July 28, 1999   
This Date's Issues: 3411 •  • 

Johnson's Russia List
#3411
28 July 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Xinhua: RUSSIA: U.S. HAS LARGER INTELLIGENCE PRESENCE IN RUSSIA.
2. Budapest MTI: Majority of Hungarians Regrets Change in Political 
System.
3. Nezavisimaya Gazeta: They Are Cleaning Kosovo Of Serbs.
4. Segodnya: God Did Not Allow It. ONLY A MIRACLE PREVENTED AN EXPLOSION 
IN THE HABAD-LYUBAVICH SYNAGOGUE.
5. Moscow Times EDITORIAL: Stepashin Loves You, Sincerely.
6. Reuters: US, Russia to hold arms control talks in August.
7. Itar-Tass: JUST CAUSE LEADERS HAVE NO PERSONAL AMBITIONS -- NEMTSOV.
8. NTV: 'Russia After Yeltsin' Conference Held.
9. Itar-Tass: Yeltsin Greets Conference on Post-Yeltsin Russia. 
10. Reuters: Russian Communist Leader Urges Unity Before Polls.
11. Journal of Commerce: John Helmer, U.S. considers new Russian food 
aid.
12. Richmond Post-Dispatch (Virginia): Eva Busza, The Unpredictable 
Genie in the Russian Bottle.
13. Moskovskiy Komsomolets: 'Family' Seen Clinging to Power at Any 
Price.
14. Moscow Times: Ethan Burger and Anton Lyapin, Hope for a 
Turnaround.
15. Reuters: Russia, U.S. see thaw in ties after Kosovo chill.] 

*******

#1
RUSSIA: U.S. HAS LARGER INTELLIGENCE PRESENCE IN RUSSIA

MOSCOW (July 27) XINHUA - Russia said the United States has a larger 
intelligence in Russia than its presence in the United States, the 
Interfax news agency reported Tuesday. 
The statement came after a report in The Washington Times saying that 
the U.S. administration has warned Moscow to voluntarily reduce the 
number of intelligence officers operating in the U.S. or face 
expulsion, Interfax said. 
The article also said that about half of the Russian diplomatic staff 
working in Seattle and San Francisco are working for the Russian 
Foreign Intelligence Service. 
Tatyana Samolis, the press secretary of the Foreign Intelligence 
Service director, said the sources that supplied information to Bill 
Gertz, the article's author, "are well known, and we do not think it 
worthwhile to argue with them." 
"But if Russian intelligence presence in the United States is compared 
with the presence of U.S. intelligence in Russia, Washington has far 
surpassed Moscow," she said. 
Interfax quoted another expert of the Foreign Intelligence Service as 
saying that the article "was timed to coincide with Russian Prime 
Minister Sergei Stepashin's visit to the United States." 
"If Russia is drawn into a discussion on this theme, Stepashin 's 
talks will be seriously complicated," the expert said. 

******

#2
Majority of Hungarians Regrets Change in Political System 

Budapest MTI in English
23 July 1999

Budapest, 23 July (MTI) -- A recent survey into 
attitudes concerning the political changes following the collapse of 
Eastern-block regimes in 1989 shows that almost two-thirds of those 
questioned in eight countries are dissatisfied with the political change. 

The survey, conducted by the market research institute Fessel Gfk in the 
spring of 1999, and carried in the daily Napi Gazdasag, involved personal 
questioning of 1,000 adults in each of the following eight countries: 
Hungary, Poland, Bulgaria, Romania, Czech Republic, Slovakia, Ukraine, 
and Russia. 

Twenty-three percent of Hungarians were satisfied regarding the change of
system, 
while 66 percent were disappointed. The remaining 11 percent had not 
expected positive changes. 

Bulgarians and Romanians were closest to the Hungarians' opinion. The ratio
of 
those disappointed and those satisfied was 65 percent to 24 percent in 
Bulgaria and 69 percent to 22 percent in Romania. 

Satisfaction was at its lowest, at 4 percent, in Ukraine, and the greatest,
at 26 
percent, in Poland. It was 20 percent in Russia, 18 percent in Slovakia, 
and 17 percent in the Czech Republic. 

Disappointment was at its greatest in Ukraine, at 76 percent, and the
lowest in 
Russia, at 59 percent. Sixty-one percent of the people expressed 
dissatisfaction about the change of system in Poland, 67 percent in 
Slovakia, and 72 percent in the Czech Republic. 

The percentage of the very disappointed is lowest in Hungary, at 15 
percent, followed by Poland, at 18 percent, the Czech Republic, at 19 
percent, Slovakia at 21 percent, Russia and Romania at 22 percent each, 
and Ukraine, at 36 percent. 

*******

#3
Russia Today press summaries
Nezavisimaya Gazeta
27 July 1999
They Are Cleaning Kosovo Of Serbs
MASS KILLINGS PROVE NATO’S INABILITY AND UNWILLINGNESS TO SECURE SAFETY OF
RESIDENTS

Summary
The daily commented on the situation in Kosovo, where 14 Serbs were shot
dead over the weekend near Staro Grachko. Yugosla vian powers have already
communicated that they may introduce their troops and police into the
province because the KFOR contingents are apparently unable to fulfill
their mission. 

This has proven earlier apprehensions that NATO peacemakers are obviously
taking the side of Albanians in the Kosovo conflict. They appear to be
indifferent to atrocities and violence if their victims are not ethnic
Albanians. Since June 18, 172,000 refugees have left Kosovo, all of whom
are of non-Albanian nationality. This means that 85 per cent of the Serbian
population has left Kosovo already. And through the entire Kosovo conflict
- from January 1998 until the beginning of NATO's war against Yugoslavia,
only 20 thousand Albanians left the province. 

Formally, the pretext for the first threat of bombing against Yugoslavia
was the killing of 45 Albanians in a Rachak neighborhood. The investigation
of this crime has finished, but its results have not been released. The
evidence could have refuted the version that the Yugoslavian Army special
detachment was guilty, making the whole war against Yugoslavia senseless 

*****

#4
Russia Today press summaries
Segodnya
27 July 1999
God Did Not Allow It
ONLY A MIRACLE PREVENTED AN EXPLOSION IN THE HABAD-LYUBAVICH SYNAGOGUE
Summary
Detectives of the Moscow FSB initiated a criminal investigation when the
bomb was detected in the Habad-Lyubavich Synagogue on Bolshaya Bronnaya
street in Moscow. Section 205 of the Russian Criminal Code: terrorism. 

This was not the first terrorist attempt against the Jewish community of
Moscow. On May 1, an explosion rocked the area outside a synagogue in
Maryina Roscha. And recently, a twenty-year-old anti-Semite named Nikita
Krevchun tried to murder the deputy director of the children's arts center
in the Moscow’s Central Synagogue. 

Moscow Jewish Community President Gennady Hazanov, a popular comic actor,
commented, "The Jewish community of Moscow has turned into a target of
continuous provocations and acts of terrorism". 

On condition of anonymity, an investigator told Segodnya that there are
leads showing the last act of terrorism did not have a political, but a
commercial purpose -- that being the removal of a competitor. On Sunday, in
the synagogue where the bomb was detected, they were celebrating the first
haircut of an influential member of the Moscow Jewish community’s child --
banker Sorkin's son. More than two hundred people were invited. The
terrorists could have been aiming at any one of them 

******

#5
Moscow Times
July 28, 1999 
EDITORIAL: Stepashin Loves You, Sincerely 

"I love you all," Prime Minister Sergei Stepashin told a crowd of Seattle 
businesspeople this weekend, apropos of nothing. 

That's the sort of rhetoric likely to bring Stepashin closer to the famously 
touchy-feely U.S. Vice President Al Gore. A strong rapport existed between 
Gore and former Prime Minister Viktor Chernomyrdin, one that Gore valued and 
bragged about. In fact, Gore found Chernomyrdin so congenial that he once 
sent back a CIA analysis alleging Chernomyrdin was corrupt with what The New 
York Times called "a barnyard epithet" scrawled across the cover. 

Now Stepashin is the prime minister, and a major part of his mission to 
Washington, we are told, is to build his own warm relationship with heir 
apparent Gore. We suspect these two bland men will be perfect for each other 
- just a couple of New Age world leaders getting in touch with their inner 
selves. 

Regardless of how it may play in Washington, however, Stepashin's professions 
of love were met skeptically in Seattle - he had the gall to include the lord 
of Vladivostok, Yevgeny Nazdratenko, in his entourage. 

No Russian and American cities have as natural a partnership as do the 
Pacific Rim cities of Seattle and Vladivostok. Seattle businesses are well 
aware of what doing business is like in the Far East, and they are deeply 
unimpressed with Nazdratenko's rule. 

The governor is a man who has driven foreign investors from the Far East 
Shipping Co., among them the honorary British consul to Vladivostok. Those 
investors say he threatened them with jail unless they got out of his way. 
Nazdratenko denies that. 

Nazdratenko also has little to say about the vicious persecution of 
journalists and environmentalists going on under his watch, though he has 
plenty shrill to say about the danger to Russia purportedly represented by 
U.S. Secretary of State Madeleine Albright and the Chinese. 

Stepashin is supposed to be talking up Russia as a place for Americans to 
invest. At his side he's got Nazdratenko, a man who is one of those walking 
symbols of much that is wrong and unattractive about investing here. 
Washington Governor Gary Locke reportedly had to make a point of seating 
himself far from Nazdratenko - he's that embarrassing. 

The Russian government is apparently so used to being in the company of 
dubious people that it sometimes forgets it can look bad. 

Then again, maybe the Russian government understands things fine. After all, 
more money seems to be on the way from the International Monetary Fund - just 
in time, as always, for election season spending. So far anyway, Stepashin's 
love is not going unrequited. 

*******

#6
US, Russia to hold arms control talks in August
By Arshad Mohammed

WASHINGTON, July 27 (Reuters) - The United States and Russia will open
talks on a new round of nuclear arms cuts in Moscow next month, U.S. and
Russian officials said on Tuesday. 

Vice President Al Gore and Russian Prime Minister Sergei Stepashin
announced the decision to begin negotiations on a START 3 treaty, which
would reduce U.S. and Russian nuclear warheads to below 3,500 each, after a
Washington meeting. 

They said the August meetings would also discuss making changes to the 1972
Anti-Ballistic Missile Treaty (ABM) that the United States wants to enable
the possible development of a "Star Wars"-style U.S. missile defense system. 

"The United States and Russia have long understood that reducing nuclear
arsenals is in our mutual interest," Gore said in a statement. "That is why
we will continue to press for ratification of START 2 and will begin
discussions next month toward START 3." 

U.S. and Russian arms control talks have been hampered for years by the
Russian Duma's failure to ratify the 1993 START 2 treaty, which was
approved by the U.S. Senate in 1996. 

The goal of START 2 is to bring warheads down to a maximum of 3,500 on each
side by the year 2003. Under START 3 they could go down to 2,000 on each
side. 

"We will try to bring START 2 to the forum again in the fall of this year,"
Stepashin told a join news conference after his talks with Gore. 

The United States and Russia have explored the outlines of what START 3
might look like in recent years, but Washington has insisted it would not
actually sign such a treaty until START 2 enters into force. 

"You can engage more seriously on START 3, but START 2 has to be ratified
before you can actually move on START 3," said a Clinton administration
official who asked not to be named. 

The other topic on the agenda at the August talks will be amendments the
United States wants to make to the 1972 ABM Treaty, which sets limits on
the type of systems Russia and the United States can deploy to intercept
incoming missiles. 

The changes are needed because legislation adopted by the Republican-led
Congress in March commits Washington to put in place a defensive shield
against limited missile attack. 

Russia is concerned that a U.S. defensive system capable of shooting down
incoming missiles would breach the ABM treaty and undermine the Cold War
doctrine of mutually assured destruction. 

The idea at the time of the ABM Treaty was that neither side would be
likely to launch a nuclear strike if they knew they had no defenses to
prevent the resulting catastrophe. 

But many military experts, diplomats and national security figures in
Washington feel the ABM Treaty is a Cold War relic that has no place in a
new, more dangerous world where so-called rogue states like North Korea and
Iraq might attempt a missile strike against the United States. 

The White House has pledged $6.6 billion in its fiscal 2000 budget for the
development of a missile defense but will delay a presidential decision on
building one until June 2000. 

*******

#7
JUST CAUSE LEADERS HAVE NO PERSONAL AMBITIONS -- NEMTSOV

MOSCOW, July 27 (Itar-Tass) - Leaders of the Just Cause movement -- 
Boris Nemtsov, Irina Khakamada and Boris Fyodorov -- do not have 
personal ambitions, and they will proceed from the interests of the 
Cause when forming the list of candidates of the rightist coalition in 
the parliament elections, Nemtsov told Itar-Tass on Tuesday. 
Now that the Just Cause has formed a coalition with the New Force and 
the Voice of Russia, the key task is to make the federal and regional 
lists of candidates, he noted. It is necessary to choose three leaders 
of the coalition "proceeding from their popularity rating," Nemtsov 
remarked. He thinks that the coalition must be headed by the most 
popular politician. 
As for the cooperation with Our Home is Russia, the rightists plan to 
continue the dialog with "renewed Our Home is Russia in the person of 
Vladimir Ryzhkov," Nemtsov said. If Our Home is Russia does not unite 
with the rightists, it will have no chance to pass the 5 percent margin 
in the elections by its own, Nemtsov noted. 

*******

#8
'Russia After Yeltsin' Conference Held 

NTV
July 23, 1999
[translation for personal use only]

[Presenter Andrey Norkin] A scientific conference 
in Moscow is considering Russia's future after 23rd July 2000. It is 
called "Russia after Yeltsin". Despite this name, President [Boris] 
Yeltsin sent its participants his greetings. He stressed that in order to 
move forward it is necessary to look back at the road we have travelled, 
assess our potential and understand what we want the Russia of the future 
to look like. 
[Correspondent Vladimir Kondratyev, reporting live on air] A similar
conference was 
held in 1989 and called "After Communism". It set the tasks for a 
post-Soviet government. The present one is called "Russia after Yeltsin" 
and works on the urgent and objective tasks for a new government. 
Nobody knows what kind of government it will be, but definitely not a 
Communist one. 
In particular, this is the opinion of the member of the conference 
organizational committee, former deputy head of Kremlin administration, 
Yevgeniy Sevostyanov. None of the participants of the conference has 
mentioned the victory of [Gennadiy] Zyuganov's party and its allies even 
as a theory. The three names repeated most often in various forecasts: 
[former Prime Minister Yevgeniy] Primakov, [Moscow mayor and Fatherland 
leader Yuriy] Luzhkov and the prime minister who will be in office at the 
time of the presidential election. 
Meanwhile, it is a question whether the incumbent president will provide
for 
the constitutional transition of power or invent something like 
unification with Belarus and the Milosevic option, a state of emergency, 
etc. But the majority agrees that after the runoff on 23rd July 2000 
Russia will have a new president. 
[Passage omitted: repetition] 
Well-known political analyst, Sergey Karaganov, one of the few people
actively 
in contact with Primakov now, shared his information. 
[Karaganov, speaking to camera] Naturally, he would like to be a
candidate from 
the broadest possible coalition. 
[Correspondent, off camera] Will he head this coalition? 
[A] It is quite logical to suppose that he will head the coalition. 
[Q] Then Luzhkov would be in second place? 
[A] Luzhkov would not be in second place. Luzhkov is a self-contained 
figure. It would be difficult for him to be in second place. But he said 
himself that he would voluntarily concede the top position. This is 
prompted by due respect for Primakov and by political expediency. 
[Q] Will Primakov make this step as early as before the parliamentary 
election, or before the presidential one? What do you think? 
[A] I think he will do it well before the parliamentary election. 
[Q] That means that he will run for a Duma seat? 
[A] I think it is quite possible. 
[Correspondent] Luzhkov, though having got an invitation, decided to
refrain from 
discussing this hot issue. But the head of his electoral team, Georgiy 
Boos, was very outspoken today. 
[Boos] They could not do us better. If they had not started pressuring us, 
we would have to pay somebody to do it. They are doing us a favour. So, I 
accept this with enthusiasm. 
[Correspondent, off camera] Do you face problems in terms of politics?
All Russia 
has not united with Fatherland so far. 
[A] That is All Russia's business. We have made a proposal to them, and 
now it is up to them to decide. If they do not meet a certain deadline, 
we shall stand for elections without them. This does not mean that we 
shall not make an alliance with somebody else. 
[Q] Who is this somebody? 
[A] Many proposals have been made to us. We also have some ideas on this 
matter. 
[Q] Can you specify? 
[A] Why should I do that ahead of time? We mentioned All Russia once, 
and have much ado about nothing. It might happen or not. It is not a 
major problem, to my mind. 
[Q] What can you say about [Fatherland's] consultations with the 
Communist Party recently mentioned by Gennadiy Zyuganov? 
[A] It is some kind of virtual reality. Somebody had been misled, 
somebody met somebody by chance. I met Gennadiy Andreyevich [Zyuaganov] 
at the opening of the film festival. We have exchanged a couple of 
phrases. Maybe, it seemed to him that it was a consultation. 
[Q] Do Luzhkov and Zyuganov hold consultations in person? 
[A] Maybe at the same level. 
[Correspondent] The Spiritual Heritage leader, Aleksey Podberezkin,
thinks that the 
current situation is greatly reminiscent of 1991. A radical reshuffle of 
the ruling elite is inevitable. Podberezkin did not rule out that his 
party would leave the left-wing camp and go over to centre, Fatherland or 
All Russia, for example. 
[Podberezkin] I cannot exclude anything, because the party congress has
the final 
say. The congress will be held in late August or early September. The 
congress is authorized to make any decisions. 
[Correspondent] Whoever comes to power, the participants of the
conference say, 
Yeltsin's team will step down together with him. But the existing regime, 
in a broader sense, will remain intact.

*******

#9
Yeltsin Greets Conference on Post-Yeltsin Russia. 

MOSCOW, July 23 (Itar-Tass) - President Boris 
Yeltsin on Friday sent a message of greeting to a conference on a 
post-Yeltsin Russia. 

"To move forward with confidence, one should comprehend the path one has 
passed, comprehend our potential and understand whatkind of Russia we 
want to see in the future," Yeltsin's message said. 

The conference gathered the country's most prominent political 
scientists who were unanimous in the opinion that the transfer of 
presidential power in 2000 was the only democratic solution for Russia. 
Vyacheslav Nikonov, head of the Politika foundation, said theKremlin was
trying 
to take hold of the campaign in the run-up to a presidential election 
scheduled for mid-2000. 

"Course was taken for clearing the battlefield for a candidate who would be 
convenient for the family of the president (Boris Yeltsin)," Nikonov 
said. 

"The Kremlin administration is the most destabilising thing in the state, 
especially in the run-up to parliamentary and presidential elections," he 
said. 

However, "a post-Yeltsin epoch will set in in Russia eventually," he said, 
adding that "it is impossible to cancel the 2000 presidential election." 
"Even a tentative union with Byelorussia into a federative state is not a 
solution for Yeltsin... One can say that a state is constitutional only 
in case of the constitutional transfer of power," according to him. 
Yet Nikonov did not deny Yeltsin "constitutional instincts". "Boris 
Yeltsin will voluntarily steer clear of the helm on the threshold of the 
third millennium," he said. 

Among possible contenders in the 2000 race he named Moscow Mayor Yuri 
Luzhkov, former prime minister Yevgeny Primakov, and "the prime minister 
that will be in charge at the moment". 

In terms of a proposal of former prime minister Sergei Kiriyenko to 
hold a referendum to oust Yeltsin, he told Tass thatthat "has no 
practical sense". 

"It is important for Russia to take to a constitutional road during the 
pre-election stage," he said in a comment on the statement by Sergei 
Kiriyenko, who is now leader of the New Forcemovement. 

"It is essential that constitutional provisions be observed with respect 
to both the president's and parliament's term," he said. 

Yevgeny Savostyanov, head of the Moscow Fund for Presidential Programmes, 
said Kiriyenko's behaviour was an "attempt to remind of himself." "Sergei 
Vladilenovich had better read Russia's law and constitution before he 
spoke of such a referendum." 

Alexei Podberyozkin, head of the Spiritual heritage movement, said 
Kiriyenko's statement was "complete rubbish", adding: "It would be 
insensible to speak of it with a parliamentary election six months and a 
presidential one a year away." 

Also, Podberyozkin said he was sure democracy would strengthen in Russia 
after the 2000 election. 

The Communists will be a major faction in the State Duma lower house, 
but they will not be a majority and take "leading positions", according 
to him. 

Sergei Karaganov, head of the Council for Defence and ForeignPolicies, said 
democracy might be dented once Yeltsin would be out of the Kremlin. 
"Trends are on the rise to smash democratic initiatives and freedoms," 
Karaganov said. 

Georgy Boos, head of the headquarters of the Fatherland movement, said 
Russia would face "insignificant changes in domestic and foreign policy" 
in the next millennium. 

"The influence of the regional elite will increase," Boos said, adding 
"political federalism should be propped up by economic federalism." 

*******

#10
Russian Communist Leader Urges Unity Before Polls

MOSCOW, June 27 (Reuters) - Russia''s Communist leader Gennady Zyuganov
urged leftist forces on Tuesday to unite ahead of a parliamentary election
in December to resist an aggressive offensive by political rivals. 

Zyuganov said the Communist Party, which dominates the State Duma lower
house of parliament together with its allies, backed the idea of forming a
powerful election bloc put forward by a prominent radical communist,
Valentin Varennikov. 

"Now that the people who tortured Russia for years are trying to create
blocs to unite as many forces as they can, it is crucial to run in the
polls as one single force," he told a news conference, referring to
separate negotiations held among liberal and centrist parties. 

"We think that the time demands the creation of a powerful patriotic bloc
and we will make every effort to do this." 

The party, inspired by confusion in Russia's liberal ranks after a
crippling economic crisis last August and reluctant to share power with
smaller allies, decided in April it would run independently in the Duma
polls. 

The party's decision has nearly destroyed the left-wing People's Patriotic
Forces of Russia bloc, which included the Agrarian party and a number of
smaller groups and worked well in 1995 Duma election. 

Some humiliated allies, like the Agrarian Party of Mikhail Lapshin and
Spiritual Heritage led by intellectual Alexei Podberyozkin, have said they
will also run independently. 

Some other Communist allies have launched negotiations with centrist
parties created by Moscow Mayor Yuri Luzhkov and a group of influential
regional leaders who said they wanted a more responsible non-Communist Duma. 

Zyuganov also faces a rebellion by its own radicals. 

Ambitious radical politician Viktor Ilyukhin and retired General Albert
Makashov have said the party leadership has gone too far in its cooperation
with the Kremlin and that they will run in the polls independently. 

Political analysts have said that if a schism in the Communist bloc widens,
it could lose its traditional 30-35 percent of votes. 

So far, the Communist Party has compromised to include candidates from
allied parties on its party list. But the allies clearly want an equal
share in any possible bloc. 

Zyuganov said he had already contacted Podberyozkin and Ilyukhin about a
possible bloc and they were considering it. 

*******

#11
Date: Tue, 27 Jul 1999
From: helmer@glasnet.ru (John Helmer)

U.S. considers new Russian food aid
Journal of Commerce, July 27 
By John Helmer
MOSCOW. United States government officials believe it is a near-
certainty that, following the visit to Washington this week of Russian
Prime Minister Sergei Stepashin, they will agree to a new program 
of food aid to Russia, starting before the mid-December parliamentary
elections.
The official sources, who decline to be identified, said preliminary
assessments of the grain harvest for the Moscow region, and for the grain-
growing areas along the Volga River, south of the Russian capital,
indicate that this year's harvest will be "no better than last year's",
and in some regions, worse. However, this year regional and federal
stocks of grain are close to zero, compared with a national reserve
a year ago of about 20 million metric tons.
After a combination of late frost, summer heat, and locusts,
one U.S. official said, "the situation for grain is worse than last year.
Even if the harvest is the same as last year [48 million metric tons],
the Ukraine and Kazakhstan will not be able to supply the usual
level of grain to Russia. So there will be a gap which foreign aid
must fill."
Officials in regions south of Moscow have already asked the U.S.
Embassy to consider a new grain program. A U.S. Department of
Agriculture team is scheduled to evaluate these requests, as well
as grain supplies elsewhere in Russia, in September.
A European Union official in Moscow said last week that, although
negotiations on a new aid program have not yet begun, "there will be
no surprise on our side" when the Russian government requests it.
Russia's parliament goes to election in mid-December, and in order
to halt a swing of the Volga River regions towards the Communist Party,
the Kremlin supports a new U.S. food aid program, especially
of grain for bread.
This year, the U.S. is delivering 200,000 tons of bread wheat
to Russia, all of it to Moscow. The European Union is delivering 1
million tons of wheat, and 500,000 tons of rye, distributing the grain
all over the country.
U.S.D.A. officials say the results of grain and seed deliveries
in this year's aid program have been "better than expected". Payments for
grain deliveries received by July 22 total Rbs284 million
($12 million), and are "ahead of schedule". Payments for 50,000
tons of seed received amount to 24% of the target. No fraud or
illegal diversion of cargoes or cash has been detected, U.S.
officials have reported to Washington.
This responds to criticism that the aid program is unneeded
and liable to criminalization, government officials say.
However, U.S. meat traders in Moscow charge that corruption is a growing
problem in meat imports. One said that if the U.S. and the European
Union agree to another year of meat aid, the result "will certainly
impede the commercial trade. It certainly won't help." 
The U.S.D.A. agreed early this month to tender terms to start
promised shipments of beef and pork to Russia. The European Union
has already delivered 22,000 tons of pork, just over 20% of the
volume promised. However, most of this remains unsold and undelivered
because the commercial price for pork, including pork imported commercially
from the European Union, is lower than the minimum price fixed by
European officials for their aid.
A veteran meat market specialist in Moscow said that criminal
organizations have taken control of imports by offering to clear
meat shipments through payment of customs duty and value-added tax
(V.A.T.) for a fixed fee. This, the source said, is holding prices level, even
though V.A.T. recently rose from 10% to 20%.
Even if the U.S. and the European Union manage to keep corruption out of
their aid programs, traders believe that corruption is fixing market
prices, and they are in turn limiting the volume of meat that can be
sold, according to U.S.D.A. and European aid rules.

*******

#12
Date: Tue, 27 Jul 1999
From: etbusz@erols.com (Eva Busza)
Subject: The Unpredictable Genie in the Russian Bottle 

Richmond Post-Dispatch (Virginia)
July 26, 1999
The Unpredictable Genie in the Russian Bottle 
By Eva Busza 
Eva Busza is a research scholar at the Kennan Institute, Woodrow Wilson 
Center for International Scholars, where she is completing a book on the 
development of civil-military relations in post-Communist states. She is also 
an assistant professor in the Department of Government at the College of 
William and Mary.

The Russian military's attempt to shape the Kosovo peace settlement through
its move into Pristina should not have come as such a shock to Westem
diplomats. It is only the most recent example of a disturbing and pervading
trend in Russia: the civilian leadership's inability to control and govern
its increasingly weak fragmented and frustrated military. 

This action took the West by surprise because policy-makers have grown to
expect passivity from the Russian military. The Russian military did not
resist the dogmatic political changes in their country, they seemed
resigned to huge budget cuts, they did not question the decline in the
fighting capacity of their divisions, and they accepted the loss of their
organization's status. As a result a consensus emerged here and abroad that
the Russian army would not pose an immediate political threat to the
Yeltsin regime or be an important player in the international arena. 

What most people failed to realize is that while an internally fragmented
and increasingly weak Russian military is unlikely to launch a coup and
impose military rule in Russia, it can still undermine the ability of
Russian state leaders to carry out state policy-raising questions for us
about the viability of Russia's international commitments. 

LAST MONTH, when negotiations over the prospective relationship between
Russian peacekeeping forces and NATO command failed to make much headway,
Colonel General Ivashov, the head of the Defense Ministry's International
Cooperation Department, hinted that Russia might force the hand of the NATO
military alliance by negotiating directly with the Serbs and laying claim
to its own control sector in Kosovo. The arrival in Pristina of a Russian
brigade previously stationed in the Bosnian Serb town of Ugljevik is
clearly a move by a frustrated Russian military that in the absence of
clear signals from leaders in Moscow is trying to influence the terms of
the peacekeeping agreement and bolster its country's rapidly diminishing
great-power status. 

This new Russian military role is a result of civilian leaders' failure to
enact military reforms and to assert their political authority over the
military. Their failure to implement a comprehensive military reform
program combined with the drastic reduction in defense spending have
resulted in military units being deprived of basic supplies needed for
their survival. 

In order to cope with the new economic hardships and the chaos in which
they find themselves, many soldiers are seeking illegal means to support
themselves. They are supplementing their meager and at times non-existent
salaries by becoming involved in a variety of activities including
drug-trafficking, financial fraud, and illegally dumping toxic wastes.
Recently there have even been reports of soldier-trafficking in Dagestan:
Russian officers are selling Russian soldiers to Chechen separatists who
are then demanding cash for their release. 

Most disturbing from the standpoint of the West has been Russian leaders'
inability to prevent armed force involvement in theft and the illegal sale
of ammunition, equipment, and weapons -- both conventional and nuclear.
These activities undermine the Russian government's ability to follow
through on its commitment to international security agreements. 

THE RUSSIAN military initiative in Kosovo is just the most recent example
of how the failure of civilians to provide the military with clear
political leadership has led soldiers to undermine the formulation of an
integrated foreign policy. Earlier examples can be found in Russian
negotiations with former Soviet Republics over various "hot spots" like
Abkhazia, Georgia, Tadjikistan, and Moldova. In these instances, Russian
military leaders played a key independent role in negotiating cease-fires
and peacekeeping operations. 
According to a report in Izvestia, a major Russian newspaper, former
Foreign Minister Kozyrev publicly complained "wholesale transfers of arms
are taking place in the Transcaucasus and Moldova. . . . Under what
agreement is this effected, I would like to ask. . . ? Why are the military
deciding the most important political issues?" 

Similarly, the contradictory statements coming from Yeltsin's office, the
Foreign Ministry, and the General Staff regarding who gave the order for
Russian troops to cross into Kosovo seem to be a replay of the confusion
surrounding Russian foreign policy during the Chechen crisis. 

How should the West respond to these developments? Unfortunately our power
to effect change is limited. The power lies with the Russian parliament and
president who must take immediate steps to implement a comprehensive
military reform program. Only they can put into place a realistic plan for
streamlining and downsizing the armed forces, create permanent and
transparent channels through which civilian and military expertise can be
exchanged and used to develop policy, and develop effective ways to assert
their own political authority. This last goal requires that Russian leaders
finally clarify the boundaries and hierarchy of authority between different
civilian elites and military elites. 

NEVERTHELESS, there are some things we can do. First, we must prepare for
the fact that increasingly we will have simultaneously to deal with a
multitude of contradictory Russian foreign policies. We must recognize that
any international agreements we conclude with Russia may be undermined not
because of ill will on the part of civilian negotiators but because leaders
cannot ensure that important domestic groups like the military will comply
to the terms of agreements negotiated by Moscow. Most important, we must
prepare for this eventuality in our own foreign policy planning. 

Second, we should encourage Russian civilian leaders to prioritize the task
of restructuring their armies, urging them both to provide their soldiers
with clear political leadership and to punish instances of military
insubordination. 

Third, we should continue and intensify our cooperative programs with the
Russian military: the military-to-military exchange programs, workshops on
how to manage the relationships between military and civilian officials in
a democratic state, and retraining programs for Russian officers. These
initiatives are important because they supply seriously lacking financial
resources, provide an infusion of positive new ideas about how to
restructure the Russian military, and help to foster trust and cooperation
between our militaries and our countries. 

THE EVENTS in Kosovo should act as an early warning signal that civilian
leaders in Russia and the West can no longer put Russian military reform on
the back burner. It is time that policy- makers in the West review their
assumptions about the Russian military and realize that this limping,
disintegrating organization has the potential to pose a serious threat both
to its own civilian leadership and to the international community. Power is
based on organized force; but when organized structures of power begin to
disintegrate, new and unexpected forces are released which can be even more
dangerous because of their sheer unpredictability. 

*******

#13
'Family' Seen Clinging to Power at Any Price 

Moskovskiy Komsomolets
23 July 1999
[for personal use only]
Article by Aleksandr Budberg: "Kremlin in Search of 'Jeunes Premiers' 
Again. Putin or Voloshin Considered for Role of Premier" 

Settings are about to change in the Kremlin yet 
again. Vladimir Putin and Aleksandr Voloshin are now being considered for 
the role of "jeunes premiers" -- candidates for the post of prime 
minister. 

All this endless guesswork as to who may become premier -- and then 
president -- could be absurd; but it is not: It is far too sad, far too 
trying [line from Lermontov poem]. 

The Yeltsin clan is clearly unable to reconcile itself to the idea that 
it is impossible to retain everything in President Boris Nikolayevich's 
absence. 

Certainly, the "family" can remain an influential political force if it keeps 
certain financial and information levers under its control. But to do so 
it should have a clear plan already now as to what will have to be 
sacrificed for sure, what losses are not fatal, and what should be 
maintained at any price. And then, after strategic tasks are set, actions 
can also be taken -- either fight against or be on friendly terms with 
NTV [Independent Television], either try to undermine Stepashin or back 
him. Because those in retreat always need to have more coherent plans 
than those who are on the offensive. 

After Aleksandr Voloshin joined the Presidential Staff, the Kremlin became 
much better organized and determined. But one can say with absolute 
certainty that it lacks more or less long-term strategy. The Kremlin 
occupants are confident that anybody can be elected president. It is not 
an individual that matters but resources that can be invested in his 
promotion. And the second point on which they are mistaken is their 
confidence that it is possible to find such an "anybody" who, once he 
becomes "leader of nation and boss in the country," would agree to 
tolerate "yesterday's heroes" near his throne, whether out of gratitude 
or out of fear. 

In reality, it is impossible to get just "anybody" elected -- there 
will not be enough money for that. And no president in office can be 
swaddled with any compromising evidence or financial commitments. In this 
country, presidential powers are simply boundless, and a mere raising of 
the presidential eyebrows will suffice to send all blackmailers packing. 
Especially considering that they are not angels either. 

Moreover, if the Kremlin makes every effort to "improve" Stepashin, who is,
in 
fact, capable of uniting the political elite and becoming a solid 
candidate from the entire party of power, it can create a situation 
similar to that in 1996. At that time the "Communists or the government" 
option was hanging by a hair. And if this political scenario recurs in 
2000, Luzhkov will be the only one who can oppose the "Reds." And then 
the "family's" personal feelings will be nobody's concern. 

*******

#14
Moscow Times
July 1, 1999 
Hope for a Turnaround 
By Ethan S. Burger (ethansb@intr.net) and Anton Lyapin 
Ethan S. Burger is the senior international counsel for the international law 
firm of Russin & Vecchi. Anton Lyapin is an associate at the firm's Moscow 
office. They contributed this comment to The Moscow Times. 

As attorneys advising clients on trade and investments in Russia, we are 
often asked extralegal questions touching upon risk analysis and political 
prognostication. Journalists, political scientists and economists who follow 
developments in Russia seldom face serious professional repercussions for 
having been wrong. Most lawyers do not enjoy this luxury f they are required 
to give practical advice to business people looking to make a profit (or at 
least minimize losses). Clients and dinner guests inevitably pose the 
question "when will Russia be a safe and reliable place to do business?" We 
wish we knew the answer, but remain optimistic concerning Russia's future, 
which is unlikely to be as bad as most fear, although not as good as many 
hope. 

The lack of political leadership in Russia today is the country's overriding 
challenge. President Boris Yeltsin's erratic behavior precludes the adoption 
of consistent policies throughout the country. Former Prime Minister Yevgeny 
Primakov's greatest success was that there were no major disasters on his 
watch. Primakov, in a sense, functioned like a foreign minister in his own 
country. He dealt with regional leaders as he would have dealt with the heads 
of foreign states. He favored incrementalism over major policy initiatives. 
He also took the Constitution seriously and tried to build coalitions with 
the various factions within the State Duma, the lower house of parliament. 

Still, much of what takes place in Moscow has limited impact on the 
provinces. Russian political subdivisions follow their own rules. The 
authority wielded by the heads of these subdivisions is largely unchecked, 
and regional officials and judges are often arbitrary and corrupt in their 
dependence upon local political leaders, organized crime bosses and the 
management of major enterprises. Changes here are unlikely to occur until the 
bureaucracy and the judiciary are paid reasonable salaries and Russia chooses 
a new political leadership. 

>From an economic perspective, Russia is currently viewed by many as an 
exporter of cheap raw materials, a "dumper" of steel and chemicals, and a 
market for low-quality, foreign-produced consumer goods. The ruble's fall has 
created new opportunities for domestic producers and companies willing to 
take the risk of making direct foreign investment. 

For example, Ford Motors, Renault, Scania, South African Breweries, Adidas, 
Danone, and Nestle are expanding or plan to expand their activities in 
Russia. Seeing the ruble's low value as providing real opportunities, they 
have chosen to approach the market from a long-term perspective. Similarly, 
some Russian companies such as Stervastal, Uralmash, Surgutneftegaz and the 
Mai Company are performing well even after (and partially as a result of) the 
August 1998 downturn. 

We believe that Russia needs to increase its accessibility to foreign banks 
(the population has, to a great extent, lost faith in Russian banks after 
last summer's financial crisis in which many lost their savings). This can 
be accomplished by replacing discriminatory restrictions on Russian banks
with 100% foreign investments and branches of foreign banks (such as
limitations on market share and the types of clients they may serve).
Unfortunately, 
the Federation Council's recent approval of additional restrictions on 
foreign-owned insurance companies is not a good omen for this scenario. If 
signed by Yeltsin, proposed amendments to the law on insurance would 
establish a 15 percent ceiling on foreign ownership of Russian insurance 
companies and ban those foreign companies from engaging in insurance 
operations on Russian territory that were involved for less than two years in 
an insurance company established in Russia or less than 25 years in their own 
country. 

At the same time, Russia should give up on the idea of joining the World 
Trade Organization and adopt a policy of import substitution with the goal of 
reviving its domestic industrial production (at the "expense" of its domestic 
market). Back in Soviet times, there were domestic producers of Russian 
consumer items such as computers, televisions and stereos. While these 
products were not competitive with those produced in Asia or the West, they 
were not universally of low quality. The enterprises that manufactured them 
could be reconstituted with new, inspired management and investment. With 
this in mind, Russia should raise tariff barriers on finished consumer 
products while lowering duties on kits and spare parts to encourage domestic 
assembly and processing of consumer and other products. Such a policy would 
encourage technology transfer and would also have the effect of educating 
Russian management in modern production and marketing techniques. 

In the event that Russian industrial enterprises be made profitable and 
forced to pay their fair share of taxes, the state might have enough revenue 
to finance the country's faltering infrastructure and public health system. 
If the population sees the state providing real services, tax collection 
should improve. But such tax collections should be targeted largely at 
improving the conditions in the country for the people, instead of just 
repaying foreign bankers who were reckless in advancing loans to non-credit 
worthy borrowers or failed to have in place systems to monitor the use of 
loaned funds. 

A politically stable Russia could be a prosperous country in the mid-term. 
The country is scheduled for new parliamentary elections in December 1999 and 
a new presidential election in June 2000. If the new leadership learns to 
work together, there would be justification for hope. While Russia has 
significant social, health-related and demographic problems, it remains a 
country with tremendous natural and human resources. Consequently, if the 
country's elites would only recognize their shared fate, the optimism of late 
1991 could be recaptured. 

******

#15
Russia, U.S. see thaw in ties after Kosovo chill
By Janet Guttsman

WASHINGTON, July 27 (Reuters) - Russia and the United States on Tuesday
promised new talks on arms control and fresh efforts on trade and
investment, predicting a thaw in their relationship after the chill caused
by the Kosovo war. 

U.S. Vice President Al Gore and Russian Prime Minister Sergei Stepashin,
speaking at a news conference after two hours of talks on political and
economic issues, admitted the Kosovo conflict had hurt ties between their
countries. 

Russia, traditionally allied to the Serbs, opposed NATO's air strikes
against Yugoslavia, but the two sides patched up the worst of their
differences during the Cologne, Germany summit of rich industrialised
nations plus Russia. Russian soldiers are now serving alongside Americans
in a NATO-led peace force. 

``We are not in a Cold War any more. We are cooperating,'' Gore said. ``Of
course there are tensions from time to time and old attitudes sometimes
fade away slowly.'' 

The two men on Tuesday announced plans to open talks on a new treaty on
arms control and promised new efforts to help Russia become a full-fledged
player in the global economy. 

The arms talks, to start in Moscow next month, will be the first
discussions on a far-reaching START 3 arms reduction treaty, which would
cut the number of nuclear warheads to a maximum of 2,000 on each side. 

START 2, which has yet to be ratified by the Russian parliament, would cut
warheads to 3,500 on each side by 2003. 

``The United States and Russia have long understood that reducing nuclear
arsenals is in our mutual interest,'' Gore said in a statement. ``That is
why we will continue to press for ratification of START 2 and will begin
discussions next month toward START 3.'' 

But Gore, who praised Stepashin as a ``no-nonsense, business-like person,''
said that START 2 had to be ratified before START 3 could take effect. 

The economic discussions centred on ways to enhance trade and investment
and develop small business in Russia, which is struggling to create a
framework for economic growth. 

Stepashin promised during his trip to create an investment-friendly
environment, and he said on Tuesday there would be no repeat of the crisis
of August 1998 when Russia devalued the rouble and defaulted on some
domestic debt. 

Stepashin, appointed in May, is the latest in a string of prime ministers
to try to resolve Russia's deep economic problems. But he leaves Washington
before the International Monetary Fund on Wednesday debates a new $4.5
billion lifeline for his country, already a big IMF borrower. 

World Bank President James Wolfensohn, speaking after a meeting with
Stepashin, said Russia's latest reforms had a good chance of success, and
he had a ``very positive feeling'' about the government's efforts to face
up to its economic problems. 

The World Bank last week agreed to terms to revive two loans to Russia,
although Russia will not get World Bank money until it meets conditions and
the IMF approves its loan. 

But not all Washington's power brokers are convinced the money is needed,
and a former Russian reform chief said the West was wrong to pay and Russia
was making a mistake to ask. 

``The Russian authorities have learned the craft of pulling the wool over
the eyes of the West and the West has learned to pretend not to notice it.
For political reasons, the West periodically tosses money at us,'' former
Finance Minister Boris Fyodorov wrote in an article in the Washington Post. 

``The prime minister should address the IMF and reject any new credits
until the moment when we have a real plan of action and have started
carrying it out,'' said Fyodorov, whose reformist policies won praise
abroad and resentment at home. 

Senate Majority Leader Trent Lott, speaking after meeting Stepashin, was
wary of the IMF loan. 

Asked if the IMF should pay out the next tranche of the loan to Russia,
Lott, a Mississippi Republican, told reporters: ``Not on what I heard here
today. I think there's still some other outstanding questions that have to
be addressed.'' 

******