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CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

February 23, 2000    
This Date's Issues: 4126 4127 4128

 

Johnson's Russia List
#4128
23 February 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Russian reform team sure Putin one of the gang.
2. Financial Times (UK): Russia's spin doctors change tack.
3. AP: Russia Celebrates Military Holiday.
4. BBC MONITORING: NTV, RESIDENTS OF RUSSIAN BOMB-DAMAGED BUILDING ON HUNGER STRIKE.
5. Itar-Tass: Parliamentary Hearings on Start-2, Abm to Be Held Mar 21. 
6. Diego Merry del Val: Answer to Monthly Review/4126.(Re "Primitive Accumulation in Russia and China")
7. Reuters: Russian tax reform chief sees progress by summer.
8. Financial Times (UK): Russia's unique economy may have led to 1998 crisis: World Bank report suggests the financial crash was caused by the wrong medicine being given to an unusual patient, writes John Thornhill in Moscow.
9. Moscow Times: Yulia Latynina, Foolish Haste In Signing London Deal.
10. Rossiyskaya Gazeta: Lebedev Roundtable on Post-Election Economic Tasks.
11. Mark Tauger: On Soviet vs. US dissidents.
12. BBC MONITORING: Ekho Moskvy radio, RUSSIAN PRESIDENTIAL CANDIDATE GOVORUKHIN SETS OUT HIS VIEWS.
13. Barnaby Thompson: Re Miller on St Petersburg Times/4123.]

*******

#1
Russian reform team sure Putin one of the gang
By Peter Henderson

MOSCOW, Feb 23 (Reuters) - Russian planners charting a strategy for Acting 
President Vladimir Putin said on Wednesday the ex-KGB spy, expected to win a 
March 26 presidential poll, was dedicated to market reform. 

German Gref, president of the non-government think tank charged by Putin with 
creating a 10-year growth strategy, told a conference short-term reforms 
would focus on taxes, customs and property rights. 

Yevgeny Yasin, one of the most liberal members of mid-1990s governments and a 
member of the board of the think tank, the Centre for Strategic Research, 
told reporters the government and parliament would quickly prove their 
resolve. 

Putin has broadly supported reforms but neither he nor Gref have laid out 
plans for them. Analysts who broadly expect a pro-market administration have 
been unsettled by the vagueness and Putin's repeated focus on a strong 
government. 

Yasin said initial measures he expected parliament to pass would include the 
second part of a long-awaited tax code, a land code, bankruptcy law 
amendments, which are key to selling off tottering factories, and 
shareholders' rights legislation. 

He said the strategy, a social agenda and economic plans in the works since 
December, was still not clear but Putin, though not an economist, knew how to 
select people and muster political will to get things done. 

``The most probable aim of policy will be continuing liberal reforms, but the 
question is how cautious it will be,'' he said. 

STATE ROLE IN ECONOMY QUESTIONED 

Yasin said he supported some government interference in the economy in order 
to modernise and restructure it, such as forming state banks, financed by 
loans, to support exports and key industries like technology. 

Gref said Putin wanted a strong government to make a fair business 
environment and enforce it throughout the country. 

``It should be strong so that it can rather quickly and effectively spell out 
new rules of the game and ensure all citizens and market participants 
followed these rules. That would be a truly strong government,'' Gref said. 

``We need strong vertical power so that on the territory of Russia there is a 
single order so that there is one set of rules in the country, complete and 
without exception.'' 

Gref in particular said the government would seek to defend intellectual 
property, long a sore point for Russia where 90 percent of computer discs are 
unlicensed, and would consult foreign firms which he said ``exported'' 
Russian specialists. 

He said he would expect companies like Microsoft(MSFT.O) and 
Hewlett-Packard(HWP.N) to respond by bringing back Russian computer 
scientists hired and sent abroad. 

********

#2
Financial Times (UK)
23 February 2000
[for personal use only]
Russia's spin doctors change tack

A mass of coloured balloons - bearing the words Lies, Libel, Filth, and 
Falsification - were released in an exhibition hall opposite Russia's 
parliament yesterday as Moscow's slickest political consultants vowed to do 
away with "dirty electoral technologies" ahead of next month's presidential 
elections. 

At the annual exhibition of Moscow's growing political consultancy and public 
relations industry, the experts who stood in the front ranks of the 
mudslinging which marked last December's Russian parliamentary elections had 
evidently changed tactics. 

"There are no winners in a political war and the whole of society is the 
loser," said a statement from Novokom and PR-Center, two of Russia's public 
relations companies considered to be among the masters of the industry's 
black arts. 

"This war must stop. And the people to stop it are those who are - not 
without foundation - considered to be its soldiers - the electoral 
technologists and political consultants." 

Many of the spin doctors attending the event applauded such sentiments, 
saying that ahead of the forthcoming presidential poll on March 26 
politicians should only use "classical" political technologies - such as 
focus groups, advertisements and direct mail. 

But Boris Makarenko, deputy director of the Centre for Political 
Technologies, an independent think tank, suggested the change in tone 
reflected a change in political realities since last December's poll. 

"The incumbent president has high popularity and the Kremlin has no use for 
dirty technologies now. They were already used several months ago to kill 
Putin's main competitors in the presidential race, Primakov and Luzhkov," Mr 
Makarenko said. 

At that time, Ort, the main state television channel, attacked Yevgeny 
Primakov, the former prime minister and leader of the Fatherland-All Russia 
movement, raising questions about his health while showing randomly selected 
footage of a gruesome operation. The television channel also targeted Yuri 
Luzhkov, accusing the Moscow mayor of gross corruption. 

Although the presidential elections are little more than a month away, there 
is little sense that the country is in the midst of a political campaign. As 
acting president, Mr Putin is already at the centre of the media's attention 
and has no need to conduct a barnstorming electoral campaign. 

Sergei Markov, professor of politics at Moscow State University, said that 
the one-sided nature of the forthcoming poll would demonstrate the limits of 
even the best "political technologies". "Russian election specialists have 
become very, very sophisticated," he said. 

"But even they cannot make something out of nothing." 

*******

#3
Russia Celebrates Military Holiday
February 23, 2000
By VLADIMIR ISACHENKOV

MOSCOW (AP) - While thousands of federal troops pressed their offensive deep 
into Chechnya's southern mountains, Russia glorified its armed forces today 
and girded against possible terrorist attacks.

Defender of the Fatherland Day - the annual holiday honoring the Russian 
military - coincides with the day when the Chechens mourn their people's mass 
deportation under Soviet dictator Josef Stalin. Russian authorities have 
warned that Chechen rebels might try to mark the anniversary with bombings, 
though they have offered no evidence of any planned attacks.

Acting President Vladimir Putin and other officials marked the army holiday 
by laying wreaths at the Tomb of the Unknown Soldier below the Kremlin wall, 
while women throughout the country were congratulating men on what is broadly 
considered their day.

The holiday, established during Soviet times, commemorates a 1918 clash with 
German troops, which went down in history as the birthday of the Red Army. It 
was later called Soviet Army and Navy Day.

The day has acquired new meaning this year, as Putin has made a pet issue of 
restoring the army's faded glory.

The military has been crippled by a severe funding shortage since the 
collapse of the Soviet Union, and its reputation was badly tarnished by the 
defeat in the previous, 1994-96 war in Chechnya.

But Putin has praised the army for the current war in Chechnya and lavished 
medals and promotions on officers leading the campaign.

The majority of Russians support the war. A poll released this week by the 
independent ROMIR polling agency showed that about 65 percent of Russians 
backed the military action. About the same number said they feared that 
Chechens might strike back with terrorist attacks against Russian cities.

The military claimed Tuesday that it had pinned thousands of rebels in Argun 
Gorge, a key passage into the rugged slopes of Chechnya's mountains. Russian 
warplanes and helicopter gunships flew more than 150 combat missions over the 
area in 24 hours, it said Tuesday.

Fears of a terrorist attack have grown as today's anniversary of the 
deportation approached.

Fifty-six years ago, thousands of Soviet security troops moved into the 
Caucasus region, sealed off towns and villages, and crowded nearly all the 
Chechens and Ingush - about half a million people - into railway cars for 
exile in the bleak northern plains of Kazakstan, a Soviet republic in Central 
Asia.

The two peoples were accused of collaborating with the Nazi German forces 
that invaded the Soviet Union in 1941.

Thousands of people died en route to Kazakstan, and tens of thousands more 
perished in exile. The Chechens and Ingush were permitted to return to their 
homeland only after Stalin's death in 1953.

The deportation became the main defining event in recent Chechen history, and 
the bitterness it awakened has not abated.

Fearing commemorative attacks, authorities this week put police throughout 
Russia on alert. Security precautions have also been taken at airports and 
train stations and police have been carrying out security sweeps, focusing on 
people originating from the Caucasus Mountains area.

In Russian-controlled regions of Chechnya, authorities have banned all 
non-military travel by car and barred people from entering or leaving the 
region.

``They deported us on Feb. 23, 1944, and today is just a continuation of 
history,'' said Khamzat Ychempyarov, watching Russian tanks roll by in 
western Chechnya.

*******

#4
BBC MONITORING
RESIDENTS OF RUSSIAN BOMB-DAMAGED BUILDING ON HUNGER STRIKE
Source: NTV, Moscow, in Russian 22 Feb 00 

Four women from an apartment block in southern Russia damaged by a bomb blast 
last year have gone on hunger strike in protest against their living 
conditions, Russian NTV reported on Tuesday. 

Residents of the damaged building in Volgodonsk are protesting against the 
way in which repairs have been carried out and are demanding that the 
authorities rehouse them. 

The TV showed footage of the cracked and damp walls of the house and a tent 
camp set up by residents nearby but added that the authorities had no new 
flats available and were not in a position to pay compensation because money 
promised by Moscow after the blast had yet to arrive. 

"The hunger strike is the final argument," a TV correspondent said. 

"Four women from the tent camp have refused to eat. One of them became ill 
and was taken to hospital. The others intend to continue their hunger strike. 

"All those living in the tent camp say that they will provide them with moral 
support. Clearly they will have to provide this support for a long time. The 
Volgodonsk authorities are simply not in any position to pay all those 
affected for the damage," the correspondent added. 

*******

#5
Parliamentary Hearings on Start-2, Abm to Be Held Mar 21. .

MOSCOW, February 22 (Itar-Tass) - Dmitry Rogozin, Chairman of the Committee 
on International Affairs of the State Duma lower house of the Russian 
parliament, announced here on Tuesday that the Committee determined a 
time-table for parliamentary hearings on military strategy matters. The House 
is to hold hearings on a comprehensive ban on nuclear bans (March 14), the 
START-2 and ABM Treaties on March 21, and the Open Skies Treaty on April 4. 

All the parliamentary hearings are to be held in the Defence Ministry 
building in a closed-door fashion, without journalists' television cameras 
and discating machines, said the MP, pointing out that it was he who insisted 
on such a decision. 

The Committee Chairman pointed out the need to enable the MPs "to get 
acquainted with all the details and nuances of the documents, the attitude of 
our agencies, including the Ministry of Defence, the Foreign Ministry and the 
Presidential administration, and make a decision following the dictates of 
their conscience". 

Rogozin's reasons for his attitude are that the holding of closed-door 
parliamentary hearings outside the Duma will prevent them from being used 
before March 26 as "a political rostrum for presidential candidates". 

*******

#6
From: "Diego Merry del Val" <merry@dol.ru>
Subject: Answer to Monthly Review/4126
Date: Wed, 23 Feb 2000 

In the article "Primitive Accumulation in Russia and China", published in
the last issue of the Monthly Review, Nancy Homlstrom and Richard Smith
seem (deliberately or not) to ignore a number of facts wich blatantly
contradict the conclusions they reach. I will point out the following:

- The so called "shock therapy" in Russia lasted for little more than one
year and it was cut short by primer minister Victor Chernomirdin, who got
his job under the pressure of the combined forces of the agro-industrial
lobby and the national-communist factions in the Supreme Soviet. Because of
that, an essential part of the derided "Harvard wisemen´s" program, namely
the structural reforms, was never implemented in Russia, as anyone with the
slightiest knowledge of the situation in the country will admit. It is not
possible therefore to blame the "disaster" in Russia on the introduction of
"capitalist reforms", since the reformers were not allowed to carry them
out to the last consequences.

- The industrial nomenklatura and their communist allies only allowed one
aspect of reform to be implemented, the privatization of enterprises,
because it was of their interest. Even today, a large number of
improductive factories continue to be subsidized by the State. The money is
detracted from the pockets of ordinary citizens (many of which don´t
receive their salaries or pensions), because the State is not some abstract
Cornucopia from which you can extract commodities for free, but it is
formed by you and me and all the passers-by on the street. The director of
a car factory in Ulianovsk (the birth place of Lenin, governed by the
communists) told me recently: "With taxes of up to 70 percent of the total
production it is impossible to run a profitable business". Same thing for
the ownership of land. Ten years after the fall of communism, 56 percent of
the land in Russia is collectively owned and the levels of production are,
of course, as dismal as ever. To call this capitalism, primitive or not, is
a bad joke. 

- If one takes to the word the conclusions of the article, the development
of market economies and the improvement of living conditions for the
majority of the population would have been impossible in any of the former
communist countries. The examples of Poland, Hungary, the Czech Republic,
and even some of the former Soviet republics, like the Baltic countries,
are a living proof of the total inaccuracy of Holmstrom and Smith´s thesis.
If you check and compare the evolution of the countries which have
introduced reforms at a slow pace (Rumania, Bulgaria, Belarus, Ukraine)
with those which have chosen a more radical and quick approach, you will
get interesting conclusions: not only the first mentioned have done worse,
but also the public services which were meant to be protected by this
"therapy without shock" have shrunk to even lower levels. I recommend the
authors of the article to leave for once their offices at the University
and make a trip around two exemplary Russian regions: Ulianovsk, governed
by communists who maintained prices controls until 1996, and neighbouring
Samara, governed by "greedy" capitalists and reformers. Look without
prejudice and get your own conclusions. By the way, all the economic
studies on the subject have shown that the level of corruption and mafia
extortion in different Russian regions is directly proportional to the size
of the State and the burocracy. 

-Last and foremost. To mention that the criminalization of the Russian
economy is due to the fact that the Russian capitalists are not "nice guys,
but ruthless motherfuckers" is indeed one of the most notorious pieces of
"insipid childishness" I have ever read (as the old and admired Karl Marx
could have pointed out). To quote it in support of an argument is a token
of limited perspective and low analytical capacity.

Diego Merry del Val
Correspondent in Moscow
ABC Spanish daily

*******

#7
Russian tax reform chief sees progress by summer
By Peter Henderson

MOSCOW, Feb 22 (Reuters) - Russia's chief architect for tax reform on Tuesday 
forecast progress in efforts to improve the much-maligned system within 
months and saw substantial changes taking effect by next year. 

Sergei Shatalov, the first deputy finance minister in charge of streamlining 
Russia's cumbersome tax system to attract new business and lure tax 
delinquents from the shadow economy, told a briefing he expected progress on 
a new tax code by summer. 

The government wanted the second part of the code passed in the key second of 
three readings by parliament's July break, which could lead to a better 
system in place by next year. 

"What do we do want to do with the second part of the tax code?" he asked. 
"To cut out the sharpest, most bothersome elements. To clear out the 
roadblocks for business growth." 

The success of Shatalov's plans will be one of the clearest indications of 
Acting President Vladimir Putin's commitment to market reforms. Putin is 
clear favourite to win a March 26 presidential election and enjoys broad 
support in parliament. 

Russia needs to cut tax rates, decrease the number of taxes and close legions 
of loopholes that Shatalov says cost $12-15 billion annually -- half as much 
as the federal budget. 

EVOLUTION, NOT REVOLUTION 

But he said there would be no revolution. Changes would be slow and thorough, 
beginning with the tax code. Parliament has passed the first of four parts, 
which defines broad terms, but in 1998 failed to pass the second, which gets 
down to rates. 

"We do not want a jump in the tax system but to change it through evolution," 
he said, eyeing a 3-4 year timeframe. 

Many legislators want to slash taxes now, but Shatalov said rates and the 
shares of the tax burden of industry, individuals and value added tax should 
not change soon. 

Instead of cuts, reforms will make it easier to do business -- expense 
deductions will be incorporated into law such as for advertising and interest 
payments, the number of taxes will be decreased, and a dreaded turnover tax, 
based on sales rather than profit, will be fazed out between next year and 
2003. 

Reforms will also make the system clearer. Russia's nominal tax burden is 
about 41 percent of gross domestic product, but the real one, since not all 
taxes are collected, is 35 percent. 

By next year Shatalov hopes to decrease the nominal burden to the real rate 
and then some, shaving 7-8 percentage points from the nominal 41 percent in a 
year or so. 

"Cutting taxes should lead to increased readiness to pay taxes, but I do not 
think that would happen in a very short period of time," Shatalov said. 

*******

#8
Financial Times (UK)
22 February 2000
[for personal use only]
Russia's unique economy may have led to 1998 crisis: 
World Bank report suggests the financial crash was caused by the wrong 
medicine being given to an unusual patient, writes John Thornhill in Moscow

Russians may always have believed they are different from other nations. But 
international financial support for the country has been based on the 
assumption that Russians are the same as everyone else. 

Now a recent World Bank report suggests that Russia may be different after 
all. How else could International Monetary Fund policies that worked 
elsewhere in post-Communist Europe have led in Russia to the spectacular 
financial crash of 1998? 

The paper argues that Russia's IMF-approved macro-economic stabilisation 
policy, which tried to cut inflation by fixing the exchange rate and 
tightening credit in the mid-1990s, was bound to collapse because of the 
country's massive micro-economic distortions, such as special favours for 
state enterprises. Indeed, the government's tough stabilisation policies only 
fuelled the growth of what other economists have called the "virtual 
economy". 

In particular, the report says the government continued to provide implicit 
subsidies to industrial enterprises from 1995 to mid-1998 to soften the 
social impact of a tight monetary policy. These subsidies took various 
convoluted forms such as allowing loss-making state enterprises to run up 
enormous payments arrears to gas and electricity companies while permitting 
these utilities to pay taxes in non-cash "offsets". This non-payments crisis 
led to the proliferation of barter and chronic shortfalls in the government's 
cash revenues contributing to the fiscal crisis of August 1998. 

"In retrospect, given the scale of subsidies implicit in non-payments - 
estimated at 4 per cent of GDP (gross domestic product) a year from the 
energy monopolies alone - it is not surprising that stabilisation collapsed," 
the report states. "To put it plainly, if low inflation is attained in the 
presence of non-payments, none of the benefits associated with low inflation 
will be forthcoming, while the economic costs will be considerable." 

The World Bank argues that to eradicate the scourge of non-payments the 
government must eliminate these implicit subsidies or - in economists' jargon 
- harden its budget constraints. It should ensure all state institutions pay 
their bills in full and on time, insist that all taxes are paid in cash and 
encourage the gas and electricity companies to cut off persistent non-payers. 
The social impact of bankrupting companies can best be addressed by targeting 
subsidies at the worst affected regions rather than by providing blanket 
subsidies. 

Moreover, the rouble's devaluation and the surge in the international oil 
price provide a perfect economic backdrop to implement such policies. 
Domestic producers are awash with cash, reducing the need for subsidies. 

Tough policies only fuelled growth of the 'virtual economy' 

The energy monopolies are steadily increasing their cash revenues, reducing 
the level of non-payments. 

>From the policy perspective, the World Bank's conclusions are perhaps less 
radical than they seem at first. What they suggest is that Russia was in 
effect "cheating" on its IMF programme by shunting spending off the 
government's balance sheet. Once micro-economic order is established, the 
normal macro-economic stabilisation policies should work. 

"At the end of the day the paradigm in Russia is not radically different from 
central and eastern Europe," says Brian Pinto, author of the World Bank 
paper. "But, ultimately, the Russian government cannot get away from 
implementing hard budget constraints." 

But other economists are not convinced by this logic, arguing that Russia has 
created a uniquely "mutant" economy, which is resistant to many stimuli. It 
would be senseless to apply tough bankruptcy proceedings in a market that 
contains so many distorted price signals. 

Alexander Nekipelov, director of the Institute for International Economic and 
Political Studies, says he is glad there is a greater recognition of the 
problem of non-payments, an issue he has been writing about for years. 

"Previously our radical liberals considered that non-payments and barter 
would simply disappear as the economy transformed itself and grew. But in 
this report the World Bank has for the first time recognised that 
non-payments are a systemic problem that will not naturally disappear," he 
says. 

"Russia does not have a normal market economy. Therefore many of the standard 
measures that would give normal results in a market economy produce perverse 
results in our conditions." . 

*******

#9
Moscow Times
February 23, 2000 
INSIDE RUSSIA: Foolish Haste In Signing London Deal 
By Yulia Latynina 

Last week, Finance Minister Mikhail Kasyanov signed an agreement with the 
London Club on the restructuring of Soviet debt. 

The government will assume responsibility for the debts of Vneshekonombank. 
In return, 35 percent of the principal will be written off, and a third of 
the interest on the debt will be written off. The first seven years will be 
favorable, but starting in 2015 payments will grow by $1.5 billion more per 
year than according to previous arrangements. In all, Russia will pay the 
London Club $40 billion dollars. 

Negotiotians were conducted at a very inopportune time for Russia. Prices on 
oil are high, and the scandal at the Bank of New York has convinced the 
Western public that there is money in Russia - though it's just stolen money. 
But most analysts think that writing off only 35 percent of the debt, which 
before the start of negotiations was worth less than 10 percent of face 
value, is unforgivably foolish. Alexander Shokhin, figures in hand, showed 
that in this case, Russia will default again before 2015. 

So why the rush to sign? 

There are various reasons. Kasyanov himself asserts that the agreement will 
improve Russia's image and will draw more money into Russia. But Russia's 
financial reputation won't change just because it has signed another piece of 
paper. 

Other opinions are less flattering toward the government. Yabloko leader 
Grigory Yavlinsky says that the restructuring is a tactical victory for 
Kasyanov but a strategic loss for Russia. The government has restructured its 
external debt to spend money now on Chechnya. But it's not concerned about 
what will happen in 10 years' time. 

There is another opinion, widely known in a small circle. The thought is that 
Vneshekonombank was not declared bankrupt because it has recently become a 
dominion of tycoon Boris Berezovsky, that there are too many people loyal to 
him there, and that the Kremlin and Berezovsky were loath to lose such an 
obedient instrument. 

That's another good explanation. But it's not totally logical. It wasn't 
necessary for Vneshekonombank to be declared bankrupt. It would have been 
possible simply to buy up its debts. Before the start of talks, they could 
have been had for a song. At that time they cost $3 billion. And the Kremlin 
has oligarchs, which it can order around. There are various interesting firms 
such as FIMACO. If FIMACO had gone under, it would have been possible to 
organize another firm. If the firms had started buying up debts, their price 
would have risen. They wouldn't have been bought for $3 billion, but for $4 
billion. 

Yet now Russia has placed a $40 billion millstone around its neck. Where's 
the logic in that? Alas, there is a certain logic. 

Some people in banking circles insistently whisper that on the eve of 
negotiations, a Kremlin insider bought a significant tranche of PRINs and 
IANs. It's clear that if that were the case, the Kremlin would have been very 
interested in two things. First, it would have been interested in seeing that 
the paper was worth kopeks before the start of talks (in fact, at the time, 
rating agencies gave them an index of "D," for default); second, that after 
the restructuring the price of paper would rise to an optimal level, that is, 
so that as little as possible would be written off. 

Yulia Latynina writes for Segodnya. 

*******

#10
Lebedev Roundtable on Post-Election Economic Tasks 

Rossiyskaya Gazeta 
18 February 2000
[for personal use only]
Article by Denis Prokopenko: "Time To Concentrate on Specific Tasks; 
National Investment Council Favors Stable Economic Legislation" 

After 26 March, Russia will enter a new era. 
With the departure of Boris Yeltsin, the contradictory period of 
systematic transformations comes to an end. During this period, the 
principles of civil society were formulated in their general outlines, 
and the authorities are now faced with a new task: To move on to specific 
matters in the economy. That is the opinion of Aleksandr Lebedev, 
chairman of the board of the National Investment Council, at whose 
initiative a "roundtable" meeting was held on 15 February. This measure 
was devoted to Russia's economic prospects and to the problems which must 
be resolved in this connection. The range of roundtable participants 
was unusually broad: From leading bankers and politicians to economists 
and editors-in-chief of the mass media. Those who had gathered came to 
the conclusion that it is impossible to solve economic problems without 
resolving political ones. As one of the economists in attendance at the 
forum noted, the government must stop engaging in science (referring to 
macro-economics--D.P.;) and concentrate on specific matters. This holds 
true for the real economy, as well as for attracting investments--which, 
in Aleksandr Lebedev's opinion, is impossible without a political 
resolution to the problem of returning capital and putting an end to its 
drain from the country. And this is realistic only under two 
conditions: A preferential rate of taxation, and guarantees against 
arbitrary actions by the authorities. 

State Duma Deputy Vladimir Ryzhkov, who continued this line of 
thought, believes that specific political conditions must be created in 
order to achieve economic growth and to attract investments. The first 
priority task in this direction is "nationalization" of the state, which 
would shed the role inherent to it and would cease to be a real subject 
of politics. The resolution of this problem would determine the 
creation of the other conditions: Control over fulfillment of the laws, 
presence of stable legislation and political stability. As Vladimir 
Ryzhkov said, this is the minimal set of political conditions which are 
met, for example, by China, which attracts significantly more investments 
than Russia (while Russia has attracted investments in the sum of $13 
billion over the past 10 years, China has attracted over $200 
billion--D.P.). 

The most obvious and indicative example of implementing such a policy 
was the experience of Novgorod Oblast, which was recounted by its 
governor, Mikhail Prusak. As a result of the economic strategy 
implemented by the region's leadership, the volume of investments 
attracted to the oblast is now greater than its entire budget. Based on 
the experience of this successful economic policy, Mikhail Prusak 
concluded that, in order to attract investments to specific enterprises, 
it is necessary for them to have at least minimal profits. A number of 
specific measures were adopted in the region. The first was to exempt 
investment projects from taxes until they achieve full economic recovery. 
The second consists of removing non-liquid property from the balance 
sheets of enterprises and selling land for investment projects at a 
minimal cost. Communications on the territory of the oblast are also 
sold to enterprises at a minimal price, but with the condition that they 
be developed and modernized. All this has facilitated an extraordinary 
influx of investments into the region. Today, foreign investments 
account for 64 percent of the oblast GDP [gross domestic product]. 
However, although Novgorod Oblast presents an obvious example of 
effective regional economic policy, nevertheless it is not a typical 
example. In connection with this, one of the main goals of the 
roundtable is to popularize the successful experience of the regions. 
In the opinion of participants, conducting such forums is necessary so 
that the political, economic and intellectual elite, working together, 
may develop the most acceptable means for developing the country.

*******

#11
From: "Mark Tauger" <mtau@wvnvm.wvnet.edu>
Subject: On Soviet vs. US dissidents 
Date: Tue, 22 Feb 2000 

I would like to make certain points regarding the dispute over dissidents
and their effects in the US and Soviet Union, particularly in response to
Peter Mahoney. First, the VVAW are not a good comparison to make with
the entire Soviet dissident movement. The VVAW dealt mostly with a single
foreign policy issue, the Vietnam war; it would best be compared with the
Soviet dissident response to the Soviet invasion of Czechoslovakia,
contemporary with Vietnam. Both of these movements dealt with diplomatic
and military issues during the Cold War, which were much less amenable to
popular pressure. 

A better and more revealing anology would be the U.S. Civil Rights
Movement, which was directed almost exclusively at changing the United
States internally, which was much broader than the VVAW and which did not
usually address matters of international diplomacy. Here the comparison
with the dissident movement, including its nationality aspects as
mentioned in the comments in JRL 4122 and 4124, seems much closer. The
U.S. Civil Rights movement, or movements, encountered much harsher
opposition than even the antiwar movement, with which it was at times
combined. 

The arrests, the violence, the espionage [FBI files on Martin Luther
King], resembled the experience of the dissident movement. But much was
different: the Civil Rights movement early on gained support from the
Federal Government, and the opposition came from local and state
governments, especially in the South. Maybe there is an anology: the
South was like another country, forcibly kept in the U.S. by the Civil
War, but resisting central government authority all along, e.g. Wallace et
al. 

But in the long run the Civil Rights movement has had tremendous effect,
it changed government policies, practices, and personnel at all levels all
over the country, it affected business, media, education, personal
relationships. And this movement is by no means over, the conflicts
continue over affirmative action, the extreme right wing groups, etc. 

When I teach about the Soviet dissident movement, I use the Civil Rights
movement as my comparison, rather than the antiwar movement, and I use
Alexeyeva's Thaw Generation for students to read, which serves as a more
engaging [for students] introduction to the general survey she wrote in
her larger Soviet Dissent book mentioned by one of the contributors
earlier. The Soviet dissident movement, if we consider all those
incarcerated during the Khrushchev and Brezhnev periods, may have been
similar in scale to the Civil Rights movement, and may also have been
similar in being representative of the resentments of much larger numbers
of people who were unwilling to participate at their own personal risk. 

The Soviet dissident movement encountered much harsher and more effective
opposition than even the Civil Rights movement initially, but with
Gorbachev this movement exploded. The previous postings emphasize how
dramatically the nationalist movements changed and destroyed the Soviet
Union, but simultaneously the informal groups that formed in the early
Gorbachev years clearly represented a continuation of the dissident
movement, and they often had explicit and defined political goals. The
dissidents in the 1960s an 1970s may not have been as concrete in their
goals, the point that Mahoney's quote overstates, but given their
circumstances and heritage it would have been unrealistic to expect
detailed and articulate political programs. But when the opportunities
came under Gorbachev these people came up with quite specific and
articulate proposals and programs and organizations (such as the groups
who managed to unseat established Party officials in the elections to the
Congress of People's Deps.) 

Given the wide array of movements that developed under Gorbachev, the
support that informal groups gave to leaders like Eltsin in his
progressive years under Gorbachev, the dramatic effects of glasnost' on
support for the Soviet regime, and the nationalist movements' ability to
break up the Soviet Union, it seems to me impossible to minimize the
dissident movement. They appeared at the time to be small and
insignificant, but in retrospect their small size reflects more the fact
that repression was so effective; much more discontent was seething under
the surface. 

Finally, it is also important to recognize that a comparison between U.S.
and Soviet dissident movements also requires a much more difficult
comparison between those two societies, really complex groups of societies
and cultures. Think about this comparison: Azerbaijan and Armenian
nationalist movements versus KKK and the Black Panthers. The first pair
fought a prolonged war; did the second group ever meet each other? Maybe
they did, I do not remember such a case, and certainly the KKK and to a
much lesser extent the Panthers were responsible for violence, but nothing
like the Azeris and Armenians. Well, I'll be curious to read responses
to this. 

Mark Tauger mtauger@wvu.edu 
Department of History 
West Virginia University 
Morgantown, WV 26506-6303 

******

#12
BBC MONITORING
RUSSIAN PRESIDENTIAL CANDIDATE GOVORUKHIN SETS OUT HIS VIEWS
Source: Ekho Moskvy radio, Moscow, in Russian 1435 gmt 22 Feb 00 

Politically engaged film director and State Duma deputy Stanislav Govorukhin 
has said he is joining the presidential race to break up a behind-the scenes 
deal between Communist leader Gennadiy Zyuganov and acting President Vladimir 
Putin. Interviewed on Russian radio he claimed that the deal was arranged by 
Kremlin spin doctors to make Putin's victory assured. Govorukhin believes 
that not individuality but money and the media decide who wins the race. 
However, he wants to get through to Russian voters and explain to them what 
is going on. Govorukhin said he would not recommend his supporters to vote 
for Zyuganov if the latter goes through to a second round with Putin. The 
following are excerpts from the interview broadcast by Russian Ekho Moskvy 
radio on 22nd February 

[Presenter] Hello, Vladimir Varfolomeyev is in the studio. Stanislav 
Govorukhin, Russian presidential candidate, is our studio guest. Hello, 
Stanislav Sergeyevich. 

[Govorukhin] Hello... 

[Q] In the current election campaign, are you, Stanislav Govorukhin, your own 
stage director? 

[A] Yes, of course. But generally speaking any candidate is his own stage 
director unless he is totally helpless and relies completely on his advisers 
and public relations team. 

[Q] At the same time, you're one of an influential members of the 
Fatherland-All Russia movement and faction. Do you feel their support? 

[A] I'd describe this as moral support. And this was my own wish. Not long 
ago Fatherland held central council where I asked that my name should not be 
mentioned. I don't want Fatherland to support me. Why? There is only one 
reason. I thought about the previous campaign, that dirty and dishonest 
campaign, I simply took pity on [Moscow mayor Yuriy] Luzhkov and [former 
Prime Minister Yevgeniy] Primakov. If Fatherland declared its support for me 
today, just imagine the amount of mud that [Russian Public TV commentator 
Sergey] Dorenko will sling at Luzhkov tomorrow. That is why I am an 
independent candidate... 

Today election results are decided by the media - money and the media rather 
than the qualities of contenders. In the final analysis, however, if we sum 
up our lives, I think my life was the worthiest of all... 

I can't stand when people are making deals in order to cheat others. Today I, 
like the majority of people, I'm sure, saw through this deal between the 
Communist faction, between [Communist leader Gennadiy] Zyuganov and [acting 
President Vladimir] Putin. Isn't it clear that Kremlin spin doctors are 
dreaming to see Zyuganov as their sparring partner in a second round. In this 
case Putin's victory is absolutely assured. But I'd like to break up this 
deal, if I succeed, I'd like to turn around this scenario. I'd like to 
address comrade Zyuganov's electorate and explain to them that the Communist 
faction in its today's shape - and I've been following this faction's 
evolution, the way it has been shedding its best and worthiest 
representatives in the Duma for over six years - I'd like to tell them that 
today's faction of secretaries of Regional Communist Party committee and 
businessmen will not defend the interests of Communist Party members or 
ordinary people. Moreover, they are hatching the most terrible betrayal of 
their voters... 

[Q] Calls can be heard now to boycott the future presidential elections, the 
arguments being that these will be no-contest elections, that Putin is simply 
looking for a sparring partner in a second round so it's better to boycott 
the elections which consequently will be deemed invalid. What is your 
attitude to this proposal? 

[A] There are currently two false ideas which I'd like to expose. One of them 
alleges that Putin is only like this for the moment. It's only now that he 
defends the interests of the oligarchs but later, after he becomes president, 
he will deal properly with them all . This is not true, a false idea. They 
are blood brothers. If he defends them today, he will continue tomorrow. 

And the second provocation is to keep people away from voting. This is 
impossible. I assure you that the elections will necessarily take place and 
quite a few people will turn up, at least out of simple curiosity... 

[Q] There is another idea current in the media but launched by politicians. 
It maintains that there are no people around worthy of voting for and it's 
better to vote against all. Do you think this is possible?] 

[A] No, I believe that Russia is doomed to follow this path, which it must 
take. Unfortunately, each time it chooses between several evils and, at the 
final stage, between two evils. Unfortunately, politics and power attract not 
the worthiest people. The worthiest have remained on the sidelines, they are 
not eager to grab power... 

[Q] Imagine the most likely situation when Putin and Zyuganov go through to a 
second round. Who will you vote for or call on the people who trust you to 
vote for? 

[A] Four years ago I supported Zyuganov. At the time it was a question of 
Zyuganov or Yeltsin. I knew what would happen with the country if Yeltsin 
became leader. So I made my choice which I don't regret. And things turned 
out the way I had thought they would. Yeltsin was incapable of running the 
country. And that time I was choosing between two evils. But I told you 
already that I had been following the evolution of this faction [Communists], 
I saw them shedding the worthiest people... 

So today I'll tell you straight that in this situation I shall not vote for 
Zyuganov. As for Putin, I'll have yet to give it a thought, even if I think 
that it is another undoing for Russia. But this is our fate. More often than 
not we choose between two evils. 

[Q] The last question: a little over a month remains until the elections. You 
don't think of withdrawing in this time, do you? 

[A]How can you say that!? 

[Q] You will fight to the very end? 

[A] Of course, to the end. And the main fight will unfold in the last week, 
in the last hours. No, I must get through to my people, I will get through to 
each voter's heart. The question is whether he or she will open their heart 
to me. But I will certainly reach their ears... 

********

#13
Date: Wed, 23 Feb 2000 
From: (Barnaby Thompson) <thompson@sptimes.ru>
Organization: The St Petersburg Times
Subject: Re Miller on SPT/4123

Andrew Miller says that there are certain things readers should know
about The St. Petersburg Times, or risk being misled. There are,
however, a number of glaring innaccuracies in his turgid and innaccurate
"analysis" of our paper, and while I am tempted to ignore him totally as
I normally ignore the rantings he sends us on a regular basis, he is so
wide of the mark here that I felt I had to reply.

Once he has wormed his way through his "meaningful sociological
research" via looking at cheating in Russian universities, he says that
the editorial of Feb. 15 speculated that St. Petersburg's governor,
Vladimir Yakovlev, may have had something to do with ballot boxes being
stuffed in a local polling station. Actually, what I said was that since
an OVR candidate won in that district, OVR would be an obvious target -
I used the word target because those looking to apportion blame (which I
did not try to do) would point at the winner of the seat. This is not an
unreasonable point to make.

He also says that Yakovlev had previously broken with OVR. At the time
of the election on Dec. 18, I recall that Yakovlev was third on the OVR
party list. Only after the elections did Fatherland and All Russia part
company.

I also referred to allies of Yakovlev in the next paragraph saying that
the affair was, on the contrary, concocted as an underhand attack on the
governor, also not an unreasonable surmise. In fact, I was extremely
careful both in editing the relevant article - 1) these are the
allegations, 2) these are the comments and arguments, 3)watch this space
- and the editorial, in which I used the word "if" at least seven times.
We will be following up the story to see if the local electoral
committee and the courts take Ruslan Linkov's claims seriously, as well
as investigating on our own. For the time being, in the editorial I
covered my bases as far as I could.

Miller says the thrust of the editorial was to say that "undesirable
people come to power in Russia not by being freely chosen but by means
of dirty tricks that frustrate the will of the people." He then says
that this simply isn't true.

In the spirit of democracy, I suggest that you conduct a poll of
journalists and others who followed December's Duma elections closely
who receive JRL, to see how many think that dirty tricks did not play a
decisive role in the result. Ask them also how many people have ever
voted for Putin, and what the chances are of the Russian electorate
getting an impartial look at the candidates for the presidential
elections. Then get them to identify themselves so that Miller can call
them ethnocentric.

Presumably he also sees nothing wrong with the favorite and widespread
practice of one group putting up candidates to oppose a rival with
exactly the same name, as happened in St. Petersburg in 1998. He does
not find it unusual that two or even three Ivan Ivanovs have run for the
same post. (For more on this, see www.sptimes.ru.)

He says that The St. Petersburg Times has not published an item about
Yakovlev since his election "that did not contain an attack on him."
This is also wrong. Miller should look at some of Charles Digges' or
Brian Whitmore's stories from Yakovlev's first year in office. I direct
you to two: the front-page, off-lead story on cleaning up St. Petersburg
on Aug. 16, 1996. Or Sept. 8, 1997 Â Brian Whitmore on Yakovlev's first
year in office. There are lots more. See www.sptimes.ru.

He says that Russians "perhaps foolishly, trust their government not to
put innocent people in jail." Oh, yes? Name ten. Do any more of your
subscribers think this? The examples of Nikitin (Miller's graphic
account of him bleeding was so ridiculous and badly written it was a
miracle my computer didn't crash) and Pasko are merely two of the high
profile injustices. There are hundreds, probably thousands more. Sarah
Karush of The Moscow Times did a three-part story on this very subject.
(www.moscowtimes.ru).

He says that there is no evidence at all that Yakovlev isn't the best
St. Petersburg can hope for. In the first place, what on earth does he
mean by evidence? Secondly, Igor Artyemev, who ran with the Yakovlev
ticket to oust Anatoly Sobchak in 1996 and who is credited with
excellent work with the city's budget before falling out with his boss,
is perhaps one piece of "evidence." Miller is apparently satisfied with
the current regime. The St. Petersburg Times is not, and will continue
to investigate and assess the work of the Yakovlev administration, and
anybody else's administration, as thoroughly as possible, in support of
open and impartial journalism as we have tried to understand it. If that
is ethnocentric, then count us in.

He also states that it is "very important" to know that we wrongly
reported the type of gun used to kill Starovoitova.

In the same article [Friday, Dec. 11. 1998] that we quoted U.S small
arms experts as saying the gun was used by special forces, we also said
that political extremists were seen as more likely to have killed
Starovoitova than local criminal groups, and quoted a number of people
to that effect. We also published the transcript of an alleged interview
with Starovoitova and MK journalist Yury Zaynashev, mentioning financial
sources for the Communists, Yavlinsky, Lebed, Zhirinovsky and
Chernomyrdin, but which did not mention Yakovlev. Can Miller find, date,
source and quote the sentence where we specifically said that Yakovlev
might have been involved in a major high-level conspiracy? (He should
search on www.sptimes.ru).

Eyebrows were raised at Yakovlev's behavior after the murder, and we
cited a Kommersant article to which City Hall responded, local deputies
Alexander Shchelkanov and Leonid Romankov, as well as past clashes
between Starovoitova and Yakovlev to illustrate why the governor's
prolonged absence - when world leaders were quick to send their
condolences - had caused comment. It was strange, and we didn't need an
independent sociologist to tell us that. We did not, however, produce
this as evidence of guilt.

Finally, why is it so important that we correctly quoted an expert
source who was mistaken? Would Starovoitova somehow be more dead than
she is now? Would it matter if we had reported a knife attack?
Starovoitova is dead, even in Miller's shiny world.

Finally, Miller says that Ruslan Linkov was "a failed candidate for the
City Council last year, and in that race he was endorsed by a St.
Petersburg Times editorial." One: Linkov never ran for the assembly,
Two: elections to the assembly were held in 1998. Three: Since Linkov
never ran, we could hardly have endorsed him.

Miller carries a torch for Yakovlev - he has consistently sent rude,
ill-considered e-mails to our editors and correspondents attacking them
for criticising the governor, as well as for praising plays and concerts
he has hated, printing photos of columnists he doesn't like the look of,
overemphasising the important of the price of oil to the Russian
economy, and so on. Rarely has a week gone by without the arrival via
e-mail of a glorious gem of armchair economics.

These are things JRL readers should know before reading Miller's
riveting accounts of getting a visa to Ukraine, and other such matters
of crucial importance. I can only deduce that you derive some dark
pleasure from seeing those who actually do the reporting attacked by
those who think they should be doing the reporting, but who don't.

Barnaby Thompson
Editor
The St. Petersburg Times

*******

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