February 2,
2000
This Date's Issues: 4085 4086
4087
Johnson's Russia List
#4087
3 February 2000
davidjohnson@erols.com
[Note from David Johnson:
DJ: I would like information from JRL recipients about FAPSI
(Federal Government Communications and Information Agency) and its
role in Russian elections).
1. AFP: Russia puts positive new spin on Chechen escape from
Grozny.
2. Reuters: Chechens Say All They Want Is Elusive Peace.
3. The Times (UK): I walked into Grozny and met the man who sacked it.
Giles Whittell confronts the broken city that was Grozny - and the avuncular Russian general responsible for the devastation.
4. Reuters: Russia's Putin bewails lack of govt discipline.
5. Moscow Times: Yevgenia Albats, A Spendthrift Nation Burns All Its
Credit.
6. Nezavisimaya Gazeta: Marina Volkova, ACTING PRESIDENT OVERHAULS
RUSSIA'S POWER SYSTEM. After Pacifying the Duma, Regions, Vladimir Putin Tackles the Kremlin.
7. Baltimore Sun: Kathy Lally, Yeltsin cast-offs change Duma's face. Emerging parliament offers return to power.
8. Reuters magazine: a 'bull' and a 'bear' on Russia. (Alex Elder and Patrick
Lannin).
9. The Wall Street Journal Europe: Ariel Cohen, Putin's Vulnerability, Albright's Advantage.
10. the eXile: Dr. N.I. Kimmelman, Yuri Luzhkov's Phallic Conflict.
11. Geoffrey Forbes: Int'l Human Resource Management Research at Purdue.]
*******
#1
Russia puts positive new spin on Chechen escape from Grozny
MOSCOW, Feb 3 (AFP) -
Russia's military admitted on Thursday that most Chechen rebels had fled the
capital Grozny but insisted they had been lured out in a special operation
and then slaughtered in a nearby settlement.
The new spin on the murky Grozny rebel escape came less than a day after the
top Russian commander in Chechnya, General Viktor Kazantsev, categorically
denied Chechen claims the separatist fighters had broken through Russia's
siege of the capital Monday and Tuesday.
Kazantsev said on Wednesday that some 2,000 fighters were still fighting
advancing Russian troops in the city and stressed that all other reports "did
not correspond to reality."
Yet a spokesman for the joint Russian command in Chechnya told NTV television
on Thursday that a huge rebel force had escaped the city -- but stressed that
they were pushed out by the Russians and then slaughtered.
"I insist that this was a planned operation, designed to lure a large portion
of the fighters out of Grozny," Colonel Yakov Firsof said.
"You understand that conducting a military operation in Grozny leads to large
losses," he said.
Russians had been pounding Grozny with artillery and cautiously advancing
towards the city center for more than a month before the rebels made their
first break on Monday.
The rebels initially claimed that the entire city had been vacated by early
Tuesday morning. Federal soldiers later reported that a small Chechen force
had stayed behind but was offering only minimal resistance.
"Most of the fighters left the city. Some of them came across a mine field,
many of them died there," Firsof said.
"Many others were destroyed after they came to Alkhan-Kala," he said,
referring to a nearby village. "We collected 60 bodies and took 129 fighters
prisoner."
NTV on Wednesday showed several injured Chechen fighters cowering in
basements and being interrogated by Russian troops in Alkhan-Kala.
Most of the rebels fled to that settlement, just southwest of Grozny, before
making a final push for the southern mountains, where another 5,000-strong
Chechen force is now based.
The NTV report said that only a small group of rebels were discovered in
Alkhan-Kala. The station identified them as a "partisan" team that was to
provide an opening for those that followed.
However Firsof on Thursday insisted that nearly the whole Chechen contingent
from Grozny was cornered in the settlement and was now being destroyed.
Confusion over the fighting carries heavy political and military implications.
Chechen fighters successfully broke out of Grozny at the start of the 1994-96
war and then fought a brutal guerrilla war against the Russians, eventually
recapturing the capital and putting Moscow to shame.
The Kremlin sued for peace only days after the Chechens took back Grozny in
that war, which killed an estimated 80,000 people and left the republic with
de facto indigence.
A similar escape from Grozny would suggest that the second Chechen war could
drag on for months, if not years. Any Russian claims of capturing the rebel
capital would then ring hollow.
Acting President Vladimir Putin had rocketed in opinion polls with his tough
handling of the Chechen separatist crisis.
But his popularity fell back under 50 percent last week as Russians expressed
fears that the war would drag on.
Putin is the leading candidate in the March 26 presidential elections, but
wants to avoid facing a run-off vote against an anti-war rival.
So far, much of the tightly-controlled Russian media has put only a positive
spin to the Grozny events.
********
#2
Chechens Say All They Want Is Elusive Peace
URUS-MARTAN, Russia, Feb 3, 2000 -- (Reuters) Chechens living in the town of
Urus-Martan in breakaway Chechnya said on Wednesday all they wanted was peace
after four months of Russia's military campaign.
"No it's not calm here," one woman said in the muddy streets of this town, a
rebel stronghold taken by Russian troops in early December. "Every day they
are shooting, we cannot sleep. What kind of calm is this?"
Urus-Martan, southwest of the Chechen capital Grozny, put up stiff resistance
to Russian forces during weeks of battles. Russian planes bombed and troops
shelled the town for weeks on end and many of the town's 30,000 residents
fled.
Those on the streets said the Russian troops, who now control the town,
offered little comfort.
"Every night they are shooting, they are destroying our homes," said Ruslan,
echoing soldiers' comments that a road leading to Urus-Martan was dangerous
after nightfall.
Chechnya's devastated capital Grozny, subjected to continuous air strikes, is
only 20 km (12 miles) from Urus-Martan. Fierce fighting is raging in the
capital and its outlying areas.
A group of men standing near the local police station said they had seen a
large column of refugees fleeing from Yermolovka, a village on the edge of
Grozny.
"We went up the road and there was a huge number of refugees, a huge column
of cars; even the (Russian) federal troops were surprised," one man said.
"They were coming from Yermolovka, the refugees keep leaving."
Russian officials said escape routes out of Grozny had become a death trap,
with mines placed on the outer rim. Up to 40,000 civilians are huddled in
basements in the capital with almost no food or firewood.
"We feel great pain over the civilian population, but war is war and of
course there will be victims amongst the civilian population," pro-Russian
Chechen leader Bislan Gantamirov, who commands a group of 800 paramilitaries,
told reporters.
"The sooner we end this war the fewer victims there will be," said
Gantamirov, former mayor of Grozny.
But residents said the war had turned their lives into misery.
"On the southern border, houses are being used for firewood," Vakha said.
"And we are here without gas, electricity, light, or food."
********
#3
The Times (UK)
3 February 2000
[for personal use only]
I walked into Grozny and met the man who sacked it
Giles Whittell confronts the broken city that was Grozny - and the avuncular
Russian general responsible for the devastation
Just hours after I walked into the shattered heart of Grozny, I was seized
and thrust into a Russian Army Jeep - and found myself face to face with the
general who has commanded the entire Chechen war.
I was bundled into the back seat of the Jeep returning from Minutka Square.
In the front sat General Viktor Kazantsev, commander of Russian forces in the
North Caucasus, reconnoitring the bombed-out locale of his latest victory.
"I want Europe to know why we're doing this," he said. "We're doing it to
prevent extremism spreading throughout the continent. We're doing this so
there will always be peace. Why don't you people bother to explain that?"
General Kazantsev is the human face of the Russian bombardment: a big,
avuncular man with a sense of humour and the confidence publicly to defer to
subordinates with a better grasp of detail and statistics. He had laughed at
my inability to drink more than three shots of vodka on an official trip to
Shali in the south of Chechnya two weeks ago. He told me I was lucky he had
picked me up, and maybe he was right.
We drove to the Khan Kala Russian base east of Grozny, where officers fed me,
offered cigarettes and disbelievingly quizzed me on how I had hitched a lift
on one of their helicopters from the base to Grozny, walked into the town
centre, and been driven back by the general.
I had been deposited by their helicopter on the outskirts of the town,
suddenly empty of the the 4,000-odd rebel fighters who had defended it for
three months.
For a surreal hour, stumbling over mud and snow, under a constant rocket and
artillery barrage coming from unseen dugouts, I had walked towards the heart
of the city which had been cut off from the world for 102 days.
Avoiding eye contact with every passing officer and driver, I entered a
strange world, almost devoid of people and utterly demolished.
Opposite block 1428 a makeshift convoy of two trucks and an armoured
personnel carrier was loading the contents of a five-story block of flats
which had been reduced to a charred concrete frame. The street was littered
with blasted masonry, shards of broken bathtubs, a crushed child's bicycle.
The air was heavy with the smell of explosives. Enemy or no enemy, the
bombardment of Minutka Square grinds on.
Armoured personnel carriers criss-crossed the city but I did not see one
civilian until brought up short by a heap of 21 discarded Russian grenade
launchers, and the sound of a cat. A woman, her face grey with grime and her
torso fat with layers of jumpers, emerged from the wreckage of her home with
three saucers. "This is what they left," she said. "I never believed this
would happen to us. It's awful, but I must say it: only the Russians would do
this."
Until two weeks ago, Kurpat Alkanova lived with ten relatives in this house,
now a shell. On January 16, the bombing started in earnest: "Artillery,
rockets, aeroplanes, they used everything," she said. All ten moved 200 yards
to the nearest bombproof cellar.
Two dozen others had been there since October. "We brought in plenty of wood
in the autumn when there were still trees on our street," one man said,
huddled with 14 others round my notebook. "I bought flour then, too. We bake
bread every day in an oven that we made from odd bricks, and we eat it with
warm water. We eat, we drink, we sleep. That's it." Another woman, Raisa
Mastaeva, cut in: "And we say to the nice Russian soldiers: 'Thank you for
not killing us'. This isn't life. It's hardly survival."
Some do not survive. Two days ago, after living for four months with 30 other
families in a cellar in central Grozny, Khava Ayubova made a run for it.
Three friends had been killed the day before when a shell shattered the
building above. "We decided that to stay there was to stay and die," she
said, and she had heard on the radio that a safe corridor was being opened to
the southeast of the city. She and nine others left on foot at 4 am on
Tuesday. Within minutes her sister-in-law, Fatima, was hit in the head by a
stray bullet in Minutka Square.
Khava stayed in the square all day under heavy fire, trying to move Fatima's
body. Yesterday, in another basement east of the square, she wept quietly: "I
couldn't move her by myself. If I can't bury her today the dogs will have
her."
The bombing stopped and the Russian Army inched on towards Minutka Square on
January 28. But the rebel fighters had disappeared - vanishing, most Russian
troops believe, after reaching a deal with the ring of armour that supposedly
had trapped them in the capital.
My return to the real world was almost comical. Within minutes of returning
to street level, the general's Jeep had found me. The Russian Army is not
used to unescorted foreigners; by demanding and routinely denying special
accreditation they have successfully shielded most of this war from the
outside world. But they treated me impeccably, more preoccupied with the
question of their security than my motives.
********
#4
Russia's Putin bewails lack of govt discipline
MOSCOW, Feb 3 (Reuters) - Russian Acting President Vladimir Putin complained
to his ministers on Thursday that many government and presidential orders
were being simply ignored.
One of the defects of post-Soviet Russia often highlighted by critics is that
government orders can get lost in a grindingly slow bureaucracy. Foreign
investors also often complain of excessive red tape.
``A quarter of the president's instructions are carried out late and we do
not always fulfil our own decisions,'' Russian news agencies quoted Putin as
saying at a cabinet meeting.
Putin holds the dual role of acting president and prime minister after the
surprise resignation on New Year's Eve of former President Boris Yeltsin.
Putin is runaway favourite for a March 26 presidential election.
Putin said the government should carry out a check of how many of its
decisions are carried out and in what manner. He said that many government
programmes were ``stillborn.''
Putin, 47, has presented the image of an energetic leader, able to get to
grips with the huge array of problems facing Russia, from the war in Chechnya
to defects in the legal system.
He has often talked of strengthening the Russian state, both in making sure
that laws and rules are fulfilled as ordered by the government and in terms
of boosting Russia's international punch.
*******
#5
Moscow Times
February 3, 2000
POWER PLAY: A Spendthrift Nation Burns All Its Credit
By Yevgenia Albats
DAVOS, Switzerland -- The year 2000 meeting of the World Economic Forum in
Davos signified the end of the great Western enthusiasm about Russia. In a
way it is another end of history. But unlike the end of history foreseen by
Francis Fukuyama, this one is hardly optimistic.
More than a decade ago, Fukuyama, a Western philosopher, proclaimed (as had
Hegel 100 years earlier) the world had reached "the end of history."
Fukuyama's essay of the same name was instantly famous. He has since backed
away from it, but in the euphoria of 1989 he saw the end nearing for the
century-long history of totalitarianism and communism. Fukuyama argued that
Western liberalism had triumphed, and had proven to have no alternative in
the contemporary world.
Not exactly so - as has become apparent in the case of Russia.
In response to the fall of the "Evil Empire" and the abandonment of communist
ideology, Russia received a unique and anonymous advanced credit from the
West, which allowed it to enter the civilized world as an equal partner. That
credit was based solely on the premise that Russia did in fact want to become
part of that world. But Russian politicians and businessmen managed to waste
that credit on corruption, the wars in Chechnya, the looting of the country
and ongoing violations of human rights.
That this credit is now exhausted was apparent in Davos, and not just
because, unlike previous years, the economic forum's program had little time
for Russia. The decay of Western enthusiasm in regard to Russia was apparent
in the speeches of U.S. President Bill Clinton and Secretary of State
Madeleine Albright as well. For the first time Ukraine - which has clearly
decided to side with the West but not Russia - was named the key country in
the region. And even in the corridors of the forum, Russia and its future
course of reforms were no longer discussed. It was as if the Western
political and business world present in Davos had handed down a ruling: No
more discussion, talks are over, now we will wait for real deeds.
That skeptical attitude was no doubt bolstered at the lone panel on Russia,
titled "Russia at the Crossroads." Those liberal Russian politicians -
Anatoly Chubais, Sergei Kiriyenko, Konstantin Titov - were vague, unclear and
even arrogant in their statements about the course of events in the country.
It was as if they saw their task as to prove the worst Western expectations.
Many no doubt left that panel thinking, "If these people, who we considered
the best and brightest, are like this, then what should we expect from others
in Russia?"
Russian businessmen grasped the situation better than politicians. Previously
in Davos, the Russian language was almost as oft-heard as English; this time,
only a few Russian oligarchs showed up, and they kept a low profile. They
clearly felt uncomfortable in an environment where the words "Russian
business" were synonymous with "corruption."
The current "end of history" is the end of the great Western expectation and
illusion about Russia. With now-opened eyes, perhaps the West will choose a
more realistic approach to Russia. The question that remains is whether
Russian politicians can open their own eyes, and see that they have exhausted
their credit.
Yevgenia Albats is an independent political analyst and journalist based in
Moscow.
********
#6
Nezavisimaya Gazeta
February 3, 2000
[translation from RIA Novosti for personal use only]
ACTING PRESIDENT OVERHAULS RUSSIA'S POWER SYSTEM
After Pacifying the Duma, Regions, Vladimir Putin Tackles
the Kremlin
By Marina VOLKOVA
An overhaul of the supreme power structures looks natural
with the coming of a new head of state. Putin has effected
personnel changes first in the government and then the
administration. The changes have been cosmetic thus far; still
one can draw preliminary conclusions as to the Putin
administration's lineup once he makes it to the presidency.
Right after Pavel Borodin had vacated the post of the chief
of the president's administrative department and several
appointees close to Putin had nearly simultaneously come to the
Kremlin--Vladislav Surkov and Dmitry Medvedev to become deputies
to the chief of the Kremlin staff and Igor Sechin to head the
chancellory--the appointments and resignations list became longer
after a month's respite.
The acting president reorganised the "household" department
to a point where it became nominal. Its former chief was
subordinated to Mikhail Kozhin, the new chief of the
administrative department.
Putin fired Andrei Loginov, the administrative department's
overseer of the domestic policy, and filled the vacancy with a
former adviser to Alexander Voloshin, Andrei Popov who is known
to be close to Surkov.
The latter's clout in the presidential administration is
clearly growing: he is breathing down the neck of the remaining
members of Yeltsin's last team. But the question is not whether
Surkov and his retinue will form the backbone of the new
administration after the presidential election is over.
Judging by everything, there will be no need for an
administration as it has been under Yeltsin, with the advent of
Putin.
Take the scandal around the Duma speaker elections and the
committee distribution. Had it flared under Yeltsin, we would
have witnessed a fine multi-stage combination brilliantly
executed by the presidential administration. A combination so
fine that it would have taken the MPs some time to realise that
they had been duped yet again, that a handful of people in the
Kremlin had again proved to be stronger than the Duma thinktank.
Moreover, it would have been even harder to understand whether
the interests discerned in the process had been those of the
peacemakers or financial groups backing them.
With Putin in office, there is nothing of the kind.
Vladislav Surkov had been tasked to have Gennady Seleznev elected
the speaker and to have the Duma scandal settled and he
did--successfully, albeit with no finesse. The Duma settlement
reminded of the military operation in Chechnya: there is the
objective, and who cares about the ways and means of attaining
it.
To all appearances, the "old" administration staffers had
nothing to do with the pacification of the Duma. And there is
every reason to believe that with the passing of time there would
be no need for Yeltsin's "magicians."
Putin is not known to favour Yeltsin's famous system of
checks and balances. Also, as distinct from the first Russian
president, the implementation of whose ideas was in the hands of
the administration, Putin prefers, and has the possibility, to
participate in everything himself, and his style differs greatly
from that of Yeltsin's "chess players."
There is one more reason why the administration's methods
and role may change literally beyond recognition: Putin is
successfully building a power vertical which would preclude
nuisances the type of impeachment, let alone smaller troubles.
Yeltsin could only dream of having a Duma Putin will be
working with. The first president could only dream of the mighty
support on the part of the regions that the acting president has.
Putin has effectively made sure there would be no situation
which could necessitate complex, multi-stage efforts to settle,
and thus precluded the participation in them of "masters of
intrigue." The administration is gradually becoming a technical
instrument.
But Putin will hardly venture to part with the surviving
members of the Yeltsin team in the runup to the elections--lest
his rating nosedives for some reason. If it does, he will need
people capable of ameliorating any bad situation on his team.
********
#7
Baltimore Sun
3 February 2000
[for personal use only]
Yeltsin cast-offs change Duma's face
Emerging parliament offers return to power
By Kathy Lally
Sun Foreign Staff
MOSCOW -- When Boris N. Yeltsin was running Russia, he made the firing of
prime ministers and Cabinet officials something of a hobby. By the time he
resigned the presidency on New Year's Eve, he had created legions of
political leaders, tantalizing them with power, then casting them out,
impotent.
Now, many of those former statesmen are again purposefully striding through
the corridors of power -- in a place they once belittled or ignored. They
have gotten themselves elected to the State Duma, the lower house of
parliament, profoundly changing the character of that still-emerging
institution.
Among the 450 members of the new Duma, which began work last month, are six
former prime ministers, three former vice prime ministers and a dozen former
Cabinet members.
The former prime ministers are Yevgeny M. Primakov, Viktor S. Chernomyrdin,
Sergei V. Stepashin, Sergei V. Kiriyenko, Yegor T. Gaidar and Nikolai I.
Ryzhkov, a premier during the Soviet era.
Two financial oligarchs prevailed in the December elections, Boris A.
Berezovsky andRoman A. Abramovich. So did such well-known Western-oriented
reformers as Boris Y. Nemtsov, a former vice prime minister, and Mikhail M.
Zadornov, former finance minister and representative to international
financial organizations.
Familiar faces
Their faces are far more familiar to Russians than all but a few of the most
vivid personalities from the last Duma. And they are now part of a
legislative branch of power that Yeltsin regularly bullied and that they
often denigrated as an obstructionist stronghold dominated by Communist
dinosaurs.
"This Duma is very different from the last one," said Valentin A. Kuptsov, a
Communist leader re-elected to the Duma. "It will be more aggressive, more
political, more professional and more unstable."
Many of the newcomers have no intention of toiling quietly away, respectfully
following the lead of Duma veterans, he said, and that has already caused a
debilitating conflict.
Strange bedfellows
During the Duma's first meeting Jan. 18, the Communists struck a deal with
the Unity party, formed last fall to support Prime Minister Vladimir V.
Putin. In a day of backroom deal-making, the two parties divided up committee
posts and agreed to re-elect Gennady A. Seleznyov, a Communist, as speaker.
Unity, which won a surprising 81 Duma seats largely because of Kremlin
manipulations carried out by friendly television stations and newspapers, was
expected to support centrists and liberals in the Duma.
Its deal with the 93 Communists infuriated the smaller centrist and liberal
parties, which led more than 100 sympathizers to march out of the Duma in a
boycott. The ringleaders of the boycott included Primakov, head of the
46-member Fatherland party; Kiriyenko, leader of the 32-member Union of Right
Forces; and Grigory A. Yavlinsky, who heads the 21-member Yabloko bloc.
Why Unity allied itself with the Communists has been a mystery to most
politicians. However, the alliance was consistent with a longtime Kremlin
strategy of trying to weaken some of the more liberal parties so that Yeltsin
could be cast as the lone reformer struggling against communism.
After that, the Duma was seized up trying to reach a compromise that would
end the boycott. Finally, with some additional leadership posts on the table,
Kiriyenko and Yavlinsky promised to return Feb. 9, and Primakov said that he
would as well.
"Now they don't know how to come back," Kuptsov said. "They don't know
whether to return quietly or to make a big scandal."
He said the unproductive beginning bodes ill for the Duma, which was elected
to a four-year term.
`They want big posts'
"Prime ministers don't want to work as ordinary deputies," he said. "They
aren't interested in Duma work. They want big posts. I can't understand why
they wanted to come here. If you're a prime minister, what is there for you
to do in the Duma? They used to talk about us as if we were serfs. Now
they're here. It's only a passion for power."
A dirty campaign
Not surprisingly, the other side finds other reasons for the impasse.
"It all follows from the dirty election campaign," said Stanislav S.
Govorukhin, a talented filmmaker and gruff politician. Govorukhin, a
nationalist who recently joined the Fatherland party led by Primakov, blames
the tone set by Putin.
He criticized Putin for helping to create and promote Unity and for the
tough-guy image he projects, regularly resorting to rough, street talk that
offends many intellectuals.
"The intolerable situation in the Duma is not because of the newcomers,"
Govorukhin said. "It's the whole disgusting situation of the country, created
by Putin himself. It started with the dirty election campaign, and it has led
to an atmosphere in the Duma that is morally unbearable. I don't see any way
out, with such an atmosphere."
Govorukhin, 63, sat erectly at his desk, wearing a dark suit, blue-striped
shirt and crisp, tartan-plaid bow tie.
"I can only hope that passions will subside," he said. "Then perhaps we can
take up our task of adopting laws."
Down the hall, Nemtsov was casually sitting on a sofa, relaxed in a
turtleneck and blazer, chatting with an acquaintance.
"Don't you live anywhere?" Govorukhin called out to him, passing by.
Difficult transition
Nemtsov, a member of the Union of Right Forces, said many of the former
government officials decided to run for the Duma because they realized the
importance of enacting the kinds of laws that will make reform possible.
"They understand that the role of the State Duma is much higher than they had
thought," Nemtsov said. "The country is undergoing a transition, and so is
the Duma."
Perhaps a difficult beginning should have been expected, he said, with two
new parties joining the four that previously dominated proceedings. The
parties have to work out a new balance of power.
"Coalitions are very unusual for Russia," he said. "For more than 70 years,
no compromise was allowed."
Nemtsov, who was part of the boycott, said he found Unity's alliance with the
Communists inexplicable.
"What the Kremlin did is a huge mistake," he said, predicting that Putin
would change tactics after the March 26 presidential election, which Putin is
expected to win.
Putin will want laws to advance a market economy in Russia, Nemtsov said, and
the Communists will oppose such laws. "Nothing will happen until March 26,"
he said, "Then everything may change."
Colorful personalities
Until then, the Duma should prove diverting, with a wide assortment of
colorful personalities.
Alevtina Aparina, a Communist, has been a party worker, cashier, pig breeder,
poultry breeder, teacher and Young Pioneer leader. Vladimir Vshivtsev, a
Unity member, entered the Guinness record book as the first blind person to
parachute without an instructor.
Mikhail Zalikhanov, a member of the Fatherland party, has climbed Mount
Elbrus 156 times. Lev Yarkin shot down two American planes in Vietnam.
The deputies also include six heroes of the Soviet Union, four heroes of
Socialist Labor, three heroes of Russia and two woman cosmonauts.
One irreverent deputy, Alexei V. Mitrofanov, a member of the party led by the
flamboyant ultranationalist Vladimir V. Zhirinovsky, told a television
interviewer that the fight for party chairmanships was more material than
ideological.
"The head of a committee gets an Audi," he said. "He gets high-level
treatment when he travels abroad. He gets a nice dacha and medical treatment
at the Kremlin clinic."
Even less-exalted deputies can enjoy pleasant surroundings. The Duma
restaurant offers an acceptable plate of beef stroganoff for about 60 cents.
A bowl of soup costs about 30 cents. There's caviar and champagne.
And signs throughout the building proclaim perhaps the dearest privilege of
all.
Deputies never have to stand in line.
*******
#8
Date: Tue, 1 Feb 2000
From: Alex Elder <leftline@yahoo.com>
Subject: a 'bull' and a 'bear' on Russia
David,
Here are the pieces we discussed some time ago. The
current January issue of Reuters Magazine, published
in London, is running them side by side - a 'bull' and
a 'bear' on Russia. The editor wrote to me that he
would welcome your publication. I would appreciate it
if you could say after these pieces that my book
RUBLES TO DOLLARS, published by Prentice Hall, is
available by contacting me at elder@elder.com
Thank you
Alex
Russia: Facing a Boom
By Alex Elder
25 years ago I was on the KGB Wanted list and looked over my shoulder
whenever I travelled outside the United States. If anyone told me that I
would return to Russia and write an optimistic book about it, I would have
laughed. But the country has changed, and today I am a long-term bull on
Russia.
We know the bad news from the media - an erratic government, the war in
Chechnya, stolen and laundered foreign aid. Most people do not see the
forest for the trees, and bears on Russia miss one hugely important
fundamental factor.
Russians have a long history of living under a brutal big man with a heavy
stick - a Mongol, a Tsar, or a Stalin. Ten years ago Russia has emerged
from two centuries of Mongol occupation, three centuries of brutal
monarchy, and almost a century of vicious communism into a young democracy.
People have tasted freedom, creating a psychological revolution in a huge
country. Today, Russians from all walks of society share a consensus that
there is no going back, that the government has to serve the people rather
than the other way around. This may sound like a normal idea to a western
financier, but to a Russian this is a fantastic fundamental change. A mass
psychological change in a country with vast natural resources and an
educated population promises a boom. We haven't seen anything like it
since the days of the 'Asian miracle' in the 60s, 70s, and 80s.
Bears are blind to Russia's millennial turnaround, leaving its equities in
the bargain basement. There are a few voices of reason - Bill Browder, a
money manager in St. Petersburg, writes that on the basis of equivalent
reserves Exxon is priced 770 times higher than Gazprom. If the US equity
markets are priced in anticipation of perfection, then in Russia they are
priced for an apocalypse. Even a slight improvement will launch Russian
equities from their irrationally low bases.
The financial crisis of 1998 has caused great pain to all Russians,
especially the emerging middle class. The average daily volume on the RTS
- Russian Trading System - collapsed from $100 million a day to $4 million
a day. Thousands of people who used to work in the financial sector lost
jobs. That painful crisis had a silver lining. Professionals in the
financial sector were among the most educated and westernized people in the
country. Now they are moving into the 'real economy' - manufacturing
companies, food distributors, and even state offices. They are bringing
the western culture of the workplace into the broad Russian economy. The
devaluation of the ruble has reduced imports and created a huge stimulus
for domestic industries.
I enjoy reading letters from readers of Rubles to Dollars. Andrey Liakhov
who practices corporate law in London, reminded me recently to "…mention
the aerospace industry which is really a pearl in the dirt and has a great
future. Russia launched more than 45% of all commercial satellites in
1997. Although Russian aerospace companies are slow in coming to the
international capital markets, they are really the next big thing in
Russia. What about the Russian gold industry? Star has a successful
operation in Siberia, Barrick is going there." A few days later I saw an
article in The New York Times - Ilyushin, the Russian aerospace giant has
received an international airworthiness certificate for its wide-body cargo
jet, with a passenger jet to follow. Once that certificate is granted,
Boeing and Airbus will have a third competitor!
The Russian stock market is starting to rise. The Templeton Russia Fund,
managed by Mark Mobius, has nearly doubled in one year since my book was
published!
"Russia is now living through a very difficult period," said a man with a
very close view of what's happening - President of Estonia Lennart Meri.
"However, the twenty-first century will be the age of a splendid and
reformed Russia. I am absolutely sure of this." A forward-looking observer
who sees that Russia has a great future has a wonderful opportunity to
profit from its changes.
Dr. Alexander Elder
elder@elder.com
Author, Rubles to Dollars
-------
Russia - fortunes lost and won
By Patrick Lannin, Reuters Moscow Bureau
Russia is undoubtedly a place of great opportunity and many have made
fortunes in its markets. Unfortunately, as many analysts and investors will
tell you, it has also been quite as easy to lose fortunes. High risk/high
reward might be the mantra, but as many people say, the playing field for
foreigners is still far from level.
The Russian markets have indeed risen over the course of the year, although
is this due to a sustained return of optimism after the crash of 1998 or to
investments in a few selected blue chip stocks that have benefited from the
rise in oil prices and last year's devaluation of the rouble? The rise
has only benefited equities - the debt market died last year - and prices
are still well below the pre-crisis peaks.
The results of parliamentary and presidential elections and the new
political landscape they herald are also key determining factors for any
investor.
Andrew Fox is a British investor who opened a securities company in the Far
East of Russia in the port town of Vladivostok, taking stakes in local
companies. All went well for several years until the local governor took an
unhealthy interest in one of the companies where he had a seat on the
board. After pressure to bend to the governor's will on how the company
should be run, Fox quit the region six months ago and has never been back.
A small problem for one individual? Ask British Petroleum, one of the
world's largest oil companies, what it thinks. It fought and lost a battle
to control part of a Russian oil company and said it was reviewing its
investment position in Russia. Both cases highlight the fact that in Russia
there can often be a cavalier attitude to investors' rights - even the
Russian government can default on its debts.
"Cautious," said Fox when asked about his attitude now to investing in
Russia. "We and our clients have a lot of money invested, a lot of time
spent there and we're not likely happily just to let that go. If we're
pleasantly surprised, which is possible, we could go back to business the
way we were before."
"But we're not holding our breath and it may just be a long slog to hold
our positions and sell out of some of them if we feel that there really is
no place for portfolio investors in Russia for the next few years," he said.
Boris Yeltsin's shock resignation as president on New Year's Eve and the
December 19 election to the State Duma lower house of parliament have
radically altered the political landscape in Russia. However, while Acting
President Vladimir Putin says he wants to stick by market reforms, his
actual policies are vague. These policies have been described by some
economists as benign neglect, which is alright as long as the oil price
stays high. But the longer term plans he has remain unclear.
Russian shares have also rallied on these political developments and some
see the market heading upwards during the first quarter. But the outlook
remains cloudy.
"It is safe to say that a Putin government would be unlikely to head
backwards toward a communist regime. He would be likely to emphasise order
and with the support of a cooperative Duma should be able to more
effectively initiate new legislation and implement policy. What is unclear
is in what direction Putin's policies would be likely to go," finance house
UFG said in a report after Yeltsin's resignation.
For many investors, the key word seems to be caution, know the partners, if
any, with whom you are going to cooperate and treat Russia with a great
deal of scepticism and respect - as might anyone dealing with a bear,
especially one with a sore head.
*******
#9
From: "Ariel Cohen" <acohen@mindspring.com>
Subject: Putin's Vulnerability, Albright's Advantage
Date: Wed, 2 Feb 2000
The Wall Street Journal Europe
February 2, 2000
Putin's Vulnerability, Albright's Advantage
By Ariel Cohen, a Research Fellow at The Heritage Foundation
U.S. Secretary of State Madeleine Albright is in Moscow Wednesday to
meet with acting Russian President Vladimir Putin for the first time since
he took office on New Year's day. She'll find she's dealing with a very
different
man than his predecessor, Boris Yeltsin. Mr. Putin is a competent,
non-ideological leader who projects an aura of toughness and has taken a
hard line on many foreign-policy issues of concern to the United States.
But Mr. Putin is also not the juggernaut he presents himself to be; in fact,
with Russia effectively insolvent and the war in Chechnya going badly, he's
never
been more vulnerable. This is Ms. Albright's chance to spell out exactly
what the West requires of Mr. Putin if it's going to continue to support
Russia in the future.
In fact, Mr. Putin is well aware of Russia's weaknesses and deficiencies.
He realizes that Russia's dependence on energy exports cannot long
underpin the Russian economy, despite currently favorable prices. And he
also realizes how far Russia has to go to catch up with the West. As a KGB
officer based in East Germany during the 1980s, he saw first-hand the
extent of the Soviet Union's industrial decline and the dynamism of Western
economies. Hence his eventual involvement in reformist politics in St.
Petersburg and his current preoccupation with economic growth as well as
Russia's technology base. Mr. Putin's recent treatise on Russia's place in
the 21st century claims that by growing at a rate of 8% to 10% a year, Russia
can reach Western Europe's current living standards within 15 to 20 years.
So far, however, Mr. Putin seems to have little idea as to how to go about
achieving those kinds of growth figures. In a statement published last
month, Mr. Putin spoke in favor of "a strong state," which, he said, "is
not an anomaly [for Russia] . . . but the initiator and driving force of
change." He
also argued against "abstract [economic] models and schemes derived from
foreign textbooks" and made vague noises in favor of foreign-exchange
controls and a loose monetary policy. All of this is cause for concern;
Ms.Albright would do well to instruct Mr. Putin about the dangers of
statism in an increasingly decentralized world.
Also worrisome is Mr. Putin's reliance on a network of ex-KGB officers
who now fill positions of responsibility in the Kremlin. They are behind
new Internet controls, attempted censorship and a crackdown on outspoken
journalists. Authorities tried to send Alexander Khinshtein, a Moscow
investigative reporter, to a psychiatric hospital for digging into the
backgrounds of the controversial tycoon Boris Berezovsky and Interior
Minister Vladimir Rushailo -- the first time psychiatry was used by the
state against a political opponent since the Soviet era. The military in
Chechnya
detained Radio Liberty's Andrey Babitsky because they disliked his
reporting. Here too, Ms. Albright must make it clear that Russian respect
for democratic norms is a prerequisite to continued Western aid.
Where Mr. Putin has done better is in public relations. To show solidarity
with the troops, he appeared in the trenches in Chechnya on New Year's
morning, giving out hunting knives to the Russian soldiers when most
Russians were still soundly asleep after imbibing the toasts to the new
millennium. And to show his distance from the corrupt circle that
surrounded Mr. Yeltsin, he sent a number of them packing, including
Yeltsin daughter/adviser Tatyana Diachenko, as well as presidential
property manager Pavel Borodin, who is currently sought by the Swiss
police. He also demoted Nikolai Aksenenko, the politically tainted first
deputy prime minister
in charge of economic policy, and elevated a tough debt negotiator, the
former Finance Minister Mikhail Kasyanov, to the number one economic
slot.
All of that, however, may not be enough to secure Mr. Putin's victory at
the polls in the March presidential election. After repeated promises of
a quick victory, it has become impossible to conceal that the Chechen
offensive has
bogged down in bad weather and even worse fighting conditions. The
mounting casualty list is taking its toll on Mr. Putin's popularity, which
has topped climbing since he was first appointed prime minister in August.
Then too, Mr. Putin may have lost the initiative in the parliament by
forming,
against expectations, an alliance with the Communist Party. While the deal
might be sensible tactically, in the long term it undermines those same
reforms Mr. Putin says he is so anxious to promote. The Communist faction
in parliament is unlikely to support private ownership of land, the new
bankruptcy law and tax reform, all of which are at the top of the
reformist legislative agenda. In addition, a coalition with Communists
discredits him in the West and among most Russian elites and
anti-Communist voters.
If Ms. Albright is worth her salt as a diplomat, she should be able to
appreciate how badly the supposedly tough Mr. Putin needs her support. She
needs to tell him that without foreign investment Russia will never
"catch-up"
with the West economically, technologically, or (particularly dear to Mr.
Putin) militarily. And foreign investments are unlikely to flow until a
comprehensive program of economic restructuring is in place, the war in
Chechnya is over, and democracy is safe.
********
#10
From: Matt Taibbi <exile.taibbi@matrix.ru>
Subject: Yuri Luzhkov's Phallic conflict
Date: Thu, 3 Feb 2000
the eXile
Yuri Luzhkov's Phallic Conflict
By Dr. N.I. Kimmelman
Less than a year ago Yury Luzhkov seemed the most likely presidential
candidate. Now, his chances are so slim that he is not even daring to run.
What has happened in the public psyche to cause such a dramatic decline of
popularity?
We believe that Mr. Luzhkov's greatest weakness as a political figure is
the unconscious conflict which causes certain peculiarities in his
behavior. As we have mentioned in the previous article, Mr. Luzhkov
displays characteristics of a phallic leader, the historic and rather
natural choice for rulers of Russia, ever since the time of czars. Let us
consider the apparent evidence of this. First of all, Luzhkov's basic
promise is to feed the people, a continuation of the traditional
phallic-oral dependence mechanism. Luzhkov's paternalistic stance is
another sign of this, as well as his preoccupation with fate of the Crimean
peninsula, a Southern appendage Russia was deprived of. His obsession with
construction, or rather erection is clearly of phallic nature. If one makes
a comprehensive survey of buildings constructed in Moscow over the last 10
years, it will be extremely hard to overlook the fact that almost half of
them incorporate a tower or other phallus-shaped elements. In fact, it
appears that Mr. Luzhkov identifies himself with a phallus to such an
extent that he finds it inappropriate to leave his hairless apex undressed
and covers it with a cap.
However, our argument is that Mr. Luzhkov's character is marred by an
underlying neurotic conflict. We believe that his phallic personality was
formed not as a result of normal, healthy psychic development, but as a
defense, or compensation mechanism. Unconsciously, Luzhkov feels insecure
in his phallic role, as he fears inferiority in his masculine performance.
Whether this is a result of a certain physiological dysfunction, childhood
trauma or simply the subject's moderate vertical dimensions remains an open
question in absence of a thorough psychoanalytic investigation. Meanwhile,
manifestations of this conflict are quite visible.
His relationship with Moscow is an illustrative example. Moscow was always
perceived as a feminine, vaginal symbol in Russian culture, as opposed to
St.Petersburg, build by Peter from ground up as a masculine, phallic
replacement for the historic capital. Mr. Luzhkov now strives to revert
this situation, despite the fact that a purely phallic personality would be
content to have domination over a feminine formation. This pursuit is
flawed by Mr. Luzhkov's unconscious pathology. He first builds the phallus
colossum of Peter the Great monument, and then excavates the vaginal Manezh
square complex just across the river. There are similar plans to build
another underground mall right in front of the University high-rise
building. Preference in Moscow urban development is given to anything
oblong as well as anything cavity-shaped. Also consider the similar
conflicting symbolism of the name of Luzhkov's electoral movement:
Fatherland (masculine)-All Russia (feminine). These are signs of a confused
sex-role identity, as the subject is torn by two conflicting needs: to
compensate his complex of masculine inferiority by planting phallic symbols
and to emphasize feminine characteristics of the object of his political
courtship.
We are not the first to reveal this psychopathologic weakness of Mr.
Luzhkov. Recently, it was exploited by his political adversaries with
outstanding skill and striking cynicism. It was not allegations of criminal
connections or mismanagement that murdered Yury Luzhkov's popularity - it
was Sergei Dorenko's innuendo, cold-bloodedly aimed at Moscow Mayor's
greatest weakness - his dostoinstvo. As you may remember, when elections
approached, Dorenko proceeded to refer with increasing frequency to Yury
Luzhkov's "dignity" in connection with the libel suit and the size of
compensation demanded by the Moscow Mayor. He then divided the sum of the
final award by the claimed compensation, and applied the resulting ratio to
the size of Mr. Luzhkov's dostoinstvo. This demonstration was not very
flattering to the Mayor, particularly if one considers that in Russian
dostoinstvo has a clear connotation of a masculine attribute. Although
completely irrational and rather harmless at first sight, this was the
final and a devastating blow to Luzhkov's parliamentary and presidential
prospects. It was an extremely effective signal to the public unconscious,
a small detail which triggered an unconscious insight revealing his
psychopathology. Respect and trust or hate and loathing a phallic figure
normally causes in people were replaced by pity - a fiasco for Mr.Luzhkov's
campaign. The way this brilliantly calculated intervention, which in a
single gesture revealed to mass psyche a concept that took me this many
words to rationally explain, makes us suspect behind-the-scenes involvement
of a certain Dr. G. This man of no principles has on numerous occasions
betrayed the psychoanalytic code of ethics by making this potent instrument
serve dubious purposes. I hope that editors of this extraordinary
publication will one day provide me with an opportunity to reveal the whole
truth about Dr. G. and his role in many of pathological processes in
Russian society.
*****
#11
From: "Geoffrey Forbes" <gforbes@tech.purdue.edu>
Subject: Int'l Human Resource Management Research at Purdue
Date: Wed, 2 Feb 2000
I am conducting research on the hiring of Russian nationals by Western
organizations in Russia. JRL recently posted my letter in which I asked for
volunteers to fill out my survey; I would like to ask again, as well as
offer some potential return for the respondents:
All respondents will receive a summary of the findings by April 30, 2000. I
need to receive all the surveys by February 18. The ideal respondent is
someone who has experience hiring Russians at Western-based facilities in
Russia. Please forward this appeal to associates of yours who may meet this
description. Thank you!
Geoffrey A. Forbes
Purdue University
*******
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