[translation for personal use only]
Interview with Irina Shurygina, scientific associate at the RAN 
[Russian Academy of Sciences] Sociology Institute

The "new Russians" have long ago become a synonym 
for the "new rich." Yet there is also another "new" group--the new poor. And 
there are many more of them. The study conducted by scientific 
associate Irina Shurygina of the RAN Sociology Institute is devoted to 
this phenomenon. 

[Correspondent] Who are the "new poor?" 
[Shurygina] First of all, we must ask, what is poverty? It would 
make the most sense to define it by the level of "deprivation:" That is, 
to determine what people cannot afford. For example, they cannot 
regularly buy meat, pay for health treatment, go on vacation, or 
purchase necessary things. The more such "cannots," the more obvious 
their poverty. The "new poor" are those who previously lived prosperously, 
belonging to the intelligentsia or to the category of skilled workers, 
but who now live below the level of the subsistence minimum. This 
distinguishes them from the "traditionally poor:" Families of 
alcoholics, drug addicts, bums and beggars. Although in recent times 
the distinction has become blurred. 
Imagine an average family which was wealthy in the recent past. 
The husband worked and received a decent salary. During the period of 
reform, his profession became devalued--and he became one of the "new 
poor." In just a few years, he became a drunkard. The wife became the 
only breadwinner in this family, responsible for feeding the children 
and her unemployed and degraded husband. So, guess what category this 
family should be relegated to today... 
[Correspondent] What is the typical route to joining the ranks of 
the "new poor?" 
[Shurygina] The paths are different in the capital city and in 
the province. Take a family of Moscow residents with a higher 
education. The wife continues to work at her former job, for example at 
a school, but now receives not a meager, but frankly a beggarly wage. 
Her husband, an engineer, is trying his hand at working in the 
commercial structures. He doing that which we are being called upon to 
do today: He is learning to earn money, seeking a new profession, not 
holding onto his diploma. These professions sometimes have impressive- 
sounding names: For example, "sales manager." But in reality, he must 
go from store to store, trying to persuade the owners to accept a 
shipment of goods. Such workers are not especially valued: They are a 
dime a dozen. And the "managers" themselves have difficulty in getting 
used to what in their opinion is a degrading business, which is hard to 
like and which does not bring big income... In monitoring the fates of 
these people, one sees how they have become socially degraded: Every new 
job which they take requires ever less skill, and pays ever less. And 
the family slips into poverty. 
Yet while it is still possible to find work in Moscow, in the 
provinces this is extremely difficult. I conducted a study among 
families from Ivanovo. There, the situation is uniquely typical. The 
people used to work at textile factores and were skilled workers. Then 
they were laid off. Now they get by on whatever odd jobs they can find. 
Even to find work as a cargo handler, with very low pay, one must have 
connections! I also encountered some families which have to go hungry on a 
regular basis. On such days, they subsist on tea, and "it is good when 
this tea is sweet"... 
Of course, despite everything, they must "get by." But how? By 
trying to do sewing for their neighbors at home, by babysitting and 
repairing or cleaning apartments? In the province there is no demand 
for this--there, everyone lives poorly, and even if people agree to pay 
for such services, objectively they are able to pay only a very small amount. 
[Correspondent] Whom do the "new poor" vote for?" 
[Shurygina] In their majority, they do not go to the polls. Such 
things no longer concern them. 
[Correspondent] What was the main purpose of your delving into 
this social strata? 
[Shurygina] In their former life, the "new poor" were accustomed 
to living prosperously, espousing values and following the principles of 
"society at large." It was important for me to determine what happens 
with these people next. Do they remain in their former culture? It 
turned out that they do not. A new subculture of poverty is formed. 
Under conditions of constant hopelessness, the people develop defensive 
mechanisms, which protect the individual from disintegration. They 
begin saying, trying to convince themselves and each other, that "the 
rich are swindlers, and there is no place for an honest person in our 
society," that "money is not the main thing; the main thing is to be a 
good person." But such "defense" secures them ever more firmly in poverty. 
For many, the way back has already been closed off. And the 
saddest thing is that, becoming accustomed to living in such a state, 
the people doom their children to it. I conducted surveys in schools. 
The children were clearly divided into four groups: The poor--from 
uneducated and educated families, and, respectively, the rich--from 
uneducated and educated families. 
The children of poor educated parents turned out to be in the most 
hopeless situation. Their aspirations to obtain a higher education are 
very high. They orient themselves toward the image of the highly paid 
professional. But the education which is attainable for them 
(engineering, pedagogical) will not help their dreams come true. The 
lack of promise for the future of such children is recognized even by 
their parents, and advice given to children to study harder sounds 
tragicomic in connection with this. 
Then again, many children also understand this. My survey 
contained the following question: "How do you imagine your life in 10 
years?" The son of university scientific associates wrote the 
following: "I will graduate MGU [Moscow State University], and probably 
remain to work at the university. Like my parents, I will engage in 
science and will receive the same small wage." The boy is preparing 
himself ahead of time for the fact that, while other young people his 
age who are from rich families will go to elite educational institutions 
and get high-paying jobs, he will be forced to follow the path of his 
parents. It is unrealistic to expect to get into a good VUZ [higher 
educational institution] free of charge and without connections. And 
the connections which his parents have lie only in the specific 
professional field. 
Thus, we are becoming a caste society: If you were born into the 
family of a translator, you will be a translator; If you grew up in a 
teacher's family, you will be a teacher. If you were born poor, you 
will be poor all of your life. 
[Correspondent] Is there no prescription for poverty? 
[[Shurygina] Poverty is a danger which we must recognize and 
eliminate. But for the present time, there is no way out of it. Most 
likely, the majority of those who are poor today will remain poor 
forever, and their children will also be poor. But what will happen to 
their grandchildren? Either a specific culture of poverty will be 
formulated, which is characteristic for people with a higher education 
(if this education does not become totally paid). Or the grandchildren 
will no longer have a higher education and will become the classic poor, 
working at low-paying, unskilled jobs. 
In any case, of all the families of the "new poor" which I 
surveyed, only 7 percent retained hope for a prosperous future. 

[Begin tabular material] [Following is a listing of tabular material 
"Deprivations as an indicator of poverty; Results of studies in St. 
Petersburg and Vyazniki (given in percentages.)" Material is presented 
in the following order: Poverty Indicator--St. Petersburg; Vyazniki.] 
1. Family does not get enough to eat--3.9; 8.3; 
2. Cannot afford meat or fish at least twice a week--24.4; 33.5; 
3. Cannot buy basic hygiene products in necessary quantity--0.3; 0.4; 
4. No money for replacement and repair of clothing--5.2; 9.5; 
5. No money for replacement and repair of shoes--6.3; 11.8; 
6. Do not have and cannot afford to buy a refrigerator--1.8; 5.9; 
7. Do not have and cannot afford to buy basic furnishings--3; 4.3; 
8. Do not have and cannot afford to buy even a black-and-white 
television set--2.3; 6.7; 
9. No money for vitally needed medicines and medical supplies-- 22.8; 24.0; 
10. Cannot afford to go to paid doctors if aid of specialists 
is unavailable free of charge--23.1; 29.1; 
11. Cannot organize ritual services without excessive debts--6.4; 22.5; 
12. Cannot buy fruit for the children--4.3; 15.3; 
13. Cannot give children school lunch money--1.8; 5.4; 
14. Cannot even rarely buy sweets for the children--7.6; 12.5 
15. Cannot buy new shoes for children or replace shoes as 
children outgrow them--11.5; 6.5; 
16. Family cannot afford to pay for children to attend preschool 
institutions--3.8; 12.5; 
17. Family cannot afford to make repairs on house (apartment) in 
case of extreme necessity--22.8; 42.5. [End tabular material] 


Chubays on Economics, Politics, Elections 

Komsomolskaya Pravda
7 July 1999
[translation for personal use only]
Interview with Anatoliy Chubays, Unified Energy System of Russia CEO, 
by Nikolay Yefimovich; date, place not specified: "Anatoliy Chubays: I 
Will Be Wiped off the Face of the Earth For Saying This, But There Is 
Economic Growth in Russia" -- first paragraph is introduction 

In Salzburg, where the World Economic Forum has 
just taken place, the leaders of the right-wing movements have announced 
their intention to create a single electoral bloc. Anatoliy Chubays gave 
a solo performance. He does not personally intend to run for the State 
Duma in any capacity. This does not mean, however, that the head of the 
Unified Energy System Russian Joint-Stock Company is only interested in 
fuel oil and kilowatts.... 

I Am a Politician -- Only in My Spare Time

[Yefimovich] Anatoliy Borisovich, once again you have bamboozled your 
ill-wishers. You have not just stayed in the post of head of the Unified 
Energy System Russian Joint-Stock Company, but you have now become a 
permanent oligarch. The president himself lobbied for the amendment to 
the Russian joint-stock company charter whereby the chairman of the 
management board is no longer appointed by the board of directors, but is 
elected by 75 percent of shareholders at a general assembly. 
[Chubays] By this decision, Yeltsin has essentially once again emphasized
equal rights of all shareholders, irrespective of form of ownership. This 
is unconditional support for the company from the president and the 
government chairman. Private shareholders have been given additional 
rights. This is a fundamental aspect for us, partly because it guarantees 
the stability of the company and its administration independently of 
political trends. 
[Yefimovich] Does this mean that neither the new head of the government nor 
the new president will be able to dismiss you? 
[Chubays] The chairman of the management board of the Unified Energy System 
Russian Joint-Stock Company is undoubtedly being given serious additional 
possibilities to work efficiently. And this labor will be assessed not 
according to what particular politicians are saying about me, but 
according to how efficiently the company is working. 
[Yefimovich] Has the appearance of Presidential Staff Head Voloshin in the 
post of chairman of the Unified Energy System Russian Joint-Stock Company 
board of directors ensured reliable Kremlin protection? 
[Chubays] I have a very close working relationship both with the chief of
President's Staff and with the premier. Why hide the fact? I have known 
them very well for a long time. The main thing is that in my work I have 
virtually never been in a situation where issues of significance to the 
company have failed to be resolved. 
[Yefimovich] The Communists and other opposition figures are seriously 
worried by 
the fact that enormous financial flows from the Unified Energy System 
Russian Joint-Stock Company will be channeled into parties and movements 
you sympathize with. Particularly since you are chief of the Just Cause 
electoral staff. 
[Chubays] I do not think that the natural monopolies, including the Unified 
Energy System Russian Joint-Stock Company, should get directly involved 
in the election process. This would be essentially wrong. They have more 
than enough tasks of their own. It is another matter that there are 
713,000 people working in our company. This is a substantial number. They 
may express their stance in the upcoming elections. But that is the 
expression of their personal will. My main work is in the company. And I 
intend to be even more seriously involved in it than before. I will be 
involved in politics only in my spare time. 
[Yefimovich] But whom do you see yourself as first and foremost -- a 
politician or an economist?... 
[Chubays] I definitely perceive myself first as an economist; I was forced 
into becoming a politician. 

Primakov Has Gathered Kiriyenko's "Harvest" 

[Yefimovich] In your opinion, what can we expect in the economy in the near 
future? Will major economic structures get involved in politics? 
[Chubays] Of course. They already are involved. The point is that these 
structures, which everyone unanimously criticized furiously over the 
crisis, the default, and the devaluation, are operating more wisely than 
many rulers. They are reacting absolutely soundly to the devaluation. 
There is economic growth in Russia. 
I am very much afraid that I will be wiped off the face of the earth 
for saying that. But it is a fact. In the first five months of 1999 as 
compared with the first five months of 1998 there was a rise of 1.5 
percent. The demand for Russian output is growing on foreign markets. 
Russia's exports have gone up. As a result of the devaluation, Russia's 
imports are falling, and this means that the Russian producer is 
receiving additional income from Russian consumers.... 
[Yefimovich] Why was it necessary to dismiss Primakov's government, since
have such brilliant results in the economy? 
[Chubays] The Primakov government has nothing to do with these results. The 
previous government, Kiriyenko's government, must unquestionably be 
thanked for this. The growth in the economy is the direct result of the 
17 August devaluation of the ruble, which was cursed repeatedly by 
Maslyukov and Primakov, as were all of the decisions adopted in August. 
Incidentally, a few days ago I carried out an experiment. I took the text of 
the government and Central Bank statement made by Maslyukov and Gerashchenko, 
which the IMF almost approved, and I placed it side by side with the 
government and Central Bank statement which Kiriyenko and I made last 
year. It was amazing. The text was exactly the same, apart from a few 
small details. 
[Yefimovich] So it works out that Primakov has not even deserved a kind
And yet, according to polls, his rating is far higher than the current 
premier's rating.... 
[Chubays] I think that the Primakov government did do one big, important,
practical job -- it kept up political stability in Russia against the 
backdrop of very difficult economic processes: a fall in the living 
standard by at least 40 percent and serious blows on the financial 
sector. All this is a political burden that Primakov's government 
withstood. At the same time, his government was a unique experiment, 
whereby in real terms the president transferred power into the hands of 
the left wing. The president had never done anything of the kind before. 
And what happened? It turned out that the Communists are not in a 
position today to carry out a single Communist slogan -- neither 
nationalization, nor the abolition of the dollar, nor the introduction of 
state control of prices. None of these ideas, put forward by the Reds, 
was implemented by Primakov's government. 
[Yefimovich] So the Communists are more of a specter than a real force? 
[Chubays] Primakov carried out his historical mission. The response to his 
departure is confirmation of this. Do you remember how Gennadiy 
Andreyevich [Zyuganov] personally announced menacingly what would happen 
in the country if, God forbid, someone touches the people's beloved 
Primakov government? Someone did touch it. They gave it a good shove. And 
not a single Communist protested. Not only that, the Communists were so 
frightened that when Stepashin appeared in the Duma, he was instantly 
supported by a constitutional majority of over 300 votes. 
All this proves once again that this whole political maneuver carried 
out by Yeltsin, to retreat and to restore lost positions, was absolutely 

I Can Certify: Abramovich Is Not a Phantom.... 

[Yefimovich] But many people are convinced that it is the so-called Family, 
and not Boris Nikolayevich himself, who make all decisions nowadays. 
[Chubays] When people call Tatyana Borisovna, Yumashev, and Voloshin The 
Family, they seem to be forgetting that Voloshin is nevertheless our most 
important official after the president and the premier. Tatyana Borisovna 
is the president's adviser, and Yumashev is too, albeit on an unofficial 
basis. Incidentally, this does not decrease his powers. These are people 
on whom it is incumbent to adopt decisions. Ex officio. 
[Yefimovich] And what kind of decisions are they? 
[Chubays] Political ones, naturally. Personnel decisions, naturally -- and 
this includes decisions on the composition of the government. You might 
reason that Comrade X was wrongly appointed, and he must be dismissed. Or 
the opposite. But I absolutely do not agree with the hysterical outbursts 
that it is the first time in Russian history that The Family has 
influenced a basic decision on the government. If you examine this 
sentence closely, you will see that everything was as it should be. It is 
another matter that mistakes and miscalculations do happen. 
[Yefimovich] Where did the nightmare phantom [Roman] Abramovich, who has 
eclipsed even Boris Abramovich [Berezovskiy] himself, come from? 
[Chubays] I can certify this personally. Abramovich exists, he is real. 
But it is hard for me to judge the scale of Abramovich's influence on 
political decisions being adopted. As for the actual man, I think that it 
is theoretically possible to discuss things with him, you can have a 
sound dialogue with him. 
[Yefimovich] People say that he has promised to dismiss you. 
[Chubays] He has not said this to me. I do not think that he would have 
seriously promised this to anyone at all. 

How I Saved Luzhkov From Loneliness

[Yefimovich] What is your relationship with Nikolay Aksenenko like now that 
you have changed places, and you are subordinate to him? 
[Chubays] Firstly, what has struck me is that my relationship with
has not changed. Actually things are simpler for me, in this case it is 
important that his attitude is unchanged. Believe me, during my numerous 
career shifts I have experienced 100 times the scenario whereby people 
who were ready to kiss your feet one day turn away from you the next day. 
[Yefimovich] How strongly did the interests of various clans clash during
formation of the present government? It is said that Stepashin was 
prepared to resign without even having appeared in the main White House 
[Chubays] Yes, major oligarchic structures and banks did have their 
Definitely. But the key question was the question of Boris Nikolayevich 
Yeltsin and Sergey Vadimovich Stepashin understanding the situation. And 
that was the root of the problem. And it was over this that emotions 
really did flare up. Everything else was secondary. And since the main 
thing was that it did prove possible to secure an understanding between 
the two top officials, I believe that the victory was a common one. 
I am convinced that this particular government, more than almost any 
other, has a real potential of being not just a short-term government, 
but also a long-term government. A government which will lead to the 
country into next year, the year of the presidential election. 
[Yefimovich] But it is dangerous to get radically involved in economics 
elections. After all, it is impossible to get by without unpopular 
measures in that case.... 
[Chubays] I do not actually think that the present government needs to get 
down to weighty problems of the Russian economy before the presidential 
election. Such as the non-payments, the complete inefficiency of the tax 
system, the lack of any real mechanisms for protecting property rights, 
mass larceny and corruption, and a great deal else besides. In order to 
tackle this, you have to have immense political support behind you. These 
are tasks for those who will lead the country after next year's 
presidential election. 
[Yefimovich] Many analysts believe that Just Cause, whose election staff 
chief you are, is not attracted by the Duma. 
[Chubays] The situation is a fairly complicated one, and I do not want to 
that fact. We have an enormous amount to do before we can return to the 
top flight. It seems to me that the first steps that have been taken are 
sensible and sound. Our troika -- Nemtsov, Fedorov, and Khakamada -- is a 
strong team. These are people who do not need personal launches or 
publicity. They are people with unique experience: at least at 
ministerial level, or even vice-premier level. At the same time, they are 
all young, they all have prospects, they all have a future. That is why 
our success will depend in many respects not so much on a search for top 
people as on organizational, technological, managerial work. 
[Yefimovich] At a recent government sitting, you were sitting next to 
your eternal opponent. Do you perhaps intend to unite in the elections? 
[Chubays] As it turned out, when I arrived at the government sitting, there 
was an empty seat next to Yuriy Mikhaylovich. I asked him, "Do you mind 
if I sit here?" -- and he said: "I am glad that you are sitting here, 
because there are nothing but empty spaces around me, everyone is afraid 
to sit near me." 
I think that Luzhkov still has quite a good chance. And there are more 
pluses than minuses in his participation in the Duma elections. A result 
for Luzhkov will in any case be to the detriment of the Communists. 
Although, at the same time, I do not agree with those who say that 
Luzhkov will be a clear favorite who will conclusively gain first place 
in the next election. This is an extremely difficult task for a new bloc 
that is being created from scratch. Even if the Moscow mayor does head 
the bloc. 
[Yefimovich] Addressing the World Congress of the Russian Press, one 
announced that Luzhkov should be Russian president, and Primakov State 
Duma chairman. 
[Chubays] As far as I know, Yevgeniy Maksimovich is now actively thinking 
about his role in the elections. I am convinced that, paradoxically 
enough, the scale of political pressure on Primakov in this case will 
prove to be immeasurably greater than in the period when Primakov was 
government chairman. But Yevgeniy Maksimovich will make the decision 
It is also obvious that Primakov and Zyuganov are not the same. But 
after all, there is a possible scenario, to my mind a very dangerous one, 
whereby Primakov could join forces with the Communists for the elections. 
I do not know whether Yevgeniy Maksimovich could make that decision. But 
if he does, this will be a great danger, which will have to be combated 
by all means available. 
[Yefimovich] Anatoliy Borisovich, is it possible that Yeltsin will stay in 
power? If a single state is created together with Belarus, for example? 
[Chubays] As I see it, this is complete nonsense from start to finish. For 
that to happen, a whole list of fundamental political preconditions would 
be required, which do not exist in the country. Paradoxically enough, the 
current Constitution is strong because the authorities are weak. And when 
the authorities are weak they cannot violate the Constitution. That is 
why I believe that such extravagant scenarios are most unlikely. In 
exactly the same way, in 1996 a lot of people thought that there would be 
no election. There were forces that were fighting for this. Nevertheless, 
the Constitution did the trick then. I hope it will this time too. 



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