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Johnson's Russia List


August 9, 1999    
This Date's Issues: 3428     

Johnson's Russia List
9 August 1999

[Note from David Johnson:
1. Reuters: Yeltsin names favoured heir, new Russian PM. (Putin)
2. Reuters: Yeltsin's speech sacking Stepashin, naming PM.
3. Reuters: Yeltsin move seen shielding inner circle.
4. Reuters: Chronology of Russian government reshuffles.
5. Reuters: Russia's new PM is former Soviet spy.
6. Reuters: US ready to work with Yeltsin's new premier.
7. Reuters: Elizabeth Piper, Leeches help some Russians through 

8. Christian Science Monitor: Fred Weir, Media key to Kremlin battle 

9. Boston Globe: David Filipov, Russia hits rebel forces by land, air.
10. Reuters: Stepashin warns Russia may lose Dagestan.
11. Bloomberg: Stepashin Falls Victim to Success of His Economic 


Yeltsin names favoured heir, new Russian PM
By Martin Nesirky

MOSCOW, Aug 9 (Reuters) - Boris Yeltsin stunned Russia on Monday by sacking 
his entire government and then naming his newly-appointed acting premier, 
ex-KGB spy Vladimir Putin, as the man he wants to succeed him as president 
next year. 

"He will be able to unite those who will renew the great Russia in the 21st 
century," the 68-year-old Kremlin chief said of Putin in a televised address 
just hours after firing his predecessor Sergei Stepashin. 

Yeltsin said Putin would guarantee the future of reforms in the world's 
largest country if elected president. 

It was a dramatic move -- the first time Yeltsin has so clearly named a 
preferred heir and the fifth time he has chosen a new premier in 17 months. 

The rouble fell immediately and Russian shares dropped before bargain hunters 
boosted prices. 

Yet major world markets were unperturbed by the latest political twists. 
Foreign governments and the International Monetary Fund said they would stay 
on track with Russia, which is wallowing in a deep economic crisis. 

Renewed violence in Russia's mainly Moslem North Caucasus may have played a 
role in Yeltsin's decision. Opposition leaders said the move was nonetheless 
lunacy and more about protecting his entourage than the nation's interests or 

Political analysts more charitably pointed to the emergence of Moscow Mayor, 
and Yeltsin rival, Yuri Luzhkov's new political alliance last week as the 
catalyst. Muscovites were cynical. 

"What do you expect from an ill president and his troupe of clowns?" asked 
Marina, sheltering in a doorway from rain. 

In his television address, the ailing Yeltsin said he had set December 19 as 
the date for an election to the State Duma, the lower house of parliament. 

Duma deputies will vote next Monday on whether to confirm Putin as premier, 
speaker Gennady Seleznyov told reporters. 

Yeltsin said by naming the election date he had fired the starting pistol for 
an election marathon that would end with a presidential poll in mid-2000. 
Yeltsin must step down by law. 

"Now I have decided to name a man who in my opinion is capable of uniting 
society, based on the broadest political forces, to ensure the continuation 
of reforms in Russia," said the bespectacled president in slow, deliberate 

"He is Security Council secretary and director of the Federal Security 
Service Vladimir Vladimirovich Putin." 

"I have confidence in him," he said. "I want those who will go to the polls 
next July to have confidence in him as well." 

Putin said he would definitely stand and described the reasons Yeltsin had 
given him for ditching Stepashin. 

"As far as I understood, this decision is linked to the president's wish to 
change the internal political configuration in the country ahead of the Duma 
election and the presidential election, as well as in connection with the 
situation in the Caucasus," Putin told his first cabinet meeting. 

Despite central bank support, the official rouble rate fell three percent to 
25.29 to the dollar in response to the news on Putin and the government's 
dismissal. Traders said increased activity by bargain hunters helped the key 
RTS1-Interfax share index regain much ground to close down 2.70 percent at 

Yeltsin has not said so clearly before whom he would prefer to succeed him, 
although he has alluded to others in the past and there had been persistent 
speculation in Moscow that pointed to the 47-year-old Putin as a possible 

The president is known to be keen to make sure his successor is from his camp 
and will guarantee immunity from prosecution for him and his entourage, known 
as "The Family." 

Putin worked as a KGB spy in Germany and then for the city administration in 
St Petersburg, where he earned the nickname "The Grey Cardinal" for his dour 
but ultra-loyal backroom style. 

He is seen as close to reformer Anatoly Chubais, architect of Russia's 
controversial privatisation programme. Chubais is widely regarded as having 
close links with the "The Family." 

It was not clear what Putin's chances were in the Duma vote. Some political 
analysts say he will not get through on the first of three possible votes, 
after which Yeltsin must dissolve the Duma. Others say deputies have little 
stomach for a fight, knowing to lose would rob them of pre-election 

Few think he will fail altogether. Even if he did, the election commission 
said the Duma election date would stand. 


Yeltsin's speech sacking Stepashin, naming PM
August 9, 1999 

MOSCOW (Reuters) -- Russian President Boris Yeltsin sacked Prime Minister 
Sergei Stepashin on Monday and named Security chief Vladimir Putin as acting 
premier to replace him. 

The full text of Russian President Boris Yeltsin's televised speech follows: 

Dear Russians, 

Today I have signed a decree on elections to the State Duma (lower house of 
parliament). They will be held on December 19. This is exactly the date set 
out by the constitution and the law. 

The start has now been given for the elections marathon. It will be very a 
complicated and responsible time. And that is why I ask you to assess, with 
special attention and even with passion, how the participants in political 
race behave themselves. I have promised that the Duma elections will be an 
honest fight and I am sure that your choice will be that of discerning and 
upstanding people. 

One should not forget that exactly within a year there will be presidential 

And now I have decided to name a man who in my opinion is capable of uniting 
society, based on the broadest political forces, to ensure the continuation 
of reforms in Russia. He will be able to unite those who will renew the great 
Russia in the 21st century. 

He is security council secretary and director of the Federal Security Service 
Vladimir Vladimirovich Putin. 

Today I have made a decision to sack the government of Sergei Vadimovich 
Stepashin. According to the constitution I have asked the State Duma to 
confirm Vladimir Vladimirovich Putin as chairman of the Russian government. 

I am sure that he will be very useful to the country working in this post, 
and the citizens of Russia will be able to assess Putin's business and human 
qualities. I have confidence in him. And I want those who go to polls next 
July to be confident in him as well and make their choice. I think he has 
enough time to show himself. 

I know Vladimir Vladimirovich very well. I have watched him for a long time 
when he worked as a first deputy mayor of St Petersburg. Over the last few 
years, we have been working side by side. In all posts he has acted 
confidently and strongly, achieving good results. Vladimir Vladimirovich has 
great experience of government work. 

To lead the government is a heavy burden, a serious challenge. He will cope, 
I am sure. And Russians will support him. 

I thank Sergei Vadimovich Stepashin for his good work. He has managed to 
create a strong team, to keep a stable political and economic situation in 
the country. I am sure Sergei Vadimovich will support his successor and his 

Russia is entering a new political era. In one year for the first time in the 
country's history the first president of Russia will transfer power to a 
fresh, newly elected president. In any case he will be your president, 
respected Russians, he who has won in honest and clean elections. 


ANALYSIS-Yeltsin move seen shielding inner circle
By Gareth Jones

MOSCOW, Aug 9 (Reuters) - President Boris Yeltsin's nomination of Russia's 
fifth new premier in 17 months smacks of desperation and is aimed at 
protecting the interests of his entourage, not of the nation, political 
analysts said on Monday. 

The choice of security boss Vladimir Putin, with roots in the Soviet-era KGB, 
also boosts the threat of ``unconstitutional'' measures like declaring a 
state of emergency which might derail a parliamentary election set for 
December 19, they said. 

Earlier on Monday Yeltsin sacked Sergei Stepashin as prime minister just 
three months after appointing him to the post and named Putin as acting 
premier. He also declared Putin his preferred candidate in next summer's 
presidential election. 

The move coincides with rising political tensions triggered by the formation 
of a powerful new bloc uniting popular Moscow Mayor Yuri Luzhkov and regional 
leaders and by fresh conflict in the unruly North Caucasus -- a development 
which could provide the grounds for declaring a state of emergency in Russia. 

``Putin is tougher than Stepashin and has the support of the security 
organs,'' said last week's edition of the Moskovskiye Novosti weekly, which 
accurately predicted Putin's appointment. 

``And a readiness for tough decisions and authority in the security apparatus 
are exactly what Putin will need,'' it said. 

Other ``unconstitutional'' scenarios rehearsed in Russia's mass media include 
banning the main opposition Communist Party in the name of fighting political 
``extremism'' and dissolving parliament to allow Yeltsin to rule indefinitely 
by decree. 

Commentators saw in Yeltsin's decision the hand of ``The Family,'' the 
president's inner circle, which they say includes his daughter Tatyana 
Dyachenko, chief of staff Alexander Voloshin and financiers Boris Berezovsky 
and Roman Abramovich. 

They are credited with having a decisive influence over the ailing president, 
who by law cannot stand for the post again. 

Their main motive, analysts say, is to secure a successor who would grant 
them immunity from prosecution. 

They reason that in Russia's fragile young democracy where trust is sorely 
lacking a future president could launch an investigation into business deals 
concluded during the Yeltsin era or into possible allegations of misuse of 
public funds. 

Yeltsin may also fear a revival of the charges made against him during a 
recent, unsuccessful parliamentary bid to impeach him. The charges included 
his decision to send tanks to crush the Soviet-era parliament in 1993 and his 
disastrous military campaign against rebel guerrillas in Chechnya. 

``Stepashin clearly failed to consolidate the pro-Yeltsin regime forces ahead 
of the parliamentary election and to show he could protect the interests of 
The Family,'' said Boris Makarenko of the Centre for Political Technologies. 

He said the Kremlin had been alarmed by last week's alliance between Luzhkov 
and regional chiefs. Ex-premier Yevgeny Primakov, Russia's most popular 
politician, is also expected to join the centre-left grouping, which opinion 
polls suggest will dominate the new State Duma, the lower house of 

Yeltsin sacked Primakov in May for dragging his feet over market reforms but 
gave no reason for ditching Stepashin. 

Superficially, at least, there seems to be little difference between 
Stepashin and Putin. Both men are 47, loyal to Yeltsin and have ample 
experience working in the security apparatus. On Monday, Putin also said he 
planned no big policy changes. 

Putin worked for many years in Germany as a spy, is close to Anatoly Chubais 
-- architect of Russia's controversial privatisation programme -- and until 
Monday headed the Federal Security Service (FSB), a successor body to the 

Yeltsin's naming of Putin as his preferred heir did not impress analysts, who 
noted he had spoken similarly of veteran premier Viktor Chernomyrdin on 
sacking him in March 1998. 

``Putin is not a public figure,'' said analyst Andrei Piontkovsky of the man 
dubbed the ``Grey Cardinal'' for his secretive, behind-the-scenes style. 
Putin's taciturn expression is also unlikely to appeal to Russian voters. 

``But Putin is the best candidate (as prime minister) if The Family is 
preparing a non-constitutional scenario for holding on to their power and 
privileges,'' Piontkovsky added. 

Politicians and analysts from across the spectrum were unanimous on one point 
-- that Putin's appointment had nothing to do with protecting national 
interests or helping the economy. 

``This could jeopardise the (economic) recovery we have seen,'' said Peter 
Westin, economist at Russian Economic Trends. 

``Yeltsin is just showing the only means of power he has, hiring and firing. 
It is becoming fairly ridiculous.'' 

Putin, whom Yeltsin also named as first deputy prime minister on Monday, must 
now be approved by the State Duma. If the opposition-dominated chamber 
rejects him three times, Yeltsin must dissolve the Duma and call a fresh 

Analysts were divided over whether deputies, who in any case face the voters 
in December, would accept Putin. 

Some said deputies would quietly nod him through, as they did Stepashin in 
May, to hold on to their privileges -- including offices, aides and immunity 
from prosecution -- until their mandate expires. 

Makarenko said Yeltsin might use this opportunity to further provoke his Duma 
foes, for example by removing Soviet state founder Vladimir Lenin from his 
mausoleum on Red Square and having him buried -- a move certain to enrage the 


Chronology of Russian government reshuffles

MOSCOW, Aug 9 (Reuters) - Russian President Boris Yeltsin sacked Prime 
Minister Sergei Stepashin on Monday and replaced him with the head of the 
domestic security service, Vladimir Putin. 

Following is a chronology of government reshuffles in post-Soviet Russia: 

November 1991 - Yeltsin wins the right from parliament to run the government 
and appoints himself prime minister to carry out bold market reforms. 

June 1992 - Yeltsin names reformer Yegor Gaidar as acting prime minister. The 
Communist-dominated parliament never agreed to confirm Gaidar in his post. 

December 1992 - Yeltsin sacks Gaidar under pressure from parliament and names 
technocrat Viktor Chernomyrdin, former head of huge natural gas monopoly 
Gazprom, to head the government. 

March 1998 - Yeltsin sacks Chernomyrdin for being too slow in reforms and 
names little-known former provincial banker and energy minister Sergei 
Kiriyenko as prime minister. 

The Communist-led Duma rejects liberal Kiriyenko twice and approves him only 
under the threat of imminent dissolution. 

August 1998 - Yeltsin sacks Kiriyenko in the wake of a painful market crunch 
marked by default on some foreign debts and the devaluation of the rouble. 

The Duma rejects Yeltsin's choice, Chernomyrdin, twice and the Kremlin steps 
back from the brink in the decisive vote by offering compromise candidate 
Yevgeny Primakov, foreign minister and a former spymaster. Conservative 
Primakov wins overwhelming Duma approval on September 11. 

May 12, 1999 - Yeltsin unexpectedly sacks Primakov, thanking him for his 
performance but adding that Russia needed a more energetic premier. 

He names Interior Minister Sergei Stepashin to head the government. Stepashin 
wins parliamentary approval at the first try. 

August 9, 1999 - Yeltsin sacks Stepashin without explaining why and names 
Putin, who also headed the influential presidential Security Council, and 
asks the Duma to confirm Putin in the new job. 

The Duma has to consider Putin's nomination by next Monday. 


NEWSMAKER-Russia's new PM is former Soviet spy

MOSCOW, Aug 9 (Reuters) - Vladimir Putin, a former KGB spy, built a 
reputation as a shrewd Russian security chief. But he will need to muster all 
his wiles to fulfil his next role as President Boris Yeltsin's new premier 
and favoured heir. 

In announcing that he had named Putin as acting premier and backed him as 
Russia's next president, Yeltsin said he was ``capable of uniting society, 
based on the broadest political forces, to ensure the continuation of reforms 
in Russia.'' 

``He will be able to unite those who will renew the great Russia in the 21st 
century,'' said Yeltsin, who must step down after an election in 2000. 

But analysts from across the Russian political spectrum said Putin's 
elevation smacked of desperation and was aimed at protecting the interests of 
the president's inner circle, not of the nation. 

They also said his appointment raised the fear that Yeltsin and his entourage 
would employ ``unconstitutional'' measures to protect themselves from the 
vengeance of a hostile successor. 

The tight-lipped 47-year-old Putin is a poor public speaker and seldom 
appears on television. But he is known for his loyalty to changing bosses and 
for getting the job done. 

Putin replaces former interior minister Sergei Stepashin, sacked as head of 
Russia's government after just three months. Putin is seen as close to market 
reformer Anatoly Chubais, architect of Russia's controversial privatisation 

Putin first entered the domestic political arena in the early 1990s as aide 
to Anatoly Sobchak, liberal mayor of Russia's second city St Petersburg. 

He remained in the shadow of his new boss but quickly made himself 
indispensable in managing the city's affairs, earning the nickname of the 
``grey cardinal.'' 

Putin often chaired meetings of the city administration in Sobchak's absence. 
He also oversaw the city's relations with foreign countries and in 1994 
became first deputy head of St Petersburg's city government. 

``He managed the local administration meetings so effectively that he would 
make a perfect prime minister,'' the Kommersant daily quoted one of Putin's 
colleagues as saying at the time. 

Putin helped Sobchak lay the foundations of a market economy in St Petersburg 
and also helped his boss brush off claims by his opponents that he was 
abusing his powers. 

In the mid-1990s Putin confessed that he had served with Soviet foreign 
intelligence, then part of the KGB secret police, for many years in Germany. 

Details of his career in intelligence remain unknown but the confession did 
no harm to his relations with Sobchak. ``He is not a KGB man, he is my 
pupil,'' Sobchak would say to critics. 

After Sobchak's election defeat in 1996, Putin was invited to Moscow to work 
as deputy to the powerful Pavel Borodin, manager of the huge office running 
the property of President Boris Yeltsin's administration, including the 
Kremlin, numerous residences and office buildings, hospitals and sanatoriums. 

Putin's move to Moscow had been arranged by Chubais, who also hails from St 
Petersburg. Within a year, Putin had been invited to join Yeltsin's 
administration as head of the Control Department, an influential watchdog 

Putin was put in charge of the Kremlin's relations with Russia's 89 regions 
and gained a reputation as a tough ``imperialist,'' who resisted giving more 
powers to the country's independent-minded regional leaders. 

``He was one of the radical bureaucrats who took an extremely tough line 
against the regional barons when in the Control Department,'' said Igor 
Bunin, head of the Centre of Political Technologies think-tank. 

In July 1998 Yeltsin named Putin head of the Federal Security Service (FSB), 
one of the successor bodies of the Soviet-era KGB. He replaced Nikolai 
Kovalyov, whom the Kremlin had suspected of becoming too independent. 

In March this year Putin also became secretary of Yeltsin's advisory Security 
Council, in a move which confirmed the president's respect for his loyalty 
and quiet efficiency. 

Vladimir Putin was born on October 7, 1952, in St Petersburg, then known as 
Leningrad. He graduated from the city's law faculty in 1975. 

He speaks fluent German and enjoys sport, especially wrestling. Putin is 
married and has two children. 


US ready to work with Yeltsin's new premier
By Deborah Zabarenko
August 9, 1999

WASHINGTON (Reuters) - The White House soft-pedaled Russian President Boris 
Yeltsin's sacking of his prime minister and the appointment of an ex-KGB spy 
as a replacement, saying 

Monday that Washington is ready to work with the new premier. 

``We work with Russian ministers based on policies, not personalities,'' 
White House national security spokesman David Leavy said in reaction to 
Yeltsin's sacking of Sergei Stepashin as premier and the appointment of 
Vladimir Putin, secretary of Russia's advisory Security Council, to replace 

Yeltsin also fired his entire cabinet and named Putin as the man he wants to 
succeed him as president when he leaves office next year. 

``We know Mr. Putin well, he is (U.S. National Security Adviser Samuel) 
Berger's counterpart, we've dealt with him on Kosovo where he was 
constructive,'' Leavy said. 

Asked about possible U.S. concerns over instability in Russia after Yeltsin's 
appointment of a fifth acting prime minister in 17 months, Leavy replied, 
``It's not for us to judge that ... We've had a good relationship with Prime 
Minister Stepashin, I'm sure we'll have a relationship with Mr. Putin.'' 

Berger and Putin discussed U.S.-Russian relations and weapons issues last 
week on a special ``hot line'' phone link, Russian news agencies reported. 

Stormy relations between Moscow and Washington worsened this year over NATO's 
bombing of Yugoslavia, and Russia's reluctance to put peacekeeping troops in 
Kosovo under NATO command. 

But one analyst, Helmut Sonnenfeldt of the Washington-based Brookings 
Institution, said the cautious White House reaction to the latest Yeltsin 
move was an appropriate step toward encouraging order in the relationship. 

``As a practical matter, I think (the Russians would) have difficulty going 
back to an angry threatening relationship (with Washington) because there are 
things that they need from the west,'' Sonnenfeldt said. 

These needs include economic aid and some kind of working relationship with 
NATO, if only to keep Russian troops supplied in Kosovo, he said. 

Sonnenfeldt added that Russia was already engaged in pre-election maneuvering 
in advance of scheduled parliamentary elections. For his part, Leavy stressed 
that it was ``important that Yeltsin reaffirm his intention to hold Duma 
elections on time in December.'' 

Leavy said Washington would continue to press for ratification of the START 2 
arms reduction treaty by the Russian parliament. 

Stepashin visited Washington two weeks ago, where he met with Vice President 
Al Gore. At a news conference following two hours of talks, the two promised 
new talks on arms control and fresh efforts on trade and investment. 

The two men also said officials from both countries would open talks in 
Moscow this month on a new round of nuclear arms cuts. U.S.-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 

The United States and Russia have explored what a START 3 treaty might be 
like, but Washington has insisted it would not actually sign such a treaty 
until START 2 enters into force. 


Leeches help some Russians through crisis
By Elizabeth Piper

RODNIKI, Russia, Aug 9 (Reuters) - For most people, they are black, slimy 
bloodsuckers, but for a village just outside Moscow leeches have become a way 
of surviving the financial turmoil that has driven millions of Russians to 

A year after a market meltdown, debt defaults and a rouble devaluation, the 
legendary patience of many long-suffering Russians has been pushed close to 
the limit. 

The vast majority are now craving political and economic stability, but a few 
desperate souls just want to feel better, even if it means sucking out the 

The leech business is flourishing. 

Not only are people buying leeches to cure illnesses ranging from 
haemorrhoids to heart disease, but those who use them claim to feel the added 
benefit of their ``bio-energy'' which leaves them uplifted and happy even in 
the worst situations. 

It may sound drastic, but times are hard. The crisis fuelled unemployment and 
soaring prices. Many accounts were frozen in collapsed banks and living 
standards remain low. 

``For those who use medical leeches, they get bio-energy and feel better than 
a normal human being. They don't need to think about bread,'' Professor 
Gennady Nikonov, general director at the International Medical Leech Centre 
based in a leafy village south-east of Moscow, said in an interview. 

``That person will live and they don't need to eat, they are happy,'' he 
said, relishing the sound of drills whining outside as his building gets a 
badly-needed refurbishment at a time when many offices around Moscow are 
standing empty. 

Nikonov said he and his company were ``a little frightened'' during the early 
days of economic crisis, which brought down some of Russia's biggest banks, 
tarnished the reputations of leading entrepreneurs and left many penniless. 

``But I am convinced after this that even in my old age my work with leeches 
will keep me well,'' he said, showing off a shabby laboratory full of large 
water-filled glass jars containing thousands of baby, old and pregnant 


Nikonov, unlike many, refused to put up prices to recoup huge expected losses 
as the rouble plunged against the dollar in the wake of the August 17 crisis. 

He said it would not be fair to charge higher prices to people who want to 
use leeches as many of them had their savings and wages eroded or lost money 
in frozen bank accounts. 

The crisis plunged millions into poverty and now more than one in three 
Russians is living below the official poverty line. 

Even Russia's political and business elite were affected. Former Soviet 
leader Mikhail Gorbachev lost $400,000 after the bank he used, Inkombank, 
lost its licence and closed its doors. 

Nikonov said the impact on his business was minimal. 

``There was a little dip in demand over the first six months after the crisis 
but we endured it because it was just due to people phoning and wanting to 
know how much the leeches cost after August,'' he said, adding that huge 
queues quickly returned when people realised the prices had not soared.'' 

Russians can now buy one leech for seven roubles (30 cents), instead of five 
roubles in August of last year. 

``We sell the cheapest leeches in the world. In France they cost $2-3 for 
one, in America they cost up to $10 and in England they cost about four and a 
half pounds,'' he said. 

``We kept the price low so that people could still get well.'' 

But for those who do not have the benefit of bio-energy from leeches, other 
price rises have been punishing. Russian food prices rose 135 percent in the 
year from June 1998. 

``Of course they're expensive (food and medicine). I never buy meat, I 
sometimes buy milk and I buy bread and that's all,'' said Domna Yermakova, 
who worked in a metal-turning factory during the war. 

``I've lived for a long time,'' said Yermakova, who was born in 1910. ``Now 
it's hard to live I am all alone. I worked all the war and now this is how 
it's worked out. Alone with my bread,'' she said sitting on her bed in a 
tumble-down apartment block. 

``The stuff in this market is too ask if prices have gone up, 
that's obvious,'' said 66-year-old Nina at the counter of a sausage stall. 

``I don't have the money to buy even a piece of that sausage,'' she said, 
picking up her bag which clinked with beer bottles she had collected to claim 
a few kopecks for their return. 

Unlike Nikonov's employees, who can earn up to 3,000 roubles ($125) a month, 
many of Russia's workers have seen their wages squeezed or halted completely 
as their bosses' axe fell. 

About 35 percent of the population, or 51.7 million people, received monthly 
salaries below the minimum subsistence level of 872 roubles ($36) during the 
first half of the year compared with 22 percent in the same period last year. 

Yekaterina's husband, once an engineer, now helps to scrape a living by 
taking turns to run her fruit and vegetables stall. 

By the end of June 10.44 million people or 14.2 percent of Russia's working 
population were out of work compared to 8.1 million a year earlier. 

``We have survived,'' she said. ``He was getting very small wages as an 


Many Muscovites say they have survived the crisis-laden months and will 
continue to do so. 

Despite the financial crisis and one of the coldest winters on record, there 
is eerie sense of calm in Moscow. 

There were no real protests against the leadership which prompted Russia's 
collapse and many Muscovites say their lives have not been radically altered. 

``We would have been better without the crisis, but at the same time it was 
positive and negative. The only bad thing was people were traumatised, people 
were stressed,'' Nikonov said. 

Survival techniques are rooted in the national character, he said, explaining 
that Russians turn to leeches even in the present day because their medical 
powers are rooted in the collective memory. 

``I named my first beauty cream (made with leech extract) Antonia after my 
mother Antonina,'' Nikonov said. ``She is still alive and introduced me to 
using leeches.'' 


Christian Science Monitor
9 August 1999
Media key to Kremlin battle plan
A government crackdown and press feud herald coming elections. Can media stay 
free of controls? 
By Fred Weir , Special to The Christian Science Monitor

Russia's fragile press freedoms could become the first casualties as the 
country's political clans begin the battle for the ultimate political prize - 
the Kremlin. 

"High-ranking officials are putting pressure on the mass media and on 
journalists," warned the editors of 14 leading Russian news publications in 
an open letter to President Boris Yeltsin last week. "They are using their 
official clout and even the name of the Russian president to do this," the 
letter said. 

The editors accuse Kremlin insiders, concerned about their own survival after 
Mr. Yeltsin leaves office next year, of ordering unwarranted tax raids and 
making other unspecified threats against news media that take an independent 
line in reporting the coming elections. A parliamentary vote is due in 
December, to be followed six months later by a presidential poll. 

An early warning that the Kremlin may be planning to manipulate those 
elections was the creation, two months ago, of a press ministry to ride herd 
on the media. 

In his first public interview, the new press czar, Mikhail Lesin, said he saw 
his job as trying to force news outlets to serve the interests of the state. 

"The defense of the state from the free mass media is a pressing problem at 
present," Mr. Lesin said. "I don't agree with the thesis that the state is 
more dangerous to the media than the media is to the state. I believe quite 
the opposite." 

The mayor's challenge 

Though the Kremlin has yet to nominate its own candidate to succeed Yeltsin, 
it is already at war with outside challengers. 

The president's inner circle seems particularly worried by Moscow Mayor Yuri 
Luzhkov, a tough, ambitious player who is building an electoral coalition of 
powerful regional leaders that could prove unstoppable. 

Several of the publications complaining of Kremlin harassment are owned by 
Vladimir Gusinsky, a media tycoon who has increasingly thrown his support 
behind Mr. Luzhkov. 

"Freedom of expression, a crucial democratic freedom guaranteed by the 
Constitution, can be sufficiently protected under the current circumstances 
only by the intercession of the president," the editors' letter to Yeltsin 

In a dramatic confirmation of those fears, one of the signatories, Raf 
Shakirov, chief editor of the respected Kommersant daily newspaper, was fired 
within days of the letter's publication. 

Kommersant was purchased a month ago by Boris Berezovsky, the most outspoken 
of Russia's shadowy ultrarich power players, known as the oligarchs, and 
rumored to be the Yeltsin family's private financial adviser. Journalists at 
Kommersant say they expect a full-scale purge of the paper's staff in the 
wake of Mr. Shakirov's departure. 

Other papers owned by Mr. Berezovsky have been trading highly personal 
allegations of corruption, theft, and conspiracy with media outlets owned by 
Mr. Gusinsky for weeks. 

Analysts say this "newspaper war" is the first volley in a looming fight 
between the incumbent Kremlin clan, which includes Berezovsky and the 
challengers led by Luzhkov. 

"The press war that's going on can't be treated as a simple struggle of 
journalists for freedom. It must be treated more as the sound effects as our 
mighty oligarchs contend for power," says Andrei Piontkovsky, director of the 
liberal Center for Strategic Studies in Moscow. 

"But even these volleys of contradictory news are better than the monolithic 
information monopoly of Soviet times," he adds. "Though there is real danger 
in this situation, no one faction is in a position today to grab total 
control of the media." 

Editors say the appeal to Yeltsin to intervene on their behalf - which sounds 
naive to Western ears - is justified by his record. "Whatever else you can 
say about him, during the eight years of his presidency Yeltsin has 
guaranteed independence of the media and freedom of expression in Russia," 
says Mikhail Berger, editor in chief of the daily Segodnya, a paper owned by 

If Yeltsin grants the editors' request for an urgent meeting, he may be 
forced to choose decisively between his faded democratic reputation and 
several of his closest aides - possibly including his own daughter. 

"Many members of Yeltsin's inner circle have a lot to lose if power changes 
hands next year and someone like Luzhkov becomes president," says Mr. 
Piontkovsky. "That explains why they may be ready to risk everything." 

Swiss police say they are investigating Pavel Borodin, the head of the 
Kremlin's property department, which controls assets worth an estimated $600 
billion, and 22 other top officials on suspicion of money laundering. 

Earlier this year an arrest warrant was even issued for Berezovsky, on 
charges of embezzlement and money laundering. But when President Yeltsin 
fired the left-leaning government of Prime Minister Yevgeny Primakov in May 
the case was dropped abruptly. 

Berezovsky has publicly bragged of his friendship with Yeltsin's daughter, 
Tatiana. Though he denies being a financial benefactor to the president's 
family, there seems little doubt about his strong influence within the 
Kremlin's walls. 

More than power at stake 

Critics are warning that these top officials, fearing for their positions, 
their freedom, and possibly their lives in any power shift, may be trying to 
stack the political deck so that they can hand pick a presidential successor. 
Accomplishing this would require tight control of the press. 

The model for this is the1996 presidential elections, when Yeltsin went from 
single-digit popularity to victory over a strong Communist contender, thanks 
largely to blanket support from Russia's mass media. 

"There may be some feeling in the Kremlin that this feat can be repeated next 
year, if only the press can be brought into line," says Ilya Bulavinov, head 
of the political department at Kommersant, the liberal daily recently 
acquired by Berezovsky. 

"But there is no big Communist threat this time, so the media aren't likely 
to unite - unless they close all the papers that don't support the Kremlin's 
candidate," he says. 

"Unfortunately, that could be a possibility." 


Boston Globe
9 August 1999
Russia hits rebel forces by land, air 
Moscow tries to halt insurgents but avoid major bloody campaign
By David Filipov

MOSCOW - Government forces launched air and artillery attacks yesterday 
against armed rebels holding positions in the Caucasus Mountains, as Russia 
faced the most serious challenge to its authority on its volatile southern 
frontier since the war in Chechnya.

Russian officials said they had launched a counteroffensive to dislodge up to 
2,000 militants who seized control of two mountain villages in the southern 
Russian republic of Dagestan on Saturday. The bold incursion has stoked fears 
of new, widespread unrest in the North Caucasus, Russia's most restive region.

The gunmen, reportedly members of a radical Muslim sect that seeks to 
establish an Islamic republic in Dagestan, presented Moscow with a serious 
dilemma: how to end the uprising without getting dragged into another bloody 
campaign in the Caucasus.

Television footage showed what appeared to be the heaviest fighting in the 
region since Russian troops withdrew from Chechnya in 1996 after a disastrous 
two-year campaign killed tens of thousands of people but did not end a 
separatist rebellion. 

Russian television showed government troops firing mortars, heavy machine 
guns, and heavy artillery into the rugged mountain territory held by the 
rebels. Casualty figures from the remote region were sketchy and unconfirmed. 
Some reports said four Dagestani police officers had been killed. Others said 
two Russian helicopters had been shot down by the militants.

Russian news agencies reported that up to 2,000 civilians, mostly women and 
children, had fled the area of fighting in the Botlykh region of Dagestan. 
Refugees told Russian Public Television that the gunmen were members of the 
radical Wahhabi sect, which supports independence for the mostly Islamic 
republics in the Caucasus. A police spokesman in Dagestan said the militants 
had kept the men in the villages as hostages.

But refugees from the villages said the gunmen didn't threaten them and asked 
their help in introducing Islamic law to the region.

''They want to proclaim an Islamic republic. They want the Russian military 
forces and police out,'' one unidentified refugee said on NTV television.

Russia's prime minister, Sergei Stepashin, rushed to Dagestan yesterday with 
the leaders of the army and police force to oversee the counteroffensive. 
Stepashin's spokesman, Alexander Mikhailov, told reporters that ''all 
necessary measures, including artillery and missile strikes and bombing the 
gunmen's locations, are being taken.''

Stepashin, who as domestic intelligence chief played a key role in the 
unsuccessful Chechnya campaign, ruled out a repeat of the Chechen debacle.

''Neither military nor civilian people should suffer during the settlement of 
the situation,'' the Russian premier told reporters in Dagestan's capital, 

But as estimates of the rebel force grew from several hundred early in the 
day to 2,000 by nightfall, it became harder to imagine how Russian forces 
would avoid bloodshed to force the militants out.

It was still unclear yesterday exactly who the militants, or their leaders, 
are. Russian officials said the gunmen were led by Shamil Basayev, a war hero 
in Chechnya who is wanted in Russia for leading a deadly hostage-taking raid 
on a Russian town in 1995. Russian news reports also mentioned another field 
commander, Khattab, a Jordanian of Chechen descent who is one of the leaders 
of the Wahhabi movement in Chechnya.

Both Basayev and Khattab are routinely blamed by Moscow for the kidnappings, 
shootings, and other violent crime that has spread throughout Chechnya and 
the North Caucasus region since the war ended.

Basayev and Khattab command large, well-trained and equipped forces that do 
not obey Chechnya's government. Both are active in a society that promotes 
the merger of Dagestan and Chechnya into a single, independent Islamic 
republic. They draw on the inspiration of Basayev's namesake, the legendary 
Imam Shamil, who used Islam to weld mountain tribes of Dagestan and Chechnya 
into a formidable fighting force that resisted the Russian conquest of the 
Caucasus into the middle of the 19th century.

Officials in Chechnya's capital, Grozny, said the militants are not Chechens, 
but Dagestanis who are protesting Moscow's rule over the region.

Dagestan avoided being dragged into the Chechnya war even when fighting 
briefly spilled into the republic in early 1996. But Dagestan has been hard 
hit by Russia's decade-long economic struggles. Moscow's authority in the 
region is at an all-time low, while radical Islamic groups like the Wahhabis 
have gained a foothold, especially in the poorest areas in the mountains 
close to Chechnya.

In another part of the North Caucasus region, unidentified gunmen reportedly 
killed two Russian servicemen and kidnapped three others in an attack on a 
military training facility in North Ossetia, which is west of Chechnya. About 
50 Russian servicemen have been killed and dozens taken hostage in frequent 
attacks along the Chechen border this year.


Stepashin warns Russia may lose Dagestan
By Andrei Shukshin
August 9, 1999

MOSCOW (Reuters) - Russia's outgoing Prime Minister Sergei Stepashin said 
Monday that Moscow risked losing its unruly southern province of Dagestan, 
where fighting raged for a third day between federal troops and Islamic 

Hundreds of armed fighters seeking independence from Moscow have taken 
control of at least three mountainous villages in Dagestan, which borders 
breakaway Chechnya, and for three days have resisted efforts to dislodge 

Police in the region contacted by telephone said fierce gunbattles resumed 
Monday morning after a quiet night. 

Dagestani police rounded up several people close to an unofficial Islamic 
Council with ties to Islamic activists in Chechnya, after it released a 
statement saying it would proclaim Dagestan an independent Islamic state, 
Russian news agencies said. 

``Today the situation in Dagestan is very difficult. I think we could really 
lose Dagestan,'' Stepashin told a final meeting of his Cabinet after 
President Boris Yeltsin fired him. 

Stepashin, who took a quick trip to Dagestan Sunday, said Russia needed to 
work harder to coordinate its efforts to stabilize the situation in the 
region, a mostly Muslim area populated by more than 30 different ethnic 

Vladimir Putin, a former security chief appointed to replace Stepashin, 
immediately pledged to carry out all the decisions and instructions on the 
North Caucasus signed by Stepashin. 

A spokesman for Dagestan's Security Council said the rebels fired rocket 
grenades at an airstrip used by the federal forces as a helicopter pad, 
damaging two aircraft. 

Russia's news agencies reported rebels fired twice at the helicopter used by 
the armed forces' Chief of Staff Anatoly Kvashnin, who arrived in Dagestan 
Sunday. The Defense Ministry denied the reports. 

Border guards in Georgia, which borders Dagestan, said a warplane bombed a 
village on their side of the border Monday, wounding two people. Moscow 
denied its planes were involved, although there is no other air power in the 

Russia's NTV television said four policemen were killed and 17 people wounded 
Sunday night when Defense Ministry aircraft accidentally bombed their own 
positions. Dagestani police confirmed the casualties but said they were 
caused by clashes with rebels. 

Leaders of Russia's Federation Council upper house of parliament, which 
groups regional chiefs, said they would meet Wednesday to discuss the 
worsening situation in Dagestan. 

Moscow says the gunmen crossed into Dagestan from Chechnya, which remains 
firmly outside federal control three years after a cease-fire ended the 
1994-96 war between the region's separatist guerrillas and federal Russian 

Chechen officials have denied involvement in the latest fighting, but 
Dagestani police officers say the rebels, mostly Dagestanis, received their 
military training in Chechnya. 

Security services say the Dagestani rebels are followers of Wahhabism, an 
austere Islamic sect found in the Middle East, who are plotting to drive 
Russians from the North Caucasus. 


Stepashin Falls Victim to Success of His Economic Policies

Moscow, Aug. 9 (Bloomberg) -- Former 
Russian Prime Minister Sergei Stepashin, who kept the economy stable and 
secured billions of dollars in loans in his three months in office, fell 
victim to his success like his predecessor Yevgeny Primakov, analysts said. 

President Boris Yeltsin today fired Stepashin, the fourth prime minister he's 
sacked in the past 17 months. He fired Viktor Chernomyrdin in March 1998, 
soon after Chernomyrdin said he'd run for president in 2000, saying that 
Chernomyrdin's government had failed to boost the economy. Yeltsin gave the 
same reason when he fired Primakov's government less than three months ago. 
This time, he didn't say why he fired Stepashin. 

Probably it was because he saw Stepashin gaining support after his government 
successfully rescheduled billions of dollars of debts and reached agreement 
with the International Monetary Fund for a $4.5 billion loan, analysts said. 

``Stepashin started to play too big of a role in Russia and abroad, which was 
not liked by Yeltsin and his circle,'' said Yevgeny Volk, director of the 
Heritage Foundation in Moscow. ``He pursued an independent policy in the U.S. 
and also he showed he was pro-governor during his visits to the regions.'' 

Political Jealousy 

Stepashin was appointed prime minister in May after serving as Interior 
Minister. During his time in office, the ruble remained stable, revenue 
collection rose, and spending was reduce. He also was well received by 
foreign leaders during the Group of Eight industrialized nations summit in 
Germany in June and by U.S. officials during a visit to the United States 
last month. 

Yeltsin also may be seeking a strong candidate to counter the growing 
popularity of Moscow Mayor Yuri Luzhkov, whose Fatherland party formed an 
alliance recently with the All Russia party of about 16 regional governors. 

``Yeltsin and his circle are being threatened by the All Russia party and 
Luzhkov,'' said Volk. ``People around Yeltsin make decisions. Stepashin was 
never their man.'' 

Yeltsin's immediate circle, referred to in Russia as ``the family'' and 
including his daughter Tatyana Dyachenko, Kremlin administration head 
Alexander Voloshin and business tycoon Boris Berezovsky, sees the union 
between Fatherland and Vsya Rossiya as a threat to their power and ability to 
control the upcoming elections, analysts said. 

Luzhkov's Threat 

``Luzhkov has been actively protesting Yeltsin's rule,'' Volk said. ``Local 
governors are very influential in non-ethnically Russian regions. A 
governor's word is law in those regions.'' 

The group wanted someone who would be sure to toe their line next year. 
Yeltsin chose Vladimir Putin, a former KGB spy, to replace Stepashin. The 
president has representatives in most of Russia's 89 regions, and his 
administration employed 2,564 people as of Jan. 1, more than double the 1,039 
people employed by the government's administration. 

``The Kremlin is very much engaged in the election process,'' said Alan 
Rousso, director of the Carnegie Moscow Centre. ``It wants to make sure it 
has a horse in this race.'' 

Berezovsky said in July he is shifting his efforts to politics from business 
in preparation for parliamentary and presidential elections. He said the 
winner of presidential elections will probably emerge only after the 
parliamentary elections in December. He also said regional leaders would be 
more active in these elections than they were in 1995 Duma elections. 

Luzhkov, who is seen as a likely presidential candidate, openly criticized 
Yeltsin and his administration last month as being incapable of protecting 
citizens and improving the economy. 

Broad Authority 

The future Russian president is likely to determine the country's course more 
than the composition of the parliament because the president's powers are 
much broader than the parliament's. Still, parties coming into the lower 
house of parliament will be in a better position to support their candidate 
for president. 

Putin confirmed today he will run for presidency, Russian news agency 
Interfax reported. 

``Putin is a figure closer to them (presidential surrounding) ..and he has no 
political preferences -- he is used to fulfilling orders,'' Volk said. 

The parliament, which is now on summer holidays must hold an extraordinary 
session this week to approve Putin for the post of prime minister. If the 
parliament refuses the candidacy three times, Yeltsin can dissolve the 

``The Duma will definitely not approve Putin in the first vote,'' Volk said. 
``To them, it is a serious blow what happened with Stepashin.'' 


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