October 27, 1999     
This Date's Issues: 3587 3588 3589

Johnson's Russia List
#3589
27 October 1999
davidjohnson@erols.com


[Note from David Johnson:
1. AFP: Troops Shell Grozny As Yeltsin Vows To Crush Insurgents 'Once And For All'
2. Reuters: Belarus leader to press for Russia pact.
3. New York Times letter: Elena Bonner, Sakharov's Advice on ABM Defense.
4. Kommersant: A Bribe-Taker In the Duma Destroyed Fundamental Science.
5. Itar-Tass: FINSEN Does Not Work Against Russia- Director.
6. Summary of Hilary Appel's talk at Kennan Institute on privatization.
7. Reuters: Dirty Ukraine campaign highlights change.
8. The Globe and Mail (Canada): Geoffrey York, Green activists face crackdown in Russia.
9. Moscow Times: Yevgenia Borisova, Bringing in The Harvest.
10. Gorodskiye Novosti (Krasnoyarsk): Viktor Evgrafov, The Hope for The Next Century. (International Community Schools Conference)
11. Washington Post: Dan Morgan and Michael Dobbs, Washington Lobbying Oils Russian Capitalism. Tycoons Go All Out to Gain U.S. Financial Backing.] 


*******


#1
Troops Shell Grozny As Yeltsin Vows To Crush Insurgents 'Once And For All'


MOSCOW, Oct 27, 1999 -- (Agence France Presse) - President Boris Yeltsin
vowed on Wednesday to crush rebel forces in the breakaway republic of
Chechnya "once and for all."


"We want to put an end to terrorism once and for all, to end international
terrorism in Chechnya so that the people lived there calmly and in peace,"
Yeltsin said in televised remarks from the Kremlin.


He described the Russian military push that was launched into the rebel
republic on October 1 as a "counter-terrorist operation."


"Russia soldiers and officers are returning peace and calm to the
long-suffering Chechen land," Yeltsin said. "With every hour and every day,
they demonstrate bravery as they clear Chechnya of bandits."


His comments appeared on television just as federal forces launched a heavy
artillery assault on regions of central Grozny, the Chechen capital, in
attacks lasting between five and 10 minutes.


It was not immediately clear if there were casualties or what sites were
targeted by the strikes, an AFP reporter at the scene said. 


*******


#2
Belarus leader to press for Russia pact
By Ivan Rodin

MOSCOW, Oct 27 (Reuters) - Belarussian President Alexander Lukashenko
called on Russia on Wednesday to give quick approval to a pact merging the
two former Soviet republics and vowed to press on with the treaty ``no
matter the cost.'' 


Lukashenko, who espouses Soviet-era values and shuns rapid reforms, told
the Duma lower house of Russia's parliament fast action was needed to
ensure people kept faith in the pact. 


``If we delay any further, the people will lose their faith in the idea of
a union state and the chance of carrying it out. We are wasting time,''
Lukashenko said. ``I am expressing the will of my people and I will carry
it out, no matter the cost.'' 


Lukashenko, given large bouquets of flowers on his arrival, was frequently
interrupted during his speech by applause in the communist-dominated Duma. 


The former farm director has made the reunification of the two neighbouring
states the corner stone of his political credo since his election in 1994.
Opponents, many in exile, accuse him of abusing power by crushing dissent,
controlling the media and prolonging his stay in power by virtue of a
referendum. 


The treaty provides for a number of joint institutions and decision-making
processes, but its provisions are so far little more than theory.
Lukashenko has complained that Russia is proceeding too slowly in drafting,
signing and implementing it. 


He told the Duma that Russian President Boris Yeltsin had agreed to
complete talks on the pact next month and sign it in December. Russian
officials, long hesitant about entering into any form of merger with a
country with undeveloped market reforms, have declined all comment on such
a timetable. 


Yeltsin, also invited to attend Lukashenko's address, did not turn out in
the Duma. 


Lukashenko spoke for one hour and 45 minutes and then discussed the treaty
at length with reporters. His originally allocated time of 45 minutes was
already far longer than any earlier address by a foreign leader. 


LUKASHENKO RENEWS CRITICISM OF THE WEST 


He devoted much of his address to accusing Western countries of hindering
passage of the treaty. He urged Russia not to cede ground to the United
States or the International Monetary Fund. 


Russia, he said, had no need to justify its campaign against Islamic
militants in Chechnya accused of regional subversion and of masterminding
terrorist blasts throughout Russia. 


``Why was (the West) not shouting when those apartment buildings were being
blown up?'' he asked the chamber. 


Nor did Russia have to stoop to concessions with the IMF when sales of
weaponry, like the C-300 anti-aircraft complex, would bring funds
equivalent to a $600 million credit currently under consideration. 


``Why go down on your knees before those crooks from the IMF? They've got
you on a hook for $600 million,'' he said. ``Just sell one (C-300 system)
and you've solved the matter.'' 


Lukashenko also dismissed a recent 20,000-strong protest in Minsk against
the treaty, broken up by police, as a pre-planned action by malcontents at
the behest of the West. Dozens of people were injured and arrested. 


``That was only the beginning. The West needs a new Kosovo on the entire
territory of the former Soviet Union,'' he said referring to NATO's air
campaign against the Yugoslav province. 


Signing the treaty in early December would precede elections to the Duma in
which Yeltsin's adversaries, the Communists and the Fatherland-All Russia
bloc of former prime minister Yevgeny Primakov, lead in opinion polls. 


Lukashenko exploited Belarus's difficulty in forging an identity after the
fall of communism to generate support for the treaty. But that enthusiasm
appears to have waned since. 


The treaty's opponents fear Lukashenko might use it as a springboard into
Russian politics or provide Yeltsin with a pretext to stay in power beyond
the end of his term next year. 


*******


#3
New York Times
27 October 1999
Letter
Sakharov's Advice on ABM Defense


To the Editor: 


The debate on revising the 1972 Antiballistic Missile Treaty (editorial,
Oct. 21) has been dominated by politicians and military officers, while
technical experts who can explain the difference between a total and a
limited ABM defense have been ignored. It is not the first time. 


A memorandum addressed by the physicist Andrei Sakharov to the Communist
Party Central Committee in 1967 argued that the moratorium proposed by
Washington on antiballistic-missile defense would benefit the Soviet Union
as well as the United States. He suggested that an exception might be made
to permit limited ABM defenses sufficient to guard against one or several
missiles fired by an outlaw regime. 


The Central Committee refused Sakharov's attempt to initiate a public
discussion of the issue. In 1968 he published in the West his essay
"Progress, Coexistence and Intellectual Freedom," in which he again urged
"a moratorium on the construction of antimissile systems." In June 1968,
Moscow agreed to begin negotiations on an ABM treaty. Although no evidence
has appeared that the essay was instrumental in this decision, Sakharov
believed that discussion by technical experts can influence Government
policy. 


Now, a serious debate about the benefits and risks of amending the ABM
treaty to permit a limited ABM defense would be timely. I urge physicists
specializing in disarmament to engage in a nonpolemical exchange of views. 


ELENA BONNER
Brookline, Mass., Oct. 22, 1999 
The writer is the widow of Andrei Sakharov. 


*******


#4
Russia Today press summaries
Kommersant
26 October 1999
A Bribe-Taker In the Duma Destroyed Fundamental Science
TEN THOUSAND DOLLARS IS BETTER THAN A NUCLEAR ACCELERATOR
Summary
For the first time, the General Prosecutor's office has brought to court a 
criminal lawsuit on corruption in the Duma. It seems from the evidence that 
the enquiry of deputy at the Duma costs at least $500 and the passage of bill 
costs at least $10,000.


According to the investigation, this was the amount of money that chief 
administrator of the Duma International Affairs Committee, Vladimir Trofimov, 
extorted from the Joint Institute of Nuclear Research in Dubna.


Last December, premier Primakov sent a draft agreement between the government 
of Russia and the Dubna institute to the Duma for ratification. The document 
contained a provision that the Institute, which is the world's leading 
organization in nuclear research, would be exempt from all taxes and levies. 
However, the draft agreement got stuck in parliament. The Duma committees 
decided that there weren’t sufficient financial grounds for a tax break. And 
Trofimov, who holds his doctorate in law, prepared a draft resolution to 
suspend the ratification of the agreement.


When Dubna Institute Director Kadyshevsky met with Trofimov, the latter 
openly hinted that the fate of the agreement depended on his own efforts and 
specified how much the efforts would cost - $10,000. Kadyshevsky told the FSB 
about this proposal, and they marked the money with a radioactive chemical 
identifier.


After Trifimov accepted the bribe, he was detained and charged with 
bribe-taking and extortion. This is the first instance of a high-ranking 
public officer being a defendant in a bribery case.


*******


#5
Finsen Does Not Work Against Russia Director.


WASHINGTON, October 26 (Itar-Tass) - The FINSEN service, the main body 
fighting financial crimes in the United States, does not conduct purposeful 
work against Russia, people of Russian or those who cooperate with them, 
FINSEN Director James Sloan told Itar-Tass on Monday. 


Mr Sloan said FINSEN tracks down suspicious financial operations because they 
are suspicious, not because of their ethnic basis. Shady transactions are not 
a unique phenomenon and it is far from being peculiar only to Russia, he 
added. 


The FINSEN Director said that over the short period of his stay at his post 
wo which he had been appointed about six months ago, he had already had 
contacts with Russian counterparts. He said he met with Russian officials and 
considers that the level of cooperation with them is very good. However, he 
did not specify whether this cooperation includes exchanges of information 
and if so to which extent. 


Mr Sloan said he does not envisage new meetings with Russian representatives 
in the coming days. This means that he will not apparently participate in 
talks with Russian Interior Minister Vladimir Rushailo, who arrives here on 
Tuesday from Florida which was the initial leg of his working visit to the 
U.S.. 


Russian Minister at large Alexander Livshits, during his recent stay in 
Washington, expressed the view that the U.S. press scandal over a leak of 
money from Russia through bank accounts opened by emigrants in America had 
revealed primarily the drawbacks of the U.S. system for monitoring financial 
flows. 


In response to a request to comment on that point of view, the FINSEN chief 
recalled that a month ago the U.S. Departments of the Treasury and Justice 
had presented the first report to Congress about a national strategy to 
combat money laundering. Mr Sloan said this is the main document "which we 
shall be guided by in this respect." In incidentally, the work on it was 
started long before this uproar was created, he added. 


Some experts maintain that U.S. commercial banks and other financial entities 
lately began to toughen their approach to work with Russia, Russian citizens 
and ex-citizens in reaction to the scandal. The FINSEN Director said he did 
not notice any such thing. "In any case, we do not do that," he pointed out. 


FINSEN was set up in April 1990 by the U.S. Department of the Treasury and 
organisationally is still accountable to it. In point of fact this is the 
main governmental financial intelligence centre which engages in systematic 
gathering and processing of information from a multitude of sources, 
including State and commercial entities. 


The purpose of this work is to reveal and carry out a comparative analysis of 
financial crimes, including the laundering of criminally obtained incomes. 
FINSEN also participates spotting and stopping financial flows that feed 
international terrorist organisations. 


*******


#6
Date: Tue, 26 Oct 1999 
From: "JOSEPH DRESEN" <DRESENJO@WWIC.SI.EDU> 
Subject: Re: Appel's talk


Here is a summary of Hilary Appel's talk.


In a Noon Discussion at the Woodrow Wilson Center on October 25, 1999,
Kennan Institute Title VIII-Supported Research Scholar Hilary Appel talked
about the relative importance of ideology in privatization processes in
Russia and the Czech Republic. She explained that in Czech Republic the
post-communist government linked the creation of the new system of private
ownership to the foundation of a new post-communist national ideology,
portraying the privatization program as anti-Communist, pro-European and,
thus ultimately, pro-Czech. By legitimizing the program through ideology,
the Czech government elicited early public support for the process. In
Russia, according to Appel, the government rejected the use of an
ideological campaign to elicit compliance to privatization, until late in
the process. Rather, in order to gain early support, the Russian
government relied on providing material incentives in the privatization
program to particular social groups, notably workers, factory managers and
industrial elites. Using ideology to support economic reform is an
important tool available to political leaders for lending a program broad
based legitimacy, Appel concluded, whereas material incentives build
support only among those small groups favored in the process.


*******


#7
ANALYSIS-Dirty Ukraine campaign highlights change
By Christina Ling

KIEV, Oct 26 (Reuters) - With accusations of muckraking and media 
manipulation flying among Ukraine's 15 presidential rivals ahead of Sunday's 
ballot, voters agree on one thing -- the race has been the dirtiest of the 
three held since Soviet rule ended. 


But the scandal-mongering is also an unlikely sign of a change for the better 
and of a society that has matured since the previous presidential election 
five years ago -- particularly in offering Ukrainians a choice in media. 


Candidates challenging President Leonid Kuchma's bid for a second term have 
swapped insults as well as turned their collective fire on the president, 
denouncing his government as corrupt and "criminal" over its patchy economic 
record. 


The generally placid agrarian country was also shaken by a grenade attack on 
one of Kuchma's closest opponents, radical socialist Natalya Vitrenko. All 
candidates denounced the attack, blamed on a local campaign team of one of 
her leftist rivals. 


Polls show Kuchma leading the field, with Vitrenko and Communist Party chief 
Petro Symonenko not far behind. 


The incumbent, while insisting his campaign has been a clean one, has clearly 
been rattled by the mudslinging. 


"You can't call what's going on in Ukraine democracy. No one has the level of 
total permissiveness that we do," Kuchma said at a campaign stop this week. 


"Dirt" spread by some reporters, he said, made him want to "punch their ugly 
mugs... I promise I will do that one day." 


Kuchma's team has come under fire from several quarters for alleged 
interference with the media. 


Russian's NTV independent television this week joined Ukrainian media in 
complaining of meddling by authorities. The Council of Europe has also voiced 
concern, but was itself accused of bias by senior officials. 


"You cannot say that these elections will be free," said prominent Kiev 
journalist Mykola Knyazhitsky. STB television station, which he helped found, 
has been among those most vocal in accusing authorities of harassment. 


MORE MEDIA, MORE MONEY AND BUSINESS 


Many observers say the very existence of different stations is an improvement 
over the 1994 campaign which was dominated by the state media. 


"Now you do have a broader spread of newspapers and radio and TV outlets and 
that's a big difference," noted one diplomat. 


"And not all of them are pro-Kuchma by any means. It's also not true that 
there's no criticism of the incumbent. There's a great deal of criticism 
which is being broadcast." 


Some candidates actually shun publicity. 


While a busload of journalists tracks Kuchma to every campaign stop -- at 
public expense -- Symonenko's aides refuse to even disclose his itinerary. 


The rise of commercial television also highlights the growing role of money 
and business in politics, said Olexander Chakmeshev, the head of Kiev's Equal 
Opportunity Committee media monitoring group which is funded by Western 
government donors. 


"Any candidate must have money now, which can come only from business 
circles," Chakmeshev said. 


He said electoral laws had improved but there were still plenty of legal 
loopholes, adding: "Society before the 1994 elections was embryonic. It 
didn't know that these problems existed." 


But Chakmeshev dismissed the pessimism of some Ukrainian politicians that 
corruption was outstripping levels seen even in Russia, its northern 
neighbour and former colonial master. 


"Our oligarchs are being compared to Russian oligarchs. But let's not forget 
that those in Russia are sitting on top of oil. Ours are mere middlemen, 
trading oil, gas and farm products. They are not owners," he said. "In 
Ukraine there is still room for manoeuvre, or to reject their influence 
outright." 


*******


#8
The Globe and Mail (Canada)
October 27, 1999
Green activists face crackdown in Russia
Espionage paranoia, anti-West hostility
rationale for hard line, observers say
GEOFFREY YORK
Moscow Bureau


Moscow -- Russian police are arresting or interrogating a growing number of
environmentalists in a security crackdown that gained momentum after a
terrorist scare last month. Activists say police have interrogated at least
seven environmentalists in the past two months. At least one of them is
still in jail.


The environmentalists are being questioned about their sources of funding
and their links to Western groups, they say. They believe the arrests are
part of Russia's increasing anti-Western hostility and paranoia about
espionage, especially among the KGB's successor agencies in the Russian
security services.


There are fears of more arrests in the future.


"I don't think it's over," said Valery Nikolsky of the Moscow Helsinki
Group, a human-rights organization. "We're still waiting to see who will be
next."


Vladimir Slivyak, an antinuclear activist who has received financial grants
from the Canadian government, was detained and questioned for 90 minutes
last month after a bomb explosion in a Moscow shopping mall.


He said the police told him he was being detained in connection with the
bombing, but almost all of their questions were focused on his
environmental activities and the financing of his group.


"They wanted to pretend it had something to do with terrorism," he said.
"First they declared that nuclear activists were spies, but that failed, so
now they're changing their tactics and declaring us as terrorists. It's
very easy to harass people by using the label of 'terrorist.' "


Mr. Slivyak, an antinuclear campaigner for two Russian-based environmental
groups, said the police showed him a small package of marijuana. "Do you
want this to be found in your bag?" they asked him, according to Mr. Slivyak.


He said the police were trying to pressure him into answering their
questions. They told him he could face a three-year jail term for drug
possession.


Human-rights activists say it is increasingly common for the Russian police
to intimidate suspects by threatening to plant drugs on them. The same
tactic was used against many Chechens arrested in Moscow last month, they say.


Another antinuclear activist, Alexei Kozlov, was questioned by police on
Sept. 7. And a third environmentalist, Yakov Kochkaryov, was arrested on
Sept. 6 and charged with drug possession.


He is still in a Moscow prison, awaiting trial. His lawyer says he signed a
confession under duress, but recanted when he gained access to a lawyer.


Four other antinuclear activists were questioned by police in Yekaterinburg
last month, and one of them had his apartment searched, Mr. Slivyak said.


The Federal Security Service (FSB), the domestic branch of the former KGB,
has publicly declared that many environmentalists are Western spies. Former
FSB director Vladimir Putin said in July that the FSB should keep a close
eye on environmental organizations because they are infiltrated by foreign
spies. Mr. Putin is now Prime Minister of Russia.


Antinuclear groups have become increasingly visible in Russia in recent
years, holding rallies to protest nuclear energy and the importing of
nuclear waste into Russia for storage.


"It's very easy for the FSB to accuse them of opposing Russia's interests,"
Mr. Nikolsky said. "It's not that they're criminals -- it's just that the
authorities don't like them."


In the provinces, the Russian police can arrest environmentalists without
any media attention or publicity, he said. "They can disappear easily."


The crackdown on antinuclear activists began in 1996 with the arrest of
Alexander Nikitin, a former Soviet naval officer who joined a Norwegian
environmental group and helped research the storage of nuclear waste from
Russian submarines. He was jailed for 10 months on treason charges and is
still awaiting a new trial.


In his first trial, a judge ordered the prosecution halted for lack of
evidence, but the FSB continues to pursue the case.


Another former navy officer, Grigory Pasko, was the next to be arrested. He
was a military journalist who wrote about the dumping of Russian nuclear
waste in the ocean. He was arrested on espionage charges, but was released
in July after 20 months in jail.


Also in July, police raided the apartment of physicist Vladimir Soifer and
seized some of his personal papers. He was researching the dumping of
Russian nuclear waste and a 1985 accident on a Soviet submarine. Although
he was never charged, police have refused to return some of the documents
they seized.


In the same month, a U.S. student exchange co-ordinator was forced to leave
Russia after the FSB accused her of collecting "secret environmental maps"
for the CIA.


"It's clear that the FSB is very sensitive about antinuclear activism,"
said Diederik Lohman, director of the Moscow office of Human Rights Watch.


******


#9
Moscow Times
October 26, 1999 
Bringing in The Harvest 
By Yevgenia Borisova
Staff Writer


The names say it all: Komsomolsky. Maisky. Put Lenina. Russia's state farms 
are too poor to afford even a simple name change. Unable to pay workers, buy 
fuel or update aging equipment - let alone spend the roughly 100,000 rubles 
required for new seals and letterhead - farms instead continue to eke out a 
living with names that hail back to a time when agriculture was, in word if 
not in deed, the pride and preoccupation of the Soviet system. 


Fighting for survival in an almost impossibly unaccommodating market economy, 
shrinking harvests and hungry farmers would seem to be the wave of Russia's 
agricultural future. About 80 percent of Russia's 24,000 state or collective 
farms and 270,000 private farms are believed to be insolvent. 


"The biggest problem is underfunding. Chronic underfunding," said Nikolai 
Kharitonov, head of the State Duma's Agrarian faction. "The safety margin 
created in Soviet times is practically gone - our machinery is worn out, our 
land has been exhausted without fertilizers. About 30 million hectares of 
land plowed in Soviet times are no longer being cultivated. Our tractor and 
combine manufacturing is almost zero." "The state treats agriculture like a 
dairy cow," said Pyotr Teikhrib, who runs the Komsomolsky state farm in the 
Orenburg region in the Southern Urals. "When you stop feeding a cow it still 
gives you milk the next day and probably the day after that, but eventually 
it dies. So when cash to farms is cut off, agriculture is done away with." 


No Bumper Crops 


Grain crops - wheat, rye, buckwheat, barley, oats and millet - have always 
been the staple of Russian agriculture. As recently as 1990, grain harvests 
reached as high as 116.7 million tons a year. In comparison, Russia's 1999 
harvest, most experts believe, is unlikely to exceed 53 million tons. By Oct. 
18, 52.3 million tons of grain crops had been officially harvested - already 
6.3 million tons more than last year, but still considerably short of a 
bountiful season. With 1.1 million hectares left to be harvested, at an 
average yield of 1.5 tons per hectare, the official crop harvest may 
ultimately reach 53.4 million tons. 


Then there is the unofficial harvest - perhaps as much as 13 million tons in 
hidden reserves kept by farms for employee salaries, sale to private traders 
or simply as stock to be held until grain prices begin to rise, usually the 
following spring. 


According to Yelena Tyurina, general director of the Moscow-based Agrarian 
Market Research Institute, farmers and shadow grain traders may be hiding as 
much as 20 percent to 25 percent more on top of official harvest totals. 


A private grain trader in the Southern Ural region of Chelyabinsk, who did 
not want to be named, said the secret reserves may in fact be even bigger: 
"It may be that in our region up to 50 percent is being hidden from 
registration and taxation. The thing is that no one can say exactly how much 
grain is in the fields." 


"There's no Geiger counter for it," the trader laughed. "Farmers hide their 
grains or sell them to traders and then they say that the harvest was 
scorched by the sun or destroyed by rain." 


Fields may be written off for any number of reasons that may or may not 
exist: storms, hail, drought, fire or locusts. According to statistics, many 
of the fields are not being used at all. Of 63 million hectares of available 
land used for grain crops in 1990, only 42.6 million were sown this year - 
7.7 million of which were written off. How many crops were in fact harvested 
from those fields remains in question. 


Farmers can also hide reserves by simply reducing their official per-hectare 
yield. Stepan Zhuravlyov, the newly elected director of the Maisky state farm 
in the Orenburg region, told officials the yield on his fields was less than 
2 tons per hectare - when just 35 kilometers away, fields sown with the same 
wheat were bringing in 2.7 tons per a hectare. Zhuravlyov said he is keeping 
the difference in order to help pay off his workers, who have gone three 
years without salaries. 


Local officials seem content to wink at such adjustments. Asked about 
Zhuravlyov's modest official yield, the head of the district administration 
said only, "Well, of course he lies a bit." 


Down and Out on the Farm 


Most farm directors would sympathize with Zhuravlyov. Attempting to survive 
the mounting obstacles of today's agrarian sector has pushed many managers 
and laborers to the point of desperation. 


"Every day my first headache is figuring out where to get enough petrol for 
my combines," said Viktor Stepovoi, head of the Put Lenina, or Lenin's Way, 
collective farm in the Uvelsky district of the Chelyabinsk region. "Another 
is where to get spare parts to repair them, then where to get money to do all 
this. I need 21,000 rubles every day to keep the farm operating, and I 
haven't paid workers for three months. I owe them 700,000 rubles." 


The farm also owes 210,000 rubles in taxes to federal coffers. Its 
profitability last year was about minus 17 percent - a decline from 1997, 
when the farm operated at zero profitability. 


Zharaskhan Daudbayev, deputy head of the Uvelsky district, called Put Lenina 
a typical farm with typical problems. Stepovoi, he said, is "a strong leader. 
He can do things out of nothing. It's only because of people like him that we 
survive here in spite of everything." The Orenburg region also has its share 
of battered farms, Zhuravlyov's among them. 


"When I took over the farm this year it had only 19 cows," he said. "Several 
years ago, it was one of the best farms in the region, with 3,700 cows." 


Now there is no fodder. The farm's debts have reached 25 million rubles, 
including 8 million in taxes. Machinery lies in pieces. Since 1994, no new 
combines have been purchased or leased. Laborers have gone without wages 
since 1995. Employees steal spare parts to sell on the side, and the 
accountant recently fled - "I suspect with money," said Zhuravlyov, who 
chalks up the farm's demise to the incompetence of the previous director, the 
son of a top district official who came to the job with no management 
experience. 


Anatoly Popov, deputy head of the Orenburg regional administration's 
agriculture department, sees little cause for hope in Russia's agrarian 
future. "In the past, there were strategic security reserves and our mills 
were full of grain," he said. "Now, we hardly survived last winter. If the 
same state policy continues - which in fact is no policy at all - we will 
simply eat whatever we still have and start fighting." 


"There are no conditions for people to apply their working energy," Popov 
said, adding that the situation at private farms differs little. "Peasants 
are turned into cattle. They can't afford to buy socks for their boots and 
they have forgotten the taste of sausage." 


Vladimir Izvekov, a combine driver at the Put Lenina collective, said that 
over the past year his family of four has survived off their garden, a 
chicken and milk from their own cow. His two children's monthly state 
allowance of 80 rubles each is the only money they have. 


Asked why he doesn't leave the farm that doesn't pay him, Izvekov looked 
helpless, as though his will had been paralyzed. 


"Who needs us somewhere else?" he asked. "Our home is here." 


A Cash-Strapped Sector 


A chronic thorn in the side of the impoverished agrarian sector is the 
inability to turn crops harvests into badly needed cash. While the cost of 
producing grains, vegetables, milk and meat have soared in recent years, the 
prices for such produce remain unprofitably low. The current situation leaves 
farms having to pay more in production costs than they can ever hope to earn 
from the sale of their produce. 


"During all those years of pseudo-reforms in Russia, the prices on 
agricultural products rose by about 2,000 times," said Agrarian faction head 
Kharitonov. 


"Meanwhile, the prices on most of the supplies and services required by the 
agriculture sector - including fuel, spare parts and machinery - went up by 
between 9,000 and 14,000 times." 


To add to the problem, the past three years have also seen the price of grain 
artificially lowered. 


Although this year's grain prices have been set at 2,400 rubles per ton, an 
analysis prepared by the agrarian department of the Chelyabinsk regional 
legislative assembly indicates that grain prices from 1996 to 1998 dropped by 
15 percent. In 1996, grain cost 602 rubles a ton; following the August 1998 
crisis prices dropped all the way to 503 rubles a ton. In dollar terms, 
per-ton prices for the same grains dropped by 74 percent - from $117.7 in 
1996 all the way to $30.6 in 1998. 


"How could grain producers work under such conditions, with grain prices 
dropping and all other prices skyrocketing?" said Vladimir Shilenko, head of 
the assembly's agrarian department. "Peasants have never dealt with marketing 
and sales - they just sell grains to whoever offers them cash to pay off 
debts for fuel they've borrowed for plowing, sowing and harvesting, and for 
fertilizers, spare parts and energy supplies." 


The debts owed by Chelyabinsk regional farms to various creditors have 
reached 5 billion rubles (roughly $200 million) this year, Shilenko added. 


Agricultural loans have proved a no-win situation for all concerned. 


"In the past, the state used to give low-interest loans for five to seven 
years," said Popov of the Orenburg administration. "There were discounted 
prices on fuel and machinery. Now all loans - for industry and for us - have 
the same terms. But the turnover in industry is several times faster." 


With enormous amounts of loans from commercial Russian banks filtering down 
to farms by way of state coffers, cash seemed to vanish into mysterious black 
holes without reaching its official destination. In 1998 alone, 6.5 billion 
of the 8.5 billion rubles lent to the agrarian sector were not returned. 


Now, with banks refusing to accept guarantees from regional administrations 
or take outdated machinery or shabby buildings as collateral, agricultural 
credits have ceased to exist. 


"The peculiarity of crediting the agricultural sector is that banks are 
giving loans on conditions that are clearly impossible to meet," said 
Teikhrib, head of the Komsomolsky farm. 


"It's like telling me to run 100 meters in nine seconds." 


On Tuesday, the State Duma is scheduled to discuss next year's agricultural 
funding. According to Kharitonov, virtually nothing from state coffers was 
designated for agrarian support in 1999 - 9.2 billion rubles ($428 million 
according to the year's budget exchange rate of 21.5 rubles to the dollar). 
Next year's initial figure is even lower - just 7.2 billion rubles ($225 
million at the 2000 budget exchange rate of 32 rubles to the dollar). 


Hope on the Horizon 


Some farms are still optimistic that they will be rescued by the state. Over 
the last several years, several Russian regions tried without success to 
establish minimum price controls for grain prices. This year, the regions are 
trying to create special grain funds that local administrations supply with 
cash and equipment to be given to farms. 


The farmers are then expected to use grain to pay off their debts to the fund 
at the prices set by the administrations - Chelyabinsk, for example, fixed 
its state prices on third-grade wheat at 2,800 rubles ($109) per ton; 
Orenburg at 2,400 rubles ($94). The farms are officially forbidden to sell 
their crops elsewhere until their debt to the state is entirely paid. The 
funds in both the Chelyabinsk and Orenburg regions plan to accumulate 400,000 
tons of grain this year. 


The Chelyabinsk Grain Fund is planning to then provide grain to regional 
social institutions, in addition to selling a portion of it to mills to raise 
money for the next agricultural season. Despite complaints from some farmers 
of insufficient fuel supplies, the program has won supporters on both the 
administrative and agricultural sides. 


"The fund is a good idea," said Shilenko, the Chelyabinsk agrarian official. 
"It will now deal with supplying hospitals, schools and kindergartens, and 
this is very expedient. Whenever these institutions are just given cash 
transfers from the administration, they end up buying God knows what foreign 
products for too-high prices." 


Stepovoi, head of the Put Lenina farm, was also pleased. 


"This is a wonderful, timely idea," he said. "We have been left to the 
arbitrary hands of fate for years, and you see what has happened to the farms 
as a result. The prices set by the administration are very profitable for us. 
I hope the system will work well, and that we will be able to finally pay off 
our debts." 


A few farms in the Southern Urals have managed to overcome debt and even 
prosper. Teikhrib's Komsomolsky state farm in the Orenburg region is one of 
them. Teikhrib's farm is nestled in a region famed, along with the Altai 
republic, for producing the nation's highest-quality durum wheat - an 
advantage that has allowed him not only to ignore private traders but to 
dictate his own prices as well. 


"We are not selling our wheat for the prices recommended to us by the 
administration, but for the prices which we consider fair. When we have good 
crops, we store most of it in our barns because in the fall it is quite 
cheap. We sometimes don't sell until March or even May; we just wait until 
market prices reach an acceptable level for us." 


Fed up with low prices dictated by processing enterprises, Teikhrib turned 
his farm into an agriculture complex, first making his own butter shop and 
then building a mill where he produces flour and pasta. 


"We will extend manufacturing facilities until we're making 45 tons of flour 
a day. Then I will sell only hard wheat while the soft varieties will be 
processed here. We are also making our own sausages." 


His farm, which employs 586 people, comprises 28,000 hectares of plowed 
fields and has 14,500 animals, including 2,000 cows. 


While other farmers complained of a lack of licensed combine drivers, 
Teikhrib gets all of his employees on a combine - including his accountant 
and chief economist - during the harvest, in a move he calls "mobilizing 
internal resources." 


He said he has 84 combines, just enough to properly cultivate his land. This 
year his farm bought six new combines, including two from Case, a U.S. 
company, at a cost of 8.4 million rubles (roughly $336,000) apiece. Each year 
the farm buys between five and nine new combines, he said. 


But it is only those farms that have a zapas prochnosti, or safety margin, 
that can do what he does. When farms are in debt, he said, "you just sell to 
whomever for whatever price has been offered. As a result, the farm is not 
only not getting profits, it loses what it has invested in future crops; in 
the end it becomes insolvent," Teikhrib said. 


"I know only a few profitable farms, but with only a few exceptions" - 
including Komsomolsky - "they are making profits not on their agricultural 
production but from some other business activities, mainly commercial 
trading," he said. "The approach to agriculture is basically wrong." 


*******


#10
Date: Tue, 26 Oct 1999 
From: "Al Decie" <ECHOal@krsk.ru> 
Subject: "The Hope for The Next Century"


"The Hope for The Next Century"
by Viktor Vladimirovich Evgrafov,
honored artist of Russia,
member of the RF Journalist Association


"Gorodskiye Novosti" (The City News)
#101 (452), October 19, 1999
Krasnoyarsk, Russia


On October 11 - 14, 1999, an International Community Schools Conference was
held in Krasnoyarsk. Invited were innovative teachers from Russia, USA,
Canada, Hungary, Czech Republic, Romania, Slovakia, Slovenia, Yugoslavia,
Armenia, Ukraine, Kazakhstan and Moldova, as well as representatives of
education departments from all Siberia's regions, from Tyumen to Chita. The
representative of the Ministry of Education of the Russian Federation
opened the Conference by reading out a greeting letter from the first
deputy minister, Mr. A. F. Kiselyov.


The Conference was convened by the Krasnoyarsk non-commercial
organization, the Krasnoyarsk Center for Community Partnerships (KCCP),
with support from the Krasnoyarsk Krai Administration's Department of
Education. The event was co-sponsored by the East-East Program of the Open
Society Institute-Novosibirsk and the Charles Stewart Mott Foundation
(USA). KCCP has operated in Krasnoyarsk for three years in partnership
with the American not-for-profit organization, ECHO, Inc., whose president,
a political scientist from New York, Sarah C. Lindemann-Komarova, has lived
in Novosibirsk for 7 years.


What are Community Schools? They originated as long ago as the 19th century
when elective district councils (the so called zemstvos) were first formed
in Russia. It was back in the 19th century that the first zemstvo schools
were established and around them took shape circles of people interested in
enlightening the nation. These schools had their wardens and
philanthropists who contributed to sustainability of the educational
institutions for people. Similar developments occurred in America, too,
especially in small towns, where the school and the church became the hub
of community life. In the 1930s an American businessman named Charles
Mott, having met a physical education school teacher, got very excited
about the idea of supporting schools which unite and mobilize people to
address various education-related issues and social problems. Mott believed
that the school should become the socially significant hub of the
neighborhood, village, or township, and that it should provide on-going
education for people of all ages and take the initiative of mobilizing
people for community service.


Charles Mott set up a charitable foundation which is still active providing
material support for community schools around the world, although its
founder died long ago. The amount of money that he left for that purpose
has since then grown bigger. The C.S. Mott Foundation is real. Its funds
are working.


Now that Russia and the East European countries have changed their social
system, and social problems have become so acute, the role of community
schools in the process of people's self-organization is becoming more and
more significant. And there were many examples of that given at the
international conference in Krasnoyarsk. KCCP and similar organizations in
a number of other countries develop and introduce social technologies which
enable "school-organized" people to tackle many local problems jointly and
freely. For example, it was KCCP that helped residents of Sovietsky
district (Krasnoyarsk) to organize themselves around public school #2 and
save the school from school by raising funds for its full renovation. The
teachers of the Divnogorsk city orphanage joined their efforts with the
fellow townsmen to hold an action aimed at the collection of shoes for the
orphanage's children. In Yurti, a village in Irkutsk Oblast, school
teachers initiated an all-village gathering which helped all the
inhabitants of the place solve a number of acute everyday-life problems and
even make serious changes in the structure of the local self-government. 
In Tomsk Oblast teachers from a number of schools, one of them located 500
km north from Tomsk, in the so called "Narym country", have introduced,
with the help of local businesses and community members, new educational
programs and computerized instruction which have made teaching practices
more efficient. In Yugoslavia, Czech Republic, Slovakia and Hungary new
programs have been developed which are aimed not only at children but their
parents, too. At such schools the unemployed can master new professions. 
Moreover, in the above countries there are non-commercial organizations
which are actively involved in providing education opportunities for
illiterate children and their parents in Roma settlements.


For 10 years now there has been a very successful school in Budapest for 16
to 25 year olds who were expelled from secondary schools for various
reasons and thus were never able to get a high school diploma. On top of
the regular school curriculum the school also carries out a psychological
rehabilitation program for these kids.


In Russia, Kazakhstan, Armenia and Ukraine, in the so called post-Soviet
realm, people are getting used to the fact that the school in their
neighborhood or village not only functions as an education provider for the
kids but also gets people of different age, beliefs, social status and
income, involved in community service. We are getting used to a life where
it makes no sense to wait for a "kind outsider" who will miraculously solve
our problems. We have to learn how to defend our rights by ourselves,
learn how to survive. Here, in Krasnoyarsk, for the three years that KCCP
has been around, it has been able to train many educators - both in the
Krai and outside it, in 5 more regions of Siberia - to transform the
secondary school from just an educational facility to a "community
organizer", too. Let's remember: just recently, there was the volunteer
action "Week of Kindness" held in Krasnoyarsk and some other Siberian towns
under the auspices of KCCP . A bit earlier children of Krasnoyarsk, with
support from KCCP, helped the national park "Stolby" in collecting food
for the animal shelter. Charitable fairs and concerts, as well as help
offered to orphanages, are no longer just one-time events. For many
vicinities such school-centered events have become an integral part of
public life in the neighborhood, the village, the town.


KCCP is headed by a young man from the USA, Albert Decie (masters in
Russian area studies), who has lived in Siberia for 5 years, and in
particular in our town for 3.5 years. His does not have many staff, just
three program coordinators (all of them Russians). The rest of the KCCP
team are teachers, secondary school students and university or college
students who are helping on a voluntary basis.


At the Conference, much attention was devoted to community education,
whereby each class is not only about providing knowledge, but also about
raising a socially active person. Is it at all bad that a 3rd grade
student from a Krasnoyarsk public school has developed a playground
improvement program and wants to present it to the head of the city
district administration? Or that a senior student at another public
secondary school says that after attending are-designed civics class that
she finally felt like a person who had every right to rely on Russia's
laws, who was a citizen.


These examples were also discussed at the 4 day international conference. 
Community schools (and this movement is just emerging in Russia) can become
and are already becoming successors of the Russian zemstvo traditions,
enriched with American pragmatic know-how. At Russian schools, public
committees, boards of trustees and school-community foundations are already
making their presence felt. The funds raised by parents and the public are
beginning to work. Parents sit down at the school desk together with their
children, filling gaps in their education and also learning to be active
citizens. Continuing education, maximum use of every opportunity to
provide more instruction - such are the other distinctive features of the
institutions that are being re-modeled to become community schools. 
Departments of Education at both the City and the Regional levels are
supporting this undertaking. Over the last few months people have been
increasingly approaching KCCP for assistance. And therefore it is not just
by chance that Krasnoyarsk, rather than any other place, was chosen to host
this international community school's forum. The Open Society
Institute-Novosibirsk and other foundations spared no expenses to provide
training for community school teachers. Because the community school model
is our hope for the future world to come, where there will be no
destitution and no illiteracy, and where the school will rightfully take
its position as a community leader.


A note from KCCP:


In addition to conference organizers and sponsors mentioned by Mr.
Evgrafov, we would like to note contributions of the following people. 
Without their active participation and support before and during the
conference, the conference would not have been of the high caliber that it
was and would not have achieved the results that it has secured. These
people are:
Csaba Lorinczi, Special Adviser on Community Education. OSI-Budapest
Daniel E. Kuzlik, Executive Director, Minnetonka Community Education and
Services. Minnetonka Public Schools
Elena Kazakova, Main Specialist, Department of General Secondary Education,
RF Ministry of Education
The Wide Open School Foundation (Slovakia)
Members of the Hungarian Community School Association
Hana Plavcova, Community Education Coordinator, Pilzen Public School #1,
Czech Republic


Submitted by:
Al Decie
Acting director, Krasnoyarsk Center for Community Partnerships
Executive Director, ECHO, Inc.
echoal@krsk.ru


*******


#11
Excerpt
Washington Post
27 October 1999
[for personal use only]
Washington Lobbying Oils Russian Capitalism
Tycoons Go All Out to Gain U.S. Financial Backing
By Dan Morgan and Michael Dobbs


When Russian American businessman Leonard Blavatnik acquired a major stake
in Russia's largest oil field in 1997, it was a coup that showed he could
maneuver in the rugged business climes of the former Soviet Union.


But that was only step one. In the last two years, Blavatnik has
demonstrated that he can also play the Washington game, as he fights to
nail down nearly $500 million in U.S.-backed credits critical to his
Russian venture.


In moves that reveal how Washington has become a second front in the
rough-and-tumble world of Russia's new capitalism, Blavatnik and his
companies have made thousands of dollars in political contributions, hired
a Washington lobbyist and employed a U.S. public relations firm to help
plead their case. The U.S. Export-Import Bank is in the final stages of
approving the loans, the first major American assistance for a Russian
enterprise since last year's collapse of the ruble.


Blavatnik's discovery of Washington's importance points up a new
phenomenon. While public attention has focused largely on the murky, and
sometimes murderous, business feuds in Russia, some of the intrigue now
takes place in the more staid setting of Washington.


Since the mid-1990s, Russian businessmen have hired public relations firms
such as Daniel J. Edelman Inc., Hill and Knowlton, and Burson-Marsteller;
lobbying and law firms such as Akin, Gump and Verner, Liipfert; and New
York investment banks to polish their images, make connections and lobby
for U.S. financial backing.


Some of the tycoons, such as media magnate Vladimir Gusinsky, represented
in Washington by former House member Don Bonker (D-Wash.) of the APCO
lobbying firm, sought international contacts. But the driving force has
been the hunt for U.S. loans and capital after easy money schemes dried up
in Russia after 1994.


To promote its quest for U.S. Department of Agriculture credits, for
example, the American arm of a now defunct Russian food importer hired
Washington lobbying firms and contributed $60,000 to the Democratic and
Republican parties in 1996.


And when Russian business mogul Boris Berezovsky came looking for capital
several years ago, CS First Boston trotted out a glamorous Washington face.
It brought in its vice chairman, former--and future--American ambassador
Richard C. Holbrooke, to join half a dozen meetings. No deals were
completed, a CS First Boston spokesman said.


None have more at stake in the Washington connection than Blavatnik, a U.S.
citizen who exemplifies a new breed of Russian-born business executives who
can maneuver with equal ease in Moscow and Washington.


"The American connection is of crucial importance," says Blavatnik, who,
together with relatives and associates, has contributed at least $20,000 to
House International Relations Committee Chairman Benjamin A. Gilman
(R-N.Y.) since 1996. His New York-based company, Access Industries, gave
$20,000 to the House Republican campaign organization last year and
followed up with $20,000 to the Republican National Committee last month.


The Washington strategy has borne fruit for Tyumen Oil Co., which Blavatnik
jointly controls with one of Moscow's banking tycoons. While most U.S.
lending to Russia has been cut off for more than a year because of bank
failures, mismanagement and corruption, the Ex-Im Bank--with Gilman's
backing and Akin, Gump's lobbying on Blavatnik's behalf--is on the verge of
guaranteeing $489 million of credits for Tyumen....


[whole article at:
http://www.washingtonpost.com/wp-srv/WPlate/1999-10/27/095l-102799-idx.html


******