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Johnson's Russia List


April 15, 2000    
This Date's Issues: 4250  4251 

Johnson's Russia List
15 April 2000

[Note from David Johnson:
1. Reuters: START-2 vote gives Putin boost for Britain trip.
2. Reuters: Breakdown of voting in Russia Duma on START-2.
3. Itar-Tass: Duma Adopts Resolution on Russian Strategic Nuclear Force
4. Jacob Kipp: Re Bruce Lincoln's obituary.
5. Vremya Novosti: Igor Yegorov, SHORTAGE OF DRAFTEES.
Russia Can Soon Run Out of Conscripts.
6. Summary of Sergey Dorenko’s Program OTR April 8. 
7. Moscow Times: Catherine Belton and Yevgenia Borisova,
Kremlin Moves to Downsize the State.
9. Larry Parr: Re Hough on Stalin.]


START-2 vote gives Putin boost for Britain trip
By Ron Popeski

MOSCOW, April 15 (Reuters) - The Russian parliament's approval of the delayed 
START-2 nuclear disarmament pact gives President-elect Vladimir Putin a trump 
card to take to Britain, his first foreign stop since winning election last 

But Friday's overwhelming vote in favour of ratification, after Putin made an 
impassioned appeal to the State Duma lower house, is also an indication of 
the political and moral authority he now enjoys. 

The Duma, which had resisted all attempts by Putin's predecessor Boris 
Yeltsin to secure approval of the 1993 accord, voted in favour by 288 votes 
to 131. Only the Communists, well back in both the parliamentary and 
presidential elections resisted, along with their Agrarian allies. 

``This is a wise and important decision. It's important for our state's 
national interests and for international peace and security as a whole,'' 
Putin said in a statement issued by the Kremlin after the vote. 

He told reporters the United States had to make the next move. ``The ball is 
in their court,'' he said, referring to follow-on START-3 talks and 
Washington's proposals to modify the ABM treaty to allow it to deploy a 
national missile defence. 

Members said the outcome had been clear from the outset, given the more 
compliant makeup of the Duma's after last December's general election, but 
that Putin's appearance had put the issue beyond doubt and underpinned his 

``It is not just ratification that is so important. Rather, after 
parliamentary and presidential elections, we have a consolidation of power,'' 
Sergei Ivanov, secretary of the influential Security Council, told RTR state 

``The fact that the president appeared before deputies alongside the defence 
and foreign ministers played an important role. This allowed for a 
consolidation of public opinion.'' 


Putin's authority, Russian politicians said, would now extend to areas well 
beyond foreign policy as he prepares for a May 7 inauguration and the 
subsequent selection of a cabinet. 

First Deputy Prime Minister Mikhail Kasyanov, tipped as Putin's prime 
minister, told RTR at the IMF-World Bank meetings in Washington that the 
president's authority meant ``he has every moral right to form exactly the 
government he wants.'' 

Foreign capitals, Washington among them, welcomed the vote. 

President Bill Clinton said the pact ``will make our people safer and our 
partnership with a democratic Russia stronger.'' NATO Secretary-General 
George Robertson said it ended an arms control logjam and showed Putin and 
the Duma on good terms. 

Putin will put the accord to good use when he embarks on his first foreign 
trip at the weekend, meeting Prime Minister Tony Blair in London. He stops 
stops on the way there in Belarus and on the way back in Ukraine -- both 
important ex-Soviet states. 

Blair's spokesman said vote was ``a very good sign and we hope it sets them 
up for progress on other security issues.'' 

But Blair, who met Putin even before his election at a high-profile encounter 
in St Petersburg, made plain in his weekly internet message that he intended 
to take the Russian leader to task over alleged human rights excesses in 

Russia remains subject to pressure over Chechnya, with Western countries 
urging the Kremlin to investigate alleged human rights abuses and negotiate 
with the rebels it has been hunting down for more than six months. 

But Russian anger at the criticism has eased at the urging of senior 
officials. Parliament this week made only a moderate reproach to the Council 
of Europe, which had issued the most stinging rebuke so far over Chechnya. 

Under START-2, the United States and Russia agree to cut the number of 
nuclear warheads from 6,000 to no more than 3,500 on each side by 2007. The 
U.S. Senate ratified the treaty in 1996. 

Ministers argued the reductions would not affect Russia's defence potential 
as it affected mainly missiles due to be taken out of service. The vote also 
included get-out options if Russia considers Washington has violated START-2 
or the ABM treaty. 


Breakdown of voting in Russia Duma on START-2

MOSCOW, April 14 (Reuters) - The overwhelming majority of factions in 
Russia's lower house of parliament voted on Friday in favour of ratifying the 
START-2 nuclear arms reduction treaty. 

Two groups, the Communist Party and Agrarians, voted against. 

More than seven years after the treaty was signed, the State Duma voted 228 
to 131 for ratification with four abstentions. 

Following is a breakdown of how the voting went. There are 450 members in the 
Duma, but figures may not necessarily add up to that figure. 

UNITY - Bloc closely aligned to President-elect Vladimir Putin. 83 in favour, 
none against, no abstentions. 

Unity parliamentary leader Boris Gryzlov called the treaty a ``significant 
event for the Duma.'' ``The presence of the president helped to persuade some 
deputies to change their mind,'' he said. 

YABLOKO - Liberal opposition group headed by economist Grigory Yavlinsky. 20 
in favour, none against, no abstentions. One member did not take part in the 

LIBERAL DEMOCRATIC PARTY (LDPR) - Nationalists led by Vladimir Zhirinovsky. 
15 in favour, none against, no abstentions. One member did not take part in 
the vote. 

Zhirinovsky called the ratification ``the unity of deputies and the 
executive.'' He added: ``A real national idea took shape.'' 

UNION OF RIGHT-WING FORCES (SPS) - Liberals led by former Prime Minister 
Sergei Kiriyenko. 28 in favour, none against, no abstentions. Four members 
did not participate, including human rights activist Sergei Kovalyov and 
leading liberal economist Irina Khakamada. 

Kiriyenko said the treaty amounted to the disarming of the United States. 
``Russia does not reduce anything except for that which is dying off by 
itself,'' he said. 

FATHERLAND-ALL RUSSIA (OVR) - 43 in favour, none against, one abstention, 
three did not participate. 

PEOPLES' DEPUTIES GROUP - bloc broadly aligned to Unity and Putin. 57 in 
favour, none against, no abstentions, one did not participate. 

RUSSIAN REGIONS GROUP -- members representing regional interests. 32 in 
favour, seven against, no abstentions, two did not participate. 

COMMUNIST PARTY -- largest group in the Duma. two in favour, 82 against, no 
abstentions, four did not participate, including former Deputy Prime Minister 
Yuri Maslyukov and Duma Speaker Gennady Seleznyov. 

Communist leader Gennady Zyuganov called the ratification an ``historic 
mistake'' and ``Russia's next defeat.'' ``Our opponents have military 
discipline,'' he said. 

AGRARIAN GROUP -- broadly linked to the Communists. one in favour, 39 
against, one abstention, one did not participate. 


Duma Adopts Resolution on Russian Strategic Nuclear Force. 

MOSCOW, April 14 (Itar-Tass) - A resolution on combat readiness and 
development of the Russian Strategic Nuclear Force, drafted by the Duma 
Committees on International Affairs and Defense, was adopted by the lower 
house at a plenary meeting on Friday. A total of 289 deputies voted for the 
resolution, four voted against and one abstained. 

"The Strategic Nuclear Force of Russia is the key instrument of provision of 
the national defense," the resolution reads. The Russian fulfillment of START 
II and the drafting new international agreements on cuts and limits of 
strategic nuclear armaments must be done in such a way that the combat 
readiness and potential of the Russian Strategic Nuclear Force are maintained 
at a level guaranteeing deterrence of an aggression of any country or a group 
of states. 

The Strategic Nuclear Force must enjoy the priority financing and its combat 
readiness must be maintained in any development of the military-strategic 
situation, the resolution says. 

The reduction of strategic armaments under START II must be done with the 
maximum use of technical resources of the armaments currently in use. 

The Cabinet must provide for the professional training and social security of 
the Strategic Nuclear Force personnel. Any organizational changes in the 
Russian Armed Forces, concerning the Strategic Nuclear Force, must be done on 
a basis of a comprehensive analysis and thorough consideration of such plans 
by of the Russian Security Council and parliament committees. 

The disbandment (relocation) of military units in fulfillment of START II and 
the related dismissal and relocation of military personnel must be done in 
conformity to all legal acts of Russia on rights and social security of 
servicemen and their family members, the resolution says. 

Bearing that in mind, the State Duma requests the President to instruct the 
Cabinet to provide for the unconditional fulfillment of the federal law "On 
Financing of the State Defense Order for the Strategic Nuclear Force of the 
Russian Federation," to draft measures guaranteeing the supply of fuel to 
defense plants, to control the policy of prices on fuel, raw materials and 
accessories of monopoly enterprises, to ensure the legal regulation in 
bankruptcy of defense plants and the optimum taxation of works and services 
done in the state defense order for cutting spending on its fulfillment. 

It is also recommended to draft within the shortest period and to coordinate 
with state power institutions in Russian constituencies a program of the 
efficient use of the Strategic Nuclear Force infrastructure, which becomes 
vacant in connection with the disbandment of military units, and a program of 
the employment of persons temporarily or permanently residing in former 
military settlements. 


Subject: Re Bruce Lincoln's obituary
Date: Fri, 14 Apr 2000 

David, Thank you for including the NYT obituary for Bruce Lincoln. Bruce
was an old and dear friend. We sent quite a bit of time together in St.
Petersburg, Moscow, and Warsaw. I learned a great deal during our many
discussions about Russian history and the historian's craft. Eric Pace
managed to catch Bruce's many gifts as an historian and writer. I was
particularly pleased by the mention of Petr Andreevich Zaionchkovsky, whom
Bruce respected so very much and who was an inspiration to a "band of
brothers and sisters" in Russia and America doing imperial institutional
history. Bruce's work was grounded in archival research. He worked the
archives like a master. He was also prolific. No scholar of this
generation has contributed more to our understanding of the era of the Great
Reforms and the role of the imperial bureaucracy. I once had a graduate
student who asked me if Bruce was a "good historian" because his work was so
popular -- a statement that says much about his mentors, the historical
profession, and academe which deserves deeper analysis. I sent him into the
professional journals to see what Bruce had written on the imperial
bureaucracy before Vanguard. He was quite amazed. But Bruce also
recognized the need to reach a broader public audience and brought fine
writing and the gifts of story teller to his many popular works. He took
very seriously the need to make the history of Russia accessable to the
reading public. With an artist's gift he could use words to paint a past,
that infomed the present but was true to the past in all its complexity and
diversity. Like many others, I will miss Bruce.


Vremya Novosti
April 12, 2000
[translation from RIA Novosti for personal use only]
Russia Can Soon Run Out of Conscripts

The shortage of draftees will be especially dire this year.
As many as 12,000 servicemen have been demobilised before time 
in Chechnya, and two more conscripted groups will be 
demobilised in May, because a day of fighting is counted as two 
days of regular service. 
Colonel-General Vladislav Putilin, head of the Main 
Organisational-Mobilisation Directorate of the Defence 
Ministry, said the spring conscription would not ensure the 
full manning of the army, with the exception of the troops 
taking part in the counter-terrorist operation, permanent 
readiness units, and units on permanent combat duty. 
According to the Defence Ministry, fewer young men are 
drafted every year. In 1988, 54.6% of registered young men 
could be drafted, but the figure for January 1, 2000 was barely 
Only 191,612 out of one million of draftable young men will be 
called up this spring. The rest will get deferments or will be 
freed from military service. 
The number of healthy draftees is shrinking, too. 57.6% of 
the young men drafted last autumn were recognised as partially 
fit for service (the figure was only 4% in 1989). If this trend 
persists, conscription will become impossible in Russia in a 
few years. 
Vladislav Putilin also said that the length of service, 
including for servicemen taking part in hostilities, would not 
be reviewed in the near future. On the other hand, conscripts 
will not be immediately sent to the units that take part in 
Likewise, reserve officers, some 4,000 of whom are to be called 
up this year, will not be dispatched to the hostilities zone 
immediately. "They will first serve for six months and reaffirm 
their worthiness in their military professions," the general 
said. "Only after that can they be sent to Chechnya." The 
conscription of reserve officers will begin as soon as the 
corresponding presidential decree is published. 


Public Russian Television (ORT) 
Sergey Dorenko’s Program 
Saturday, April 8, 2000 

[Summary prepared by 
Olga Kryazheva, Research Assistant 
Center for Defense Information]

Dorenko started by noting that Russia might be expelled from the Council of
Europe. The process of expelling is long and complicated. The Parliamentary
Assembly of the Council of Europe [PACE] demands that Russia stop the
military aggression in Chechnya. PACE opposes executions, robberies, and
massive destruction of the peaceful areas. Dorenko stressed that the PACE
knows the real situation in Chechnya, knows about Chechen aggression in
Dagestan, oppressed Russians in Chechnya, the speculations of Western mass
media, but yet continues to humiliate Russia. The purpose of such
humiliation is offending Russia. If this is the case, Russia should
seriously reassess the need of membership in the Council of Europe. Some
politicians believe that membership in European Council is beneficial only
for those countries that pursue the purpose of integration. Russian
integration into European Union is not possible for geopolitical reasons. 

The interview with Russian’s Foreign Minister Igor Ivanov followed. He
briefly discussed positive and negative sides of the EC membership. Among
the positive sides of this membership he named the common interest of
building the united Europe with mutual interests and legal and social
standards. For example, such membership would give Russia a possibility to
legalize university diplomas within the European community. Dorenko noted
that in order to expel Russia from the European Council, 41 countries would
have to reach a consensus on the matter. Therefore, this process is almost
impossible. Ivanov stressed that in his opinion, the PACE suggestion was
based on emotions, therefore the process of expulsion would be hard to

Today Tbilisi is choosing its future again for the next five years.
Dorenko reported that Tbilisi is getting ready for presidential elections
and commemorates the 1989 demonstration. Lyudmila Naruseva, Anatoly
Sobchak's widow, visited Tbilisi to present a translation of the book devoted
to the events of 1989 by Anatoly Sobchak.

According to Public Opinion Foundation survey, the question “Do you trust
current politicians?” showed the following results. 47% trust Putin, 20% do
not trust him; 24% trust Tuleyev, 40% do not trust him; Zyuganov also has
24% of trust and 53% of distrust. Yavlinsky received 11% of trust and 66%
of distrust, followed by Zhirinovsky, who has only 7% trust and 77%
distrust. On the same question of trust to the power structures, Public
Opinion Foundation showed that 14% trust the Duma, and 46% distrust it,
whereas 24% trust the government, and 32% distrust it.

Dorenko covered the situation in St. Petersburg. He stressed that during
Yakovlev’s office the city sank in crime and corruption. The government
approved both Stepashin’s and Matviyenko’s opposition to Yakovlev and his
replacement, although both of these candidates removed their candidacies
from the city elections. Dorenko offered his interpretation of the events
in St. Petersburg. Matvienko removed her candidacy with the Kremlin's
approval, because Kremlin cannot afford to lose in these elections.
Matviyenko with her 15% of support would definitely lose these elections.
In addition, Putin is hoping to strengthen the power of Kremlin in the
regions, and as the result, fire Yakovlev in the near future. On the other
hand, Putin realizes that Yakovlev, knowing his mistakes and failures,
would work hard this time and gradually improve his policies. Also, if
Yakovlev is willing to give up his semi-criminal team, Putin can replace it
with his people. These policies have nothing to do with the regular open
public policy. Thus, the Kremlin is lacking clarity in its actions. 

There are currently 28 candidates registered for the governor’s elections
in the St. Petersburg. Dorenko’s crew noted that at this point of time, 27
opponents of Yakovlev fight not for the victory, but for the runoff election. 
A month prior to the elections, Yakovlev is very confident. Analysts say,
that if Yakovlev stops financing mass media, the public will remain
uninformed. But if the public television and newspapers will offer some
campaign time and space to the opposition, it still has chances to win. ORT
reporters note that the only way to keep Yakovlev from governor’s office
is job offer in the government.

Next followed an interview with Yuly Rybakov, a leader of democratic
opposition to Yakovlev. He entered the pre-election campaign late, thus
decreased his chances to win. Yuly Rybakov, a representative from the
Union of Right Forces, stated that SPS would have been willing to support
either Stepashin or Matviyenko, although did not have enough time to sign
the agreement with the candidates. He also noted that ratings for Yakovlev
reported by public television are not actual, and between two other
candidates and Rybakov the opposition is hoping to cause the election
runoff. Rybakov emphasized that St. Petersburg is tired from lawlessness
and control of the Kremlin, and concluded that he does not know about the
agreement between Yakovlev and Kremlin, although does not neglect the fact
that Kremlin needs its own person in the post of St. Petersburg’s governor. 

Dorenko briefly covered the details of governor of Samara Konstantin
Titov’s resignation. In ORT’s opinion, this resignation was a show off, a
smart move to gain more support for the upcoming election campaign in Samara.
ORT supports analysts who state that Samara’s voters made the right choice
by supporting Putin in presidential elections. Dorenko reported that last
week Gennady Zyuganov and Gregory Yavlinsky accused Tatarstan and a number
of other regions in a massive election fraud. ORT presented interviews
with republic officials who insist that Tatarstan is corrupted. The
republic deputies are represented by either regional mayors, or directors
of enterprises and relatives of Mintimir Shamiyev, president of Tatarstan.
ORT has stated that Shamiyev’s relatives run most of the businesses in the

Dorenko concluded the program with an episode on Karachai-Cherkess
Autonomous Region. The president of Karachai-Cherkessia Vladimir Semyenov
refused to follow the agreement that the president of the republic should
be Russian and the head of the republic’s parliament Circassian. Dorenko
noted that the regional lawlessness in Russia is becoming a most important
problem for president Putin and promised to follow-up on the
Karachai-Cherkess conflict.


Moscow Times
15 April 2000
Kremlin Moves to Downsize the State
By Catherine Belton and Yevgenia Borisova 
Staff Writers 

President-elect Vladimir Putin looks to be gearing himself up to launch an 
attack on one of the nation's greatest economic enemies — its own choking 

Just days after Putin tapped an avowed liberal economist who has often called 
for a smaller, less interventionary state, the president's economic policy 
research center said Friday it was working on detailed plans to hack Russia's 
bureaucratic behemoth down to size.

It was also announced that a government decree signed April 4 calls for 
firing 3,882 civil servants by Aug. 1, Prime-Tass reported. While that will 
make a very small dent in the federal bureaucracy's 1.1 million staff — 
according to the Russian Statistics Agency's preliminary results — it could 
mark a very important start. 

At the first news conference since his appointment, presidential economics 
adviser Andrei Illarionov said Friday he hoped to have "great influence" in 
persuading Putin to pass measures to cut down the size of the state.

For economic growth to be achieved, state spending has to be cutback, he 

"The optimal level of state spending to free conditions for economic growth 
is 17 percent to 20 percent of GDP," he said, adding that this volume had 
been proven as the result of numerous studies by economists across the world.

A dose of "sensible" economics could boost Russia's economic growth to 8 
percent to 10 percent per year, he said.

"This is not an ultra or radical [growth] rate, but a normal growth rate. 
More than 15 other countries have achieved this, and why can't Russia."

For Russia to achieve sustainable economic growth, it needs to chop down the 
immense, creaking state apparatus that is continuing to swallow well over a 
third of the nation's gross domestic product, a World Bank economist said 

"The state is still occupying a dominant place in the economy and that state 
sector is hugely inefficient," said Alexander Morozov, an economist at the 
World Bank in Moscow. "It is impossible to talk of any prospect for economic 
growth without changes in the way the state works."

Officially, state spending was eating up around 37 percent of Russia's GDP, 
but this figure could be as high as 50 percent to 70 percent of GDP if 
unofficial expenditures that are not reflected in the budget are included, 
like benefits such as free housing for state officials, free cars and 
vacations, he said.

If Putin's promises to push ahead with major reforms bear fruit, those 3,882 
officials could be just the first wave. Officials at the Center for Strategic 
Research - a research center charged by the president-elect with producing a 
blueprint for reforming the Russian economy - said Friday they were already 
producing plans to reduce the size of the state apparatus and cut down the 
state's role in the economy.

"At the first stage of the center's work, there was a mass exchange of 
opinions about what path Russia should take. Some said we need to restore the 
system of state planning, and others said that the economy needed to be 
deregulated," said Oleg Vyugin, former deputy finance minister and now in 
charge of macroeconomic policy for the research center.

"Those in favor of deregulating the economy won out. Now documents are being 
developed by lawyers at the center mapping out the exact steps needed to be 
taken to cut down the size of the state and remove state interference from 
areas where it is not needed," he said.

"The program is aimed not only at cutting down the state apparatus, but also 
at making it more effective and at removing the existing conditions for 
corruption," he said.

Former presidential administration aide Mikhail Krasnov is now working out 
plans at the research center for ways to reform the massive apparatus, but he 
said such a major reform will take time.

"Cutbacks cannot happen overnight," Krasnov said in a telephone interview. 
"First of all we need to begin by examining closely the resources we do have 
and how they are used."

He said the center has proposed that the government begin taking inventory of 
the state this year, so that reforms can begin in 2001.

Vyugin said other concrete measures being planned included raising wages for 
state officials and wiping out hidden fiscal payments such as free holidays 
and apartments, and changing the selection procedures for hiring new 
officials to make conditions more competitive to get a job working for the 

He said one of the most important areas of reform was to clarify the role of 
all state officials so their sphere of authority was clearly defined.

Illarionov denied Friday that reducing the role of the state was going to 
come into conflict with Putin's pre-election vows to strengthen it.

"This means strengthening the state to ensure equal and transparent rules of 
the game, and ensuring the implementation of laws," he said after the 
conference. "I've been appointed to advise the president on actions that will 
fuel growth in the economy and that [cutting down the size of the state 
apparatus] is an action that would ensure that growth," he said.

"We need to determine the state's place and role in the economy," he said.

Considering that the Russian Statistics Agency study showed that the number 
of state officials - including those working for either the executive or the 
legislative arms of government - blossomed by 93,000 people last year, any 
reductions at all this year would represent a significant step. 

At the moment, one quarter of state expenditure goes toward paying wages for 
state employees. Nearly 2.6 million people are employed in state jobs, 
according to unofficial data, said Arkady Dvorkovich, the head of the Finance 
Ministry's economic expert group, who is also currently in charge of mapping 
out budgetary policy at the research center.

During his presidency, Boris Yeltsin repeatedly promised - but failed - to 
reduce the huge state apparatus in order to de-bureaucratize the economy, 
thus easing business conditions and removing one of the main sources of 
Russia's endemic corruption. 

Businessmen regularly call for an end to the armada of red-tape merchants, 
who extort bribes in return for the myriad of licenses and certificates that 
entrepreneurs need to buy in order to start up and then keep alive their 

For example, Magomed Merov, a director on the board at the Mosavtolegtrans 
company - which coordinates the work of some 60 percent of city taxi firms 
and a handful of companies selling and servicing foreign and Russian cars - 
said what stimulates corruption is the way decisions are taken.

"Look, these commissions are being created by some bureaucrat and the members 
are people allied to him. When a decision depends on such commissions, it is 
impossible to find out who took a bribe."

Both Merov and Yakov Gilinsky - a professor at the St. Petersburg-based 
Sociology Institute who has researched organized crime for more than a decade 
- said Russia urgently needs to bring in strict regulations to govern the 
professional duties of state officials. 

"Officials' duties must be clear and transparent and understandable for 
people," Merov said. "Officials must be made personally responsible for their 

Others called for slashing the number of civil servants and raising the 
salaries of those left over.

"First of all, the state apparatus must be reduced significantly so that 
wages may be raised for officials," said Professor Mark Levin, an expert on 
corruption with the Russian Academy of Science and a consultant for Georgy 
Satarov's INDEM Foundation. "It must be understood that a good official holds 
a highly qualified job and that he or she must be well paid," he said.

To reduce the bureaucracy, many of its functions must be transferred to the 
"free, transparent market," Levin said. The numerous petty restrictions and 
certifications must be abolished where possible, a move that would also make 
some of the state work force redundant.

"We don't need someone to prescribe what the length of socks must be, and if 
some canteen feeds us with rotten food it will go bankrupt by itself. But a 
doctor who does abortions must apparently have a certificate."


(ARGUMENTY I FAKTY WEEKLY, P. 4-5, NO. 15, 2000)
DATE: 04/12/00


Everybody is waiting with interest to see who is going to join
the new government and what it is going to do. Mikhail Kasyanov is
named among the most likely candidates for the post of prime
minister. Today he is the guest of Editor-in-Chief Vladislav

Starkov: Don't you have any bodyguards with you? 

Kasyanov: Vice-premiers are not entitled to have them. 

Q: Do you know who is going to be the prime minister? 

A: I have my guesses. 

Q: Will it really be a purely technical government? 

A: First of all, it is going to be a government of people who
think along the same lines as the president. There should be no
vacillations. Any president, the more so a president who won in the
first round, would form such a government. Incidentally, precisely
such a coordinated team has formed in the presidential
administration. A very strong team. 

Q: When after your numerous negotiations you appear before
television cameras nothing can be deduced from the expression on
your face: whether you won or lost. Are you a good actor or is this
something you have learned? 

A: Of course, I do have emotions but I have learned to conceal

Q: What is the main thing in negotiations: to find a
compromise or uphold your point of view? 

A: We were successful because we were able to use a lot of
room for maneuver. If you can suddenly change the subject and go in
a totally different direction this usually turns out to be a
surprise for your partner and produces success. If you stubbornly
follow some instruction, your partner will be able to calculate
your next move and present such arguments that you will not be able
to cope with. Besides, in any negotiations it is important to
respect your partners. 

Q: Could you coach our delegation that left the Council of
Europe when Russia was denied the right to speak? Do you approve of
the way it conducted its negotiations?

A: In my opinion they should have acted in a milder way. But
I cannot pass any judgment because I do not know all the
circumstances. It could be that the negative attitude to us was
provoked by some imprudent behavior on our part and this could be
avoided. But it could also be that the majority in the Council was
so programmed to achieve precisely such a result that they did not
hear our arguments and reasoning. It appears that this was
precisely the case. But then it would be useless to conduct any
dialogue with them altogether. 
I regret to say that some of our closest partners in Europe
with whom we have had and could have had the best of ties have such
an absence of flexibility. They do not know when to stop. The
attitude to the problem of Chechnya in other, non-European
countries is becoming more objective. They have understood that the
time for confrontations is passing. It will be necessary to develop
relations with Russia anyway.
We lived through the first quarter of the year without hardly
any foreign borrowing. It is only the World Bank that gave us 100
million dollars and the Japanese gave us as much. We do not expect
anything in the second quarter. And we will manage just as well.
The West is beginning to ponder: Russia is lessening its
dependence. Besides, we are behaving politely. We say: "You can't
give us anything at present? Doesn't matter. Perhaps, some other
time. We will still repay all our debts, we will cooperate, we will
share with you our perception of economic development". Of course,
we need money. Even if we are beginning to have our own money any
financial assistance is welcome. Western bankers and businessmen
are already hurrying their politicians. These politicians want to
get some concessions from Russia. But business wants to invest
money in Russia and understands that there is a chance that it can
miss a lot. Before coming here I met with the IMF Deputy Director,
the American Stanley Fischer. 

Q: Did he come to scout out the political situation or did he
bring any concrete proposals? 

A: Well, I did not specially speak about money with him.
Indeed, they have already grown accustomed that we only speak about
money. But even in December I did not begin with the subject of
money. The more so now when we have improved the situation. 

Q: What was your biggest success at negotiations, when did you
tell yourself "Way to go, Misha!"?

A: This has happened quite many times since I became involved
in this work in 1994. But the most difficult talks were on the
restructuring of GKO after the crisis in 1998. At the time nobody
in the country knew what to do. And from the Western side they were
all so emotional, they were screaming: "We have been robbed! We
will rather eat nuclear wastes than ever buy Russian securities
again!" You know, I had nothing to do with the default. I always
criticized this endless short-term borrowing but it was I who was
given the task to clear up the mess. 

Q: How long do talks continue? 

A: The longest talks that I can remember were those with the
Paris Club in 1996 -- five days and four nights nonstop. We all
were exhausted. One member of the foreign delegation fainted,
foaming at the mouth. We all got scared.

Q: How do you manage to withstand this? 

A: I drink coffee although this is bad for your health, of
course. And I try to smoke less. Incidentally, nobody smokes during

Q: In what language do you negotiate? 

A: English. I will not say that I know the literary language
well, but I have no problems with the professional language.
Unfortunately, very few senior officials in our country know
foreign languages. Not counting the Foreign Ministry, of course.
But hardly anyone in the economic sphere. 

Q: This means that now at the pinnacle of power we will have
yet another person who knows a foreign language. 

A: Who are you referring to?

Q: Vladimir Vladimirovich Putin, of course. He knows German.
Incidentally, how often do you meet with him? 

A: Twice a week. 

Q: I believe the papers that you have to sign are so numerous
that they are brought to you in a cart, isn't that so? 

A: Practically yes. Almost every working day lasts till one
o'clock in the morning. Conferences during the day and documents in
the evening. This is a difficult time.

Q: Vladimir Vladimirovich has started traveling a lot around
the country lately. A sort of a "Yeltsin syndrome." Remember 1991?
The putsch, everything ends well and Yeltsin goes on leave. Then
1993. The White House is blasted by tanks. Everything ends and
Yeltsin flies to Sochi. Putin is acting likewise. He has just been
elected and it would appear that he should work on his program but
he, instead, spends time aboard a submarine. He can't stop or what?

A: It was still before the elections that Vladimir
Vladimirovich promised to come to Murmansk. Anyway, he is not
writing the program himself, he is hearing out various views and
formulating the main directions of policy. Besides, a president
must know his country. 

Q: What should our readers expect? Let us do some dreaming.
Not ten years ahead but just one year ahead. Will communists still
have something to criticize you for? 

A: No matter how we are going to develop it will always be
possible to find something to criticize. Some reason the following
way: it is necessary to make big promises, create serious
expectations in society and thereby put it in motion. The idea is
to keep people hoping... My personal attitude is different. We
should not overestimate our possibilities and thus avoid deceived
expectations. Otherwise, society will become disappointed two years
later. On the other hand, if improvements exceed our promises, it
will be possible to say: "We have worked well. Let us set ourselves
even bigger aims." In this case enthusiasm will be sustained all
the time.
It is my experience of a negotiator that has molded in me this
approach. We must advance not in spurts but smoothly, steadily,
consistently and, most important, always in the same direction. Of
course, there should be no wasting of time.
Look at the good results that are produced by consistency of
action even during a short period of time. For instance, since last
August. Despite all the grim forecasts nothing bad happened in the
first quarter, more than that, the situation even improved. The
budget is being fully implemented. Pensions are being increased.
Output is growing. State debts to the population and enterprises
are being repaid. Using our own resources we paid 2.5 billion
dollars of our foreign debt. In the same stride we increased our
currency reserves by 2.5 billion dollars. Today, if an emergency
happens, we will be able to pay for vitally important imports for
a period of four months out of the state currency reserves alone.
Three and a half months are regarded as the norm. We have not yet
taken a single kopeck from the Central Bank although the law allows
us to borrow 30 billion rubles and one billion dollars from it. The
ruble is strengthening. Inflation, which hurts the population, has
substantially slowed down. The share of barter settlements has

Q: To what extent are these successes due to the export of

A: The matter is not only in oil. Oil is important but still
its share does not exceed 20 percent of our export. It is just that
taxes are collected better. A tough credit and monetary policy is
being pursued. The budget is not being embezzled because all
spending is being controlled. For several months already "business"
is no longer revolving around the Finance Ministry -- they can now
count only on themselves. Plus a noticeable recovery has begun in
the economy. And it inspires plant managers, gives them energy to
expand their work. In the past, by tradition, they all asked for
money. Now, too, they ask for money, but not too persistently.
There are industries where serious growth of output has already
begun, for instance, metallurgy, the chemical industry, the food
industry, light industry, mostly textiles, and the woodworking
industry. They are growing at a pace of 15-20 percent per annum.

Q: Did the 1998 crisis hurt us badly? 

A: We managed to make proper use of the only positive result
of the crisis for our economy -- the effect of devaluation. Now it
is our task to prevent a drastic, unfounded strengthening of the
ruble. Of course, it is always very tempting to strengthen the
ruble, there is the desire to help people, to keep prices from
growing rapidly. But this may again stifle our industry. The ruble
must strengthen but not sooner than stable growth begins in the
economy. The budget provides for an average annual rate of 32
rubles for the dollar. I think that the actual rate will be 29-30
rubles per dollar. 

Q: What is the real worth of the dollar? 

A: It is worth exactly what it is worth. Today the exchange
rate of the ruble is backed by our currency reserves to the extent
of 98 percent. We never had this in the past. The usual figures
were always 60-70 percent. 

Q: The banks have accumulated huge amounts of money -- about
70 billion rubles not to count foreign currency. The impression is
that they simply cannot find any use for this money. Do you know
any ways of making them invest money in industry? 

A: The banks do not want to risk for two reasons. Firstly,
because we do not have a precise and clear legal framework that
would guarantee a repayment of credits. If a bank gives an
enterprise money with something provided as security it is not a
fact that in the event of nonpayment the bank is going to get this
security. And even if there is a law which says that it is going to
get it there definitely exists some other law which says something
slightly differently. And the second reason is that throughout the
previous years the banks have grown accustomed to making money by
playing games with foreign currency or GKO. They had no reason to
go into the real sector and get a 10 percent profit while they
could get a 100 percent profit without going outside of Moscow. 
In fact, these were not really banks but financial companies
with a network of exchange bureaus. The banks, for instance, do not
have departments capable of assessing a suggested investment
project, of calculating its profitability. There was no need for
that. Now we are thinking of creating a mechanism under which the
state would share risks with banks that credit enterprises. After
all, it is the fault of the state that our legislation is so vague
and oozy.

Q: We have stopped talking about agriculture as if it has
vanished. But Russia really is an agrarian country. All our roots
are there. It is the military-industrial complex that has duped us
into thinking that we are an industrial power. 

A: The situation is more complicated here. What was the
attitude so far? Give us money or we will not plant anything. Then,
give us more money or we are not going to take in the harvest.
Money was provided and it vanished into thin air. We must have a
concept in our agriculture. The farmer must know that in autumn he
will be able to sell his harvest. If he manages to sell at a high
price and get a good profit, fine. But if the prices have dropped
or the farmer could not sell his harvest for some other reason, for
instance, because of the absence of a marketing system, the state
must guarantee that it will buy his harvest in any event and pay
for it such prices that will allow him to repay all his creditors.

Q: A calf takes only 18 months to grow. Over the past years we
could have grown enough of them both for ourselves and the rest of
the world. But our agricultural production is organized in such a
way that our cows are wallowing in manure... This is mockery of
common sense!

A: A theory that appears to be an ideal one in world practice
is not always applicable to us. The present generations of Russians
have never been proprietors. It takes long years, decades for the
sense of being a proprietor to develop in a person. And I always
say this at the talks with the IMF: we have our Russian
specificity. They respond by saying: "You always try to justify
everything by references to Russian specificity". But there does
exist a Russian specificity. There is no escaping from it. All
possibilities for high rates of growth exist in our country. But
there is also something that slows things down, serves as a brake.
This is the hugeness of our country, its sogginess. If we were the
size of Poland or Korea we could have changed everything within a
matter of ten years. But we have such ductile roots and the Russian
people are such slow starters. True, once we get started it is
difficult to turn a bend. And in order to make a turn we need to
further accelerate, accelerate, accelerate... 

Q: Frankly, I am an optimist in this sense. There is no
avoiding our steady advance to a good life. The mechanism has been
started. And we must give credit to Boris Nikolayevich for managing
to create this mechanism. And now we no longer depend so much on
change of government. Argumenty i Fakty knows this from its own
experience. Times are changing, prime ministers are changing, but
the newspaper continues to come out. 
I have read somewhere that your only shortcoming is your
"fourth paragraph". You are from Moscow, aren't you? 

A: Yes, I am from Solntsevo, I was born here. 

Q: Remember, at the beginning of his career Yeltsin liked to
answer simple questions. He was asked, for instance, "Of what make
are your shoes and suit?" He would answer: "The shoes are by the
Skorokhod factory, while the suit was made by the Bolshevichka
factory." What is our elite going to think if it is told that the
prime minister wears a suit from Bolshevichka? Incidentally, if it
is not a secret, who made your suit? 

A: I do not know. Let's take a look. 

Q: Aha, Cerruti. I believe this is the leading house for men's

A: I don't think so, I believe it is of a second or third

Q: Does your family take part in fitting you out? 

A: I make most of the purchases myself. True, there is little
time left for this now. But I have often traveled abroad all these
years. Besides, I was taught from childhood to dress with taste,
not loudly. I remember that when my father would get his vacation
money and we would plan to go on his leave somewhere, the first
thing he would do was to buy me new shoes for 15 rubles. There were
three children in our family. I was the youngest one. My mother
worked as head of the planning department in Glavmosstroi.

Q: It turns out that being a planner is a family tradition. 

A: In a certain sense. I have my father's character. He was a
calm and staid man, a teacher of mathematics. Mother, on the
contrary, is a talkative person. When I start speaking quickly it
is something that I have inherited from my mother. 

Q: Whom would you describe as your teachers? I mean people
whom you trust, whose company is not only pleasant but also useful?

A: First of all my father. He died a long time ago. I was 18
then and studying at the institute. But he is the man who molded my
perception of the world. He was 48 years old when I was born. He
was a solid man wisened by experience by then. He had gone through
the war and worked as a school principal. 
Well, after my father it was already life that taught me... 
I graduated from the Moscow Automobile and Road Building
Institute and worked in the system of Gosstroi, in a design
institute. Later on I was invited to Gosplan of the RSFSR to work
in its department of external economic ties. My responsibility was
transport. Incidentally, I had there a teacher as well, a deputy
department head, who trained me to become a government official.
You know, the old Soviet school, I would even describe it as drill.
He taught me the proper attitude to work, he taught me to be sure
to complete a job. 
It was Boris Fyodorov who invited me to leave the Ministry of
Economy and join the Finance Ministry as a department head. We were
not acquainted at the time. He arranged a contest and chose me out
of 10 contenders. 

Q: We are terribly interested in having a turn for the better
in the country at long last. So, let's start moving. To a new young
government, to a new life. We so yearn for this new life to finally
set in. After all, we all deserve it. Such a rich country! We want
to be proud of it!

A: I am sure that we have all the grounds for this. 


Date: Fri, 14 Apr 
From: Larry Parr <>
Subject: Simply Extraordinary

Jerry Hough of How the Soviet Union is "Governed" fame or infamy thinks
that Stalin was limited by Politburo oligarchs. When?

When he had Molotov's wife arrested and tortured? When he banned
Voroshilov from Politburo meetings? When he roared with laughter as an
underling related the death grovellings of Zinoviev? When he had Kh, Y
and Z, not to mention the remainder of a longer alphabet than English,
arrested, tortured and executed?

If Mr. Hough were talking about the period before the Kirov
assassination, then his point is meaningless. If he was describing,
say, the year 1939, then his point was ludicrous. If he was describing,
say, the year 1949, then his point becomes eerie and makes one wonder
whether we have a David Irving-esque Stalin-didn't-know argument.

I cannot believe -- indeed, I know -- that others among your grateful
readers have not let this outrageous piece of retrospective Sovietized
pining go unremarked. Whether or not you publish any of our comments,
you are aware that there are dissenters out in e-land.

To my mind, Jerry Hough's comment is yet another affront to the tens of
millions of innocent lives destroyed by a regime that "ruled" and never
"governed," if the latter word is to be understood as something
exclusive from dispatching tens of millions of innocent people to death

Best regards from faraway Malaysia,
Larry Parr


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