May 17, 2000    
This Date's Issues: 4305 • 4306 • 4307

Johnson's Russia List
#4305
17 May 2000
davidjohnson@erols.com


[Note from David Johnson:
1. AP: Russian Author Shuns New President. (Solzhenitsyn)
2. Reuters: Gorbachev to Head Russia Media Watchdog after Raid.
3. APN: Basaev has been cooperating with Russian and foreign special services for long.
4. Anne L. Clunan: Putin and Primakov.
5. Gordon Hahn: Putin's Federal Policy.
6. Izvestiya: Cut Seven Times. To the New Federation ­ Through Tests and Errors.
7. gazeta.ru: Rebels Prepare to Storm Grozny.
8. The New Republic: Domino. Masha Gessen on how Putin's 
scorched-earth policy in Chechnya has pushed an entire region to 
the brink of explosion. 
9. Chicago Tribune: Colin McMahon, RUSSIANS FLOCK TO IKEA AS STORE BATTLES MOSCOW.
10. Washington Monthly book review: Russia's Tumultuous Decade.
Jeffrey Sachs reviews Days of Defeat and Victory by Yegor Gaidar.]


******


#1
Russian Author Shuns New President
May 16, 2000
By ANDREW KRAMER 


MOSCOW (AP) - Alexander Solzhenitsyn, the dissident author who protested 
Soviet injustice and then turned his pen against corruption under former 
President Boris Yeltsin, said Tuesday that Russia's new leader was continuing 
in the misguided path of his predecessors. 


The comments were among Solzhenitsyn's first on President Vladimir Putin's 
performance. 


Solzhenitsyn - whom many see as the country's voice of conscience - 
reprimanded Putin for waiting so long to release his economic plans while so 
many Russians were facing severe hardship. He also criticized what he called 
Putin's record of inaction as Russia's second democratically elected leader. 


"Russia needs to be saved not in a matter of years, but in weeks and months," 
Solzhenitsyn said, addressing a small audience of intellectuals and students 
in Moscow's central Lenin Library. 


The 81-year-old Nobel laureate - who has led a mostly reclusive life since 
his 1994 return from exile - spoke in the elegant and reasoned style that 
belies the decade he spent in hard labor camps under the Soviets. 


"The new president has been in office for not just 40 days," but for more 
than half a year including his work as prime minister. "In this time I have 
seen nothing," he said. 


Named prime minister in August, Putin assumed the presidency on Dec. 31 after 
Yeltsin unexpectedly resigned, and then won an election on March 26. 


Solzhenitsyn criticized Putin's reluctance to distance himself from 
corruption in government. The writer specifically lashed out at Putin for 
granting Yeltsin a blanket decree of immunity from prosecution, and for 
Putin's seeming reluctance to fire self-serving officials. 


"Hundreds should be brought before the courts" for pilfering national 
property, Solzhenitsyn said. 


He said Putin, who has not yet released an official economic program but 
appears ready to support more privatization and a liberal market approach, 
was uncritically following Yeltsin's policies. Solzhenitsyn said these 
policies enriched a tight coterie of Kremlin insiders while bringing poverty 
to the majority of Russians. 


"We literally exist among ruins, but pretend to have a normal life," the 
writer was quoted as saying last week in a Moscow newspaper. 


Solzhenitsyn spoke out against a proposed law on privatizing agricultural 
land, which he said would not help farmers realize a centuries-old dream of 
owning the land they tilled, but would allow a few business moguls to divide 
up the country. 


He also lashed out at powerful regional governors, saying they were eroding 
the country's unity. Russia instead should focus on city and local government 
to build a true democracy, he said. 


"We can only build something strong and healthy from the bottom up, as all 
things grow in nature," he said. 


Solzhenitsyn's books, including "A Day in the Life of Ivan Denisovich" and 
"The Gulag Archipelago," became classic studies of totalitarianism and the 
prison camp experience, and exposed the cruelty cloaked in the Soviet 
communist ideals. 


But after an emotional return from decades in exile, mostly spent in Vermont, 
the writer has alienated many Russians with his conservative and nationalist 
views, and his shrill criticism of capitalism and the West is sometimes 
ignored. 


Still, he is among the few Russians who remain voices of moral authority to 
their country. 


Solzhenitsyn also decried the poor state of Russia's library system, and the 
lack of new books for the young generation. 


******


#2
Gorbachev to Head Russia Media Watchdog after Raid
May 16, 2000


MOSCOW (Reuters) - Russia's NTV television said Tuesday it had set up a media 
monitoring group headed by former Soviet President Mikhail Gorbachev after 
police raided its parent company's headquarters. 


NTV parent company Media-MOST was raided by dozens of armed tax police 
wearing masks and camouflage late last week. NTV officials said the search 
was an attempt to stifle freedom of speech and silence any critical coverage 
of the Kremlin. 


The FSB domestic security service said they were carrying out a criminal 
investigation. President Vladimir Putin said after the raid that he supported 
freedom of speech in Russia. 


NTV said in a statement it had been prompted to form what it called a "public 
council" by the "complicated situation of our television station." The 
council would be charged with providing a forum for debating issues affecting 
non-state media. 


Gorbachev said in a letter of acceptance released by NTV that he hoped the 
council would help underpin the "difficult" development of democracy in 
Russia. 


"Non-state media, free from arbitrary bureaucratic interference, are among 
the necessary and essential guarantees of democracy," he said. 


A spokeswoman for NTV said by telephone that the new monitoring body would be 
sponsored by NTV, but was not part of the company and would have no editorial 
control over the television station. 


She said Gorbachev would seek other public figures to join the council. 


Separately, Interfax news agency quoted an investigator from the prosecutor 
general's office as saying Thursday's raid on Media-MOST had nothing to do 
with the company's media concerns. 


It quoted investigator, Vladimir Danilov, as saying officials were 
investigating alleged crimes by workers in the security department of MOST 
Group, which includes Media-MOST as well as other commercial interests. 


In a further sign that the search of Media-MOST had shaken Russian 
journalists, a special edition of the Obshchaya Gazeta newspaper would be 
published Wednesday, Media-MOST's Ekho Moskvy radio reported. 


The paper, only published when Russia's press freedom is considered to be 
under threat, last appeared in February to protest against the mysterious 
disappearance of Radio Liberty reporter Andrei Babitsky. 


Babitsky, whose reporting from behind rebel lines in separatist Chechnya 
angered the Kremlin, was detained by Russian troops there in January and 
disappeared in a prisoner swap which drew international criticism. He has 
since been released. 


******


#3
APN
16 May, 2000
Basaev has been cooperating with Russian and foreign special services for long


APN reporter quoted members of Public Council to Make Peace in Chechen 
Republic as saying at a news conference that known field commander Shamil 
Basaev has been successfully cooperating with Russian and foreign special 
services for a long time. He is a double and even a triple agent.


To evidence the information, chairman of Coordination Council of Chechen 
public, political and cultural organisations in Moscow, doctor of history, 
professor Dzhabrail Gakaev, recounted the way Basaev and another famous field 
commander Khattab were leading out their troops of Botlikhsky region in 
Dagestan through a narrow passage «with Russian helicopters to guard them.»


Gakaev stated that Chechen crisis had been designed by Western special 
services to split Russia, to force it out of North Caucasus.


As for an assumption that a certain Russian elite was interested in it, 
according to Gakaev, neither Yeltsin`s victory in the 1996 presidential 
elections nor Putin`s success in 2000 could be possible but for the Chechen 
conflict keep the Russian society in stress until the very elections.
******


#4
Date: Tue, 16 May 2000 
From: aclunan@socrates.berkeley.edu (Anne L. Clunan)
Subject: DJ/Alternatives


A follow up to your comment about alternatives. Aside from agreeing as the
other Western commentators have done, I thought I'd pass on the gist of
the remarks made recently here by a leading Yabloko Duma MP on the
differences and similarities between Primakov and Putin, especially in
their rhetoric about a "strong state". While both Ps want to make the
Russian state strong, according to this MP, Primakov's way would have been
more democratic and less corrupt, while Putin's will be the reverese. 
What struck me most was the MP's clear respect for Primakov and his
distrust of Putin.


According to him, Primakov would not, as some Western pundits implied,
sanction a return to a repressive state or abandon a market economy. His
"dissatisfaction" with wild capitalism and organized crime would have
moved him towards increasing the competitiveness of Russia's market
economy by fighting the oligarchic economy. He would have preserved
freedom of the press, albeit with rhetorical pressure from the state.
Primakov felt that Russia's current position vis-a-vis the West was
humiliating and therefore would have adopted non-military competition with
the West.


The Yabloko MP said that Putin inherited almost all of these traits, but
there are disturbing differences. The MP painted a picture of Putin as
personally very weak and completely reliant on his patrons (the family and
the oligarchs). The MP claims that Putin and his backers are trying to
create their own strong political party (similar to Mexico's PRI) through
non-democratic means, which Primakov would not have and has not done.
Putin's pressure on the press is material and legal action against
journalists whereas Primakov's pressure was merely voicing his
displeasure. Putin won't adopt a strategy of levelling the playing field
in Russia's economy because he is in the pocket of the oligarchs who put
him in power. As a result, Russia's market will retain its oligarchic
character and SMEs won't have equal access. With regard to a competitive
orientation towards the West, the MP sees little difference between Putin
and Primakov, though he believes Putin has "more room for manuever in
looking for alliances with the West." As for Chechnya, the MP indicated
that Putin was not in control of things there, rather the military was.
Putin did not authorize the move into Chechnya.


The striking thing about this talk was the patent concern regarding
Putin's and the praising of Primakov's democratic instincts. Here is one
of Russia's "good guys" telling us in the West that Primakov the old
Communist spymaster was a much better package, both for Russia and hence
for us, than Putin the bright young KGBnik. The difference between the two
is the cost to democracy in Russia. Both would increase the strength and
powers of the central government; for Primakov this probably would have
meant pandering more to statist economics, but for Putin it means
pandering to the oligarchs and the military. The former might restore some
public confidence that the state acts in the public interest, the latter
certainly does not. Combine that with Putin's peculiar definition of


freedom of the press, and we might all join the ranks of those wishing for
what might have been. The question of whether Primakov would have had the
power to accomplish his goals is open: if we simply say that he would not,
that implies that the only political-economic alignments we can
envision/accept are the ones that led Russia to its present mess. Primakov
was outmanuevered. The family pulled a Bill Clinton and took the political
center that he was creating, and made it their own.


Anne L. Clunan
University of California
Dept. of Political Science
210 Barrows Hall
Berkeley, CA 94720-1950


******


#5
Date: Tue, 16 May 2000
From: Gordon Hahn <hahn@hoover.stanford.edu> 
Subject: Putin's Federal Policy


It does not seem to me that, as Jerry Hough suggrested in JRL 4303, that
Putin's districting program is related to Zhirinovskii's or any
gubernization program. Rather, it seems to me that it is designed to
prevent the cooptation of presidential representatives by regional leaders.
Since each region will apparently no longer receive a presidential envoy
and since the new envoys will be running 12 or so regions, it will be much
more difficult for governors to 'turn' these envoys.


Second in light of the administration's recent court victory in which the
courts of general jurisdiction will be allowed to rule on the
constitutionality or illegality of regional constitutions and laws (that
is, their correspondence with the federation's constitution and laws), it
is entirley possible, as has been suggested by some Russian legal scholars,
that these new federal districts will receive federal district courts that
would focus exactly on cases involving federal relations. This would
complement another Putin administration policy, or planned one, to stop the
unconstitutional regional funding of courts, which compromises their
independence. The report that the Putin administration is prepared to
introduce legislation that would allow the highest court of general
jurisdiction, the Supreme Court, to remove from office those regional
officials responsible for promulgating unconstitutional or illegal regional
legislation, suggests how the strategy of reining in the regions will be
rounded out. But like Hough, I am into speculation here.


Gordon M. Hahn
Hoover Inst.
Stanford U. 


******


#6
Russia Today press summaries
Izvestiya
May 16, 2000
Cut Seven Times
To the New Federation ­ Through Tests and Errors
Summary


Two days after Vladimir Putin's decree on establishing seven large federal 
districts was published, most of the governors have already voiced their 
consent with the proposed measures to improve administration. The majority of 
the Russian elite has also supported the innovation. However, the situation 
is threatening because of its possible consequences: President Putin may 
start to rule the country with support of force structures, rather than of 
civilian structures, unless he conducts constitutional reforms that would be 
supported by the elite.


The new institute of federal representatives, introduced by Putin's decree 
and meant to secure better manageability of the state, has several precedents 
in the Russian history. It started with Ivan the Terrible oprichniks ­ 
semi-military czar representatives in Russian provinces to oppose the 
independence of Boyars. Later, Arakcheev made a similar effort under Nikolay 
the First. Both experiences have proved that, if we rely solely on "military 
discipline" in the regions of Russia, the results are sad.


Sources in the presidential administration communicated that the volume of 
future authority of seven presidential representatives ­ "seven samurais" 
have not yet been completely determined. Rather, their powers will be 
broadened step by step by means of tests and errors. Eventually, they will be 
passed not only functions of control over force structures, but also 
regulation of finances. Finally the principle of appointing, rather than 
electing governors will be realized ­ the author supposed.


******


#7
gazeta.ru
May 16, 2000
Rebels Prepare to Storm Grozny
The military are expecting the Chechen rebels to become much more active in 
the next couple of days. There is information that between May 16th-20th the 
fighters plan a number of daring attacks in different parts of the republic. 
Faced with such threats, the Interior Ministry (MVD) and the army have 
started disarming allied Chechen units. 

The fact that something very serious is stirring is also confirmed by 
Tuesday’s reports that either on Sunday or Monday several Chechen warlords 
held an important meeting, not in the mountains, but under the very nose of 
the military, not far from Gudermes, which only two weeks ago was the seat of 
the Temporary Chechen Administration with the headquarters of presidential 
envoy Nikolai Koshman and that of the head of the pro-Russian Chechen Militia 
Bislan Gantamirov. 


The location of the meeting is in itself ominous news for Federal Army 
Group commander Gennady Troshev, because it means that the fighters can 
easily descend to the lowlands and cross territory full of checkpoints and 
almost reach Grozny itself. The names of the warlords who took part in the 
meeting clearly demonstrate that the military have failed to surround them in 
the mountains. Maskhadov, Basayev, Gelayev and some ten other rebel leaders 
all met near Gudermes. 


It has also been reported that a large group of Taliban mercenaries 
numbering up to 150 men has managed to enter Chechen territory. They are 
armed with mobile anti-aircraft missiles of the Stinger type (according to 
some reports, Russian-made). And somewhere in Georgia another detachment of 
almost 400 men, equipped with similar weapons, is ready to move into the 
republic. According to the border troops, the latter group will attempt to 
enter Chechnya in the next couple of days, because the rebels are counting on 
its help. What for? It is believed that the fighters will launch attacks on 
large towns and cities ­ Grozny, Gudermes, Argun, Shali, Urus-Martan. 
Captured Chechen rebels testify that large-scale attacks might happen even 
in Khankala, the very headquarters of the Federal Army Group. 


The fighters are already prepared to make the strikes early next week. 
They have had two months to reinforce their units, recover from their wounds 
and to restore the command chain over various groups. As a result, according 
to Russian intelligence, Maskhadov, the Basayev brothers and Khattab alone 
have more than 3000 men under their command. Another 700-800 form 
independent detachments such as that of Gelayev or ‘General Dudayev’s Army’. 
In addition, in the three cities ­ Grozny, Argun and Gudermes ­ there are no 
les than 5000 ‘former’ rebels, who are ready to take up arms at the first 
call. These reports are from of the Federal Security Service (FSB) for the 
army and the Interior Ministry. 


In such conditions a surprise storm of one of these three cities is 
not only possible, but, very likely to succeed: The combined federal forces 
are at present evenly dispersed across Chechnya. The Federal forces will not 
be able to resist an unexpected and direct strike for long. And if in the 
mountains minefields and various defenses properly protect fortified bases, 
in the lowlands nothing but sand bags and concrete blocks can help the 
soldiers hide from unexpected enemy fire. The chances that large scale 
fighting will again break out in the lowlands are even higher considering the 
majority of the local population is hostile towards the Federal forces. 


One of the signs that the military are nervous and anticipating a 
large-scale rebel offensive is the fact that they are hastily disarming local 
militia units. In particular, the famous brothers Yamadayev, who last 
December surrendered Gudermes to the Federal forces, were on Tuesday ordered 
to hand over their arms. They were in possession of a whole arsenal including 
anti-tank rockets, an 80mm mortar, dozens of submachine guns, grenade 
launchers and loads of ammunition. Officially the militia units are handing 
over their weapons because the order’s headline is soon to expire. 


Why the militiamen have been denied permission to keep their weapons 
is an uncomfortable question for the Federal generals. They say that such are 
the rules. But some people believe that the military and MVD leadership is 
afraid that if they get the chance, the majority of Chechens who form these 
detachments might turn their weapons on the Federal Forces. 


Andrei Matiash, staff writer


******


#8
The New Republic
May 22, 2000
[for personal use only]
CAUCASUS DISPATCH
Domino
Masha Gessen on how Putin's scorched-earth policy in Chechnya has pushed an 
entire region to the brink of explosion. 
By MASHA GESSEN (mgessen@glasnet.ru) 
MASHA GESSEN is chief correspondent at Itogi, the Russian partner to 
Newsweek. 


The glitz and fanfare surrounding Vladimir Putin's May 7 inauguration led 
many to compare the event to a czar's coronation. A better analogy would be a 
shotgun wedding: everyone knew the real reason for the event but was too 
polite to name it. When the new president, in his brief and stiff speech, 
proclaimed, "We have one motherland and one people," everyone in Russia knew 
he was talking about Chechnya, the war that brought him to power and the 
consequences of which form the central challenge of his tenure. 


When Boris Yeltsin tapped Putin as his successor last August, Putin 
proclaimed it his mission to restore glory to the military and order to the 
nation. He has accomplished the former by bombing away the humiliations of 
the past, along with most of the life in Chechnya. But achieving the first 
goal has come at the cost of the second, because, thanks largely to Putin's 
scorched-earth Chechnya policy, the entire North Caucasus region is now on 
the brink of exploding. 


For starters, there's Chechnya itself. The Russian campaign to retake the 
regional capital of Grozny during the first Chechen war, from 1994 to 1996, 
left the city so decimated that a shocked member of a delegation from the 
Organization for Security and Cooperation in Europe compared it to post-World 
War II Dresden. By the time the rebels took back the city, in August 1996, 
not a single building was left unscathed. I once spent the better part of a 
day there looking for a place to spend the night, in the vain hope of finding 
a house with both a roof and intact windows. Now, following Moscow's latest 
assault--which began with bombings in September and ended with house-to-house 
fighting in February--I doubt it's possible to find a structure in Grozny 
that even has four walls. 


Grozny used to boast half a million residents. Today it must be the quietest 
city on earth. On my visits there--the most recent of which was last week--I 
found high-rise upon high-rise collapsed into piles of concrete. Monuments 
had been reduced to their pedestals. Advertising signs, pockmarked by 
shrapnel, served not to inform but to remind: INTERNET in a city with no 
electricity or phone lines; AUTOMOTIVE SPARE PARTS in a city with no cars; 
CAFÉ in a city with no food. 


The temporary authorities, installed by the federal government on legally 
questionable grounds, announced that the city would be closed and a capital 
for Chechnya established elsewhere. But by early April it was clear that the 
military could not keep the civilians out of their ruined city. People bribed 
and tricked their way past checkpoints to get to what was left of their 
bombed, shelled, and looted homes. More than 200 Chechens, led by a woman and 
authorized by no one, started rebuilding the Grozny railroad station. 
Finally, in a show of utter helplessness, the federal authorities declared 
that Grozny would be rebuilt as the capital. 


As people return--the current population estimate, issued by the Emergencies 
Ministry, is 100,000--the Russian soldiers who formally control the city grow 
increasingly fearful. Their precautions range from the naive to the 
murderous. In what used to be one of the city's main squares, they have 
stretched chicken wire from one checkpoint to another, covering most of the 
perimeter of the square. Soldiers try not to venture past the fence. On April 
6, though, I saw a military truck drive out of the square onto one of the 
side streets and start firing, unprovoked, into the basement of a residential 
building. Ask Grozny's residents, and they'll say this is normal: Russian 
soldiers fire at anything that seems to move. 


Helping the Russians are, theoretically, a temporary Chechen administration 
and a temporary Chechen police force. Opposition leaders have returned from 
three years' exile in Moscow to assume positions vacated by politicians whom 
the war turned into guerrilla fighters. But the new administrators have even 
less control over their heavily armed people than did their predecessors, 
under whom kidnappers, robbers, and bandits thrived. And, if the 
administrators are at least fairly loyal to Moscow, the same cannot be said 
of the police. "Half of them have just come down from the mountains and 
shaved off their beards," says an interior ministry colonel who administers 
one of Grozny's districts--meaning that yesterday these cops were guerrillas. 
His 160 men work with 86 new Chechen police. "We try to do background checks, 
of course, but what's the point when we don't even have the ability to 
communicate with the city's other districts to find out if they've checked 
these guys out?" In other words, all a Chechen rebel needs to do to secure a 
Russian-issued gun and uniform is move a few blocks from his home. 


Outside Grozny, federal influence is even weaker. The mountains, where a 
scorched-earth policy is far more difficult to implement, are outside Russian 
control altogether. Even the city of Gudermes, largely spared thanks to town 
elders who negotiated the rebels' retreat before Moscow started bombing, is 
not fully secure. Just last week the temporary federal-administration office 
was shelled; heavy fighting breaks out almost every night. 


The disorder is hardly limited to Chechnya. The population of neighboring 
Ingushetia has nearly doubled, thanks to almost 300,000 displaced Chechens 
who have been there as long as eight months. Moscow has tried both carrot and 
stick to convince the refugees to return to "liberated" Chechnya: it has 
organized transport home and stopped food supplies to refugee camps. But, 
when they discover that they have no home to return to or that their native 
towns are still being bombed or shelled, many come back to the camps. Others 
arrive from areas of new combat, so the few who do leave the camps are 
quickly replaced. 


In response, Ingush authorities are playing a double game, complaining loudly 
about the unbearable burden refugees place on the republic while 
simultaneously refusing to cooperate with the federal authorities' attempts 
to manipulate the refugees into returning to Chechnya. The reason is that the 
Ingush and the Chechens are closely related. They speak more or less the same 
language, they endured the same Soviet atrocities--in 1944 Stalin deported 
members of both groups to Siberian Kazakhstan--and, until nine years ago, 
they formed a single republic. Although that republic split in two when 
Chechnya decided to break with Russia in 1991, the administrative border 
between Chechnya and Ingushetia was never clearly demarcated, and the two 
peoples continue to feel strong sympathy for each other. 


Until now, Ingushetia's president, retired General Ruslan Aushev, has 
masterfully managed his people's dual loyalties. When refugees from the first 
Chechen war strained the Ingush economy, he welcomed them--and offset the ill 
effects by securing from Moscow free-trade-zone status for his republic. But 
he has no more such tricks this time, and there are more refugees now, who 
are likely to stay far longer. Signs that the Chechens have overstayed their 
welcome are everywhere. Police have been placed on emergency duty to address 
outbreaks of violence between refugees and locals. And tensions, once they 
have escalated, are almost impossible to defuse. 


The instability in Ingushetia is particularly flammable given the republic's 
hostile relationship with its neighbor to the west, the Christian and 
traditionally pro-Moscow region of North Ossetia. The Ossetian border is 
hotly disputed. Indeed, in 1991-1992 the Ingush and the North Ossetians went 
to war over a tiny region that belonged to the Chechen-Ingush Republic before 
Stalin's 1944 deportation but was later handed over to North Ossetia. 
Thousands of refugees from the war remain in Ingushetia, unable to return 
home because the conflict was put down but never resolved. Peacekeeping 
troops and good sense have so far kept the Ingush and the Ossetians apart. 
(It is still impossible, for example, to convince a taxi from an Ingush town 
to drive you to an Ossetian town a dozen miles away, because cars with Ingush 
plates are certain to be stoned or shot at in Ossetia, and vice versa.) But, 
with Ingushetia bursting at the seams, the Ossetian-Ingush conflict is all 
but certain to flare up again. 


Like North Ossetia, other pro-Russian parts of the North Caucasus have also 
been destabilized by their proximity to breakaway Muslims. Here everyone has 
to pick sides. For example, the Adygei Republic, located to Chechnya's west, 
whose minority Muslim population controls the local government, seems to be 
siding with the Chechens: its constitution is remarkably similar to 
Chechnya's, and an Islamic militant organization believed to be aiding the 
rebels has its offices here. 


Multiethnic but primarily Muslim Dagestan has a more complex position: A 
Chechen incursion in August mobilized Dagestanis to the Russian side, but the 
brutality with which the federal military drove the Chechens out left locals 
bitter. Perhaps fearing an uprising, federal authorities have sealed off the 
regions where the fighting took place. 


Yet another explosion may be brewing in Karachayevo-Cherkessia. Ethnic 
Russians make up nearly half its population, but the region's two other 
ethnic groups, the Karachai and the Cherkess, have been on the verge of war 
since a Karachai won the republic's first gubernatorial election last year. 
Mass Cherkess rallies filled the capital's central square last year, and, now 
that Cherkess efforts to overturn the vote seem doomed to fail, those 
combustible demonstrations are set to resume. Inflaming the situation 
further, Chechen rebels have long been believed to maintain outposts in the 
republic--and in mid-April federal law enforcement authorities said they had 
arrested several Karachayevo-Cherkessia residents implicated in last fall's 
building explosions in Moscow. 


Chechnya's bigger neighbors--North Ossetia, the Stavropol and Krasnodar 
territories, and the Rostov region-- have also been radicalized by the war. 
But in their case the effect has been to make them zealously, even 
militantly, pro-Russian, thus increasing the chances of prolonged conflict 
with Chechens and other Muslim groups. 


In most of Russia, people support the Chechen war because they know too 
little about it; here people support it because they know too much. The 
federal military bases from which the Chechen war is conducted are located in 
North Ossetia and Rostov. Rostov is also home to the biggest military 
hospital in the region. As a result, the locals in these parts grasp the true 
casualty numbers better than most Russians. "You journalists never tell the 
truth," an airport cabbie told me. "A plane full of wounded soldiers lands 
here, and the same day you report there were two wounded today." 


One in ten soldiers serving in Chechnya come from Rostov, but sending their 
children off to die produces in the locals a hatred not of Moscow but of 
their Muslim neighbors. Just about everyone I met, from a hotel clerk to two 
deputy governors, complained about Chechens and other dark "Caucasians"--a 
derogatory term, even here in the Caucasus--taking over the region. The 
threat is imagined--there are no more than 10,000 ethnic Chechens in the 
area, according to local authorities--but the response is real, and 
dangerous. Rostov's local governments have instituted strict, 
unconstitutional residence-permit systems to keep the Chechens out. And the 
war has strengthened Cossack groups that preach ethnic hatred. Most schools 
in the region have uniformed Cossacks guarding against the perceived 
Caucasian menace. Throughout the region, Cossacks patrol alongside police, 
checking documents and detaining ethnic outsiders. 


Rostov's actual police are just as paranoid. They have been working twelve 
hours a day, seven days a week, since mid-September, when terrorists blew up 
a building in the region. In the following three months, there were 455 bomb 
threats--and each time the police sent out officers and dogs, often 
evacuating residents. So far all 455 have proved false, and all connections 
to Chechnya have proved imaginary. But that hasn't stopped the police from 
conducting endless "anti-terrorist measures": mass document checks and 
detention of anyone swarthy. Meanwhile, admits the region's deputy head of 
interior affairs, Viktor Burakov, "we leave the [real] criminals unattended." 
As a result, the number of unsolved violent crimes is on the rise. 


This, believes Burakov, reflects a trend throughout the country: Some of the 
police are away in Chechnya, while the rest are fighting terrorism. 
Meanwhile, the number of rapes and murders grows. In short, Vladimir Putin's 
grand plan to bring order to his country has not just made Chechnya more 
deadly, and it is not just leading to civil war throughout the Caucasus--it 
is also bringing new violence to Russia itself. A shotgun wedding indeed. 


********


#9
Chicago Tribune
16 May 2000
[for personal use only]
RUSSIANS FLOCK TO IKEA AS STORE BATTLES MOSCOW 
THE GIANT FURNITURE AND HOUSEWARES RETAILER LONG HAS TRIED TO CONQUER THE 
FORMER SOVIET UNION, AND THE WELCOME GIVEN ITS NEW STORE SHOWS THE WAIT WAS 
WORTH IT. 
By Colin McMahon 
Tribune Foreign Correspondent 


KHIMKI, Russia -- Talk about pent-up demand.


On the day Russia's only Ikea store opened in suburban Moscow, the wait to 
get in took an hour. Highway traffic backed up for miles. More than 40,000 
people crammed into the place, picking clean sections of the warehouse.


Now, more than a month after opening, the housewares and furniture store 
founded in Sweden still pulls in nearly 100,000 people a week, company 
officials say.


Ikea has big plans for Russia. A half-dozen stores are on tap in Moscow and 
beyond. Company officials dream of placing Ikea's simple shelves, kitchens, 
bathrooms and bedrooms in millions of Russian apartments that have not been 
remodeled since Soviet days.


Yet Ikea's entrance into Russia has been rocky.


Like many foreign investors, Ikea struggled with crushing bureaucracy, a 
Byzantine legal system and economic uncertainty. Missteps and false starts, 
wrangles over land, leases, import tariffs and even marketing have frustrated 
company officials for years. Even today, Ikea is embroiled in a zoning 
dispute with the City of Moscow.


Still, the people continue to come.


"This is kind of like an excursion for us," said Alla, a florist in her 20s. 
"We're not looking for anything in particular. We just want to see it."


In size and mission, Ikea is unlike any other store in the country.


Ikea is targeted at a middle class that is struggling to take shape in 
Russia. Its products--simple, sturdy furniture and housewares at reasonable 
prices--are not commonly found in a nation where many stores concentrate on 
either high-priced goods for the rich or cheap stuff for the masses.


The prices, in fact, are remarkably low for Moscow. Ceramic mugs for 15 
rubles, or about 50 cents. Giant floor plants for $30. A bathroom set with 
vanity, mirror and shelf for about $250.


Perhaps accustomed to the sky-high prices of imported articles in Moscow 
boutiques, some shoppers were unsettled on the store's first weekend. They 
pulled staff members aside, wondering why the prices were so high.


At first alarmed, store personnel soon figured out that some people thought 
the prices were marked in U.S. dollars instead of Russian rubles.


The ruble trades at about 28 to the dollar. A bookcase that a shopper had 
believed cost $600 really cost only $22.


"We spent the first weekend writing the word `ruble' on all the price tags," 
said Lennart Dahlgren, Ikea's general director in Russia.


Ikea also emphasizes customer service, still a foreign concept in many 
Russian stores. Its 440 Russian employees were whittled from 16,000 
applicants. Supervisors and so-called "core employees" were trained in Ikea 
stores abroad.


Ikea offers free shuttle service from several Metro stops. It has a playroom 
for children. It serves coffee to those who show up early.


All this plays into the still small but growing expectations of Russian 
consumers.


"There is a lot of variety in Moscow now, a lot more than there was," said 
30-year-old Natasha. "But you have to go from place to place to get 
everything. It is nice to have these big stores.


"I like these hypermarkets, where you can get yogurt, soil for your garden 
and, excuse me, toilet paper, all at once."


Indeed, Ikea is trying to entice other merchants--a supermarket, for example, 
and an electronics store--to build on its 120-acre site. Ikea has a 98-year 
lease on the land with an option to buy should Russia ever allow such land 
sales.


Ikea, which is privately held, is expanding aggressively. The company has 
doubled in size every four years for the past three decades, Dahlgren said. 
It has targeted former eastern bloc nations such as Poland and Hungary, but 
Russia is the first country in the former Soviet Union with an Ikea.


The opening was a long time coming. Even during Soviet times, Ikea officials 
wanted to open a store in Russia. After the fall of the USSR in 1991, they 
tried again only to pull out amid Russia's hyperinflation and economic 
uncertainty of the early 1990s.


Ikea returned in 1997 for discussions with Moscow Mayor Yuri Luzhkov. But 
Dahlgren said the city demanded lease rates that would have made the project 
economically impossible. So Ikea moved to Khimki, a suburb on Moscow's 
northern edge.


The store sits just off the Leningrad Highway, the road to the Sheremetyevo 
airports, about 12 miles north of Moscow's center.


Ikea, with the urging of Khimki officials, wants to build a bridge over 
Leningrad Highway to ease traffic to the store. But Moscow City Hall, which 
controls the highway, has blocked construction.


Luzhkov's team says the bridge would obscure the view of a Tank Trap monument 
that marks where Russian troops stopped the Nazis in World War II. Ikea says 
Moscow's real motivation is to punish Ikea for not locating within city 
limits.


Some observers view Ikea's fight with Moscow as a cautionary tale for foreign 
investors. It's not so simple, however.


Ikea made mistakes of its own, such as failing to research the bridge issue 
enough to find out that Moscow, not Khimki, controls Leningrad Highway. And 
Dahlgren says Russian officials have been willing to work with Ikea to make 
its $100 million investment work.


Russian officials granted Ikea a customs exemption that made Ikea's imports 
economically feasible, although tariffs of about 28 percent (compared with 
about 3 percent in Europe and North America) will have to come down for Ikea 
to prosper in Russia, Dahlgren said.


Ikea also must grow to be profitable in Russia, Dahlgren said. Ikea does not 
make much money off each item it sells, so it has to sell a lot. To do that, 
it needs more than one store. It needs several.


New stores would bring profits to Ikea, tax monies to Moscow and the federal 
government and long-envied choices to the Russian public.


But first, Ikea and Moscow must find a way to bridge their gap.


*******


#10
Washington Monthly
March 2000 
Book reviews 
Russia's Tumultuous Decade
An Insider Remembers 
By Jeffrey D. Sachs
Jeffrey D. Sachs is the Director of the Center for International Development 
at Harvard University. He advised the Russian Government from December 1991 
until his resignation in January 1994. 


Days of Defeat and Victory
By Yegor Gaidar
University of Washington Press 


Yegor Gaidar's Days of Defeat and Victory is a unique chronicle of the first 
five years of Russia's post-Communist Revolution. Through Gaidar, we again 
ride the whirlwind, experiencing the drama of the failed Communist putsch of 
August 1991, the collapse of the Soviet Union in December 1991, the launch of 
radical economic reforms in early 1992, the violent confrontation with the 
Supreme Soviet in the Fall of 1993, and a myriad of other pivotal events up 
to Yeltsin's re-election victory in 1996. We could have no better guide. Not 
only was Gaidar the intellectual leader of many of Russia's political and 
economic reforms during this period, but he was also one of the few pivotal 
actors. 


>From November 1991, Gaidar served as Yeltsin's chief economic advisor and as 
deputy prime minister. During the second half of 1992, until his ouster by 
the hostile Supreme Soviet in December, Gaidar was acting prime minister. He 
returned to Government briefly in late 1993. For the remaining period of 
these memoirs, Gaidar was a leader of democratic Russian politics, a member 
of the Duma, as well as a continuing key advisor to the Russian Government 
and President Yeltsin. 


Gaidar's re-telling reminds us of his lucidity, boldness, and persistence. We 
are also reminded of the shameless naivete or cynicism of many of Gaidar's 
critics, both in Russia and the United States, who argue to this day that 
Russia's tumultuous decade was the result of misjudged economic reform ideas 
championed by Gaidar (and outside economists such as myself). Finally, we are 
reminded, implicitly, if we care to reflect on it, how much the United States 
lost by hardly lifting a finger to help Gaidar and his reform compatriots 
during the harrowing first years of their struggle. 


This book is an instant antidote to those such as outgoing World Bank Chief 
Economist Joseph Stiglitz who somehow confuse Russia's revolution with an 
academic seminar. Stiglitz leads a group of American academics who think that 
Russia's reforms suffered mainly because Gaidar and other advocates of "shock 
therapy" somehow forgot that market economies are based on institutions and 
laws, and not just on textbook pictures of supply and demand. Duh! Readers of 
Gaidar's memoirs will quickly learn that Russia's reform struggle was not 
mainly about the niceties of sequencing market reforms. The real issues were 
elemental and urgent. Would there be bread in Moscow in the winter of 
1991-92? Would private property be legal? Would Russia lurch towards a 
violent, revanchist politics? Would Russia have a national currency and when? 
Would there be civil war in Moscow in 1993? In each case, Gaidar's cool 
pragmatism and power of analysis helped to find a way out of a near 
catastrophe. 


Gaidar's basic goal was unwavering: to help Russia become a democratic, 
market-based society. At the same time, however, his tactics, such as they 
were, were driven by the remarkable press of events rather than by grand 
theory. And in many cases, there simply were no tactics because the reform 
leaders had no power to carry forward their programs. Even so, the reformers 
received most of the public blame, not only inside Russia but remarkably even 
from U.S.-based critics who might have known better. Critics would do well to 
reflect on Gaidar's superb elaborations of the enormity of challenges 
inherited from the Soviet collapse: massive foreign debts combined with the 
exhaustion of foreign exchange reserves; a flight from the currency; a 
collapsing energy sector on which Russia's energy-squandered heavy industry 
depended; the absence of functioning political institutions; the struggle for 
power between the executive and the Soviet-era parliament; and the chaos of 
monetary, military, and economic relations among the successor states of the 
Soviet empire. 


The greatest trauma of the first year of reforms was the high inflation that 
ripped through Russia, decimating savings and undermining confidence in 
market reforms. This was often blamed on Gaidar's decision to free prices 
from controls on January 2, 1990, ending decades of state price-setting. The 
action followed a similar tactic introduced by Poland two years earlier. In 
Poland the result had been a single sharp jump in prices, followed by price 
stability, and once-empty store shelves now filled with goods. In Russia, 
however, the jump in prices was even sharper; the stores never quite filled 
with goods (though food shortages did diminish); and the inflation kept 
barreling on, even nearing hyperinflation by the end of 1992. 


Gaidar recounts this experience with great detail, historical sensitivity, 
and economic insight. (This part alone makes the book required reading for 
monetary specialists.) Gaidar decided to move abruptly, as in Poland, because 
of the real danger that price controls, combined with an explosive money 
printing to fund a huge budget deficit, were leading to the collapse of any 
trade at official prices, with all transactions taking place in a burgeoning 
black market. Store shelves were empty. Farmers were hoarding grain. There 
was real fear of hunger in the cities in the approaching winter. 


But Russia's price decontrol did not work as smoothly as in Poland. While 
food did get to the cities (a major victory), inflation continued to soar. 
Divided politics kept the budget deficit high. Other post-Soviet states such 
as Ukraine continued to issue ruble credits, undermining Russia's attempt to 
end inflation. (It wasn't until mid-1992 that the various new states 
effectively separated their currencies.) And the Russian central bank, led by 
Communist-era apparatchik Viktor Gerashchenko, undermined Gaidar's 
anti-inflation strategy by relentlessly printing money. This cost Gaidar 
precious public support and definitely contributed to his ouster as prime 
minister by the Supreme Soviet at the end of 1992. Gaidar writes that his 
support for Gerashchenko's appointment in 1992 was perhaps his biggest 
blunder that year. 


These may seem like ancient battles, but in revolutions early events can have 
fateful consequences. Thus, Gaidar's ouster led to the return to power of 
Communist-era apparatchiks such as Prime Minister Chernomyrdin, who presided 
over a period of stunning corruption (while being showered with U.S. 
affection in the Gore-Chernomyrdin get-togethers). The Russian public came to 
view reform as the combination of inflation and corruption. In this, as in 
many other things, the reformers who fought hardest against these outcomes 
took much of the blame. 


There is a critical episode of Russian reform history on which Gaidar is 
disappointingly silent. Long after his second departure from power, after the 
fateful battles on inflation and voucher privatization, came the corrupted 
privatization of oil and gas enterprises, under the rubric of a bizarre 
"shares for loans" scheme. In essence, tens of billions of dollars worth of 
natural resource deposits were turned over to Yeltsin insiders, doing much to 
create the corrupt "oligarchy" that has so poisoned Russia's politics in the 
past few years. The true story of these grotesque financial manipulations is 
still not known. Reform leaders such as Anatoly Chubais presumably played a 
role, but that role is obscure and debated. Given the scale of abuse, the 
Russian public (and the world public for that matter) deserves an 
explanation. 


Since this important book was first published in Russian for a Russian 
audience, it gives us a realistic glimpse into the internal Russian debate, 
not written for a Western audience. The role of the West in these events can 
therefore be more accurately sized up in this book, rather than it can in 
stump speeches given by Russians to Western audiences. The result is rather 
stunning. The West plays almost no role whatsoever in these pages. 


In the few places that the West is mentioned, the reading is sobering, even 
distressing. As I myself witnessed, Gaidar's first encounters with the Bush 
administration came in the form of tough U.S. warnings that Russia should 
continue to pay its debts at all costs (specifically, that a default would be 
met by a stoppage of vital food aid). The result was a contribution to 
Russia's financial destabilization at the critical period of early 1992. The 
IMF is written off as a thoroughly miscast institution, not appropriate for 
the tasks for which it was assigned by the West. It is specifically charged 
with having delayed stabilization in the vital months of 1992 by its mistaken 
advice to the post-Soviet states to delay the introduction of national 
currencies. In short, the West did almost nothing to affect the outcomes for 
democracy and market reforms in Russia, despite all the high-minded rhetoric 
to the contrary. If anything, the early inaction (on aid, on monetary reform, 
on debt rescheduling) made things worse. The subsequent blind eye to 
corruption merely added to the deep skepticism of the Russian people that the 
U.S. and Europe actually cared about their welfare. 


Advisors such as myself don't even get a bit role. This, I've always tried to 
explain, is how I actually felt when in Moscow. After helping to devise and 
introduce Poland's reforms during 1989-91, and after conveying their 
significance to Russian colleagues such as Gaidar in late 1991, my actual 
influence on events was essentially zero. This was certainly true inside 
Russia, but also in the U.S., where both the U.S. government and the IMF 
simply rejected my criticisms of their inaction (to provide vital aid and 
debt relief) and policy recommendations (such as to maintain the Soviet-era 
ruble as a shared currency). 


Many of the key American advisors from the period 1991-96 are still in 
positions of enormous influence. Many of the Bush Administration advisors who 
did so little in the first year of Russia's reforms are key advisors of 
George W. Bush. And of course, much of the Clinton team remains in place. 
They would learn a great deal from this book. I earnestly hope that they have 
a careful look in preparation for more fruitful relations between Russian 
reformers and the U.S. in the coming years, when both Russia and the United 
States will have new presidential leadership. 


******



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