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Johnson's Russia List


July 26, 1999   
This Date's Issues: 3407 3408 

Johnson's Russia List
26 July 1999

[Note from David Johnson:
1. AP: Russia Seeks U.S. Farm, Airline Aid.
2. Reuters: Russian premier Stephasin visits Boeing plant.
3. The Times (UK): Anna Blundy, 'Russia unnerves us because its
familiar-lookingpeople consistently refuse to conform to our ideas of acceptable behaviour'

4. The Electronic Telegraph (UK): David Wastell, Top Bush aide calls for 
nuclear shield. (Condoleezza Rice)

5. Itar-Tass: Russia Should Do much to Lure Investments in Energy Sector.
6. Jerry Hough: Re: 3404-Adshead&Schmidt/Hough&Shapiro
7. AFP: Balkans summit will highlight Russia's diplomatic split personality.
8. The Economist: Will Belarus merge with Russia?
9. Business Week: Margaret Coker, Russia's Image Doctor Has a New Patient. 
Controversial Sergei Lisovsky is backing Moscow's mayor.

10. The Electronic Telegraph: Alice Lagnado, Yeltsin curbs media during 
run-up to poll.

11. Stratfor commentary: Russia Argues for Debt Forgiveness.
12. AFP: Albright prepares for wide-ranging talks with Russian FM.]


Russia Seeks U.S. Farm, Airline Aid
July 26, 199

EVERETT, Wash. (AP) - Prime Minister Sergei Stepashin and other Russian 
officials arrived Sunday in the United States in a bid to seek U.S. aid for 
Russian farms and airlines and to discuss a steel trade dispute.

Stepashin's U.S. visit, his first since his appointment in May, is aimed at 
mending relations that fell to their lowest point in the post-Cold War era 
during NATO's airstrikes on Yugoslavia. Russia fiercely opposed the bombings 
but now has peacekeeping troops serving alongside NATO in Kosovo.

``There is still hard work to do to ... restore confidence undermined by 
NATO's military action against Yugoslavia,'' Stepashin told reporters in the 
Far Eastern port city Vladivostok before leaving Sunday, according to Russian 
news agencies. ``We need to get back to serious dialogue.''

The Russian premier is also seeking to boost U.S. investment in his country's 
flailing economy.

Arriving in the United States Sunday afternoon, Stepashin then toured the 
factory here where Boeing 747s, 767s and 777s are made. With Boeing president 
Harry C. Stonecipher constantly beside him, Stepashin examined the interior 
of a newly painted 767 scheduled for delivery to Russia's flagship carrier, 
Aeroflot, next month.

Stepashin and his entourage met behind closed doors with Boeing officials for 
about four hours before heading 25 miles south to Seattle for a banquet given 
by Gov. Gary Locke.

At the hotel banquet, attended by about 250 government and business leaders, 
Stepashin promised that Russia is coming out of its financial crisis more 
quickly than had been expected.

``There are good prospects for investment in Russia,'' he said, urging the 
business leaders in the crowd not to waste any time.

Regarding his Boeing visit, Stepashin said he was optimistic not only about 
Aeroflot buying Boeing planes, but about the possibility of sharing Russian 
engineering and technical expertise to develop new products.

``I believe this is the most promising aspect ... from the point of view of 
improving the economic situation in Russia,'' he said.

Stepashin declined to answer a question on how the central mission of his 
trip, reducing tensions between Russia and the United States over Kosovo, 
would be affected by the killing of 14 Serb farmers on Friday.

``With regard to the Kosovo problem, we are going to discuss it in 
Washington,'' he said.

Stepashin heads to Washington on Tuesday, where he will meet with his host, 
Vice President Al Gore, and with President Clinton and other officials.

Russia's Federal Aviation Service is appealing for $1 billion in loans 
guaranteed by the U.S. Export-Import Bank to build 20 Il-96M/T planes for 
Aeroflot, the Interfax news agency said.

The Russian delegation is to talk with U.S. farm machine manufacturers John 
Deere and Co. and Case Corp. about proposed loans for $1 billion worth of 
agriculture equipment, Interfax reported. Stepashin is not planning to ask 
for more food aid, the ITAR-Tass news agency reported, citing Richard Fritz, 
a U.S. Agriculture Department official.

Stepashin said Sunday he would voice Russian concerns about a trade agreement 
reached earlier this month sharply limiting Russian steel exports to the 
United States, which had accused Russia of ``dumping'' steel at below 
manufacturing cost.

Russia has said its prices are fair and warned the deal will seriously hurt 
its steel industry, which makes up 7 percent of gross domestic product.

Stepashin's talks will also focus on a proposed loan from the International 
Monetary Fund, prospects for Russian ratification of the START II arms 
control treaty, and U.S. concerns about the spread of Russian nuclear 

Stepashin said Sunday that President Boris Yeltsin had instructed the Defense 
and Foreign Ministries to work on the long-stalled START-2 nuclear arms 
reduction treaty, as well as START-3 and the Anti-Ballistic Missile treaty, 
before his meeting with Clinton, ITAR-Tass reported.

Yeltsin and Clinton agreed to modifications in the ABM treaty three years 
ago, but the U.S. administration has said it would not submit the 
modifications to the U.S. Senate until the Russian parliament ratifies 


Russian premier Stephasin visits Boeing plant
By Chris Stetkiewicz

EVERETT, Wash., July 25 (Reuters) - Russian Prime Minister Sergei Stepashin 
began a three-day visit to the United States on Sunday, temporarily setting 
aside U.S.-Russian tensions over Kosovo to praise aerospace giant Boeing Co. 
for its active trade with his country. 

"I believe that our cooperation with the Boeing Co. has not been affected in 
any way by the events in Kosovo," Stepashin told reporters after touring a 
Boeing airplane assembly plant 20 miles (32 km) north of Seattle. 

"With regard to the Kosovo problem, we are going to discuss it in 
Washington," he added, saying he would raise the latest crisis in the 
Yugoslav province with President Bill Clinton later this week. 

Fourteen Serb farmers were ambushed and shot dead while harvesting grain in 
Kosovo, NATO said Saturday. The incident prompted Yugoslav President Slobodan 
Milosevic to demand Yugoslav troops and police be allowed to return to the 
war-torn province. 

Stepashin's visit to the United States is the first by a Russian prime 
minister since before March, when his predecessor Yevgeny Primakov abruptly 
turned his plane around over the Atlantic Ocean while en route to the United 

Primakov canceled the visit with U.S. Vice President Al Gore after Gore 
advised him NATO was planning to go ahead with a bombing campaign against 
Yugoslavia despite fierce Russian opposition. 

Stepashin has said he expects tough talks with U.S. officials on economic and 
defense issues, a proposed $4.5 billion International Monetary Fund loan for 
Russia, and its ties with long-time U.S. nemeses Iraq, Iran and North Korea. 

After landing at a Boeing <<A HREF="aol://4785:BA">BA.N</A>> airfield, the 
prime minister inspected a Boeing 767 set for delivery to Russia's state 
flagship airline Aeroflot next month. It will bring the total number of 
Boeings in the Russian commercial fleet to 43. 

Boeing hopes to sell more planes to Russian airlines as they upgrade the 
aging fleet in years to come. 

"The Russian aviation market has potential for American-made aircraft. A lot 
of their planes are outdated and will need to be replaced," said Viktor 
Anoshkin, communications manager at Boeing. 

Russian companies have worked extensively with Washington state-based Boeing 
on developing the International Space Station and Sea Launch, a platform in 
the Pacific Ocean slated to begin sending commercial satellites into orbit 
later this summer. Sea Launch uses Ukrainian Zenit rockets with engines built 
in Russia. 

Russia also supplies about 20 percent of the 13 million pounds of titanium, a 
metal which is lighter and stronger than steel, that Boeing uses in its 
commercial aircraft each year. 

Washington Secretary of State Ralph Munro estimated annual bilateral trade 
between his state and Russia at about $1 billion, mostly in fish and other 

That makes Washington the No. 1 U.S. destination for Russian goods, Munro 
said, brushing aside concerns that Russia's crime-ridden, lurching 
free-market system might scare off foreign investors. 

"You sort out pretty quickly whom you can trust," Munro told Reuters. 

Close economic ties between the U.S. Northwest and Russia were the main 
reason Stepashin chose to land in Washington and to huddle for an hour with 
Boeing officials. 

"We've known these people for a long time. We want to know them better," said 
Boeing President Harry Stonecipher. 

Stepashin was also due to meet Washington Gov. Gary Locke and senators Slade 
Gorton and Patty Murray. 


The Times (UK)
July 26 1999
[for personal use only]
Anna Blundy 
'Russia unnerves us because its familiar-looking people consistently refuse 
to conform to our ideas of acceptable behaviour'

To your casual observer most Russians look reasonably European. Not in the 
sense that they all sit drinking frothy cappuccino in pavement cafés or wear 
tasteful, expensive and understated clothes, but in that they are, crudely 
speaking, white. 

Admittedly, they mostly have a bit of Tartar in them (few Russian women came 
away unimpregnated from the hundreds of years of Tartar yoke), but you 
wouldn't necessarily notice it. Not unless you happened to be staring into 
the face of one of Moscow's incredible-looking women - the kind of 
perfect-skinned, green-eyed, tall and exotic-looking types that make Western 
businessmen sweat into their suits and go even redder in the face than usual. 

But basically, if you put your average Russian outside a Soho bar with a 
mobile phone and a glass of chablis it would only be the long-suffering look 
in his eyes and the air of casual menace that would be likely to give him 
away. And it is partly this unity of skin colour that fuels the West's 
enduring obsession with Russia and her people. 

We are horrified by Russia's crime figures, though there are Latin American 
countries with worse. We are appalled by the bleak stories of Moscow's 
orphaned street children who sniff glue, beg and prostitute themselves, but 
there are far too many countries in the world with similar tales. The British 
press runs articles about the fact that Russia is cold in winter, yet it is 
just as cold in Canada. 

Of course, our concern stems partly from the fact that Russia is near, 
although at around four hours from Heathrow it is not much nearer to England 
than Greece and much of the Middle East. Granted, the Soviet Union was a 
superpower to be reckoned with and, OK, we would all like to get our hands on 
the natural resources. 

But the root of our interest really lies in the fact that we are inherently 
racist and Russians are white. Any nation where the majority of inhabitants 
have skin less pallid than ours is allowed its idiosyncracies, but Russia 
unnerves us because its familiar-looking people consistently refuse to 
conform to our ideas of acceptable behaviour. 

Westerners have been afraid of Russians for centuries. "Both the men and 
women are handsome, but they are a brutal race," wrote Ambrosio Contarini, a 
Venetian ambassador, after his visit to Muscovy in 1476. "They boast of being 
great drunkards, and despise those who are not. The sovereign, however, will 
not grant permission to every one to make it; for, if they had that 
permission they would be constantly intoxicated and would murder each other 
like brutes," he says. He was not the first to comment on this phenomenon. 

The fact that Russia opposed Nato's bombing of Yugoslavia rather than 
toadying up to the West came as something of a relief to the disturbingly 
large number of Europeans and Americans who like to pontificate on the 
subject of Russia. (Articles entitled "A World Without Russia?" are forever 
popping up on the computer screens of Moscow's resident foreigners.) 

You know where you are with a contrary, combative Russia that hates you. It 
is when she is being all pally that you have to worry. For in the same way 
that the Russians' current need for money disguises their true feelings about 
Europeans and Americans (essentially that they are cowardly, uncultured, 
grinning idiots), their pale skins disguise the fact that they are in fact 
half-Western and half-Eastern, and so more incomprehensible and fascinating 
to us than either. 

Russians sneer at the likes of us for being so chilly - not talking to each 
other in lifts, keeping a constant physical distance between ourselves and 
whomever we are talking to - and they also make jokes at the expense of their 
Southern and Eastern friends for what they see as their excessive 
unselfconsciousness with friends and strangers. 

They themselves don't seem to know what they are. They appear to flail 
aimlessly when required to produce a national identity, and always end up 
talking about Russian souls, enigmas, the countryside and snow. All they know 
is that whatever happens in the world, they are of vital importance to it. 

Nikolai Gogol brilliantly failed to put his finger on this in his 1842 
unfinished classic Dead Souls: "'And you Russia, speeding along like a 
spirited troika that nothing can overtake? Everything on earth is flying 
past, and looking askance, other nations and states draw aside and make way." 
Well, they had to in Kosovo and will almost certainly have to do so again.


The Electronic Telegraph (UK)
25 July 1999
[for personal use only] 
Top Bush aide calls for nuclear shield
By David Wastell

AN ANTI-MISSILE shield to protect Britain and other American allies in 
Europe from attack by Middle Eastern "rogue states" is advocated by a senior 
aide to George W Bush, the Republicans' leading presidential candidate.
Iraq and Iran are both striving to develop rockets capable of striking 
targets in Europe. Condoleezza Rice, a strategic weapons expert and Mr Bush's 
senior foreign policy adviser, told The Telegraph she believes that America 
should develop and deploy a "theatre defence" system as soon as possible.

Such a system - still some years from fruition - could not defend against the 
sheer number of missiles available to China or Russia. But, she said: "If 
you're talking about a launch by a rogue state, or an unauthorised launch by 
someone else, then why shouldn't both the United States and its allies be 

Mr Bush, the governor of Texas, has made the creation of an anti-missile 
defence system to protect US forces stationed around the world a central 
plank of his presidential election platform.

Dr Rice, 44, who emerged as Mr Bush's leading foreign policy adviser earlier 
this year, is being tipped as a likely National Security Adviser or Secretary 
of State if Mr Bush, the son of the former US leader, wins next year's race 
for the White House. He is a favourite in public opinion polls to be the next 

Although Dr Rice - widely known as Condi - has spent much of her life as an 
academic, she has had spells in the Pentagon and the White House under 
Presidents Reagan and Bush, and, until earlier this month was Provost of 
Stanford University.

A top job in a new Republican administration would be a formidable 
achievement for a woman whose early childhood was spent in segregated 
Birmingham, Alabama, at a time of acute racial tension. She did not have a 
white classmate until she was 12, when her family moved to Denver, Colorado. 

A study of the Soviet bloc and arms control led to a temporary attachment to 
the US government. She was working within the Pentagon when President Reagan 
- at the Reykjavik summit with President Gorbachev - surprised the world by 
offering a deal to scrap all long-range ballistic missiles.

She regards nuclear weapons as a necessity whose "absolute horror" has 
actually prevented war. "The world doesn't need to be embarrassed about 
nuclear weapons. They had their place and still have their place."

Critics of Mr Bush say it is essential to find out the foreign policy views 
of people such as Dr Rice because Mr Bush has so few of his own. He seemed 
slow to state a clear position on the launch of the air campaign in Kosovo, 
at first merely commenting that he had "concerns" about it. He has also been 
ridiculed for confusing Slovenia with Slovakia, and referring to inhabitants 
of Greece as "Grecians".

She defends Mr Bush strongly against his critics. She said: "People are 
playing an elite game with him. 'Can we catch him calling some group of 
people by the wrong noun, or mis-hearing where somebody in the audience says 
they are from?'

"This was something people played with Ronald Reagan all the time, and he 
couldn't tell Brazil from Bolivia. But he got one thing right - he knew it 
was time to challenge the Soviet Union because it was weak enough that you no 
longer had to try to accommodate its interests everywhere. That single 
decision ended up creating the conditions on which we ended the Cold War 
after 45 years' trying."

On Kosovo, she shows how her own experience has shaped her thinking. While 
still a child in Birmingham, one of her former kindergarten classmates was 
killed in a racial confrontation at a church - a horror that left a deep 

She said: "I appreciate how far America has come and that we are now a 
functioning multi-ethnic democracy. The reason to take on Milosevic was that 
he challenged what may be the most important principle for Europe going 
forward, which is that multi-ethnic groups can live together without threat 
to minorities."

The Foreign Office has issued a standing invitation to her to visit Britain 
at any time. For now, however, she insists that she has not even decided 
whether she would work in a possible Bush administration, preferring to wait 
and see.

But British diplomats are not the only ones in Washington rushing to get 
alongside her - just in case. She said: "I have a lot of friends in the 
foreign policy establishment over there. And, yeah, for some reason I 
suddenly seem to be hearing from them rather more often."


Russia Should Do much to Lure Investments in Energy Sector.

WASHINGTON, July 26 (Itar-Tass) - Adviser of the U.S. Commerce Department
on relations with Russia in energy and commerce spheres Jan Kalicki,
speaking in an interview with Itar-Tass on Sunday, said that Russia Vitaly
needs foreign and local investments to maintain the present level of oil
production for a long perspective. 

However, it has not made so far several steps in the legislative sphere to
invite capital investments. The adviser has been directly involved for
years in preparing sessions of the Russian-American commission on economic
and technological cooperation. 

The meeting between the co-chairmen of the commission -- Russian Prime
Minister Sergei Stepashin and U.S. Vice-President Albert Gore -- will take
place in Washington on Tuesday. 

The Russian cabinet head arrived in the United States on a visit on Sunday,
starting it with the U.S. West coast where he inspected the operation of
the Boeing aerospace corporation. 

Asked what Russia should do to boost foreign investments in the energy
sector, Kalitsky said that it should, above all, give Western and Russian
companies a chance to reap fruit of legislation on product sharing, issuing
appropriate normative acts. 

He noted that these documents are very important to push forward such
priority projects with prevailing participation of foreigners as Sakhlin-1
and Sakhalin-2, to develop Kharyaginskoye and Timano-Pechorskoye deposits
as well as operations in the Northern territories. 

Secondly, the Russian State Duma should speed up approval of bills which
are to be realised on the basis of agreements on product sharing, the
adviser continued. 

He noted that only eight oil-fields -- out of hundreds of undeveloped
deposits which are vitally important for the Russian oil sector -- are
approved for development on product-sharing conditions. 

Another 30 deposits are examined in the framework of three separate lists.
However, the State Duma has no schedule for the final adoption of decisions. 

Although oil prices start climbing, international oil companies are very
cautious of using their funds under the present situation on the world oil
market, Kalitski said. 

He stressed that Russia has always competed with the rest of the world in
attempts to lure investments in the energy sector, but under the present
conditions, companies are even more cautious in their approach to the
question of which countries promise the greatest yield to every invested

Therefore, the American expert believes, Russia should exert additional
efforts to make itself a luring place for capital investments. 


Date: Sun, 25 Jul 1999 
From: "Jerry F. Hough" <>
Subject: Re: 3404-Adshead&Schmidt/Hough&Shapiro

I really don't know why Jack Schmidt reproaches me. Everything 
I have said for years is that Yeltsin's Russia has the old Soviet system of 
centralized non-monetary distribution of goods. That is what barter 
means. That is the theme of my book. I said we should have tariffs on
their steel. And I have been emphasizingsince 1985 that Russia desperately
needs agricultural reform and investment in agriculture. Tariffs should be
part of such a program.

Jonas Bernstein's comment on the Berezovsky threat of bloodshed 
reminds us that is not new. It was said all the time in the 1996 
presidential election, and it meant that if the Communists won, Yeltsin 
would use force to prevent them from coming to power. I think it is a 
decisive reason Yeltsin won. People rationally voted for him in the 
belief he would be dead in months, and then they might have a real 
presidential election with good centrist candidates. People 
interested in the subject should read the very informative Korzhakov 
memoirs. The Communists were being threatened in private, and Korzhakov was
spreading the word to everyone. One whole chapter is Korzhakov's 
transcript of his taping of a conversation with Chernomyrdin where he 
told him this and accused him of disloyalty to intimidate him. The March 
1993 impeachment vote took place under a signed presidential decree to
arrest the deputies if they impeached.

The problem is not a dirty election. It is that the Family will 
not give up power voluntarily. The question is whether Luzhkov, 
Primakov, and so others can come to power with a military coup--Committee 
of Salvation that removes Yeltsin and the Family--or whether there is a 
police coup with Stepashin, Chubais, and Berezovsky. The US and Gore 
specifically need to handle Stepashin with kid gloves, for, one way or 
another, I feel certain that it is going to hit the fan well before the 
presidential election, and he is not likely to look like a great ally to 
have. Ideally we would even support the other side.


Balkans summit will highlight Russia's diplomatic split personality

MOSCOW, July 26 (AFP) - Russia will use a Balkans summit this week to press 
for western cash to rebuild Yugoslavia after the Kosovo conflict, and act as 
unofficial spokesman for a Belgrade regime the West wants to isolate, experts 

Senior Balkans, European and US officials will attend Friday's one-day 
conference in Sarajevo on rebuilding the region, devastated by a string of 
conflicts since the bloody breakup of the former Yugoslavia in the 1990s.

But the meeting will only highlight Russia's "Jekyll and Hyde diplomacy" warn 
analysts, who contrast Moscow's sharp attacks on western policy in the 
Balkans with its desire to secure lucrative reconstruction contracts.

"Russian (foreign) policy is schizophrenic," said Andrei Piontkovsky, head of 
Moscow's Centre for Strategic Studies.

"It needs two Wests: one to denounce, to blame for all our failures; the 
second to ask for credits, for humanitarian aid, for reconstruction contracts 
in Yugoslavia.

"That's why you cannot get a clear idea of Russia policy, because it's driven 
by psychological complexes, and not clear-cut national interest," he said.

Government officials here were unable to tell AFP what Moscow sought from the 
gathering, one frustrated official admitting that "I myself want to know" 
what the policy line is.

The diplomatic split personality was again in evidence at the weekend.

Sergei Stepashin, who was Sunday to make his debut visit as premier to the 
White House, said the US-Russian relationship was "stable and cannot be 
shattered by even by the war in Yugoslavia."

His Foreign Minister Igor Ivanov meanwhile used the massacre of 14 Serbs in 
Kosovo to accuse NATO of "flirting with Albanian extremists and separatists," 
a policy which was "fraught with the most severe consequences."

The comment echoed the virulent anti-West rhetoric employed by Moscow to 
condemn air strikes launched by NATO to force Belgrade to halt its crackdown 
on ethnic Albanians in Kosovo.

Although both sides have since made conspicuous efforts to mend fences, acute 
differences remain over post-conflict reconstruction of Yugoslavia and the 
future of the Balkans region in general.

Piontkovsky said Moscow would use the Sarajevo conference to push Belgrade's 
agenda in the absence of the excluded Yugoslav President Milosevic, 
"objecting to the idea that there will be no substantial help for rebuilding 
Serbia while Milosevic is still in power," the US and British line.

"Its political agenda will be to protect Milosevic as much as possible even 
though he is in a desperate situation," he added, notably by insisting Kosovo 
remain part of Serbia and the disarming of ethnic-Albanian guerrillas.

Cash-strapped Russia, desperate for fresh IMF credits to help in its battle 
against outright default on its foreign debt, will devote little if any of 
its own funds to Yugoslav reconstruction itself.

But Moscow will be looking to secure a substantial slice of the lucrative 
contracts to rebuild Serbia's shattered infrastructure for its own firms, 
notably oil installations and bridges -- bankrolled by US and European 

Analysts predict the West will be eager to accommodate Moscow to ease 
cooperation in the Kosovo peace force and to avoid fuelling anti-western 
sentiment in Russia ahead of legislative polls in December and presidential 
elections next summer.

But Sergei Kolmakov, deputy director of the Fond Politika think-tank here, 
warned that the march of history was against Russia playing a major strategic 
role in the Balkans long-term.

Regional states "are trying to join the European Union, and Russia cannot 
help very much in improving their economic situation," he said.

Russia retained some influence as a major provider of natural gas, oil and 
military hardware but "is becoming more and more a minor partner. It's an 
objective process connected to the weakening of Russia in general," Kolmakov 


The Economist
July 24-30, 1999
[for personal use only]
Will Belarus merge with Russia?
Slavic disunion? 
M I N S K 
Despite repeated protestations by the governments of both Russia and Belarus 
that their countries will reunite, Belarus is still proving too much of a 
liability for the idea to bear fruit—and its erratic leader may anyway be 
having second thoughts 

A MERE wobble or a sensational U-turn that could shift Europe’s centre of 
geopolitical gravity?At the start of this month, Belarus’s eccentric 
president, Alexander Lukashenka seemed to be moving away from his big idea, 
union with Russia, and turning to the West instead. “I have ordered the 
foreign ministry to establish the warmest, closest relations with all our 
neighbours, including western countries,” he said. “We made a big mistake by 
leaning towards the east for too long.” Then, presumably to sweeten the West, 
which has long castigated him for being dictatorial, he offered to hold a 
dialogue with his much-harried political opposition. 

Were Belarus to switch its gaze from east to west, the shape and mood of 
Slavdom would alter appreciably. Russia would lose a buffer. Those in Ukraine 
struggling to pull their country out from under the shadow of a Russia that 
still resents its independence would get a fillip. And several countries in 
Central and Eastern Europe, such as Poland and the Baltic states, would gain 
in confidence if Belarus were able, as it were, to come over to their new way 
of thinking. 

But among Slavs a rival view too is strong. Over the past few years, and 
especially during NATO’s campaign against Serbia, those many Russians, 
Belarussians and Ukrainians who think life was better when they were bound 
together within the Soviet Union have talked fondly of re-creating a Slavic 
core that would halt, if not roll back, what they deem to be the West’s 
encroachment on them—witness the eastbound expansion of NATO and the European 
Union. A Russian union with Belarus and perhaps the election, this October, 
of a Ukrainian president who might try to relink Ukraine and Russia have been 
the two hopes lifting the spirits of the nostalgically minded. 

Why has Mr Lukashenka begun to sing a different tune? And will he go on 
singing it? He has plenty of reasons to do so. Once one of the less deadbeat 
bits of the Soviet Union, Belarus is diplomatically and economically 
isolated, nearly bankrupt, and falling ever further behind such neighbours as 
Poland, which was once just about as oppressed but which is now knocking at 
the gates of a welcoming EU. 

Besides, Mr Lukashenka’s grand design for reunion with Russia has repeatedly 
got nowhere. His chief negotiator, Mikhail Sazonov, sighs that Russia sees 
the project as a long-term political plan, whereas Belarus has wanted 
economic benefits—and fast. Russia has already got most of what it wants, 
particularly on the military side. Belarus has reintegrated its air defence, 
intelligence and arms production with Russia’s. Most recently, and 
importantly, it has agreed do the same with its ground forces. But this falls 
far short of full union. 

At the same time, however, Russia sees no reason to hurry to bail out its 
neighbour’s weaker economy—for example, by letting Belarus’s mismanaged 
central bank start printing roubles. The Russians certainly do not want the 
two currencies to merge at a rate favourable to the Belarussians: a 
once-mooted merger of the two different roubles at parity might, according to 
some economists, shave 5% off Russia’s already shrinking GDP. 

In any event, negotiations to merge the two countries have again stalled. 
Not for too long perhaps, if Russia’s president, Boris Yeltsin, follows the 
advice of those of his courtiers most desperate to hang on to power, by 
declaring himself president of a new and enlarged state, with Mr Lukashenka 
as his deputy. That might let him continue beyond next year, when his two 
terms as Russia’s president, under the current constitution, are up. But this 
ruse looks dubious. A fortnight ago Mr Yeltsin categorically said he would 
hand over, on time, to a democratically elected successor. Moreover, those 
who have been keenest on Russia and Belarus getting together again are 
precisely those communists and nationalists who are keenest to see the back 
of Mr Yeltsin. 

That leaves Mr Lukashenka with three main choices. He can indeed try, 
belatedly, to woo the West. Or patiently wait to see who becomes Russia’s 
next president, and then make his pitch, all over again, for a more agreeable 
union. Or stay on as king of his own patch; after all, he has already changed 
Belarus’s constitution once, enabling him to remain president until at least 

No option looks very attractive. The West is sceptical about his proclaimed 
new affection for it. He changes his mind frequently—and virulently. He has 
no love of democracy. He has sidelined his own parliament, packed the 
constitutional court with cronies, bullied and perverted the press, 
imprisoned opposition leaders and had some of them beaten up. He has blamed 
the West for most of his country’s misfortunes; refused to apologise when his 
soldiers shot down (and killed) some innocently overflying amateur American 
balloonists; peremptorily booted out western ambassadors from their official 
residences (most returned to Minsk, after six months, at the end of last 
year); and has even spoken fondly of Hitler. 

For all that, Mr Lukashenka, a former chicken-farm manager, is a wily 
demagogue. Only 43, he may well remain popular among his own people. He won 
80% of the votes cast to become president in 1994; two years later he won a 
referendum, albeit one dirtily run, letting him remould the constitution to 
his liking. Though Germany may be readier than others to give him the benefit 
of doubt, the West is unlikely to welcome Belarus, under Mr Lukashenka’s 
thumb, as a prospective candidate to western clubs. 

As for Russia, it would be loth to embrace Belarus on the sort of equal terms 
that Mr Lukashenka has demanded. The best he might get is unification on the 
German model of 1990, with Belarus’s six regions joining Russia’s existing 
89. He would probably then concentrate on paving his way for a run at the 
presidency of what would, in effect, be an enlarged Russia, in 2004. 

Given the volatility of Russian politics, his candidacy would not be laughed 
off. He assiduously cultivates Russians: he has made at least a dozen 
glad-handing visits to Russian provinces since early last year. He makes 
notably little effort to foster Belarus’s fragile sense of identity. As a 
prelude, perhaps, to reintegration, he has squeezed Belarus’s language and 
history out of the curriculum. And he has put a striking number of old KGB 
men (including his foreign minister) and Russians in top positions. “They 
play in Belarus like they used to run revolutions in Africa and Latin 
America,” says a leader of Belarus’s browbeaten democratic opposition. 

But even if Mr Lukashenka agreed, a union of unequals might be hard to 
arrange. Belarus’s two westernmost provinces, once part of Poland, might 
demand a plebiscite. More to the point, many Russians who have their own eyes 
on the prizes, once Mr Yeltsin has gone, are keen to keep Mr Lukashenka out 
of the action. Some of them see him as a threat. And Russia’s democrats 
definitely do not want to have him around. 

That would leave him with a third way: staying put in Belarus, unable to turn 
his country eastwards or westwards. On paper, he might then be hard put to 
survive. Under his leadership, Belarus has got poorer. Farmworkers earn $8 a 
month, paid three months late; teachers get $20, a month in arrears. There 
are shortages. Some goods are rationed. Businessmen are punitively—and 
capriciously—taxed. Inflation is around 20% a month. The likeliest prospect, 
if Mr Lukashenka seeks to preserve the status quo, is a spiral of 
impoverishment and repression. Fortunately for him, his 120,000-strong 
internal security force is bigger and better equipped than the regular army. 


Business Week
August 2, 1999
[for personal use only]
Russia's Image Doctor Has a New Patient (int'l edition)
Controversial Sergei Lisovsky is backing Moscow's mayor
By Margaret Coker in Moscow 

Sergei F. Lisovsky knows how to run a political campaign. In early 1996, 
Boris N. Yeltsin was badly lagging behind Communist Party leader Gennady 
Zyuganov in the polls for Russia's presidential election that summer. 
Lisovsky, a top advertising executive and concert promoter, persuaded his 
rock-star pals to boogie with Yeltsin in Russia's rusting heartland, 
spreading the message ``Vote or Lose'' to the younger generation. The 
showmanship went a long way toward clinching the vote. ``The plan was 
controversial, but it worked,'' Lisovsky boasts.
Now, Russia is gearing up for another dramatic presidential race. This 
time around, the 39-year-old spin doctor is working for a new 
candidate--Yeltsin nemesis Yuri M. Luzhkov, the feisty mayor of Moscow. 
Luzhkov hasn't officially announced his candidacy for the elections in June, 
2000, but he is already a leader in the polls. It will be a tough campaign, 
and media backing will be crucial. For starters, the mayor has asked Lisovsky 
to turn his Moscow-based media group into a nationwide force.
FIND THE SLOGAN. Perhaps no one is better suited for the job than the 
colorful Lisovsky. The Moscow-based magazine Expert ranks him as the third 
most influential media magnate in Russia, behind tycoon Boris Berezovsky and 
Luzhkov himself. He owns a music-video channel, a popular TV guide, and 
Russia's biggest advertising agency--holdings now worth a total of $500 
million, by his estimates. And he has survived his share of scandals--most 
recently, he was cleared of alleged tax evasion. To Lisovsky, it's all grist 
for the mill when it comes to giving advice in Russia's rough-and-tumble 
political world. ``Any problem can be overcome,'' he says. ``It's a matter of 
building an image and finding a slogan.''
To build Luzhkov's national image, Lisovsky's first task will be to shake 
up TV Center, the station owned by the Moscow City government. He plans to 
target young adults and expand the affiliates' network so the mayor can be 
beamed into every Russian home. A lifelong media junkie, Lisovsky started as 
a disk jockey and record producer in the 1980s. He became a media czar in 
1995 after his advertising agency, Premier SV, secured the monopoly to sell 
time on Russia's biggest channel, ORT. By 1998, Premier controlled 80% of the 
$1 billion TV sales market. Premier lost its lead this year after Russia's 
financial crisis.
But Lisovsky's successes have been shadowed by controversies. He was 
questioned in the investigation of the 1995 murder of Vladislav Listyev, the 
head of ORT. Listyev was shot to death soon after he announced a plan to root 
out corruption in ORT ad sales, which were controlled by Lisovsky. Lisovsky 
has not been charged. He says he is in no way connected to the death. Then, 
in 1996, Lisovsky and a colleague were arrested leaving the Yeltsin campaign 
offices carrying boxes with $500,000 in cash. An investigation into possible 
illegal campaign financing was dropped after Yeltsin won. Lisovsky says he 
did nothing wrong.
TAX TROUBLE. The most recent incident came in December, 1998, when ski-masked 
tax police raided Lisovsky's offices and he left Russia. Authorities returned 
to his home in March and accused him of wire-tapping Russian politicians. In 
June, Lisovsky returned from a Swiss ski resort with his name cleared and a 
new job working for Luzhkov. Lisovsky says he paid off $11,000 in tax arrears 
and that the wire-tapping investigation died for lack of evidence. ``Security 
agencies are used as tools in political games,'' he says.
Mudslinging will only get worse as the election draws closer. In 1996, 
voters faced a clear choice: Zyuganov and a return to the Soviet past, or 
Yeltsin and the hope for a more open, prosperous society. Nearly all of the 
media unabashedly supported Yeltsin. Now, the press, and the moguls who own 
it, are divided. To strengthen his chances, Luzhkov may forge a partnership 
with another popular politician, the former Prime Minister Yevgeny Primakov. 
But there is also ``a good chance a dark horse'' could win, Lisovsky says. 
``Elections are going to be much dirtier,'' he adds.
In a country jaded by biased media and fed up with corruption, Lisovsky 
will need plenty of new tricks to make sure this campaign--and his 
comeback--don't founder.


The Electronic Telegraph
25 July 1999
[for personal use only] 
Yeltsin curbs media during run-up to poll
By Alice Lagnado in Moscow

RUSSIAN journalists have protested to President Yeltsin over moves to curb 
the media as the Kremlin gears up for parliamentary and presidential 
elections during the next 12 months.

A new Press Ministry has been created which Russian newspapers are already 
calling the "Ministry of Truth". The move follows a government announcement 
that the FSB - the main successor security agency to the KGB - will be 
ordered to combat the influence of organised crime on December's 
parliamentary elections.

This will give the FSB the power to prevent publication. Journalists fear 
that the agency will exploit its new role to threaten anyone it chooses. 
Mikhail Berger, the editor of the Segodnya newspaper, said: "The FSB can say 
that a candidate has Mafia links without producing any proof."

Meanwhile, the new ministry will have the power to revoke publishing 
licences, which are all up for renewal by tender next March - three months 
before the presidential poll. It will also have broad powers to regulate the 

Journalists from Russia's struggling independent media wrote to Mr Yeltsin 
last week to complain. A letter signed by editors from NTV television, Ekho 
Moskvy radio and Segodnya said: "For the first time in the history of the new 
Russia, we are becoming witnesses to a deep and open attack on one of the 
main triumphs of Russian democracy - freedom of speech.

"Highly-placed Kremlin officials are using influence on security structures, 
obliging them to crack down on independent media." The moves hark back to 
Soviet control of the presses.

Mr Berger said: "The Press Ministry will be no more than an instrument of the 
Kremlin. The ministry can use blackmail or revoke licences."

Dmitry Muratov, the editor of the investigative weekly Novaya Gazeta, said: 
"This is a typical bureaucrat's approach. They could create 100 ministries, 
but they will never be able to affect us. This is all about Boris Yeltsin 
wanting a third [presidential] term."

The curbs presents a particular threat to independent television stations, 
whose licences are also up for renewal next year. Matt Bivens, the editor of 
the Moscow Times, said: "Independent stations will have to think about how 
much they want to annoy Yeltsin because next March he could shut them down." 
At NTV, memories are still fresh of how the Kremlin threatened to close it 
down for reporting tragedies during the war in Chechnya.

Journalists in Russia already work in dangerous conditions, especially 
outside Moscow, where local governors have full control of newspapers. Sixty 
journalists were attacked and 11 of them killed last year, according to the 
Glasnost Defence Foundation. One victim was Larisa Yudina, an editor who 
campaigned for more democracy in the south-east republic of Kalmykia. She was 
murdered by unknown killers.


Stratfor commentary
2355 GMT, 990724 – Russia Argues for Debt Forgiveness

Russian economic authorities have launched a new campaign, making the case to 
international lenders that Russia is simply unable to pay its debt. According 
to Russia’s Interfax news agency, Russian officials informed the IMF in a 
document that Russia’s foreign debt amounted to $150 billion, or 90 percent 
of its GDP for 1999. The document called the figure, "well beyond any 
realistic threshold for repayment capacity." The document also stated that 
Russia was still actively trying to reschedule Soviet-era debt accumulated 
before January 1, 1992, while simultaneously attempting to pay its more 
recent debts. 

In an interview published by AP Worldstream on July 23, Russian envoy to 
international financial organizations Mikhail Zadornov said Russia will see 
no economic growth for at least a decade unless the debts are rescheduled, 
because Russia’s debt payments to foreign countries almost equal its expected 
revenue. Russia is supposed to pay between $13 billion and $19 billion per 
year to foreign lenders until 2008. Zadornov said that while Russia is 
scheduled to pay out $17 billion of its approximately $20 billion in 
revenues, these creditors will not see more than $9 billion.

Russia is now publicly arguing what has long been apparent – it is simply 
unable to service its debt burden. Russia’s default is not a matter of 
choice, Moscow argues, but an inevitability unless much of its debt is 
forgiven. Moscow is making this claim just as the IMF is finalizing plans to 
disburse billions of dollars in still further loans – loans which presumably 
will be unserviceable from the start.

It is payback time. The Kremlin buckled in its dispute with NATO over Kosovo, 
selling out both the Serbs and Russian hardliners. Now it wants to be 
compensated for the act that ignited a power struggle inside Moscow over 
Russian foreign – and perhaps soon domestic – policy. As the West is clearly 
unable to give sufficient money to Russia to bail out the Russian economy, it 
now has the opportunity to forgive some of Russia’s debts instead. After all, 
it’s not exactly the same thing. At least with debt forgiveness the West will 
be assured of where the money is going. Loans have a tendency to be 
squandered. Moreover, as Zadornov noted, the West really does not have an 
option. It can reschedule and forgive Russia’s loans, or it can have Moscow 
do it instead.


Albright prepares for wide-ranging talks with Russian FM

SINGAPORE, July 26 (AFP) - Fresh from friendly talks with the Chinese that 
apparently eased tension resulting from the bombing of Beijing's embassy in 
Belgrade, US Secretary of State Madeleine Albright prepared Monday for talks 
with the other major opponent of the Kosovo war -- Russia.

Albright was to hold a working dinner with Russian Foreign Minister Igor 
Ivanov on the sidelines of the annual Association of Southeast Asian Nations 
Regional Forum here to discuss the Balkans, arms control and international 
financial assistance, US officials said.

The meeting comes as Russian Prime Minister Sergei Stepashin visits 
Washington for talks with President Bill Clinton and US Vice President Al 
Gore, and is part of series of recent bilateral gatherings aimed at improving 
relations in the wake of NATO's campaign against Yugoslavia.

"This is a week of a more rapid tempo of discussions," a senior State 
Department official said, looking hopefully towards the "first real 
post-Kosovo" Albright-Ivanov meeting.

Russia has now partially restored relations with the North Atlantic alliance 
which it had broken when the bombing began, and the official said Washington 
was eager to see those ties fully functioning again.

Despite Moscow's re-opening of its office at NATO headquarters in Brussels, 
differences linger over Kosovo, especially regarding reconstruction aid for 
Serbia and the disarmament of the Kosovo Liberation Army.

Albright and Ivanov "will be talking about Kosovo and the Balkans looking 
ahead to Sarajevo," the official said, referring to Friday's summit in the 
Bosnian capital which both, as well as Clinton and Russian President Boris 
Yeltsin, are to attend.

"There will be a general review of how the process of creating normal 
conditions in Kosovo is going," the official said, adding that the recent 
murder of Serb farmers in the province was likely to raise Russian concerns.

"There will be a discussion of the murder of Serb farmers and what that says 
about the demilitarization of the KLA," he said, noting that Ivanov was also 
expected to bring up questions about the United Nation's civilian 
adminstration in Kosovo and elements of Russia's participation in the Kosovo 
peacekeeping force.

Albright and Ivanov last met in Helsinki to work out the details of Russia's 
involvement in the force known as KFOR.

Also on the Albright-Ivanov agenda will be a host of other security issues 
regarding Europe but perhaps none more important that nuclear weapons.

The secretary will be pushing the Russians towards moving to improve the 
Anti-Ballistic Missile Treaty which Washington wants to amend against 
Moscow's objections, the Duma's ratification of the START II weapons 
reduction treaty and negotiations over a future START III arms limitation 


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