April 19, 2000    
This Date's Issues: 4257 • 4258

Johnson's Russia List
#4258
19 April 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Putin scores new assembly win, wants tighter budget.
2. Itar-Tass: Sergei Stepashin Appointed Chairman of Audit Chamber. 
3. Reuters: Putin's state of nation address after inauguration.
4. Washington Times: Jack Kemp, Testing time for reform.
We should give Valdimir Putin a chance to reform Russia.
5. Moscow Tribune: Stanislav Menshikov, PUTIN PUSHES FOR NEW CLIMATE.                   But Adam Smith Alone Will Not Do the Job.
6. Ira Straus: Putin responds to NATO's unresponsiveness.
7. World Socialist Web Site: Chris Marsden, Hypocrisy and double standards during Russian President Putin's London visit.
8. Bloomberg: Clinton to Press Putin on Economy; Arms Control Spat Looms.
9. Ekonomika i Zhizn: V. Butkevich, NON-PAYMENTS ANATOMY.
10. Washington Post: Daniel Williams, In Russia, 'Unteachable' Take Center Stage. (Down syndrome)
11. Reuters: Maria Eismont, Soccer-Russia fears explosion of football violence.]

********

#1
Putin scores new assembly win, wants tighter budget
By Ron Popeski

MOSCOW, April 19 (Reuters) - President-elect Vladimir Putin made more
headway with Russia's parliament on Friday, securing final ratification of
a key arms treaty and the long-delayed departure of the country's
prosecutor general. 

On the economy, where Putin's plans remain unclear, he received mixed news,
with the central bank chief predicting the rouble would remain stable,
while saying inflation was on the rise. Putin called for a tighter 2000
budget to account for an expected downturn in oil prices later in the year. 

Russia proceeded doggedly with its military campaign in Chechnya,
dispatching fresh troops to the south of the region to consolidate its
uncertain hold on mountainous districts. The military said 21 ``special
operations'' had been conducted in various town to guard against new rebel
raids. 

Putin, fresh from his first trip abroad as president-elect to Britain and
two ex-Soviet republics, showed he was able to push measures through
parliament with easy passage for the START-2 nuclear arms pact in the
Federation Council upper house. 

The house, made up of regional bosses, approved the 1993 treaty by 122
votes to 15 votes with seven abstentions -- the final stage of Russian
joining the pact. 

Defence Minister Igor Sergeyev said the vote showed Russia had ``done its
part in moving towards a more stable and secure world. Matters are now up
to the United States.'' 

He said Washington now had ``no arguments'' to back out of the 1972
Anti-Ballistic Missile treaty. The White House has proposed building a
national missile defence system and both houses of parliament tied
ratification to leaving ABM in place. 

Retired general Alexander Lebed, now governor of Krasnoyarsk region in
Siberia said Russia had no choice: ``It is dreadful to be blind and carry a
big stick. But had we not adopted this, we would have been blind and mad
with a big stick.'' 

The debate lacked the drama of last Friday's ratification by the State Duma
lower house after an impassioned address by Putin. The outcome then
underscored the new relationship between the Kremlin and parliament after
seven years of failed attempts to secure ratification by Putin's
predecessor, Boris Yeltsin. 

The Federal Council had earlier reversed more than a year of opposition and
dismissed by an overwhelming vote suspended chief prosecutor Yuri Skuratov.
It had refused on three previous occasions to bow to former President Boris
Yeltsin's request. 

MOVE ON PROSECUTOR GIVES PUTIN FREE HAND 

The chamber saw the move as giving Putin a free hand to proceed with
selection of a team before his May 7 inauguration. 

``The new president has a right to put his own people into key positions,''
said Aman Tuleyev, popular leftist governor of Keremovo region in Siberia. 

Skuratov had aroused controversy before his suspension last April by
Yeltsin on charges of abusing his office and Russia has been left without a
chief prosecutor ever since. 

Skuratov had been leading corruption investigations against top officials
and accused the Kremlin then of trying to block them. His suspension also
followed the television screening of film of a man resembling Skuratov in
bed with two prostitutes. 

Tuleyev and Skuratov were among 10 candidates challenging Putin in last
month's election, the former receiving about three percent of the vote and
the latter less than one percent. 

Putin also won election of an ally, former Prime Minister Sergei Stepashin,
to the job of heading the Duma's Auditing Chamber overseeing expenditure.
Stepashin replaced a Communist. 

On the economy, First Deputy Prime Minister Mikhail Kasyanov told reporters
he had been mandated by Putin to produce a tougher budger ``to compensate
for negative developments in the second half of the year if energy prices
decline.'' 

Central bank governor Viktor Gerashchenko told the Duma that Russia's
favourable economic performance allowed for an adjustment in the average
2000 rouble rate to make it stronger than the 32 per dollar initially
calculated. 

But Gerashchenko expected April consumer price inflation to rise to 1.0
percent in April from 0.6 percent in March. 

*******

#2
Sergei Stepashin Appointed Chairman of Audit Chamber. .

MOSCOW, April 19 (Itar-Tass) - The State Duma has appointed Sergei
Stepashin ( Yabloko bloc) Chairman of the Audit Chamber of the Russian
Federation. 

Stepashin was backed by 309 votes with twenty-nine votes against and ten
abstentions. 

The State Duma has relieved Khachim Karmokov from duties of Chairman of the
Audit Chamber of the Russian Federation. The resolution on Karmokov's
dismissal was supported by 269 Duma deputies, with 129 votes against and
one abstention. 

Khachim Karmokov was relieved of his duties as Chairman of the Audit
Chamber because his term in office had expired. 

******

#3
Putin's state of nation address after inauguration

MOSCOW, April 19 (Reuters) - President-elect Vladimir Putin is to deliver a
State of the Nation address to Russia's parliament some time after his
inauguration on May 7, a presidential spokesman said on Wednesday. 

Alexander Kotenkov, Putin's representative in the State Duma (lower house),
told reporters there was no date set for the address as work on it was
still proceeding. 

"It will be the new president's first address to the Federal Assembly
(parliament) and I think it will touch upon the whole range of issues
related to Russia," he said. 

Kotenkov said that one chapter of the address would outline Putin's views
on Russia's economy. The economic programme is now being drawn up by the
Strategic Research Centre, a think-tank overseeing work by other research
bodies. 

German Gref, head of the think-tank, told reporters last month that reforms
he was devising were firmly pro-market and that Putin was pressing for a
very high growth rate. 

Putin won a resounding victory in an early presidential election last month
on the back of an election programme in which he pledged to defend the
interests of Russia and its citizens but gave few specific details. 

********

#4
Washington Times
19 April 2000
Testing time for reform
We should give Valdimir Putin a chance to reform Russia
By Jack Kemp
Jack Kemp is co-director of Empower America and distinguished fellow of the
Competitive Enterprise Institute.

Will Vladimir Putin be a Rasputin or a reform Putin? When the Soviet
Union collapsed in 1991, Russians looked west for advice and assistance.
What they got was International Monetary Fund loans tied to a lot of bad
advice from Keynesian economists — so-called "shock therapy" — that pushed
the country precipitously into a market economy without the prerequisite
sound currency, functioning banking system and rule of law to protect
private property.
When prices were decontrolled, inflation exploded so that the ruble,
then exchanging at 4-to-1 with the dollar, disintegrated and a new ruble
had to be instituted by knocking three zeros off its old value. When
state-owned assets were privatized, a few robber oligarchs stole most of them.
In addition, the IMF demanded that Russia keep tax rates exorbitantly
high to fight deficits, which crushed incentives and created an enormous
underground economy.
It is not surprising that the Russian economy remains a basket case,
even though it has performed much better than expected after collapsing in
1998 during the aftermath of the Asian financial crisis. Still, the ruble,
at almost 29 to the dollar today, has not recovered to its 1998 value of 6
to the dollar.
Since being elected president, Mr. Putin has indicated that he seeks
to give Russia a "second beginning." He says economic reform will be a top
priority for his administration and has talked about overhauling the tax
code and cutting marginal tax rates, reportedly to 20 percent. He has
signaled a willingness to attack corruption, institute reforms necessary to
protect property rights and to encourage foreign investment in Russia —
"The right of ownership must become a priority in Russia," he told the New
York Times. Bravo.
It is in our vital interest for democracy and capitalism to succeed in
Russia. There are still 10,000 "loose nukes" in Russia that could find
their way into the hands of people desiring to do the United States harm.
We can raise the odds Mr. Putin will succeed in his reforms by engaging in
free and open trade with Russia and by keeping the IMF out of Russia with
its poisonous policy mix of high tax rates and a weak and floating ruble.
To his credit, Mr. Putin appears in no hurry to resume IMF borrowing.
He should, however, go beyond merely resisting new loans on old terms and
call on the IMF to forgive those past loans because they were based upon
such extraordinarily bad advice. Perhaps he should sue the IMF in the
appropriate courts.
In 1922, in the midst of economic upheaval, V.I. Lenin stabilized the
currency by creating the gold-backed chervonets. Shortly thereafter, John
Maynard Keynes wrote about the successful monetary reform: "Lenin was
certainly right. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process engages
all the hidden forces of economic law on the side of destruction, and it
does it in a manner which not one man in a million is able to diagnose."
With oil revenues up in Russia today, and tax revenues rising, much of
the pressure on the ruble of the past several years has been temporarily
relieved. But as the price of oil falls, which it will, tax revenues will
fall, and the ruble once again will come under pressure. Therefore, now is
a perfect time for Russia to lay the foundation for economic stability and
prosperity by restoring sound money and enacting a simple, low-rate tax
system.
Mr. Putin should link the Russian currency to a stable store of value,
perhaps even taking a page out of history and issuing a gold-backed ruble
based upon Russia's national gold reserves, which could be used as the
currency to pay government employees and pensioners. The Russian central
bank could stabilize the remaining outstanding paper rubles by adopting a
price rule (I favor a gold-price rule) to direct its open-market operations
and selling asset-backed (e.g., oil- and other commodity-backed) bonds to
soak up excessive paper rubles.
With a program such as this in place, it would be safe for the U.S.
Treasury to assist Russia in its endeavor to launch a sound, gold-backed
ruble by purchasing Russian bonds that may be required to cover any
temporary revenue shortfall as the new tax code was implemented and the
Russian economy recovered. The Russian government would then be able to
repay those bonds with a ruble as good as gold.
With strong performance by a reformed Russian economy based on low tax
rates, sound money and open trade with the West, Russia can move to the
type of liberal democracy that can be a peaceful partner for the 21st century.

********

#5
Date: Tue, 18 Apr 2000:39:35 -0400
To: davidj
From: "stanislav menshikov" <menschivok@globalxs.nl> 
Subject: PUTIN PUSHES FOR NEW CLIMATE

Moscow Tribune, April 18, 2000
PUTIN PUSHES FOR NEW CLIMATE
But Adam Smith Alone Will Not Do the Job
By Stanislav Menshikov

http://www.fast.ane.ru/smenshikov
http://www.ecaar-russia.org

By pushing ratification of START II Mr. Putin has won a trump card in his
dialogue with the West. Bill Clinton and Al Gore can now more rightfully
claim that their Russian policy has brought America dividends in an area
that counts among the highest national security priorities. Even if Clinton
botches that achievement by going ahead with the ABM shield, a better
international climate will prevail for at least a few months. Hopefully, it
would also help reduce tensions around Chechnya.

A glimpse of a new climate is also seen in the changing tone of IMF
comments on the Russian economic scene. Stanley Fischer, normally a cold
blooded customer, is making clear his enchantment with the new man in the
Kremlin. This could simply be a political gesture and new tactics emanating
from the White House. In fact, new money from the IMF may not be
forthcoming this year, at all. 

Nor does Moscow really need it so badly. For the first time in years, the
Russian federal budget is enjoying an overall surplus. Tax revenues in real
terms are twice larger than they were at this time last year, and official
foreign currency reserves have exceeded $15.5 billion, a figure not seen
since before the August crash. These achievements are due mainly to strong 
economic growth. Latest statistics confirm that an upturn in industrial
output is continuing: the boost in the 1st quarter is 11.9 per cent over
1st quarter of 1999. It is also 4.5 per cent higher than in the last
quarter of last year. Expansion is gaining strength rather than receding. 

Recently published IMF and World Bank forecasts of slower Russian growth in
2000 are all wrong. Their mistake was putting too much emphasis on high oil
prices and import substitution as the principal factors explaining output
expansion. That was true of 1999, but not of 2000. Real personal
consumption last year fell by 15 per cent while it is now up by 7 per cent.
Growth in capital investment is accelerating as manufacturing industries
are adding to capacity in order to meet expanding domestic demand. 

So Washington is faced with a changing Russia that is able to stop begging
for financial aid and start talking from a position of relative strength.
As Mr. Kasyanov recently said, he has not discussed money matters with
Fischer for some time. The country certainly is not yet off the external
financial hook. But things are working in its favour.

The weak link today is energy. Putin needs to get to the roots of this
matter that have been clouded by both RAO EES and Gasprom. The reasons for
cutting down gas deliveries to Russian cities are not clear. Gas exports to
the West are based on long-term contracts, they help bring in hard currency
earnings and should be honoured. But why should Russian consumers and
enterprises suffer at the hands of non-paying Ukraine is hard to
understand. So far, Moscow's soft line towards Kiyev is not bringing the
expected political dividends. So why not get tougher and switch off some

Ukrainian companies for a change?

Mr. Chubais has been blaming Mr. Viakhirev for making poor investment
decisions. But statistics show that capital investment into gas is rising
while investment in electric power generation is falling. Chubais's company
pays only a quarter of its bills for gas in hard cash. Most of the money
paid by consumers for electricity never reaches electric power plants.
Precious funds are squandered on the way by "intermediaries". By any
criterion this is unsatisfactory management performance. Yet, Mr. Putin
still seems to value Mr. Chubais's executive talents. But the truth is that
, intentionally or not, the former "young reformer" is undermining the base
of economic strength from which the new president wishes to operate. Sooner
or later Mr. Putin will have to make the right decision. Energy is the
critical economic sector in Russia today, and the new president needs
competent loyal professionals to run it.

Another weakness is a continuous overrating by the Putin-Kasyanov
administration of the feasibility of attracting more investment from
abroad. Current levels of annual foreign direct investment from abroad
(FDI) are very low - slightly more than $4 billion at the latest count. In
terms of real, not financial investment this is a meagre 3.2 per cent of
total fixed capital formation. Bringing this up to $10 billion involves too
many structural changes inside Russia and shifts in foreign investor
attitudes to be realistic in the short- and medium-term. Potential large
projects are all in natural resources where domestic oligarchs dominate the
scene and show no signs of willingness to share power with foreign
partners. More than enough capital is generated domestically but is
deflected from capital investment to outside havens or is otherwise
squandered. 

This is one crucial point that Mr. Putin has yet to tackle if he really
wants to change the Russian economic and political climate. To succeed he
needs realistic non-ideological advisers and competent non-political
managers. Adam Smith and the invisible hand will not do the job.

********

#6
From: IRASTRAUS@aol.com (Ira Straus)
Date: Tue, 18 Apr 2000 
Subject: Putin responds to NATO's unresponsiveness

The NATO question came up again for Putin in Sevastopol, where he was meeting 
with the Ukrainian President, Leonid Kuchma. His comment was simple and 
direct:

"On this question, Russia must follow its national interest. When a British 
journalist asked me about Russia joining NATO, I answered, 'Why not?' ... 
After a while, I got an answer from NATO, 'We don't want Russia.' ... If they 
don't want us, then Russia must oppose NATO expansion to the east."

(He was seen saying this on ORT, April 18, 2000, by tens of millions of 
Russians. How many Westerners will ever hear of it is another matter; I saw 
it on the WNVC relay of ORT. I should warn the reader that I wrote down the 
comment immediately after hearing it, and while I got the gist of it, I 
couldn't get all the exact words down.)

Whether Putin received an official answer from NATO is unknown to me, but it 
was enough that he got a cold put-down that he got from NATO 
Secretary-General, George Robertson -- that Russia's joining NATO is "not on 
the agenda". It would not have been too hard for Mr. Robertson to say, "We 
agree, 'Why not', that Russia might someday join NATO. We're ready to sit 
down and talk with you about it when you're ready, since sooner or later 
we'll have to both work out the conditions under which it would make sense 
for you and make sense for us too." It would not have been too hard for any 
other Western leader to say something like that. But none of them did. From 
Washington to Warsaw, Putin got a cold shoulder.

Putin's response seems to be that Russia will adjust to defend its interests, 
under the worsened condition that it is being excluded. And under this 
condition, defending its interests means opposing the expansion of NATO.

Putin's point is, of course, nothing new. Russian officials from Yeltsin on 
down have been making the same point ever since 1991. Russia sees itself as a 
European country and an ally of the West. If the Atlantic Alliance is sincere 
about having outgrown the Cold War enemy relation, the way it outgrew the 
enemy relation with Germany after 1945, then it will bring in Russia as a 
full member, as it did with Germany. If Russia is instead kept on out of 
NATO, then it would be against Russia's interests -- Russia's objective, 
large-scale, valid interests -- for everyone else to get in. If Russia is 
kept out and everyone else is brought in anyway, then it is not being 
regarded as a partner but as an enemy, and the whole thing is directed 
against it.

The reasons for this are obvious and compelling. They have been stated over 
and over again. Nevertheless, there are many people involved in this business 
who have managed never to understand them, so perhaps they bear repeating. 1. 
If NATO is sincere in saying that it regards as a strategic partner not as an 
enemy any longer, then there is no reason in principle why it shouldn't 
welcome the idea of Russia coming even closer and becoming a member. This 
should only be a matter of working out the details and figuring out the terms 
and conditions so it would be work well for both sides. 2. But NATO doesn't 
welcome Russia joining and doesn't even try to think about how to make it 
work. Instead, lots of NATO people shrink from the idea as a matter of 
principle. Yelps are heard about how this would destroy the whole purpose of 
the NATO alliance. This means they still do think of enmity to Russia as 
NATO's raison d'etre. Ergo, their expansion of the alliance is directed 
against Russia. 3. Russia has interests in all European security questions, 
and accordingly, in being a member of the group where these questions are 
thrashed out. 4. If everyone else were brought into NATO and Russia kept out, 
then Russia would be isolated. It would lose its ability to pursue its 
interests by normal diplomatic means. The only means it would have left would 
be military threats. Including Russia in NATO, on the other hand, would give 
it a new channel for pursuing its interests by normal peaceful diplomatic 
influence in a balanced joint council. 5. Russia has valid interests 
throughout Europe -- sentimental interests, economic interests, an interest 
in trade expansion and close financial links with the West, kinship 
interests, strategic interests. It has an interest in the treatment of its 
diaspora in the Baltic states and Ukraine -- their language rights, 
citizenship rights, travel rights, property rights, equality, and dignity -- 
an interest every bit as valid and inescapable as the ones Jews have in their 
own diaspora. If they all are let into NATO and Russia is not, they'll think 
they can stomp on Russian interests with impunity. 6. The new members would 
bring their historic resentments against Russia into NATO's councils and 
re-orient its work back to making military plans against Russia. NATO could 
easily start taking military actions against Russian allies and interests, 
especially if Russia's voice is not heard as an organic part of its 
discussion.

Russians have stated these reasons a thousand times, publicly, privately, 
clearly, diffusely, in one-liners, in long articles, calmly, hysterically -- 
in every way they could. The official West has turned a deaf ear just as many 
times. It has "answered" with one-liners, or rather two-liners, the substance 
of which has been to dismiss any Russian interests beyond its borders as 
imperialist, and then to deduce that no nice non-imperialist Russian could 
possibly have any good reason for being against NATO expansion. This has 
served as a kind of inoculation against listening. It has routed the Russian 
complaints to go in one ear and out the other.

What is new is not the point that Putin is making, but that it is Putin who 
is making it this time. And by making it in Ukraine, whose elite would like 
to join NATO but whose society is bound up with Russia, Putin has illustrated 
the high price that is to be paid for the spurning of Russia as an ally. It 
is a price that has been paid for a number of years already. All that Putin's 
statement shows is that it is still being paid. And it will continue to be 
paid as long as Russia is kept out of doors without any serious hope of 
coming in.

Western officialdom, having put Russia's actual concerns out of mind, has 
managed to make believe that it would be in Russia's interest for a 
Russia-less NATO to expand up to Russia's borders and surround it. NATO's 
Supreme Commander, Gen. Wesley Clark, is the latest one to do this. What is 
one to say, when one sees him making supercilious comments in Tallinn last 
Saturday (April 15) about how it would be good for Russia if NATO expands 
into the Baltics -- "After all, what better insurance of security and 
stability could Russia have than an enlarged NATO.'' An observer from outer 
space, unaware of the limitations of the NATO universe of discourse, might 
suppose that he was trying to insult the intelligence of his listeners. Or 
that he was deliberately trying to provoke the Russians.

Russians have much in common with our observer from outer space, at least 
when it comes to their bafflement at the peculiarities of NATO speech. They 
do get insulted. They do get provoked. They do interpret it as deliberate 
trashing of their interests. After they have told NATO a thousand times, in 
clear and compelling terms, why it would be harmful to them, they assume that 
NATO understands what it is doing. Maybe that is their mistake. 

Putin is in his formative period as leader, somewhat like Yeltsin in 1991 but 
even more so. Gorbachev said two weeks ago (April 7) that Putin is ''someone 
who can learn quickly; the important thing is that he have the right 
teachers.'' He is learning in the school of experience, and the experiences 
he is getting on NATO have not constituted a good teacher. He is being taught 
to be wary of giving anything away to the West or making any sentimental 
overtures to it. He is being taught that, when he does seem to be doing 
something nice for the West, he must cover his rear and present it for 
domestic consumption as a clever tactic in negotiating vis-a-vis the West. 
His speech at the Duma on April 14, asking for ratification of START-2, shows 
that he has learned well how to do this. 

The reaction on the Western side follows inexorably in turn: his every 
friendly overture ends up getting interpreted as a hostile tactic, along the 
lines of the old phrase about its being a "plot to divide and deceive the 
West". Constructive initiatives become next to impossible under these 
conditions.

Ira Straus
U.S. Coordinator
Committee on Eastern Europe and Russia in NATO
www.fas.org/man/nato/ceern

*******

#7
World Socialist Web Site
www.wsws.org
Hypocrisy and double standards during Russian President Putin's London visit
By Chris Marsden
19 April 2000

Russian President Vladimir Putin chose London for his first foreign visit
since winning last month's elections. He was accorded, literally, the
red-carpet treatment by the Labour government of Prime Minister Tony Blair,
culminating in an audience with the Queen at Windsor Castle.

During his visit, Putin was bellicose in his defence of Russia's offensive
in Chechnya. At a joint press conference with Blair, he described it as “a
struggle against extremism".

"We have seen European countries and European leaders not able to support
the Russian fight because they are afraid of a reaction among the Moslem
inhabitants of Europe, but that's the wrong conclusion.... Western Europe
could pay heavily for this," Putin said.

Blair dismissed all protests against Putin's visit. At the joint press
conference, he said, "Some say that because of our concerns about Chechnya
we should keep some distance from Moscow. I have to tell you that while I
share those concerns I believe that the best way to register those concerns
and to get results is by engaging with Russia and not isolating Russia."

The Russian media was delighted by events. The Kommersant newspaper wrote,
“Russia has been accepted into high society.... Putin and Blair chatted
(calling each other Vladimir and Tony), smiled, cheered each other up all
the time." “Putin and Blair like each other and they don't hide it," wrote
Izvestia, “Russia is seen as a long-term partner of Britain."

Blair's comments angered many of his liberal apologists, who have endorsed
his military offensives against Serbia and Iraq on the basis of the
government's supposed humanitarian motives and “ethical foreign policy”.
Far from advocating a policy of “engagement” in other instances, Blair is a
fervent supporter of continued sanctions and isolation of Iraq and Serbia
despite the appalling cost in human lives and suffering this has caused.

The Guardian's Hugo Young was provoked to comment; "He [Blair] was going to
be a different sort of leader, standing for something new in the grammar of
foreign policy, an ethical dimension. He raised expectations. These have
been betrayed many times over.... He is wholly pragmatic, ruthlessly
focused, hard-as-nails committed to the supreme relevance of his own
persuasive role. The outrage expressed by many sincere people against this
premature welcoming of Putin into the embrace of the Western powers meets
Blair's own passionate unconcern."

There is no conflict of substance between Blair's advocacy of sanctions
against Serbia and Iraq, and dialogue and “engagement” with Russia. In both
instances, he acts as the representative of Britain's interests.

Putin has the support of Britain and the Western powers not in spite of,
but because of his willingness to resort to brutal repression. Previous
claims that the restoration of capitalism in the former USSR would bring
democracy in its wake now look increasingly threadbare. The West regards
Putin as the type of strongman necessary to push through pro-market reforms
in Russia against the opposition this will provoke amongst working people.

And Putin knows this very well. His first stop was the National Liberal
Club in Whitehall to meet representatives from the Confederation of British
Industry, where he promised to ensure that ownership of property was
sacrosanct. He urged British businessmen to invest in Russia and promised
sweeping reforms, including tax changes and a battle against corruption, in
order to attract foreign investment.

"The members of the British government have said on many occasions that the
Russian angle is very important for your economy. On our side, we have a
similar perception and a similar determination to develop our cooperation
even further," he said. "You would, with your business acumen, be able to
seize new opportunities opening in Russia, and we are very optimistic about
improvements in our bilateral relationship."

His newly appointed economics adviser Andrei Illarionov has said, "The
optimal level of state spending to free conditions for economic growth is
17 percent to 20 percent of GDP," echoing the demands of the World Bank and
other institutions for massive cuts in state expenditure. Officially, state
spending is presently around 37 percent of Russia's GDP, though unofficial
estimates range as high as 50-70 percent, if perks to the nomenklatura are
factored in. At the moment, one quarter of state expenditure goes toward
paying wages for nearly 2.6 million state employees. Putin's plans would
lead to further poverty and mass unemployment.

It is this programme that has earned Blair's endorsement for Putin. He
described him as “a leader who is ready to embrace a new relationship with
the European Union and the United States, who wants a strong and modern
Russia and a strong relationship with the West".

Britain was chosen as Putin's first port of call because for many years it
has played a key role as America's most loyal ally in Europe. President
Clinton will meet Putin in Moscow on June 4-5, to discuss arms control,
economic reforms and Russia's offensive in Chechnya.

According to a Pravda correspondent, talking to Blair was a “bridge to the
United States”. Blair acknowledged this in his own comments that Britain
could act as a "bridge of understanding" between Russia and Europe, and
Russia and the US. British ministers were reported to be delighted that
Putin chose London for his first overseas trip, rather than Germany, which
has far more substantial economic links with Russia.

Putin, for his part, was keen to use the occasion to demonstrate to the US
that Russia is still a force to be reckoned with. He entered the prime
minister's official residence at 10 Downing Street flanked by two leading
military personnel carrying a briefcase presumed to contain Russia's
nuclear codes. He also informed Blair of his continued opposition to US
plans for a new missile defence shield, involving Britain's radar stations,
and warned that Russia would withdraw from the Start II nuclear missile
treaty if the project went ahead. It was this that prompted the Russian
journal Sevodnya to note that Putin's visit gave him “the chance to play a
more marked role in the European arena, and to leave the shadow of the big
American brother".

*******

#8
Clinton to Press Putin on Economy; Arms Control Spat Looms

Washington, April 19 (Bloomberg)
-- U.S. President Bill Clinton will press Russia's newly elected 
president, Vladimir Putin, to press ahead with economic reforms when the two 
meet in Moscow in early June, an administration official said. 

``He has to work on measures to guard against corruption and deepen his 
market reforms,'' Clinton's National Security Council spokesman, P.J. 
Crowley, said yesterday. ``Once he is sworn in as president, we will be 
looking to see what specifics he comes up with.'' 

Russia is seeking International Monetary Fund financing this year to help 
cover $7 billion in foreign debt payments due, and has promised to overhaul 
its tax system to make the economy more attractive to investors. IMF acting 
chief Stanley Fischer said last week that lending likely will resume by 
year-end if Russia carries out reforms. 

Another major discussion point for Clinton and Putin will be U.S. development 
of a system to defend the U.S. against a potential missile attack. Clinton's 
June 4-5 trip comes three weeks before a crucial third test of the system, 
and Clinton is expected to decide later this year whether to begin deploying 
it in the next five years. 

The Clinton administration says the system is intended to stop missiles fired 
by rogue nations such as Iraq, Iran or North Korea, not Russia. Russians 
disagree, saying it would violate the 1972 Anti-Ballistic Missile Treaty. 

Last week Putin got Russia's parliament, the Duma, to do something it had 
refused to do for seven years under Putin's predecessor, Boris Yeltsin: 
ratify the Start II arms limitation treaty. But the Duma attached conditions 
to the Start accord aimed at prodding the U.S. to limit its anti-missile 
program. 

Republican Pressure 

At the same time, congressional Republicans are pressing Clinton to go ahead 
with deployment of the system. Senate Majority Leader Trent Lott and 24 other 
Republican senators urged Clinton in a letter Monday not to sacrifice U.S. 
missile defense interests to achieve a final agreement on Start II or to make 
progress on Start III, the next round of talks aimed at further reducing 
nuclear stockpiles. 

So far, though, two tests of the U.S. missile defense system have had mixed 
results; the June test will be the third. 

``Most of the advice the president is getting is that no decision should be 
made now, in that we need to continue studying this and see how the results 
come in,'' said Andy Fisher, a spokesman for Richard Lugar, an Indiana 
Republican on the Senate Foreign Relations Committee. 

The Senate may not have time this year to consider alterations to the Start 
II accord based on the measure approved by the Duma, Fisher said. ``There 
aren't a lot of legislative days left in the Clinton administration,'' he 
said. ``This may hold over until next year.'' 

Dispute Over Scope 

Republican concerns are centered on a fear that Clinton would agree to a 
Russian suggestion for the U.S. to limit its missile defense to a single, 
100-interceptor system based in Alaska. Republicans say that system couldn't 
adequately defend America's entire land mass. 

The administration likely wouldn't accept such conditions, Crowley said. 

``We're working hard to develop the capability to defend the entire United 
States from the threat of nuclear missiles, and we believe we can accomplish 
that while preserving the ABM treaty,'' he said. 

The NSC spokesman said Clinton would also use the visit to address Russia's 
moves toward democracy and regional issues, like preserving peace in the 
Balkans and other matters affecting European security. 

``There is a full, broad-ranging set of issues that reflect our mutual 
interests, mutual concerns, and some areas, like Chechnya, where we have 
important differences,'' Crowley said. 

The U.S. objects to the war in the breakaway Russian province, while Russia 
says it's fighting terrorists. 

Clinton talked with Putin over the weekend, and made clear that he ``also 
wants to talk about areas where we have important differences, like 
Chechnya,'' Crowley said. 

Russian and American officials also squabbled last year about what role 
Russia would play in the United Nations-led Kosovo peacekeeping force. Russia 
criticized the North Atlantic Treaty Organization's bombing campaign last 
year against Yugoslav President Slobodan Milosevic, and initially refused to 
serve under UN officials spearheading the peacekeeping effort in Kosovo. 

*******

#9
Ekonomika i Zhizn
No. 15
[translation from RIA Novosti for personal use only]
NON-PAYMENTS ANATOMY
By V. BUTKEVICH 

Facts and Figures 

* As of January 1, 2000 total debts on liabilities of 
enterprises and organisations equalled 3,609.4 billion roubles, 
including 1,445.3 billion roubles in overdue debts, i.e. 40 per 
cent of total debts. 
* As of January 1, 2000 creditor outstandings across the 
country constituted 2,900.8 billion roubles, with overdue 
credit payment accounting for 46.7 per cent of this sum. 
* Outstandings on loans granted by banks in Russia 
amounted to 708.6 billion roubles as of January 1, 2000, 
includng 90.8 billion roubles in overdue loans. 

-----------------------------------------------------------
Jan. 2000 In % to 
bn rbls. Jan. 1999 Dec. 1999 
-----------------------------------------------------------
Overdue credit payment 1,452.6 117.0 107.2 
including: 
industry 782.1 110.6 101.8 
construction 102.5 112.5 97.7 
agriculture 118.2 122.8 100.2 
transport 121.8 71.0 96.7 
communications 3.8 104.4 90.3 
trade and public 
catering 143.1 by 5 times by 3.1 times
wholesale trade in 
capital goods 9.6 100.9 85.4 
housing and utilities 133.7 126.9 97.5 
-----------------------------------------------------------


* As of January 1, 2000 debtor outstandings across the 
country constituted 1,999.7 billion roubles with overdue debt 
payments accounting for 40.7 per cent of that sum. 
* 7.1 per cent of all debts to suppliers and 3.6 per cent 
of the buyer's debts were in the form of bills. 
* The debts of Russian enterprises and organisations to 
their partners in the CIS states amounted to 3.1 billion 
roubles, with overdue debts accounting for 42.9 per cent of 
this sum. 
* Enterprises and organisations of the CIS states owe 
their Russian contractors 7.1 billion roubles and their overdue 
debts account for 46.1 per cent of this sum. 
* Moreover, Ukraine, Belarus and Kazakhstan account for 
most of these debts. They owe Russian partners a total of 5.1 
billion roubles. 
* Debts for products shipped, works fulfilled and services 
rendered accounted for 39.9 per cent of enterprises' 
circulating assets last year. 
* As of January 1, 2000 the arrears of tax payments to the 
federal budget (without taking into account the reproduction 
fund of small and medium businesses) amounted to 246.7 billion 
roubles (5.5% of the gross domestic product). The largest share 
in the structure of debts to the federal budget belongs to 
industry (53.7%), including the fuel sector (11.6%), 
machine-building (14.4%), construction (11.9%) and trade 
(9.9%). The most significant debt growth from February 1999 to 
January 2000 was in trade (16.7 billion roubles or 20% of the 
total debt growth), machine-building (12 billion roubles or 
14%), oil extraction and oil refining (7 billion roubles or 8%) 
and construction (8.7 billion roubles or 10%). 
* Iron and steel and non-ferrous metals producers reduced 
their tax arrears by 1.6 billion roubles or 19%, the railways 
sector by 0.21 billion roubles or 2%, the pipeline transport by 
0.72 billion roubles or 9%. But on the whole, overdue tax 
payments grew by 84 billion roubles in all the sectors. 
* The arrears of tax payments to the federal budget 
constitute 92.9% (229.1 billion roubles), with deferred 
payments accounting for 7.1% (17.6 billion roubles). 

* The amount of deferred payments to the federal budgets 
amounts to 17.6 billion roubles. Payments delayed by decision 
of arbitration courts on corporate insolvency account for the 
bulk of this amount (55.6%). 

(According to data of the State Statistics Committee of 
Russia and the Finance Ministry of Russia) 

*******

#10
Washington Post
19 April 2000
[for personal use only]
In Russia, 'Unteachable' Take Center Stage
By Daniel Williams
Washington Post Foreign Service

MOSCOW It is fictional 19th-century Russia. The downtrodden war veteran, 
Capt. Kopeikin, begs the indifferent government minister for a few rubles in 
pension to make up for his injuries. As was long typical in Russian 
literature and life, the poor petitioner comes away empty-handed. 

Turn to 21st-century Moscow. Actors in a schoolroom rehearse "The Tale of 
Capt. Kopeikin," a stage adaptation of a passage from Nikolai Gogol's novel 
"Dead Souls." Even in the city's burgeoning theater scene, this rendition 
will be a guaranteed eye-catcher. The cast is made up of young people and 
adults struggling with Down syndrome and other mental disabilities. In 
contrast to the despair that permeates "Capt. Kopeikin," however, the actors, 
their parents and instructors are imbued with an optimistic conviction: 
"Down's people," as they are called here, can alter attitudes in a society 
and government long indifferent to their quest to live a full life.

More than nine years after the collapse of the Soviet Union, it is 
fashionable for many Russians to insist that what this country needs is less 
democracy and more guidance from a strong government, in every facet of life. 
The belief was manifest in last month's election of Vladimir Putin, who as 
president has promised to make Russia great again.

But there's a counter-theory, which argues that the governed ought to be the 
engine of progress in a country where the "strong state" often has been 
synonymous with cruelty. The creed informs quiet revolutionaries throughout 
the country--new ecological activists, the few independent journalists who 
crusade against corruption, the clutch of persistent lawyers who take up the 
banner of civil rights and, at this school on Donskaya Street, earnest actors 
straining to interpret Gogol's morality tale. The little effort at theater is 
a fable of grass-roots change in Russia.

Under the direction of Igor Neupokoyev, a professional actor, the cast 
painstakingly follows elaborate stage directions, laboring to enunciate 
properly through their sometimes slurred speech. With gestures that are 
alternately slow and abrupt, they move through an imaginary, magnificent and 
uncaring St. Petersburg, the czarist capital and setting for Kopeikin's story.

The project is not designed as a circus act. "This is no curiosity. We're 
here to put on a good play," said Neupokoyev. He tentatively plans to stage 
the production in June. But if the cast isn't ready, he will postpone it 
until it is presentable. "I don't want the audience to think about how 
difficult it is for the actors to perform the play. I want them to think it 
was easy," the director said. The cast has been rehearsing for three months. 
Neupokoyev is asking theater friends to find him costumes.

Investing energy in disabled citizens would have been unthinkable a decade 
ago, not to mention in Gogol's time. Soviet policy toward mental disorders 
was to provide basic care in state homes, but nothing else, regardless of 
individual capabilities. "All were regarded as unteachable. They were kept on 
a shelf like objects," said Sergei Koloskov, head of the Down Syndrome 
Association of parents.

Koloskov became an advocate for Down syndrome victims four years ago, when he 
went to the Education Ministry to inquire about schooling for his preschool 
daughter, who had the genetic disorder that inhibits physical and mental 
development. Shades of Capt. Kopeikin: "The officials said it made no sense," 
Koloskov said.

He helped form the association, which not only lobbies the government for 
educational opportunities but also provides recreational and artistic 
activities for "Down's people." Funding for the group comes from foreign 
embassies and charitable groups.

Changing official attitudes has been slow, and money to implement programs 
scarce. Russia has created only four schools specifically for children with 
mental disabilities, all of them in Moscow. A total of 138 students out of an 
estimated population of 1,500 with Down syndrome in the city are enrolled.

The association hopes to integrate capable Down syndrome children into 
regular schools--so far, 36 children attend a special mixed school in Moscow. 
The move has met resistance from parents of children without disabilities who 
feared the syndrome was contagious. "We are out to teach the state and people 
to be flexible, to accept that Down syndrome is only a part of what makes up 
these human beings," said Koloskov.

Nationwide, however, the situation for children with Down syndrome is still 
"catastrophic" for thousands of victims, Koloskov said. Most are given up to 
orphanages by their parents, and many of the children die in their first year 
of life. The association is forming parents' groups in towns across the 
country and two information offices in Siberia.

In this context, the rehearsal of "Capt. Kopeikin" is something of a miracle. 
It is alive with enthusiasm. Cast members who happen to speak English 
immediately greet an American visitor in his own language. Mashenka, who 
plays a singsong girl in the play, offers an impromptu flute recital. Another 
cast member begins to tell his life story.

Their outgoing manner is an attraction for director Neupokoyev, who first 
worked with Down syndrome actors at a winter vacation camp where he staged a 
production of "Thumbelina." There is no unnatural resistance to getting into 
character.

At the same time, actors are prone to recite lines at the wrong time or 
wander off. Coordinating group movements is a challenge. "Sometimes, we have 
to repeat a scene over and over. People forget," said Neupokoyev, who 
volunteers his time. Kibitzing mothers sometimes compete with the director 
for the actors' attention.

The other day, a dark-haired 18-year-old, Ruslan Vanyan, was playing a 
doorman. He has one line, "Forbidden!," which he shouted at Kopeikin as the 
veteran tried to visit the official to win a pension. "He comes home from 
rehearsal tired, but happy," said his mother, Svetlana.

"Forbidden!" Ruslan yelled. "We've passed that," Neupokoyev gently informed 
him.

A big scene was set to begin. But the actor penciled in to play the 
government minister was absent. In desperation, Neupokoyev turned to Misha 
Vasyanin, 37. He is shy, and had wanted a silent role, but it turns out he 
had memorized everybody's lines, including the minister's.

Vasyanin resisted. It seems he had seen a movie featuring an evil minister, 
taken from a Chekhov character, and didn't find it appealing to play a 
villain. "I write poetry," he said.

Finally, he relented. Hand inserted into shirt, Napoleon style, he approached 
center stage. "Think Putin," suggested the director. "You're a man of the 
state." Vasyanin began to strut.

******

#11
Soccer-Russia fears explosion of football violence
By Maria Eismont

MOSCOW, April 19 (Reuters) - Russian officials fear soccer related violence 
could spiral out of control unless swift action is taken by the country's 
security forces. 

Concerns about an escalation in hooliganism have increased after a teenager 
was killed during clashes between rival fans last weekend. 

Vitaly Petukhov, 15, died after fans armed with rocks, bottles and sticks 
clashed in the streets of St Petersburg in the run-up to the match between St 
Petersburg Zelit and Dynamo Moscow. 

Police said the teenager had died of either a drug overdose or an epileptic 
fit, but newspapers quoted eyewitnesses claiming he was killed by a flare 
fired by rival fans. 

Officials and media have being blamed the police for failing to maintain 
order while football officials have been accused of trying to play down a 
rapidly growing catalogue of violent incidents. 

``We are very concerned by what is going on in the stadiums, we think its a 
very serious problem,'' said Andrei Sokolov, a Professional Football League 
official. ``Football is a game, peoples' lives are much more important.'' 

``There are different reasons being given for what happened. But I believe 
the main one is the failure to realise that there is a problem, mostly on the 
part of security forces.'' 

Russian media said officials were trying to hush up the recent explosion of 
violence and predicted a new wave of clashes, saying fans were now locked in 
a revenge cycle. 

``When the fans were knifed in Istanbul, senior Turkish governmental 
officials reacted immediately,'' the daily Sport-Express said, referring to 
the recent killing of two Leeds United fans before a UEFA Cup match with 
Galatasaray. 

``All we get in response is silence.'' 

According to media reports, St Petersburg fans have been preparing to seek 
another showdown with Moscow hooligans at Zenit's next match at Ramenskoye, 
outside the capital. 

``If we hadn't been attacking them, they would have been attacking us,'' 
Sovetsky Sport daily quoted a Dynamo fan as saying. ``There was no third 
option.'' 

Another fan, quoted by Sport-Express said: ``Nothing good will come from the 
Moscow match. St Petersbourg fans will come seeking revenge.'' 

Ramenskoye has been the scene of two of the most violent incidents in recent 
months. 

In one instance last year, Oleg Romantsev, coach of both Moscow Spartak and 
the national side, intervened to calm battles between his club's fans and 
riot police. 

Sokolov said it was not merely up to sports organisations to tackle what he 
sees as a social malaise. 

``It is beyond the power of soccer organisations to prevent such incidents on 
their own,'' he said. ``Only together with governmental bodies, can we deal 
with it.'' 

Some fans claim that football-related violence could spiral out of control in 
Russia if action is not taken soon. 

``There is no doubt how it will all end if measures are not taken,'' said 
Dynamo's unofficial website Western Tribune. 

``Dynamo supporters have already promised that few Zenit fans will actually 
reach Ramenskoye next Saturday.'' 

*******

Web page for CDI Russia Weekly: 
http://www.cdi.org/russia