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Johnson's Russia List


March 22, 2000    
This Date's Issues: 4188  4189 4190 

Johnson's Russia List
22 March 2000

[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, Who wants to be a president?
Russia votes for its next leader on Sunday. Vladimir Putin seems a 
shoo-in, so his rivals seek any possible hype - even game shows. 

2. Bloomberg: US' Pickering Sees Russian Economy Reviving, Chance 
to Invest.

3. RFE/RL: Floriana Fossato, Press Ban Doesn't Bother Regional Media.
4. Catherine A. Fitzpatrick: Re: 4187-Putin's Memoirs.
5. New PONARS Memo: The Dynamics of US-Russian Relations: A Critical
Perspective by Celeste Wallander.

6. The Foreign Policy Centre: Re-engaging Russia by John Lloyd.
7. Obshchaya Gazeta: Yelena Skvortsova, Blown-Up Space. The 
Authorities Have Become Bogged Down in the 'Chechen Trail'

8. Michael Hudson: Wedel's so-called "conspiracy theory"




Christian Science Monitor
22 March 2000
Who wants to be a president?
Russia votes for its next leader on Sunday. Vladimir Putin seems a shoo-in,
so his rivals seek any possible hype - even game shows. 
By Fred Weir, Special to The Christian Science Monitor

Russian voters were treated to two telling images in the last week before
their second-ever presidential elections. 

Image No. 1: Acting President Vladimir Putin dominates the news on Monday,
making an unannounced trip to war-torn Chechnya by SU-27 fighter jet. The
usually staid Mr. Putin cut a dashing figure, climbing out of the aircraft
in a bomber jacket and pilot's mask. One news agency reported he took the
controls during the flight. 

Image No. 2: Desperate for exposure, several of Putin's rivals in the
presidential race appeared as contestants this past weekend on Russia's
equivalent of "Who Wants To Be a Millionaire?" 

That about sums up the state of campaigning in the March 26 Kremlin

Unable to erode Putin's massive lead in opinion polls, rival candidates are
resorting to almost any tactics to secure their status as honorable
"also-rans" or to influence voters on peripheral issues. One candidate
candidly urged voters to support his bid for second place. 

"There is no actual struggle taking place here, just a frantic jockeying
for position among the losers," says Mikhail Omski, director of
Image-Kontakt, a Moscow political-consulting firm. "It's as if we're having
a virtual election, not a real one." 

Grigory Yavlinsky, a veteran liberal campaigner for Yabloko, a
reform-oriented party, routinely tells audiences that he's running "because
it's time to beat the Communists." 

In other words, Mr. Yavlinsky dreams of overtaking lackluster Communist
Party leader Gennady Zyuganov, the No. 2 contender, who himself trails some
35 points behind Putin in recent polls. 

And the winner will be ... 

A television commercial for ultranationalist candidate Vladimir Zhirinovsky
depicts an exotic fortune teller saying the stars ordain that he will win
the presidential election - the next one, that is, four years from now. 

A survey conducted by the All-Russia Public Opinion Center last week found
that 58 percent of respondents would vote for Putin, 21 percent for Mr.
Zyuganov, and 4 percent each for Mr. Yavlinsky and Mr. Zhirinovsky. 

If those proportions hold, Putin may be expected to win an outright
majority in next Sunday's vote and thus escape the indignity of facing a
second-round runoff three weeks later. 

Last weekend, while a confident Putin relaxed at the Black Sea resort of
Sochi, four of his 11 rivals battled each other on "Lucky One," a top game
show where contestants answer questions for cash. 

No politicking was allowed, but a smiling Ella Pamfilova, who is the first
woman to run for president in Russia, took home $1,400 in winnings,
presumably for her war chest. 

Putin has made the most of his opponent's desperation by grandly declining
to avail himself of the 80 minutes of free TV time granted each candidate
for stating their positions and debating the issues with rivals. 

"People in the executive must prove their worth by their concrete deeds,
not advertising," the acting president said in turning down his share of
the time. 

"I will not be trying to find out in the course of my election campaign
which is more important, Tampax or Snickers," he said in a jab at
politicians who "market" themselves like a name brand. Of course, Putin can
afford his Olympian stand. He's already a name brand. 

Two of Russia's three nationwide TV networks are state-owned, and they seem
to have adopted an all-Putin, all- the-time news agenda. 

Whenever the acting president meets a foreign leader, holds a Kremlin
reception, visits a region, or even takes a weekend ski break, the networks
cover his every word and move. 

During Putin's visit to an automobile factory in western Russia yesterday,
the media presence was expectedly heavy. The ORT television station even
deemed the candidate's publicity spin in a factory car worthy of airtime. 

Zyuganov, No. 2 in the polls, has complained that Russia's three big TV
networks show an average 2-1/2 hours of Putin in their daily news shows,
compared to eight minutes of Zyuganov. 

"We haven't done exact calculations on this, but Zyuganov's calculations
sound about right," says Yury Levada, director of VTsIOM, Russia's largest
public-opinion agency. "The advantages of incumbency have never been used
so overwhelmingly before. Putin simply dominates the media." 

What's the point anyway? 

For many Russians the ascension of Putin already seems so certain that
there seems little point in paying attention to the campaign. 

"Putin is already like a Czar," says Mikhail Ryazanov, a graphic artist.
"He doesn't beg for votes or ask the people what should be done. He rules,
we follow. Just like it's always been in Russia." 

A joke making the Moscow rounds seems drawn direct from this popular mood.
In a version of the Aesop fable, a crow is sitting on a tree branch with a
large piece of cheese in his beak. 

A fox comes along, and says, "Crow, are you planning to vote for Putin?"
The crow says nothing. 

The fox paces a bit, then says, "I'm asking again, will you vote for
Putin?" The crow shifts nervously but keeps his beak shut. 

"For the last time," says the fox, "I demand to know if you're going to
vote for Putin." The crow says, "Yes," dropping the piece of cheese, and
the fox snatches it up. 

The crow looks down and asks himself, "Would it have made any difference if
I'd said 'No?' " 


US' Pickering Sees Russian Economy Reviving, Chance to Invest

Washington, March 21 )Bloomberg)
-- Following are comments from Undersecretary of State Thomas 
Pickering, a former U.S. ambassador to Russia, in a keynote address to the 
annual Trade and Investment Forecast Conference of the U.S.-Russia Business 

``The Russian economy seems to be on the rebound, and with that rebound comes 
opportunities for American investors,'' Pickering said. 

Pickering noted that Acting Russian President Vladimir Putin is widely 
expected by pollsters to win an outright victory in Sunday's election. ``They 
may be right, but we all do need to wait until the voters have made their 
choice, and then until Putin -- when and if he gains the presidency -- makes 
his choices,'' he said. 

``The immediate challenge for Russia's incoming presidential administration 
will be economic policy,'' Pickering said. ``Rising oil prices and import 
substitution have helped Russia's economy rally over the past year. But 
sustained growth will require more structural reform, more capital, more 
investment, more growth, more jobs, and more of almost everything except 
crime, corruption and concentration of the economy in state hands.'' 

``Putin-ology has become a cottage industry in Moscow and Washington,'' 
Pickering said, in urging U.S. business leaders to feel upbeat about Putin's 
promises but wait to see what he actually delivers. 

Putin made ``some positive points'' last week in promising quick action on 
investment legislation, tax law reforms and production sharing, Pickering 
said. ``Let me say we've heard that before, but now he will have a real 
opportunity to show us what he can deliver,'' he said. 

Among the welcome promises from Putin is a commitment to allow businesses 
greater tax deductibility of expenses, Pickering said. Putin and his team 
also have suggested they ``understand the need to accelerate the adoption of 
international accounting standards by companies listed on the Russian stock 
market,'' he said. 

``No matter who wins next Sunday, this is the right business- friendly 
approach for Russia's incoming government,'' Pickering said. 

``I remain an optimist on Russia over the long term, but with a major caveat: 
The raw ingredients of a vibrant economy exist, but its achievement will 
depend on the decisions Russian leaders make -- resistance to reform must 
still be overcome,'' Pickering said. ``It will take longer than we all 
thought, but there are some positive indicators.'' 

``One of the most overlooked facts about this election is that democracy is 
becoming unchallenged in Russia as the way to select leaders,'' Pickering 


Russia: Press Ban Doesn't Bother Regional Media
By Floriana Fossato

In Moscow, Russian media had little to say about last week's warning by the 
Information Ministry that interviewing Chechen leaders would be considered a 
violation of anti-terrorism laws. Outside of Moscow, Russian news 
organizations showed even less interest. RFE/RL correspondent Floriana 
Fossato spoke with Russian-based media experts to find out why. 

London, 21 March 2000 (RFE/RL) -- The Russian Information Ministry's warning 
last week against reporting the words of Chechen leaders raised the hackles 
of a few Moscow-based journalists. But journalists in Russia's regions 
expressed little concern. And media experts say that is not very surprising.

Robert Coalson is a regional project coordinator at the National Press 
Institute, a nongovernmental organization that assists Russian independent 
regional news outlets. He says that regional media, particularly newspapers, 
lack the expertise to analyze complicated political matters. Therefore, they 
tend to rely on Moscow.

"Ideally, of course, the media should have a strong element of questioning 
government policies in general and stimulating public debate on them. In 
Russia, that has never been the case. The media are viewed by politicians and 
by the public in general more as an agitator or an informer of what the 
official line is, rather than to stimulate public discussion of things."

Regional media in particular, Coalson says, lack the resources and expertise 
to analyze complicated political matters. Therefore, they tend to simply 
report the views of Moscow officials. 

Oleg Dmitriev is a correspondent for Internews, a nongovernmental 
organization that supports independent media. After the Information Ministry 
announced that among those barred from media access are Chechen President 
Aslan Maskhadov, field commander Shamil Basayev, and former spokesman Mavladi 
Udugov -- the top sources for the Chechen point of view in covering the 
Chechen war -- Dmitriev talked with television station editors in several 
Russian regions, including Tatarstan, Kaliningrad, and Siberia. 

In all cases, the television editors said they did not feel affected by the 
measure. They said that their priority is to provide what the audience 
demands, not to seek out the other side. They seemed uninterested in drawing 
lessons for other regions from Chechnya's fate. Dmitriev:

"In general, there is no interest for the relationship between the situation 
in Chechnya and cities like Kaliningrad, or Petrozavodsk. Obviously, what 
does concern audiences in [places like] Petrozavodsk is information on the 
local boys [serving in Chechnya.] As a rule, information from the other side 
(the Chechen side) is not broadcast because, we could say, it is not in 

What the people want to hear about, the television editors say, is the fate 
of local soldiers fighting in Chechnya, therefore, takes precedence in 
Russian reporting. The fate of civilians is less important. Dmitriev:

"The regions have little to do with Chechnya. However, they show Chechen 
[refugees] arriving in their region from the area of the conflict, how they 
are housed, etc. But editors say that, for what concerns voices [of guerrilla 
leaders], their task is a bit different. [The Kazan TV station] Efir, for 
instance, recently prepared a news item on how the appearance of [Chechen 
warlord] Salman Raduyev has changed. They did talk about that. But this is 
not a top subject. What is more important is reporting on [Russia's 
prosecution of] the war. Receiving information from opposition forces comes 
in second, or even third, place."

But Dmitriev says he noticed one main difference in coverage among regional 
television broadcasters. That is in Kazan, the capital of the republic of 
Tatarstan, where many viewers are Muslim. 

"I talked to Sergei Sherstnev, news editor of the TV company 'Efir' from 
Kazan. Their credo concerning reports from Chechnya is to leave out any 
negative characterization of events. They broadcast information, but do not 
comment it."

In many regions, when Chechen warlords are arrested, television broadcasters 
generally say "a just punishment awaits him." But the Kazan station did not 
use such language when Salman Raduyev was arrested.

According to the National Press Institute's Coalson regional governors, who 
have been competing among themselves to demonstrate the greatest loyalty to 
Putin, have strong influence on regional television programming. 

"The primary role of the local administrations and of governors is to 
minimize discussion of such things as Chechnya, and to maximize discussion 
of, 'a,' concrete local issues, such as raising pensions and getting wages 
paid on time and 'b,' abstract issues that everybody can support, such as 
patriotism, a strong state, respect for Russia abroad."

Regional television editors told Dmitriev, however, that regional leaders 
generally do not interfere directly with their Chechnya coverage. Most 
coverage of the war consists of interviews with local soldiers who have 
returned alive, and the funerals of those who did not. 


Date: Tue, 21 Mar 2000 
From: (Catherine A. Fitzpatrick)
Subject: Re: 4187-Putin's Memoirs

Yasushi Toda said that the electronic version of Putin's book is available
at It is now back online; however, after the CEC decision
it was removed or inaccessible from this address for several days.

I have just finished translating the ms. for "First Person" for Public
Affairs, and it should be out by the end of April. Here's my unofficial
one-line review: "A superb KGB active measure, following Cheka Rule No.
297: 'The best place to hide everything is in plain sight.'"

A must read!Among my favorite episodes include Vladimir Vladimirovich using
a blowtorch to remove a red Communist flag from a building in Leningrad,
still held by stubborn comrades; punching out a guy who bugged him in the
metro and breaking his arm; judo-flipping another guy who asked him for a
cigarette the wrong way at a bus stop; rescuing his daughter and secretary
from a burning dacha, but leaving the Barbies to fry; (and here's one
especially for you, David) calling Chubais "a hard-nosed Bolshevik". Great
books quoted: none. Great Russian thinkers quoted: uh...just V.I. Lenin.
Life's mantra: "No regrets." Best friend: the cellist of the St. Petersburg

My summaries of other highlights: On Chechnya: "The kid's gonna knock his
noggin on this one"--let it go, and the next thing you know other dominoes
like Tatarstan and Kabardino-Balkaria will go--are we talking about
Principality of Muscovy here--and presumably Luzhkov will take over the Ring
Road, i vse dela. On Borodin: has to be kept around for awhile because he
knows where the light switches are. On Jane Fonda and Ted Turner: worth
leaving Lyudochka in the hospital with a broken spine for the sake of
cash-strapped L-grad. On Kissinger: agrees with him that the Soviets
shouldn't have left Eastern Europe so hastily. Dramatic Historical Moments:
stomping out of the marbled Knights' Hall in Estonia, his footfalls
resounding, when Lennart Meri talked about Russian "occupiers," and slamming
shut a giant iron door; in New Zealand, walking out of a dinner party in
tandem with Clinton, through a corridor of applauding admirers. Dog: Toy
poodle named Tosca. Wait a minute, a TOY POODLE NAMED TOSCA? What happened
to V.V.'s Caucasian sheepdog? Read the book to find out... Ties: wife buys,
V.V. wears reluctantly. Recent Special Moment: sushi and beer with a
reflective Boris Nikolayevich. For advance copies and orders write: One Princeton professor who received some
advance chapters writes: "[I thought] Just take a bite, to see what they
taste like. They turned out to be like potatoe chips. I couldn't stop and
gobbled down the whole bunch. Fascinating. No matter what they say, I
think it should be a best seller."


Date: Tue, 21 Mar 2000 
From: Erin Powers <>
Subject: memo

Policy Memo #111 "The Dynamics of US-Russian Relations: A Critical
Perspective," by Celeste Wallander is now posted on our website.

p.s.: We'll soon be preparing another briefing book so there will be a slew
of memos posted in about a month.

Erin R. Powers
Assistant Director
Program on New Approaches to Russian Security (PONARS
Davis Center for Russian Studies * Harvard University
Cambridge, MA 02138
tel: (617) 496-3426 * (617) 495-8319
program website:


Date: Tue, 21 Mar 2000 
From: "The Foreign Policy Centre" <> 
Subject: Re-engaging Russia by John Lloyd

This is just to let you know that the Foreign Policy Centre published on 20th
March 2000 a new pamphlet, Re-engaging Russia by John Lloyd.

Re-engaging Russia sets out a radical approach for the West as Russia enters a
new political era with its presidential elections on March 26th . John Lloyd
shows why Russia's stalled reform process has failed to deliver, causing
hostility and led to increasing calls for disengagement in both Russia and the
West alike. He argues that the way forward is not to disengage, but to engage
differently -with the West seeking to engage much more broadly beyond a small
elite, with reform being Russian-led and with the EU playing a more proactive
role than in the past. Re-engaging Russia does not underestimate the scale of
the challenges but marks and important attempt to redefine the way western
countries seek to promote their values and engage with other societies. 

John Lloyd is a former East European Editor and Moscow bureau chief of the
Financial Times. A freelance writer in London, he writes for the Financial
Times, the New York Times, Scotland on Sunday, Prospect and other magazines.
John is a member of the advisory council of the Foreign Policy Centre.

The Foreign Policy Centre is an independent think-tank committed to developing
innovative thinking and effective solutions for our increasingly
world. The Foreign Policy Centre publishes books and reports, organise
high-profile conferences, public lectures and seminars, and runs major
in-house research programmes on cross-cutting international issues. 

For more information and subscriptions details, please contact The Foreign
Policy Centre, Panton House, 25 Haymarket, London SW1Y 4EN (New address from
June 2000: Waterloo Centre, Elisabeth House, York Road, London SE1); tel: 0207
925 1800. Fax: 0207 925 1811, email: You can also visit our
website at

If you would like to order copies of individual pamphlets, including
Re-engaging Russia ( 9.95 + 1 p&p), please contact Central Books, 99 Wallis
Road, London E9 5LN; tel: 0208 986 5488, fax: 0208 833 5821, email:


Blasts Investigation 'Chechen Trail' Examined 

Obshchaya Gazeta 
16 March 2000
[translation for personal use only]
Article by Yelena Skvortsova: "Blown-Up Space. The Authorities Have 
Become Bogged Down in the 'Chechen Trail'" 

MANEZH SQUARE, Buynaksk, Guryanova, Kashirskoye 
Shose, Volgodonsk... It has been more than half a year now that Russia 
has lived in fear. The threats of more and more new terrorist acts are 
made public for us by representatives of the special services. There are 
so many of these threats that you cannot understand: Either we are being 
forewarned or being whipped into a panic... And there is something to 
panic about: Those guilty of the previous tragedies have never yet been 
found; but no, that is not so. We are assured that they have been found, 
they have neither face nor name.... But then, the trail of the enemy is 
showing through ever more distinctly. The "Chechen trail." Of this we are 
promised by enforcement men and politicians of all ranks. Of this we are 
assured by acting President Vladimir Putin. Like his echo comes the voice 
of head of the public relations center of the Federal Security Service, 
Aleksandr Zdanovich. 
At the end of September of last year, Obshchaya Gazeta wondered: And 
what do we, properly speaking, know about the investigation? How 
convincing do the assurances on the "Chechen trail" sound? Today, half a 
year later, we are again asking these same questions. The first question: 
Who took upon himself the responsibility for the explosions? 
ALEKSANDR ZDANOVICH: "There were reports, including the statements of 
Maskhadov's press secretary, to the effect that they were prepared 
already three days after the blasts to produce documentary evidence and 
people who either were involved in these explosions or had complete 
information on these explosions. They did not produce anything. At the 
beginning of October, an intelligence agency group was seized by 
gangsters. And under torture, they forced one of the officers to speak 
before the camera. That officer reports how he, together with Federal 
Security Service personnel, supposedly set up the explosions in Moscow. 
Rather, not him, but his associates. In my opinion, if a normal person 
listens to this, it will immediately become plain that this is a 
primitive propaganda move. They are not producing anyone, because we know 
to the last man who took part in the conduct of the terrorist acts. We 
know that they are now in Chechnya, and we are conducting intelligence 
and search measures directed at their apprehension." 
That was said in December 1999. But even now, in March 2000, after an 
investigation shocking in its results, which was undertaken by Novaya 
Gazeta with respect to the "alarm drill" in Ryazan, in answer to a 
point-blank question, the acting President asks in surprise, how can you 
suspect the special services? 
All right, we will not suspect the special services of having 
organized the terrorist acts in Moscow. But then explain intelligibly why 
real hexogen was found in the building in Ryazan, but the evacuation of 
the residents was called an exercise? Why were sacks of explosives masked 
as sugar kept at the 137th Ryazan Airborne Forces Regiment depot? Or 
conclusively refute this information. 
The second question: Whom do they suspect? FOR THE TIME BEING, only 
one thing can be called a serious achievement of the investigation with 
respect to the blasts: On 6 March the Procuracy of Dagestan charged two 
detainees on suspicion of participation in the organization of the 
bombing of a residential building in Buynaksk. The case, it is expected, 
will be transferred to the Supreme Court of Dagestan even before 20 
March. But it will be the rank-and-file perpetrators who will be tried. 
The investigation considers the organizers to be the Salikhov brothers 
and Issa Zaynutdinov. All of them had at various times undergone training 
in camps on the territory of Chechnya and are on the federal wanted list 
But the question arises again - can it really be that it has been 
proven to us that Buynaksk, Moscow, and Volgodonsk are links in a single 
chain? Meanwhile, according to Obshchaya Gazeta's data (see j9 [as 
published], 2000), there is indirect evidence that the blasts in 
Volgodonsk and Moscow at the "mid-level" echelon were organized by people 
associated with Kislovodsk criminal groupings. The persons whom we are 
speaking about are not members of gang formations. With respect to the 
state of affairs that is known to Obshchaya Gazeta, it is logical to 
assume that these mid-level coordinators were hired on by a person very 
familiar with the realia of the criminal world of Stavropol Kray. That 
is, "their" man - from among the former (or current) personnel of the 
police, Procuracy, or Federal Security Service. But where he received the 
order from for the organization of the terrorist acts requires the most 
serious study. 
Meanwhile, Aleksandr Zdanovich maintains: 
"It has been established by us that under the leadership of Khattab 
and Basayev, a terrorist organization was created, whose ideological 
basis was extremism. The participants (including Slavs) of that 
organization were split into combat groups and sent off to various 
regions of Russia. The reliability of the perpetrators is ensured by 
threats by organization leaders to kill their relatives." 
It is not to be ruled out that all that is true. But does this theory 
have to do directly with the explosions? 
But let us return to the arguments of the Federal Security Service. 
Aleksandr Zdanovich: "Photographs have been received of gangsters who 
underwent training at one training camp with Gochiyayev (False Laypanov) 
and Saytakov - as you know, these persons were the direct perpetrators of 
the blasts in Moscow." 
But in order to "tie" these gangsters to the Moscow explosions, it is 
necessary at a minimum to prove that at that very time they were in 
Moscow or that they were seen in the vicinity of the warehouses with the 
hexogen, or that they had lined up buildings "convenient" for bombing.... 
No, no such proofs have been presented to us. We are told: Two men 
have been detained and arrested for the bombing in Moscow and four for 
the bombing in Volgodonsk. Who are they, under what circumstances were 
they detained, what proves their participation in the bombings? In 
response: "That is a secret of the investigation. These people are 
important witnesses, representing a threat to the leaders of the 
Khattab's and Basayev's organizations. It is not to be ruled out that 
attempts at their physical elimination could be undertaken." 
And further on, general words again: "We have irrefutable evidence, 
procedurally confirmed, on the participation in the September explosions 
in Moscow and in other cities of international terrorists, who had 
created their own bases in Chechnya." 
Incomprehensible. If all this exists and is confirmed procedurally, 
why not say: We arrested so-and-so and so-and-so. They did this and that. 
After all, the terrorists themselves, whose vengeance the Federal 
Security Service so fears, are perfectly well informed who exactly of the 
perpetrators of the blasts in Moscow they have lost. And what exactly 
these people might tell the investigation. 
So it turns out that everyone knows everything. And only we, the 
citizens, are in the dark. 


Date: Tue, 21 Mar 2000
Subject: Wedel's so-called "conspiracy theory"
From: Michael Hudson (

The negative comments about J. Wedel's article having pointed out that
many Russians believed that the U.S. "set out deliberately to destroy their
economy" miss the important point. They misrepresent her statement as
implying that the U.S. set out in a conspiratorial manner - and then
counter this by saying that the kleptocracy was an unfortunate accident.
What they miss is how U.S. investors benefited from this kleptocracy, and
how they made their feelings clear to the U.S. Government.
In my capacity as a professional economist I have worked most of my
life for U.S. international banks and money managers. I also have consulted
for U.S. Government agencies with regard to US-Russian relations (esp. for
the State Dept. re the 1972 normalization of U.S. trade with Russia), and
have addressed the Duma on numerous occasions on this very topic. Based on
discussions I had with U.S. investors in Russia during the 1990s, I believe
I am in a good position to point out just why they preferred to see major
Russian companies pass into only a few corrupt hands. If a few Russian
insiders could buy out Russian oil fields and other firms at only 1 or 2
cents on the dollar, they probably would be willing to sell their takings
to U.S. and other international investors for 2 to 4 cents. This would
enable them to double their money, and also provide foreigners with what
they wanted: inexpensive ownership of Russia's potentially lucrative
mineral wealth and public utilities, as well as its real estate (or more
specifically, its land).
The choice back in 1991-92 was whether to turn ownership of Russian
enterprises over to their employees, managers, or outside investors, and
how much ownership the Russian Government would keep for itself. The
leading Russian plans aimed at giving labor a major voice, if not in fact
control. That was the thrust of the voucher plans apart from that of
Chubais. It was especially the case for factories and other commercial
enterprises that would not have entailed giving the labor force and
managers control of subsoil wealth (oil, gas, minerals) or land, i.e.,
wealth not created by labor or management. 
Mineral wealth, and public utility rights (as well as the land) was
held to belong to the people, as it is in Spanish-speaking countries and
many other countries. The question was, how could this be handled in a way
that gave foreign investors a good slice of ownership - the famous "free
The World Bank and IMF's Houston document of 1989 opposed giving labor
a major voice in industrial enterprises. The reason cited was that labor
management was inefficient. But that was basically just a cover story. The
Western reformers recognized that to the extent that labor - or the Russian
people, through state agencies - gained ownership of these firms, their
control would tend not to be sold to foreigners (or for that matter, to the
"reformers" and the oligarchy behind them). The U.S. Government, and other
governments as well, therefore endorsed the anti-labor thrust of the
reformers' plans. That was a major reason why the Chubais clan got the U.S.
support that it did.
One reason why the U.S. Government welcomed an anti-labor mode of
reform was because of pressure from large international investors. This was
especially the case with campaign contributors in the financial sector.
Wall Street investment bankers had a well-known influence on Treasury
Secretary Rubin and the World Bank. Their mindset is obvious enough: If
they wanted to take an investment position in Russia, they could do so much
more easily - and at a much lower price - if only a few families gained
ownership of Russia's prize assets. However, if Russian labor or the
Russian government retained control over these assets, they would not be
sold as rapidly, and probably would be sold at a higher (fairer?) price.
Here is what U.S. investors realized: The kleptocrats wanted to
transfer their Russian fortunes abroad. This is what all thieves want to
do, for a simple reason: If they keep their money at home, it can be
seized. Hence, Russian appropriators sought to move their money to Cypress,
Switzerland and other offshore banking centers, topped by the United States.
To do this, they needed security in the West. The traditional way to do
this is to go into partnership with well-placed Westerners. Partnership
agreements were sealed by selling part of their stock ownership to Western
investors. In fact, such sale was the only way in which the privatizers
were able to realize financial value for their control, as there was no
purchasing power within Russia itself to buy their shares. To raise money
off the shares they had obtained, Russians needed to sell abroad. 
This was of course well recognized by international investors. It is
why they turned a blind eye to the abuses by Chubais and other insiders,
for they knew that they themselves would be the beneficiaries.
There is general agreement that Russia has lost about $25 billion
annually in flight capital. What is less discussed is how much of this
capital has returned to Russia, in a suitably "laundered" and anonymous form. 
By the mid-1990s I heard jokes in Russia that a "foreigner" was a Russian
operating through an offshore bank account, usually in partnership with a
"beard" in the form of a well-known international investor. Russian
oligarchs accordingly began to seek out such foreign investor-partners.
The consequence was indeed the economic devastation described by Wedel,
Anne Williamson, et al. Was it intended directly, as a means of "hurting
Russia" and thereby disabling it from posing a future threat to the United
States and other countries? There's no need to assume this (although I have
seen military strategy studies that reasoned in this way). Rather, it was
the consequence of the game-plan by Western investors (mainly in the U.S.)
to get rich quickly off Russia. 
The fact that the Russian economy was shrunken in the process was
simply a form of "collateral damage." It is the same sort of damage caused
by IMF austerity programs imposed on hapless third world debtors. The
domestic market is shrunken by monetarist austerity, to free more materials
for export, so as to service foreign debts and sustain the transmission of
dividends to foreign investors (and also to sustain capital flight by local
oligarchies). I have described the general theory and consequences in my
books Super Imperialism (1972), Global Fracture: The New International
Economic Order (1979), and Trade, Development and Foreign Debt (1992).
My conclusion is that the U.S. Government is guilty of gross negligence
as to the consequences of the "reformers'" privatization plans it backed.
It didn't mean to kill Russia. It just wanted to take its money and
property. Russia's economy got killed in the process. I suppose you might
call this second or third degree murder, not first degree murder. But that
is all that Wedel's article claimed, in my reading.


Text of report by Russian Public TV on 19th March 

[Presenter] And now one more characteristic feature of the current electoral
marathon: the campaign to disrupt the elections. Attempts are being made to
achieve this by two basic methods: to simply persuade people not to come to
polling stations - or to make sure the percentage of those who vote against
all candidates is as high as possible. 
According to the latest public opinion polls, this is an entirely realistic
threat, a fact which was to a degree confirmed by today's primary voting in
Yaroslavl, the subject of our previous report. There the voting slips
marked as "against all candidates" accounted for about seven per cent. 
[Video report, shows demonstrations calling for boycott] For almost a month
now a number of tiny parties have been campaigning for a vote against
Yet apparently the potential of those who are today placing a bomb under the
elections is not being appreciated. 
Here is an example. It is generally accepted that generally in Russia about
to five per cent vote against all candidates. Yet people might not be so lazy,
they might go to the polling stations and vote, precisely, against all the
candidates. It had been thought that in order to achieve 6-7 per cent against
all candidates would require a serious financial investment in campaigning. 
Yet the latest opinion polls show the following: in the capital, where the
campaigning was most aggressive, last week 15 per cent were ready to vote in
this way. Thus the explosive charge in the bomb is growing an alarming rate,
and for that reason one can clearly see a desire to blow up the situation in
Russia. [Image of explosion appears on screen] 
What you see now is yesterday's meeting of the so-called New Left. They are
calling for an outright boycott of the elections. It all looks rather
that is why the reaction of the press was mocking. Yet it should not be,
because the aim is the same here, and the possibilities of achieving the
objective are no less. 
For the elections to be valid, at least one half of the electorate should take
part. Normally 60 per cent of the voters turn out. That is, as to whether the
election will pass off or not depends on about 10 per cent of votes. But in
some Regions of the countries the degree to which voters are active is
considerably lower, for example, it is 53 per cent. And if in these places
these people succeed in convincing just another four per cent of voters not to
turn out, then the elections will not be valid there. 
This is, in the first instance, beneficial to those who in today's relatively
calm atmosphere to not have a chance in the elections. But if this happens
throughout the country a political and economic collapse in Russia will be
inevitable. Most analysts agree that this will seriously bring about the
disintegration of the Russian Federation. 
To make matters worse, the radicalism of these people is very attractive for
extremists of all colours, people whose ideology is: the worse things are, the
better. This week the slogan: "Against all!" acquired an even more ominous
tone: alongside it a swastika appeared. 
Leaflets like these are being stuck up around Moscow and other towns of
[Leaflets shown on video] The Headquarters of the ultra-nationalist Party of
Russian National Unity has refused to confirm or reject participation in this
campaign - yet on the same evening, in Smolensk, the FSB [Federal Security
Service] detained its activists with just such leaflets on them. 


Source: Ekho Moskvy radio, Moscow, in Russian 1318 gmt 20 Mar 00 

A Russian presidential candidate has said acting President Vladimir Putin is
using the Chechen war as a tool to boost his popularity rating. Interviewed on
Russian radio Yabloko leader Grigoriy Yavlinskiy said that Putin had no
programme to offer to the Russians and his performance as head of state was
depressing. Yavlinskiy alleged that Putin's views are indistinguishable from
those of his Communist rival Gennadiy Zyuganov. Yavlinskiy was confident that
he has a chance to defeat Zyuganov and go to a second round of presidential
elections. The following are excerpts from report by Russian Ekho Moskvy radio
on 20th March 
[Presenter] Aleksey Venediktov is at the microphone. Presidential candidate
Grigoriy Yavlinskiy, who is also the leader of the Yabloko movement, is our
guest. Good afternoon, Grigoriy Alekseyevich. 
[Yavlinskiy] Good afternoon. 
[Q] The election campaign is drawing to a close. Today [20th March] you
presented your presidential programme Breakthrough Strategy. It seems this
campaign has little to do with programmes because yours was the first
I received from a presidential candidate. If you agree with me, how would you
define this presidential campaign 2000? 
[A] Thank you. It was very important for me to present a detailed programme of
action in order to get us out of the situation we are in within the next 10
years. This programme covers all the main areas of state development, human
rights, the country's economy, education, culture and medicine... 
But as I see it, my opponents don't have such a programme because they don't
have any programme at all. They have done everything to turn this election
is a
case of succession. Yeltsin handed over his office and seat in not quite a
legally-sound manner, I think, because the procedure was based on a decree
stipulating protection for the rights and freedoms of a single individual, a
decree saying that this individual can't be touched. I too think that any
political persecution of Yeltsin is absolutely out of the question, I too
that there should not be any squabbles. But this is my stand with regard to
voters, and this decision can be taken only if it finds support whereas in
case it happened differently. So now we all are taking part in this procedure
of the transfer of power. Who needs programmes when it's absolutely clear that
Vladimir Putin is virtually indistinguishable from [Communist leader Gennadiy]
Zyuganov and his course, with some ideas borrowed from [Liberal Democratic
leader Vladimir] Zhirinovskiy. 
[Q] What do you have in mind? It's a very serious charge for those who are
going to vote for Putin. 
[A] I have in mind the policy Putin has been implementing in the last eight
months, I have in mind the use of war as a political factor aimed at
his own popularity rating. I have in mind the transformation of an
antiterrorist operation in an undeclared war which has already turned into a
guerrilla war which will be our armed forces' undoing and which will bring
suffering to an enormous number of people. This is a very dangerous thing, and
accountability for it is unavoidable. I have in mind the handing over of the
entire State Duma to the Communists. I have in mind the Kremlin-supported
nonalternative election of [State Duma speaker Gennadiy] Seleznev in the State
Duma. I have in mind the transfer of all the key committees in the country's
legislature to the Communists. I have in mind the introduction of political
snooping in the armed forces. I have in mind the introduction of military
training in children's establishments and, vice versa, the elimination of
military training in higher educational establishments. I have in mind the
style in which policy is being implemented. I have in mind policy as a whole
and our general secretaries for whom the end justifies the means. 
[Q] But Grigoriy Alekseyevich, judging by opinion polls, the majority likes
this. The country has found its hero. 
[A] It's a Versailles syndrome, it's the humiliation that Russia has
suffered in
the last 10 years, and, being an acting president, Putin can play a fateful
role, simply fateful. Because the search for those who have humiliated the
country will turn out to be a method of taking revenge whereas the country was
humiliated in these 10 years by its own party nomenklatura and its own
mob cultivated on the basis of this party nomenklatura. And he represents
structures and speaks on their behalf. So this is a dangerous edge which
be avoided. Also, Putin's rule may become dangerous for the country's
population and our electorate. 
[Q] Why may it become dangerous? 
[A] And if on top of everything Zyuganov is not kicked out of a second round -
and he will be the main influence on Putin - they will make such an explosive
mixture together that we will have to suffer the final default of Russian
democracy. In 10 years we will have to build everything from scratch. And the
words uttered today in order to please everyone, both the reds, whites, blues
and greens, all of them, show that there is no principles in this policy. It
shows that we can expect literally anything. 
[Q] It seems therefore that you're against so-called national reconciliation.
Some people are calling to forget divisions into the reds and the whites. The
Communists of old don't exist, they have joined Social Democracy and so on.
Are you against this reconciliation? 
[A] The Communists that exist today are known to me as Communists who lay
flowers at the tomb of Stalin, and this is my answer. And I know that from
to time the acting president does similar things. This leaves me dissatisfied.
And if after 26th March he is able to take definitive decisions in the
I'm convinced that in many respects these will be Soviet-style decisions, when
policy is implemented by two methods only: either recruiting or active
measures. We have already seen this. 
Let's look at the situation at another angle. What positive changes have
happened in the country, what can we highlight in the economy, education, or
[Q] Why, pension and wage arrears are being paid back. [Deputy Prime Minister
Valentina] Matviyenko took a decision today to raise the salaries of the
public-sector employees by 20 per cent. The Chechen bandits have been crushed.
How can you say that there is nothing positive? 
[A] In the last eight months the real income of the population have dropped by
more than 30 per cent and pensions and social benefits by 45 per cent and they
have been raised by 9 per cent. So this is what is happening in reality. This
way we can decrease everything and then start raising gradually. As to the
bandits, I can say the following: the war is turning into a guerrilla war, and
the situation has considerably deteriorated. I don't know who will waste whom
but they, those who were going to crush everyone there, have got themselves
into a mess. Today's situation is as follows: Russian troops are suffering
enormous losses among servicemen and officers, peaceful population has been
turned into refugees but no solution to this problem has been found... 
[Q] Incidentally, when you were here a month ago you promised to send Putin a
[A] I sent him everything. 
[Q] And what happened? 
[A] Nothing, simply nothing. The plan was sent to him, I spoke about it more
than once, explained everything. The plan was drawn up to do everything
possible to prevent a guerrilla war. The plan wasn't implemented. 
[Q] Why, what do you think? 
[A] Because a totally different view of these things prevails. Because
there is
no understanding of the fact that military operations are not enough and
that a
political solution to the problem should be sought. Strong-arm measures should
be combined with political ones. Talks should be conducted from a position of
strength. But this was and is lacking... 
[Q] Grigoriy Alekseyevich, do you think that, given the current state of
Russian society, a second round without Mr Zyuganov is possible as well as an
equal contest between presidential candidates? [Omitted: more of the same] 
[A] I have not the slightest doubt that there can be and will be a second
round. I have not the slightest doubt that it's possible to defeat Zyuganov
go to a second round, especially as a considerable part of Zyuganov's
electorate will vote for Putin this time , because I don't see any substantial
difference between Zyuganov's policy and that of Putin, and people don't
see it
either. I am confident that in the next century we should not have an
influential party represented by Zyuganov and like-minded people who are
sitting in the Kremlin today. I'm confident that my struggle will succeed,
I'll go to a second round and will be Putin's rival in a second round. I'm
confident of this and will continue along this path. 
[Q] Thank you very much. 


Text of report by Russia TV on 20th March 

[Voice-over] Vladimir Volfovich Zhirinovskiy. A politician on a national
Leader of a major party. Deputy speaker of the State Duma. This man knows how
to return Russia to its past greatness. How to make its citizens worthy of
homeland. His policy programme is effective and rational. It meets the
needs of
Russia's peoples. The correctness of his words and deeds is confirmed in time.
Zhirinovskiy always tells the truth. 
[Zhirinovskiy] What needs to be done today? In this year 2000? Most
- change the way the country is run. We need to have a different system of
government. To remove the nationality aspect. To do as all other countries in
the world do. We need boundaries along geographical principles. Fifteen
provinces [Russian: guberniya]. 
There's no bluff in what I'm telling you. We have to bring back what was, when
we had the Russian Empire or the Soviet Union. Take the best, that is, the
country should be organized geographically, as all other states in the world. 
Secondly - parliament. There should be a single-chamber parliament, just the
State Duma with one MP elected for every 300,000 people. Three hundred MPs
form the legislature. And provincial dumas could be elected as well. No other
elections are necessary. They would be a waste of money. 
We must have a large army. Three million strong. We've got under a million
That means we get into wars. If we have three million, we won't get into wars
here, at home. Volunteers can fight abroad. We must have strong state-security
bodies. That's another million people. And another million in a new police
force. We can feed five million. We've got a working population of 100
million, so it's only 5 per cent. And then we'll live in security. 
The main thing needed to revive society and the economy is to hold two
far-reaching amnesties. An economic amnesty. Forgive everyone. Forgive all the
capital that's been taken out of the country, or that's here on the side
instead of in the banks. Forgive all debts and write everything off. And go
for the zero option. The same goes for taxes. 
I want it all to stay here, so that money comes here instead of getting stolen
from us. Because I gain from the authority of my party. Because I'm not a
businessman or a crook but the leader of our country's most powerful political
party. When I've been abroad I've met our New Russians. They say to me -
Vladimir Volfovich, if there's a communist or another democrat in power
then we
won't bring our money back. But if you're in power, we'll bring it back.
Because we must have confidence in someone. Why will they have confidence in
me? Because I've never been a communist. Because in me they do not fear the
return of communism - I cannot defend something to which I've never
I was never a communist and will never return to communism. And I was never a
reformer, and I didn't support the reforms. So they don't fear me. They
like my tough style. 
Finally - monopolies. On alcohol, tobacco and sugar. This would guarantee that
there would always be enough money to pay the public sector - the teachers,
police, civil servants and so on. And for pensions. So that we don't have
problems. And last of all - exports. But only of things that we have in
surplus. Metals. Weapons first of all. The warehouses are overflowing with
modern armaments. We can export our weapons systems en masse and no need to
look over our shoulders. 
That's where I stand. I'm telling you how it always was and how it is. It
us all happy. We should be able to stand up for ourselves. You can't do it by
yourselves. So you need to support the political party that suits you best. If
you continue to support the communists and democrats, then nothing good will
come of it. 
Make our people truly free, happy, calm, confident. There is no richer or
stronger power on Earth. Russia! We shall inscribe these six letters in
gold on
all the political maps of the world. And they will scrap their plans to
[Voice-over] Vote for Zhirinovskiy. 


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