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Johnson's Russia List


May 28, 2000    
This Date's Issues: 4330


Johnson's Russia List
28 May 2000

[Note from David Johnson:
1. AP: Putin Reappoints Chief-of-Staff. (Voloshin)
2. New York Times editorial: Russia's Promising Tax Plan.
3. The Russia Journal: Andrei Piontkovsky, The Great Decade.(re Chechnya and Russian nationalism)
4. The Electronic Telegraph (UK): Guy Chazan, Russia threatens new war on Afghanistan.
6. New York Times: Michael Wines, Russia's Favorite Spread Smeared by Counterfeiters.
7. Itar-Tass: Senator Urges Smaller Aid to Russia Because of Yugoslavia. (Jesse Helms).
8. The Russia Journal: Otto Latsis, A Russian detective story.(re government's program)
9. Moscow Times: Revolutionizing Education. (Interview with Education Minister Vladimir Filippov)
10. AP: PEN Condemns Chechnya Campaign.] 


Putin Reappoints Chief-of-Staff
May 27, 2000

MOSCOW (AP) - President Vladimir Putin quietly reappointed the controversial 
Kremlin chief-of-staff Saturday, the strongest sign yet that he won't sever 
ties with the powerful circle of advisers of his predecessor, Boris Yeltsin. 

Alexander Voloshin, the presidential chief-of-staff, was a central figure in 
the group of businessmen and politicians who made up the so-called ``Family'' 
of advisers who wielded enormous power under Yeltsin. 

Russian and Swiss investigators have probed allegations linking members of 
Yeltsin's family and top Kremlin aides to alleged kickbacks for lucrative 
government contracts and money laundering. No charges have been made in 
connection with the probes. 

Putin, who was named acting president by Yeltsin and won elections in March, 
vowed to crack down on the corruption that pervades the government and many 
parts of Russian society. His untainted image and promises to punish 
corruption were key to his popularity. 

Russian politicians and analysts had been waiting to see if Putin would 
rehire Voloshin and other senior figures from the previous administration as 
a test of whether he would act independently and tackle the corruption that 
blossomed under Yeltsin. 

But Putin has reappointed most of the ministers and senior officials from the 
old government. Since he was inaugurated on May 7, Putin has focused on 
consolidating the Kremlin's power. 

Voloshin's reappointment was likely to worry those Russians who had hoped 
that Putin's election would signal the end of the power and influence of the 
tiny circle of politicians and tycoons who have dominated Russian politics 
since the Soviet collapse in 1991. 

Russia's former chief prosecutor, Yuri Skuratov, who was involved in the 
corruption probes, alleged earlier this year that there was evidence of 
wrongdoing involving Voloshin. 

``The entire Kremlin inner circle has problems with the law,'' Skuratov said 
at a news conference in February. Evidence of wrongdoing ``has been lying 
unasked for without any checking,'' he said. ``I don't say they are 
criminals, but all this evidence must be thoroughly investigated.'' 

Yeltsin attempted to dismiss Skuratov, who was himself implicated in 
corruption allegations. Putin secured Skuratov's dismissal after he took 

News of Voloshin's reappointment late Saturday suggested the Kremlin wanted 
to minimize the announcement. Russia does not have Sunday newspapers and 
weekend TV and radio announcements are shorter than during the week. 

Also Saturday, Putin reappointed Sergei Ivanov as secretary of Russia's 
Security Council. Ivanov, like Putin, used to work in the Federal Security 
Service, the chief successor to the KGB. 

Announcements of the appointments were carried by Russian news agencies and 
TV networks. 

In another decree Putin signed Saturday, the Security Council will now 
include the presidential representatives of Russia's seven new 
super-districts. Putin announced a plan earlier this month to divide the 
country into seven districts to boost federal control. 

Putin sought Saturday to reassure the elected governors of Russia's 89 
regions that the new federal districts were intended to improve government 
efficiency, not to weaken the governors. 

``I want to stress and repeat that the purpose is not to interfere in the 
internal affairs of the regions but to ensure more efficient work of federal 
structures,'' Putin said in a meeting with 16 governors from Siberia, the 
ITAR-Tass news agency reported. 

Putin has also introduced draft laws that would remove regional governors 
from the upper house of parliament and allow the president to fire them if 
they violate federal law. 

Those moves have been interpreted as attempts by Putin to wrest control away 
from the governors, who acted with little federal oversight under Yeltsin, 
sometimes passing laws that contradict the federal Constitution. 


New York Times
May 28, 2000
Russia's Promising Tax Plan

Though Russia's new president, Vladimir Putin, has yet to chart a clear course on most domestic fronts, he made clear last week that he intends to move aggressively to mend the economy, ending years of meandering policies. The Putin government asked parliament to replace the country's progressive but largely dysfunctional personal income tax with a simple flat tax. By radically simplifying the code and slashing rates, Mr. Putin hopes to raise collections by cutting down on the corruption that has left his government starving for revenue. If the plan works, Mr. Putin would not only have the money to provide badly needed public services, but also establish the credibility to push for further economic reforms. 

The government proposed to replace the current income tax, with rates ranging from 12 percent to 30 percent, with a code with just one rate, 13 percent. Many in the country, including the Communists, want to hold on to progressive rates. But in a society where few people pay anything close to their legally required taxes, and wealthy individuals often pay no tax, the idea of a progressive tax code is an illusion. 

By cutting rates and simplifying the code, Mr. Putin hopes to encourage people to pay taxes and make it easier for the government to track down those who do not. If Mr. Putin has the will, a flat tax makes a crackdown feasible. A flat tax can also cut down political corruption, removing layers of subsidies in the code that officials like to shower on favored constituents. 

Mr. Putin is right that tax rates are too high. A destructive competition to raise revenue rages among Russia's local, regional and federal authorities. Each sets rates high before the other jurisdictions can do so. Indeed, local officials often help businesses hide their local tax payments so that local governments can avoid sharing the proceeds with Moscow as the law requires. Russia has created the worst of all tax worlds: high rates and little revenue. 

The government also announced other tax reforms, including eliminating a regressive, ineffective business tax and raising gasoline and tobacco taxes. Part of the motivation is economic reform. But the package of reforms, depending on the details, might also tilt tax collections toward sources that go primarily to Moscow and away from those that feed local and regional coffers. Mr. Putin is already engaged in a power struggle with regional governors, warning them that he intends to rein in their autonomy. 

It will not be easy to make the flat tax and other reforms work. Corruption and bureaucratic incompetence will not disappear overnight. But Mr. Putin is starting his economic reform in the right place. If Russia can get its tax system in order and the Kremlin can begin to count on a steady source of income for government programs, the country can at last begin to deal with some of its chronic problems, including a failing health care system, erratic law enforcement and the poverty of millions of elderly citizens. 


The Russia Journal
May 29-June 4, 2000
The Great Decade
Columnist Andrei Piontkovsky looks at the war in Chechnya and Russian nationalism.

‘Future historians will say the Yeltsin decade was the Great Decade. Great successes were achieved in consolidating democracy, free speech and European values. And it was we who did all this, dear friends!" Anatoly Chubais declared emotionally to delegates at the Congress of the Union of Right Forces.

The shadows of survivors from the hell of Grozny moved through the ruins of modern Dresden. Tens of thousands of absolutely innocent people were buried under the wreckage of buildings, burned alive in bombardments and shot in cleansings, in both Yeltsin’s and Putin’s wars in Chechnya. 

"And it was we who did all this, dear friends!" Anatoly Chubais could have said with pride. In attempting to saddle the wave of chauvinism engineered by the operators of power, Chubais became one of the main ideologues of the Chechen war, attacking everyone who tried to stop it with accusations of treason.

He made the monstrous statement that, "In the end, it doesn't matter what happens to Chechnya; what matters is the rebirth of the Russian Army and the rebirth of Russia."

When considering the "rebirth of Russia, " one of the results of the Great Decade is that the morals of our society have gone wild. Ten years ago, it would have been unthinkable that the majority of the population and practically all the "intellectual elite" of the country would support a slaughter with mass killings of civilians. 

When 13 people were killed on the streets of Vilnius 10 years ago, hundreds of thousands of people protested on the streets of Moscow. Even five years ago, the majority of people and practically all the mass media spoke out against the first Chechen war. 

But now, respectable journalists on the main television stations calmly talk about how the war could be successfully concluded in two weeks if the term "civilian" is dropped and our enemies are considered to be "any male Chechen over 10 years old."

Fortunately, this radical point of view is not yet supported by most of society. But when I argue with its supporters, I never bring humanitarian issues or human rights into the argument. There's no point.

In our society, a person defending human rights is considered at best to be a village idiot, at worst a traitor who has received $1.5 billion from Movladi Udugov (FSB Gen. Alexander Zdanovich claimed this amount had been allocated to bribe opposition journalists).

I try to use solely pragmatic arguments to explain why Putin's policy in Chechnya threatens Russia's long-term interests. Recently, I found an unexpected ally: the governor of Krasnodar Krai, Nikolai Kondratenko, known for his extreme nationalist views. 

Let's listen to what he says: "The war in Chechnya needs to stop. And the sooner the better. We can't test the patience of a people any longer. I'm a Russian, and I'm worried by the rising Russophobia in the Caucasus. The logic of this Russophobia is clear to me. These small nations can't understand why a policy has prevailed among us Russians whereby we drop bombs and shells and use Grad rocket launchers on the elderly, women and children of our own country. 

"It's an attempt to reinforce the might of a country through a civil war. Such actions have never turned out well in history. No one has ever strengthened their state in this way. But such a policy has led to the destruction of empires and kingdoms." 

(Andrei Piontkovsky is director of the Center of Strategic Research.)


The Electronic Telegraph (UK)
28 May 2000
[for personal use only] 
Russia threatens new war on Afghanistan
By Guy Chazan in Moscow

RUSSIA is threatening a fresh confrontation with Afghanistan after claiming 
to have uncovered evidence of a pact between the ruling Taliban movement and 
the Saudi terrorist leader Osama bin Laden to aid Chechen rebels.

Both Valery Manilov, first deputy head of the general staff, and defence 
minister Igor Sergeyev last week declared Russia's readiness to launch 
"preventative" air strikes on Afghanistan, from which it made a humiliating 
retreat in 1989.

The threat of military action puts Russia in the unusual position of sharing 
one of the key aims of US foreign policy - the removal of bin Laden, who is 
suspected by Washington of being behind the bombings of American embassies in 
Kenya and Tanzania in 1998.

Their common aim could be discussed in Moscow next weekend when President 
Clinton meets the Russian leader, President Vladimir Putin, for summit talks. 
America has already set a precedent for intervention in Afghanistan with its 
cruise missile attack against suspected terrorist camps after the embassy 

Russia's foreign minister, Igor Ivanov, warned: "Terror acts and other 
actions which could damage the interest of Russia, and its partners in 
Central Asia, are being prepared on the territory of Afghanistan. We shall 
act according to how the situation develops."

The threat of "preventative" air strikes against suspected guerrilla bases - 
controlled by the Taliban hard-line Islamic government in Kabul - is part of 
a campaign by Moscow to reassert its presence in Central Asia, where local 
leaders are seeking Russian help to quell home-grown Islamic extremists they 
claim are supported by Afghanistan. 

The Taliban have denied the Russian claim, warning Moscow that it would 
retaliate if attacked. A foreign ministry spokesman, Faiz Ahmed Faiz, said 
Russians should "learn their lesson from the past". The Taliban say their 
support is political and moral. They have recognised Chechnya and allowed 
Chechen rebels to open an embassy in Kabul and a consulate in southern 

The Taliban statement said:"Afghanistan offers only political and moral 
support to the Chechens." It issued a warning to the Central Asian nations 
bordering Afghanistan that Russian air strikes would be answered with 
retaliatory action against countries that allowed attacks from their 
territory. "Such a country would be considered the enemy of Afghans."

Strikes are likely to be carried out by Russian Tu-160 and Tu-95 strategic 
bombers, which can carry long-range cruise missiles, which could hit Afghan 
targets without leaving Russian airspace.

Moscow's threat to widen the Chechen war serves President Putin's purposes 
well: for months now, he has been seeking to portray his local struggle with 
the separatists as part of a broader crusade against international terrorism. 
Russia claims the rebels are sponsored and supplied by foreign Islamic 
groups, including those linked to bin Laden. 

Russia is also accusing the Taliban of sheltering and supporting rebels 
active in the former Soviet republics of Central Asia, such as Uzbekistan, 
Kyrgyzstan and Tajikistan, which have become hotbeds of Islamic 
fundamentalism and violence, as well as in Chechnya.

A note of caution, however, has been sounded by former Soviet president 
Mikhail Gorbachev, who oversaw withdrawal from Afghanistan, where 14,000 
Soviet troops died in 10 years of ill-fated occupation to prop up a Communist 

He said: "Afghanistan is our neighbour. It's a country with which we have our 
own history of relations and long years of cooperation. There was an 
adventure for which we have paid a dear price. We thoughtlessly entered that 
country and then got out with enormous losses." 

Alexei Malashenko, an analyst at the Moscow Carnegie Centre, said: "It would 
be a catastrophe. If they really do start bombing, it means Russia will 
become embroiled in a regional conflict that takes in Pakistan, Afghanistan 
and all of Central Asia."

There is concern in Russia that the Taliban would respond to any air strikes 
by carrying out terrorist attacks on Russian territory, similar to the 
apartment block bombings that rocked Russian cities last September, killing 
nearly 300 people. Russia blamed the blasts on Islamic militants and used 
them as a pretext for its invasion of Chechnya.


27-May-2000 12:00:00 am ; 1701 words

When addressing the Unity Congress, Russian President Vladimir Putin first enjoined the newly created Unity party that it should maintain the movement's momentum, consolidate its success and move ahead. There is no more important task than getting rid of poverty and backwardness. This requires steady economic growth which, in turn, needs political stability and an improvement in the machinery of state with new federal laws ensuring regional compliance and a new balance of interests. Putin approved Unity not laying claim to being considered the party of power. He stressed the need for broad public support and for every single ordinary Russian to personally feel protected. The following is the full text of Putin's speech carried by ITAR-TASS - it was said to have been taken from an audio recording: 

Moscow, 27th May: Russian President Vladimir Putin has called on the Unity party which was set up today to become the political bulwark of reforms. Here follows the full text of the head of state's address at the Unity Congress: 

"Dear colleagues, dear friends! I wish to extend a cordial welcome to all of you. There is a very representative gathering in this hall today, delegates from all 89 constituent members of the Russian Federation. A powerful detachment of people who wish, are able to and will engage in politics. I welcome everyone. But I think that no-one will take offence if I particularly welcome an 18-strong delegation from the Chechen Republic. 

You have just taken a responsible step, you have voted for the creation of a party. I congratulate you on this event. 

I am convinced that you have taken the correct decision. Firstly, one should not lose the momentum developed by Unity, it is necessary to consolidate any success and move ahead. And, secondly, the economic and state reforms need a reliable, political bulwark. The citizens of Russia should have the opportunity to engage in matters of state and take an active part in the party's work. 

So far, however, we have been faced, unfortunately, only with weakness of state institutions as well as with weakness of civil society. It is the party's task to overcome this weakness and to attract as many people as possible into its organizations. A political party can become a partner and a bulwark of the authorities only when it is itself involved in forming these authorities. We know that Unity has entered into this process. We have an influential faction in the State Duma. You have taken an active part in the election campaign to elect the president of the Russian Federation. 

The next stage is participation in the elections of the constituent members of the Russian Federation and of local government bodies. The influence of political parties on regional elections is so far very modest. You and I are very well aware of this. Candidates, to whatever posts they are elected, are seeking to distance themselves altogether from these parties and, evidently, this is not by chance. But there is also another danger, another predicament in which many of the candidates, unfortunately, find themselves: they frequently come under the influence of clans and groups, closed off from society and pursuing their own corporate interests. 

Therefore the construction of an effective party system, which is open and clear to people, is a task of state in the full sense of this word. I have to say that as head of state I would consider this to be one of the most important tasks. I am telling you honestly: I am simply dreaming of all these instruments beginning to work in our country. If you and I succeed in doing this and I succeed in assisting this process, I 'll believe that a considerable part of the tasks I am facing as the country's president, will be fulfilled. The vitality and competitiveness of our society and state for the long-term historical perspective depends on this, I am absolutely convinced of this. 

Not pocketsize parties should appear, but parties actively involved in forming the authorities and nominating from their ranks outstanding leaders, outstanding people, capable of setting up teams which operate effectively and which are responsible to society and to the state. This task is tackled not only by the constituent congress. Yours is a huge and lengthy job and I wish to tell you that both your movement and any other political movements and parties of the most different tendencies, even opposite ones, will receive the state's support. But only a party choosing this difficult path can count on a future. 

A few words about what we are going to be working on together. We all know that the main thing is to get rid of poverty and backwardness in the country. We have no more important task, nor will we in the near future. Of course, these problems can be resolved through steady economic growth. To achieve this, an economic and political system must be set up which would become a reliable means of protection against political risks. These two processes - political stability and steady economic development - cannot proceed without each other. 

There is one further long-term and responsible task which we must resolve in order to achieve successful economic development. This is the task of improving the machinery of state. It is precisely for this reason that a package of draft laws has been worked out and submitted to the Duma. These draft laws are aimed at making the running of the country more effective and more in accord with the times, at achieving the rigorous implementation of federal laws and at protecting the rights of the citizens of Russia over its whole territory, wherever they live, be it in Moscow or a thousand kilometres from the capital. It is no secret that we are still coming up against attempts to establish authoritarian rule and to put pressure on local self-government. This is why medium-sized and small businesses have failed to develop and why we have seen the appearance of "states within the state" with their own laws which run counter to the constitution of the Russian Federation and to the laws which apply to the whole of Russia. I think that it is high time to bring them into line. 

At the same time, no-one is casting doubt on the priorities and principles of federalism and regional autonomy. God save us from entering on that path. This must not happen in any event. But everyone should understand that there are basic principles of improving the machinery of state. And if we violate these principles we, as it were, undermine the foundations of the building which will inevitably collapse no matter how majestic and powerful its external appearance may be. Indeed, the more mighty this building is, the greater are its chances of collapsing if its foundations are destroyed. It is essential to preserve the balance of interests. This balance of interests must be reflected in the balance of powers between all the branches and all the levels of authority. This is the aim of the package of draft laws which has been submitted to the State Duma and which I have just spoken about. 

The steps that we are taking are aimed at strengthening the unity of Russia. No-one must be allowed to deviate from what we have achieved in the sphere of human rights, business freedom, creative freedom and freedom of speech. Every citizen of Russia should feel secure. This security can be ensured only by the state and only by developed institutions of civil society. Ensuring the inviolability of the individual and of property and establishing stable rules and norms of life which are the same for everyone, everywhere in Russia: this is, in effect, the task for the authorities today, or, at least, it is one of their tasks. I think that this is, to a large extent, what is expected of us by ordinary Russian citizens, our electorate. 

As I understand it, and as we have heard from the report delivered by Sergey Kuzhugetovich (Shoygu), Unity intends to become a partner of those in power. I must say straight away that that also imposes many obligations on those in power if they feel that they are backed by a powerful political force and a party. In the first instance, this relates to our overall responsibility for everything that takes place in the country. You lay claim [as received] to being considered the party of power. I think that this approach is fully justified. Attempts have already been made in this very new Russia of ours to create similar parties. They drew their support mainly from civil servants, and, moreover, from civil servants of the very top rank. And let us be frank: in their time these political forces and political creations and formations played a positive role in the life of society and the state. For various reasons they were unable to become system-forming and authoritative and were unable to put their roots down in society, down into the lowest strata of society. 

You know that popularity and respect do not come automatically. These qualities cannot be self-proclaimed and, even less, imposed. That is impossible, it cannot be done, it would be useless. The experience and fate of many a Russian party have shown this. I think that you in Unity, who are just setting out on your path, can do worse than learn from this experience. The Duma election has brought you your first success and initial credibility. It would be a pity and an unforgivable mistake to lose it. The public must feel that both the party and its leaders are actually defending their interests, influencing the life of the country and actually changing it for the better, and that truly respected people are joining the party ranks in the regions. Let's be frank: there are people always trying to associate themselves with power who should not be let within cannon range of it. This is how it has always been, is, and will be. I think the Unity will also come to face this problem. So I just wanted to draw your attention to it. 

Esteemed colleagues, among our electorate there are people of most diverse political views and you must value this highly. This is not a negative, but a positive thing. Preserving this unity and consolidation, and identifying what brings together people holding various opinions and political views is very important. To achieve such unity and consolidation is a major task both for the president and for various political forces. It seems to me that you and I no longer need parties advocating revolutionary transformations, we have had enough of them. 

Our common task is to achieve mutual understanding, taking into consideration the interests, as I have already said, of the most diverse social groups. "Unity" has already demonstrated its ability to work towards consolidation of society as a whole as well as protection of every single Russian individual. What you need to ensure is that this ordinary Russian individual can feel this, feel this personally. If that happens, I have no doubt whatsoever that Unity will be a huge success. But the path to this success is complex as well as difficult. I should like to wish you success along this route. I wish you all the best. Thank you for your attention." 


New York Times
May 27, 2000
[for personal use only]
Russia's Favorite Spread Smeared by Counterfeiters

VOLOGDA, Russia, May 24 -- As any gourmand around here will tell you, there 
are but two types of butter in Russia. There is ordinary, bland butter, 
bought by ordinary, bland people and consumed on ordinary, bland occasions. 
And there is Vologda butter. 

Vologodskoye maslo: the name fairly trips off the tongue -- the Russian 
tongue, anyway. This is butter so cultured that it was originally called 
Parisian butter (about which more later), even though it is made in the 
Vologda Region, a vaguely Massachusetts-shaped, almost New York-sized area 
about 250 miles northeast of Moscow. 

This is creamy, melt-in-your-mouth butter. This is infarction-inducing 
butter, no less than 82.5 percent pure butterfat, by order of the Russian 

This is expensive butter. This is also profitable butter. 

This is why some scruple-deprived people are making counterfeit Vologda 
butter and pawning it off on hapless Russians as the Real Thing. 

And this is why Vladimir V. Mizgirev is angry. 

To be honest, Vladimir V. Mizgirev appears more hurt than angry. Mr. 
Mizgirev, a thin, slightly balding, pleasant-but-serious man, is general 
director of the Vologda Dairy Factory. In all of the Vologda Region, there 
are but three dairies that make Vologda butter, and Mr. Mizgirev's is the 
biggest by far. 

Everyone knows Mr. Mizgirev's butter. It is sold not only in the usual squat, 
foil-wrapped rectangles, but in bigger imitation-wood barrels that are 
instantly recognizable in better stores. He displays both packages -- empty, 
of course -- on a shelf in his office, along with other Vologda Dairy Factory 
products like chocolate butter and cheese. But Vologda butter is the company 

"Last year we sold 110 tons," he said. "Our product is sold in Archangel -- 
17 per cent there. Moscow Region, 15 per cent. Yaroslavl Region, 14 or 15 per 
cent. And so on." 

The three makers of Vologda butter do not know how much of their market the 
counterfeit butter hawkers have stolen, but Mr. Mizgirev says it is 

"If you take Russia as a whole," he said, "the producers of Vologda butter 
have lost millions of rubles. 

"You know, there are criminals behind this," he added darkly. But that is 
getting ahead of the story. 

Why is Vologda butter "so good that unscrupulous people counterfeit it," a 
phrase that is not the company's advertising slogan, but could be? The answer 
is not simple. 

Tradition is one reason. The first creameries appeared here in 1835, and 
Vologda boasts the first cream separator in all Russia. Butter making has 
been an industry in this region since 1881, begun in the aptly named village 
of Molochnoye, or Milky. But the tale really begins with Nikolai V. 
Vereshchagin (b. 1839), founder of the Milk Academy of Vologda, operator of 
the nation's first, and presumably the only, butter-making school, noted 
turn-of-the-last-century expert on dairy innovation. 

It was Mr. Vereshchagin who noticed that ordinary butter sometimes seemed 
sour, and set about to fix that. Experimenting, he tried separating sweet 
cream from milk twice during butter-making, rather than once as was the usual 

The result was a king among butters. It was fattier than the 70-percent-fat 
butter produced by one round of separation, and creamier as well. It had no 
odor, a delicious walnutty taste and utterly no aftertaste, thanks to its 
remarkable 16 to 18 Turner degrees of acidity. 

This, then, was real Vologda butter. 

At the time, actually, it was real Parisian butter, winner of the gold medal 
at the turn-of-the-last-century Paris Exhibition. 

Remote Vologda became the buttered toast of Europe, its superior recipe 
demanded by better classes of people across the Continent. 

In 1916 entrepreneurs set up the Vologda Dairy Factory to make Parisian 
butter. That was exceptionally bad timing: in 1917 Russia turned Communist 
and seized all private property. Later the Soviet authorities banned 
exporting of Parisian butter. In 1939 they changed its decadent Western name 
to Vologda butter. And Europeans forgot all about it. 

There it languished, a butter without honor in its own country, until 
Communism fell in 1991 and state-owned enterprises -- among them the Vologda 
Dairy Factory -- began to be turned over to private owners. 

Mr. Mizgirev, a two-decade veteran of the dairy industry, was one of them. He 
vowed to resurrect the glory days of Vologda butter. He turned the Vologda 
Dairy Factory into a spic-and-span milk palace. He made workers and visitors 
don clean uniforms before entering production areas, lest they bring dirt or 
germs from the outside. And soon his strategy began to work. 

In 1998 the Vologda Dairy Factory and its butter captured the gold medal at 
the Moscow Agricultural-Industrial Exhibition. A competing spread paid 
tribute to Vologda butter's cachet, adopting the catchy, snob-appeal slogan 
"Rama margarine smells like Vologda butter." 

"The governor said we should thank them for advertising our product," Mr. 
Mizgirev said. 

But such bliss was not to last. Behind the scenes, forces already were at 
work, purloining Vologda butter's customers and undermining its hard-won 

Mr. Mizgirev cannot remember when he first heard the bad news, but the somber 
details are etched in his memory. In the Vologda Region, old 
government-surplus butter began turning up on store shelves with the label 
"Vologda Butter." Buyers told him some stores were carrying so-called Vologda 
butter that was actually margarine. 

Consumers complained that wrappers of the Vologda butter they had bought bore 
a spine-chilling notice in eye-straining type: "Made in Finland." 

Mr. Mizgirev complained bitterly to the authorities, but to no avail. The 
Vologda Dairy Factory adopted a symbol for all of its packages, an oval 
portrait of a fetching young milkmaid, as a signal of authenticity. It paid a 
major Moscow newspaper to publish an article about the merits of genuine 
Vologda butter as opposed to cheap imitations. 

Together the three Vologda butter makers tried legal maneuvers, eventually 
securing a trademark for the name "Vologodskoye maslo." But the butter 
counterfeiters were a wily bunch: they eschewed "Vologodskoye maslo," in 
which the region's name is an adjective, in favor of "Vologda maslo," in 
which region's name is a noun. 

"They told us that because it wasn't the exact name, there was nothing we 
could do," Mr. Mizgirev said. 

But even at a latitude that endures 19 hours of daylight in the summer and 5 
in the winter, it is always darkest before the dawn. And in the blackest 
hours of Vologda's bitter battle for better butter, the forces of light 
reached deep and found new strength. 

Rising to defend its own, the Vologda Chamber of Trade and Commerce has 
mounted a lobbying campaign to persuade Moscow to restrict production of 
Vologda butter to the Vologda Region, much as bourbon production is confined 
to Kentucky and Champagne making to a specific region of France. 

"As of now it hasn't been regulated," Mr. Mizgirev said, "but we think it 
will come to that." 

Perhaps more important, the butter makers themselves have struck a blow at 
last against their tormentors. 

One of the region's three butter manufacturers, the Experimental Firm, 
persuaded the Chamber long ago to file a complaint about butter 
counterfeiters with the federal anti-monopoly commission. The case wound 
through Russia's labyrinthine bureaucracy for three years. 

But on May 16 the regulatory commission issued a verdict: a Moscow company 
named Havana-M had improperly used the Vologda butter trademark, and was 
ordered to stop. 

A small victory, Mr. Mizgirev allowed this week, but a significant one. 

For if butter justice has prevailed in Vologda, can justice in all Russia be 
far behind? 

"The country is moving toward discipline and order," he said. "The anarchy we 
had, where anyone could do anything, is passing. Not for nothing do I say 
that things are changing for the better." 


Senator Urges Smaller Aid to Russia Because of Yugoslavia. .

WASHINGTON, May 26 (Itar-Tass) - Chairman of the U.S. Senate Foreign Relations Committee Jesse Helms has proposed to cut the American assistance to Russia if Moscow continues to give the political and economic support to the Yugoslav Cabinet. 

He suggested an amendment to a budget bill of the 2001 fiscal year, which cuts the aid to Russia by the sum equal to Moscow credits to Yugoslavia. The Senator wants the American administration to freeze Russian projects in the Export-Import Bank and the corporation for private investments abroad, to oppose the rescheduling of Russia's debt and assistance by the International Monetary Fund. 

Helms said he favored partnership with Russia but it was impossible against the background of Moscow's support to the regime that endangered stability in the Balkans. 


The Russia Journal
May 29-June 4, 2000
A Russian detective story
By Otto Latsis
Columnist Otto Latsis looks at the rumors surrounding the new government’s program.

If one collects all the rumors surrounding the new Russian government's program, it becomes a real detective story. Even now, with work on the program nearly finished and only the government's approval of the draft to go, there are stunning assumptions in the press. 

For example, that President Vladimir Putin may base his strategy not on the program of the Center for Strategic Research, but on that of Yury Masliukov.

It is well known that Putin himself founded the center and gave it the task of creating an economic strategy for Russia. He appointed German Gref and Aleksei Kudrin as the heads and met with them regularly to discuss progress. He made former Deputy Minister Kudrin the minister of finance and vice premier responsible for economic departments of the government, and he named Gref, also a former deputy minister, head of the newly formed economic superministry that replaced the three former ministries.

All this to then take the proposed Communist opposition program, without even having discussed the center's program, and appoint Kudrin and Gref to carry out someone else's ideas? This would be a very strange step, and it is worth explaining the logic behind it.

It is true that, when Mikhail Kasyanov was asked his opinion on Gref's program at his confirmation by parliament as head of government, he said he had not read it. But this may have been only the formal truth: Insofar as the program had not been presented to the government as an official document, anything Kasyanov may have read could only be considered a draft text.

But it is hard to believe that the acting premier would be entirely unfamiliar with the document intended to determine the direction of the government for the next 10 years.

This was probably an intelligent tactical move by a known diplomat and financier: The Communist Party spoke out strongly against Gref's program when the premier's candidacy was under discussion, and Kasyanov did not want to force leader Gennady Zyuganov's supporters into a conciliatory position over his candidacy.

Now that the work is finished, Kasyanov cannot say he is unfamiliar with the final text. On May 22, he introduced the team in Gref's Ministry of Economic Development and Trade. That very evening, Gref, along with colleagues Yevgeny Gavrilenkov and Mikhail Dmitriev, presented the program prepared by his team in a round table discussion with the Moscow Carnegie Center.

Judging by statements, the program reflects a completely liberal approach to economics. The strategic aim is to reinforce the growth tendency that has appeared in the last year and a half. A key resource is the huge amount of currency leaving Russia: about $18 billion a year. If even a half of this amount can be reinvested in Russia, the GDP would rise by 10 percent a year. The current program promises a yearly growth rate of just above 5 percent with a 70 percent total GDP increase by 2010.

To create a favorable investment climate, the first step is to protect private property, mainly by strengthening the weak court system. The second step is to lower the tax burden on producers. The reduced budget income would be compensated for by reduced spending, primarily in social areas. A key part of this is a reform of the pension system and of utilities and housing, which in 1997 received more in subsidies than defense and law and order enforcement combined.

The program's authors recognize the political and social risk involved in the proposed reforms. In their defense, they offer two main arguments. Firstly, the government will not have the money to fulfil its social obligations anyway. If the current pension system is not reformed, for example, it will collapse in a matter of years because of the aging population and increase in the number of pensioners. In 2010, it will be impossible to cover pension payments with tax collection.

The second point is that there is no conflict between economic and social goals. There is a conflict between unreasonable social goals and more rational ones. The current discounts, mainly those affecting residential maintenance and utilities, essentially redistribute money from the poor to the rich. The proposed reform would reverse this flow.

The political difficulty is that the population of Russia grew up in a world where market relations were forbidden fruit. It does not yet fully understand the dynamics of the market, nor does it always properly assess its own interests. This becomes a breeding ground for leftist populism.

The problem is that Russian reformers usually explain their policy poorly and organize essential reforms badly. The recent sharp drop in Russian share values, unexpected and hard to explain in the light of economic successes, shows how weak the improvement in the Russian economy is.


Moscow Times
May 27, 2000 
Revolutionizing Education 
By Max Ognev 

As education minister, Vladimir Filippov is responsible for some 39 million 
students a year. Since his appointment in September 1998, he has worked 
16-hour days, seven days a week in order to keep up with the rigors of his 
post. But Filippov, who earned his doctorate in physics and mathematics and 
has authored 138 scientific monographs, does not let this responsibility 
overwhelm him. He is an energetic bureaucrat who harbors visions of 
revolutionizing the country's education system. Among his top priorities are 
establishing a standardized system of nationwide testing to battle the 
corrupt system of university entrance exams and setting up committees through 
which parents can have a voice in their children's education. Max Ognev spoke 
with Filippov about his ambitious plans. 

What are the biggest problems in education today? 

The biggest problem is financing, and it has been for several years. Higher 
education receives only 30 percent of the funding it needs from the budget. 
This situation has forced our universities to become more capitalistic than 
they are in the West - even compared to American universities! Russian 
universities earn 50 percent of their operating budgets on their own, while 
the so-called state universities in the United States, for example, earn only 
30 percent. Another important problem is our aging teaching staff. Young 
people are not going into teaching because of the salaries and their delays. 
We also lack computer equipment and information technology education in both 
schools and universities. 

Do you recognize the problem of bribing officials, which high-school students 
face when trying to pass university entrance exams? 

I know about this and I think it is a problem. To tell the truth, the problem 
is not as widespread as they say it is. This mostly takes place in the big 
cities, and more often in the economic, juridical and medical faculties. But 
there is a problem, and together with the union of rectors we are planning 
how to struggle against it. I personally called the prosecutor general. 

But I think that we have to cope with this problem not by prohibitive means, 
but by [introducing] methods that will eradicate the problem altogether. We 
are going to cancel individual entrance exams at all universities, and in 
three years we are going to set up a centralized system of testing like they 
have in America. This way, [graduating] high-school students throughout the 
country can take one test and send those test results to the five or six 
universities [to which they want to apply]. The best [universities] will 
choose the best students, while the average schools will choose the average 
students. It will be both objective and fair. 

Is this testing system going to be computerized? 

Of course. We have already launched a trial system [last year], and 350,000 
pupils participated. This is not very many because we need to create a 
computer network that will accommodate 2 million. 

What is the ratio of those who study in state institutions and those who 
study in private colleges and universities? 

We have 570 state [free] universities and up to 400 commercial ones. But as 
few as 7 percent of all university-level students are studying in commercial 
institutes. These universities offer a handful of specializations - mostly 
economics, law and management - while the total number of fields offered in 
government universities exceeds 400. I think that in the future, the number 
of commercial universities will decrease, but the number of students studying 
on a commercial basis at government schools will increase. Our budget simply 
will not be able to provide [free] higher education for everyone. This can 
only occur in a system of highly developed socialism or capitalism. As we 
have neither, we need to find a compromise. 

Did you support the rise of private institutions? 

We made a strategic mistake in 1991 and 1992 when we introduced education for 
a fee in the private sector and made restrictions on paid education in state 
universities. I think there should only be state universities, and that each 
faculty or small university should have its own unit for paying students. If 
we did this we would solve two problems at once. First of all, we would 
attract money to the state system instead of it going into private hands. And 
second, we could guarantee the quality of education - we cannot do that in 
fledgling and unknown commercial universities. 

Do you think the state will be able to provide an adequate level of education 
in Chechnya soon? 

In recent years, the republic has fallen 10 years behind in education because 
most schoolchildren have been absent for the past four years, and those who 
were going to school were forced to pay. 

The going rate was 50 rubles a month, 100 rubles for those in the 10th and 
11th classes. And this is in Chechnya, where the population had no money at 
all! Last year, we set aside 350 university slots for Chechen pupils, but 
only 14 students opted to enroll. The rest turned out to be unprepared to 
study. That is a tragedy for the [Chechen] people. But parents there 
understand that a future for their kids is impossible without an education, 
and they are trying to support the schools. 

We have prepared a detailed program to revive the whole system of education 
in Chechnya. Now almost 200 of Chechnya's 350 schools are operating, but 
Sept. 1 all of them will open. In September, we will also open three 
universities, including the Oil Institute, Grozny University and the Grozny 
Teaching University. The money for this project is already in the budget, and 
we have found the buildings and a means of accepting students. 

What about the brain-drain problem? Does this still exist for Russia? 

There is a joke that an American university is where Russian professors teach 
Chinese students. But this is a problem more for the scientific schools than 
for the humanities. 

What can you say about the new president and his attitude toward education? 

The government has been waiting for this moment for the past several years. 
At last we have a certain period of political stability for the years ahead. 
Now that the Duma and presidential elections are over, the time for 
creativity has begun. One can work on programs looking ahead two or three 
years and not expect the government to change within six months. I am very 
happy about that. As for [President Vladimir] Putin, I can say that just one 
day after the State Duma confirmed him as prime minister last August he had 
arranged for a report on assistance to state education. 

Last August, he became the chairman of the committee to develop the national 
education doctrine. Putin is pragmatic, and this is very good. 

What is the education doctrine? 

The doctrine has been in the works for the past two years, and it was 
approved by the government last February. It foresees an educational strategy 
for the next decade, including the introduction of more extracurricular 
studies, and a guarantee of free higher education for 50 percent of all 
graduating high school students. 

The doctrine also calls for two important goals - to attract nonbudgetary 
means to support education and to establish parent-teacher councils at every 
educational institute. This way, parents will have more control over how the 
school's budget funds are spent and the content of their children's 


PEN Condemns Chechnya Campaign
May 27, 2000

MOSCOW (AP) - An influential group of writers from around the world ended a 
congress in Moscow on Saturday with a harsh condemnation of Russia's military 
campaign in breakaway Chechnya, accusing the government of masking the truth 
about the war.

A resolution by the 67th International PEN Congress said the conflict was 
having a damaging effect on all of Russian society.

The PEN Congress is ``convinced that all Russian society has suffered from 
this war, demoralized by militarization, cruelty, intolerance, the escalation 
of violence and grief that have affected thousands of families all over 
Russia misled by propagandist information,'' the resolution said.

Human rights groups and Western governments have accused Russian troops in 
Chechnya of torture, murder and rape. They say the government has caused 
needless civilian casualties in the campaign. Even so, the campaign is widely 
popular in Russia.

International PEN, which claims a membership of more than 10,000 writers 
around the world, advocates freedom of expression and campaigns for the 
freedom of writers imprisoned because of their work.

Russian President Vladimir Putin defended the military campaign Saturday, 
saying the government was not trying to oppress the Chechen people but had to 
crack down on terrorism.

Russia is ``only pursuing a goal of combatting terrorism and banditry'' Putin 
said, according to the Interfax news agency.

Separately, Putin defended Russia's human rights record since the 1991 
collapse of the Soviet Union and pledged to protect it.

``Nobody must be allowed to step back from our victories in the field of 
human rights, freedom of business creation, freedom of speech,'' Putin said 
in a speech to the Unity political arty. ``Any citizen of Russia should feel 

The PEN Congress resolution, backed by such influential authors as Nobel 
Laureate Guenter Grass of Germany, demanded that Russia immediately stop 
fighting and begin negotiations with ``those forces in Chechnya ... who are 
ready for a peaceful solution to the conflict.''

Moscow has said repeatedly that it would consider negotiations only if the 
rebels give up their claims of independence, surrender their arms and turn 
over any alleged hostage takers or murderers.

The commander of the Russian forces, Gen. Gennady Troshev, said on NTV 
television Saturday that a referendum should be held in Chechnya to determine 
who could negotiate with the Russian government. But he ruled out any talks 
with rebel leaders, saying they didn't want peace anyway.

He repeated Russia's claim that the military campaign will not stop until 
Russia is victorious.

Inside Chechnya, rebels staged more than a dozen attacks on Russian military 
facilities over the past 24 hours, while Russian warplanes attacked 
militants' bases in the southern mountains, the military command said 

Russian forces carrying out reconnaissance and search operations in the south 
seized a large cache of rebel weapons in the Argun gorge, the military 
command press center said.

Russia launched its offensive in Chechnya in September, after Islamic 
militants seized villages in the neighboring Russian region of Dagestan. 
Moscow also blamed Chechens for four apartment bombings in Russia that killed 
about 300 people.



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