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Johnson's Russia List


July 27th, 2000    
This Date's Issues: 4425 4426   4427 

Johnson's Russia List
26 July 2000

[Note from David Johnson:
1. Stanford University: Alexander Dallin dies; expert in Soviet 
and East European studies.

3. The Guardian (UK): David Lowry, THE CRADLE OF DEATH: WEST TURNS 

4. Financial Times (UK): Russian ministry to probe privatisations.
5. Reuters: Russia's governors agree to leave upper house.
6. Reuters: Post-Soviet Russia introduces student loans.
7. New Born Baby Dies in Power Cut.
8. From Larissa Maskina, The Association of Outcasts, Chita, Russia.
9. Los Angeles Time: Jim Mann, Putin Turns Russia Eastward Again.
10. Financial Times (UK): Charles Clover, Russia stakes Caspian 

CONTROL. Famous Kremlin Political Technologist Gleb PAVLOVSKY 
Reveals the Oligarch's Latest Secret in an Interview.

12. Bloomberg: Putin's Tax Reform Raises Skepticism Among Businesses.
13. AFP: Tough competition ahead as Russia braces for internet boom.] 


>From Stanford University:
Alexander Dallin dies; expert in Soviet and East European studies 

Alexander Dallin, a leading scholar in the field of Soviet and East European 
studies, died July 22 at Stanford Hospital at age 76. Dallin, the Raymond A. 
Spruance Professor of International History, Emeritus, at Stanford 
University, suffered a stroke on July 21. 

"Dallin had a profound and beneficial influence on the field of Soviet and 
East European studies," said David Holloway, the current Raymond A. Spruance 
Professor of International History. "For him, the study of the Soviet Union 
was not a question of confirming an already held point of view, but rather a 
matter of seeking to understand a complex and changing reality." 

The son of the famous Menshevik activist and scholar David Dallin, Alex 
Dallin was born in Berlin on May 21, 1924. The family fled from the Nazis to 
France, and then made their way to the United States. 

He earned a bachelor's degree in social science from City College of New York 
in 1947 and master's and doctoral degrees in history from Columbia University 
in 1948 and 1953. 

Dallin began his career by working after World War II on the Harvard 
Interview Project, which used the testimony of refugees and emigres from the 
Soviet Union to study the functioning of the Soviet system. He taught at 
Harvard, Columbia and the University of California-Berkeley before joining 
the faculty at Stanford in 1971. 

Holloway described Dallin as "the model scholar-organizer," who applied his 
immense energy for the benefit of the broader community of specialists in the 
field. Dallin served as director of the Russian Institute at Columbia and, 
later, of the Center for Russian and East European Studies at Stanford. 

For several decades he was a member of virtually every important committee in 
the field, his colleagues recall, and in 1984-85 he served as president of 
the American Association for the Advancement of Slavic Studies. After the 
fall of the Soviet Union, Dallin devoted his energy to the revival of the 
social sciences in the former communist world. He helped to establish the new 
European University in St. Petersburg and ran the New Democracy Fellows 
Program, which brought students from the post-communist states to Stanford to 
do graduate work in the social sciences. 

Dallin's classic study, German Rule in Russia, 1941-1945, which was published 
in 1957 (and republished in 1981) won the Wolfson Prize for History. 
According to Holloway, Dallin demonstrated how a gifted mind and a talented 
pen could turn painstaking research in captured German archives into a 
fascinating and moving story of occupation and resistance. 

"Dallin's scholarship had the unusual quality of being deeply researched and 
carefully formulated while also lively and full of ideas. These qualities are 
evident in the stream of books and articles he produced for over 50 years. 

"The disciplines of history and political science mix easily in his writings, 
while domestic politics and foreign policy are always presented in their 
interconnection, and not as isolated spheres of activity. He trained 
generations of students, providing them with encouragement and mentorship, 
and gaining in the process many firm friends." 

Among his later works were Black Box (1985), about the Soviet shootdown of 
Korea Air Lines Flight 007, and The Gorbachev Era (1986), coedited with 
Condoleezza Rice. His last book, coedited with the Russian scholar F. I. 
Firsov, was Dimitrov and Stalin 1934-1943: Letters from the Soviet Archives, 
which was published by Yale University Press earlier this year. 

Dallin is survived by his wife, political scientist Gail Lapidus, with whom 
he frequently collaborated; by three children from a previous marriage, 
Linda, Natasha and Andrew; and by four grandchildren, Nicaela, Katya, Maya 
and Leo. A memorial service will be held after the beginning of the academic 
year. SR 


Date: Wed, 26 Jul 2000
From: abe brumberg <>


The first time I heard of Alex Dallin was in l949, in a
conversation with Samuel Hendel, at the City College of New York. Hendel
was an amiable political scientist who taught a course on the Soviet
Union--the very first in an American university, to my knowledge--whose
motto could be summarized as "on the one side and on the other" (or as
Bertram Wolfe used to put it, "on the side that was there and on the side
that wasn't"). I was enrolled in his course, but Hendel was a democratic
man, and did not think it indecorous to open his heart to a mere student of
He showed me an article by Alex Dallin, a former student, on the
subject of the tenth anniversary of the Hitler-Stalin Pact, which appeared,
if memory serves me right, in the New York Times. He said he was sadly
disappointed in Alex, who scathingly criticized the Pact, without taking
into consideration his former professor's insistence that however unhappy
the new marriage between the two dictators, it was forced on Stalin by the
Western powers, and was justified on the ground that Stalin had to gain
breathing space to prepare his armed forces [whose general staff he
massacred just a year earlier] for the eventual confrontation with Nazi
Germany. I nodded my head, and knew as of that moment that Alex was my
man. (So, I might add, did Hendel soon thereafter). 
I got to know Alex personally within the next few years, first as a
graduate student in Russian Studies at Yale University, and later as Editor
of the bi-monthly journal Problems of Communism. I would visit him
frequently at his house inn Leonia, New Jersey, and our families would
occasionally go out together to a museum or (if it was Christmas) a
performance of Tchaikovsky's "Nutcracker Suite" I enjoyed these outings
enormously: Alex was an exceptionally good father, and his three children,
whom I quickly took to, reciprocated in warmth and affection..
Spiritually, or politically, we saw very much eye to eye, having
imbibed basic social democratic values from our respectful families--in his
case, Menshevik, in my case Bundist. .
At the same time, Alex was for a long time, it seemed to me, eager to
compete with and outdo his father, whom he considered a competent
journalist but not a scholar in the strict sense of the word Well, he was
right. And indeed he soon became a splendid scholar, one of the best in
our field.
Together, Alex and I befriended Max Schachtman, a leader of a wing
of the Fourth (Trotskyite) International, a delightful man with an
expansive sense of humor, most of them at the expense of "Mensheviks". 
Neither Alex nor I minded that, knowing Schachtman's taste for the 
irreverent. I met Schachtman at Alex's house, and I remember our evenings 
filled with good food, good wine, and general hilarity. (Schachtman soon
joined the American Socialist Party, and within a few months organized a
semi-Trotskyite faction within it.)
Alex, never pompous, was possessed of a sense of wit and of irony
that he often turned opon himself. A restless man, never quite satisfied
with his manifest accomplishments, he was always searching for better
answers to questions that flowed most of the time from his own intellectual
turbulence rather than from objective conundrums. After several years
--including one memorable year in the Washington area, when among others we
spent a week-end, with our families, in the wilds of the Viginian
woods--Alex went West, and thenceeforth we no longer met as often as in the
past. But we stayed good and loyal friends. 
I shall leave it to others to speak of Alex's professional
achievements, his awards, prizes, honors, his books, articles (some off
which appeared in the journal Problems of Communism), his edited volumes,
all marked by that quest for the right answer to tormenting questions that
followed him all his life. Here I want to bid good-bye to a good friend,
a fellow-questioner, one, I fear, of the steadily shrinking number of my
coevals who over half a century ago set out on our own and joint voyages
of intellectual discovery.

Abraham Brumberg
Chevy Chase, Md. 20815
July 25, 2000


The Guardian (UK)
26 July 2000
[for personal use only]
By David Lowry
David Lowry is a researcher for a number of anti-nuclear MPs 

Yuri Pirogov, with his gnarled face, looked older than his 62 years as he
took the podium to talk to nuclear experts at an international conference
discussing Russia's unsolved nuclear waste problems. 

The conference was held as Russia's President Putin and US President
Clinton prepared to sign a deal that will involve countries of the G8 top
industrial nations funding a huge expansion of nuclear power in Russia,
based on plutonium mixed oxide fuel (MOX). Russia wants to build 29 new
reactors and consume 33,000kg of former warhead plutonium in its
controversial new atomic programme. But in its anxiety to solve the
plutonium problem, the west and Russia are turning a blind eye to past
practices and Pirogov's current problems. He had a chilling tale to tell. 

All his life, save some time as a military mercenary, Pirogov had lived in
the village of Atomanova on the eastern banks of the mighty Yenisei River -
at nearly 3,500km long, the greatest in Siberia. Atomanova is 5km
downstream from a vast nuclear complex formerly called Krasnoyarsk-26, now
called the Mining Chemical Combine (MCC), at Zhelenzngorsk, one of three
Sellafield-type nuclear combines in Russia. 

Built in 1950, it houses a reprocessing plant, nuclear waste stores, a
part-built fast breeder plutonium fuel reactor, called RT-2, and a unique
plutonium production reactor constructed entirely underground in a vast
rock cavern to protect it against US nuclear attack in the Cold War.
Zhelenzngorsk is one of 10 former Zatos - secret and closed military cities
in Russia - now opened up. 

Pirigov said that, before 1988, the villagers of Atomanova did not even
suspect that such a nuclear complex existed so close to their homes. But
when they noticed large pipes being laid by the far bank of the Yenisei
from their village, they inquired what was happening. Soon they discovered
the pipes were for liquid nuclear waste disposal. 

Officials from the MCC gave the villagers a briefing about radiation
effects on humans. With curiosity - and no little fear - aroused, the
villagers put questions to the local administration, who knew little more
than Pirigov and his neighbours. 

Angered but undeterred, the villagers petitioned the Krasnoyarsk Krai, the
regional territory government responsible for an area 10 times the size of
Britain. Even the professors at the city's university were in the dark
about the Zato. 

Pirigov said that with the help of Vladimir Mikheev, director of the
Krasnoyarsk citizen centre on non-proliferation, the Atomanova villagers
finally discovered the pipes were for chanelling the nuclear waste deep

In all, the MCC planned to discharge over 25m cubic metres of
plutonium-contaminated wastes deep into the earth. Pirigov was later
pestered by the MCC security police, and told: 'You are helping the damned
Americans with your fuss.' 

On the nearby bank of the Yenisei, young girls would swim in the unusually
warm water. It became clear to the villagers that the warmth had come from
nuclear discharges at the MCC. As belated compensation, in 1996, Atomanova
was offered 5m roubles to improve the village infrastructure. Two
ambulances were bought for 520,000 roubles, yet the village failed to
benefit from electricity generated at the reactors across the river. 

In support of Pirigov's claims, Dr Irina Osokina, chief of the
endocrinology department at the Insititute for Medical Problems of the
North, in Krasnoyarsk, unveiled research demonstrating that plutonium
contamination in the area around the 'special protection zone' at the MCC
was between eight and 17 times the measurable plutonium from atmospheric
weapons tests. 

Radioactive contamination has been found as far as 1,400km downstream on
the Yenisei, which pours nearly 20,000 cubic metres of water per second
into the Arctic. Expeditions by the Siberian Institute of Biophysics have
found 'hot' radioactive particles in many spots along the Yenisei
riverbank, even at a forest campsite. The institute scientists estimate
that the ill-fated campers would have unknowingly received a year's
radiation dose in just three hours as they had fun in the forest. 

The worst radioactive contamination has been found on Gorodskoi island,
near Atomanova, close to the radioactive effluent discharge pipe. Other
surveys by the Siberian branch of the Russian Academy of Sciences have
found contamination on the island, and at the nearby downstream village of
Bolshoi Balchung, up to 1,000 times the caesium-137 discharged in the
Chernobyl accident in 1986. Hot particles have also been found in the
Yenisei flood plain and at Yeniseik City, nearly 400km north of MCC. 

German Kukashin, a former senior nuclear fuel scientist at the Mayak
Chemical Combine nuclear complex, told of a serious accident at research
reactors at the State Scientific Centre Research Insititute of Atomic
Reactors, at Dimitrovgrad, in the Ulyanovsk region east of Moscow. Kukashin
was later sacked for his attempts to publicise the accident risks. 

The Mayak complex is one of the most polluted places on the planet. In
1957, a nuclear waste storage tank exploded, scattering highly toxic waste
over the local villages. They were not evacuated for two weeks, despite the
Soviet atomic authorities knowing people had to be moved within 36 hours to
ensure protective measures might work. 

One village has never been evacuated. Despite being in the centre of the
danger zone, the 4,500 people of Muslumova have stayed for decades because
it is the local railway halt. Every summer children still flock to the
village by rail to see their grandparents. In Yekaterinburg, famous for
being the site of the murder in 1919 of the last tsar, Nicholas Romanov and
his family, scientists revealed at the public hearings, that by the years
2020/2030 every second child born to parents in the Chelyabinsk region will
suffer 'severe genetic deficiencies'. The Soviet authorities are still not
anxious to discuss these problems as they plough ahead with plans for new
reactors with new fuel. 

A former local state duma (parliament) member, Natalia Mironova and local
Chelyabinsk lawyer, Anna Ilyina, told the Guardian that they were now
pressing for proper compensation for families afflicted by the Mayak
accidents, so far without result. 

David Lowry is a researcher for a number of anti-nuclear MPs 


Financial Times (UK)
July 26, 2000
Russian ministry to probe privatisations
By Arkady Ostrovsky

Russia's Ministry of Interior on Tuesday said it would investigate any
privatisation of Russian state-owned enterprises that had harmed Russia's
economic interests. 

General Nikolai Nino, the deputy head of the economic crime unit, said this
was part of the programme of "decriminalisation of the Russian economy". 

"If the interest of the state suffered during privatisation we must
investigate and the damage must be restored." He said that while "there is
no talk of redistribution of property, the investigation of certain crimes
must be completed". 

The tough comments were made ahead of a meeting between Vladimir Putin, the
Russian president, and business tycoons on Friday. The businessmen hope to
end a Kremlin campaign that has led to criminal tax investigations against
some of Russia's largest business groups. 


Russia's governors agree to leave upper house
By Ron Popeski

MOSCOW, July 26 (Reuters) - Russia's once-powerful regional governors bowed 
to the inevitable on Wednesday and approved a law inspired by President 
Vladimir Putin further trimming their powers by removing them from the upper 
house of parliament. 

The Federation Council, the upper house where regional bosses sit for the 
moment, voted overwhelmingly in favour of a softened version of measures to 
tighten Putin's grip on Russia's far-flung regions. 

But the governors could offer renewed resistance to Putin's drive to overhaul 
post-Soviet institutions in a debate later in the day on tax reforms changing 
the way they raise revenues. 

In their last session before the summer recess, 119 members of the upper 
house backed a bill to end their automatic right to sit in the chamber. Only 
18 voted against. 

Nikolai Fyodorov, governor of Chuvashia region in central Russia and a bitter 
opponent of the measure, warned of a new era of central authority but was 
more restrained than usual. 

``The atmosphere in our society is such that the will of the emperor, or that 
of the president, is tantamount to law,'' he told members. ``A Kremlin 
official's opinion is more important than the Federation Council's 
constitutional position.'' 


Other governors appeared simply resigned to their fate. 

``Whether we reject this or not, the bill will come into law even if it means 
overriding our veto,'' said Alexander Surikov, governor of Altai region in 
southern Siberia. 

The Federation Council's speaker, Yegor Stroyev, had set the tone before the 
opening of the session by signalling that his chamber has ``no quarrel'' with 
the president. Stroyev had met Putin in the Kremlin on the eve of the debate. 

During weeks of thrust-and-parry exchanges between the two houses, 
parliament's lower chamber, the State Duma, has overridden the regional 
bosses' veto of a second bill allowing Putin to sack governors and dissolve 
local assemblies if they break laws. 

A third bill empowering governors to dismiss lower-ranking officials is also 
about to become law. 

The governors had rejected two bills in a first reading, denouncing them as 
an attack on post-Soviet federal structures. 

A compromise was reached by a commission of both houses, which allowed 
governors to stay in the Federation Council for the length of their terms -- 
up to a deadline of January 2002. 

It also allowed them to appoint and sack their own representatives to sit in 
their place in the upper house. 

Former President Boris Yeltsin had encouraged governors to make full use of 
their autonomy. Regional bosses often approved laws which contradicted those 
drafted at the federal level. 

Putin, elected in March on pledges to restore Russia's lost greatness, wants 
the legislation to re-establish uniform observance of the rule of law in the 
world's largest country. 

The tax reforms under consideration, at the heart of Putin's economic plan, 
appeared in jeopardy after a committee of the Federation Council rejected key 

Deputy Prime Minister Alexei Kudrin, who has been lobbying hard for approval, 
told the chamber a conciliation commission could start work on Thursday to 
thrash out a compromise. 


Unlike the laws curtailing the governors' political prerogatives, the tax 
bill failed to secure a big enough majority in the State Duma to guard 
against any Federation Council veto. 

The government and the International Monetary Fund see the changes as vital 
to sustain a growth forecast of up to five percent this year after 3.2 
percent in 1999. 

The budget committee of the Federation Council recommended that the regional 
bosses accept the main tax laws, but reject the ``implementation bill,'' a 
separate piece of legislation required for putting the changes into effect. 

The last document contains contentious measures -- including the eventual 
scrapping of a four percent tax on companies' turnover, now collected and 
spent in many regions. 

One effect of the tax overhaul would be to centralise collection and 
distribution of tax revenues previously left to the regional governors to 


Post-Soviet Russia introduces student loans

MOSCOW, July 25 (Reuters) - Russia's largest retail bank announced on Tuesday 
an innovation unthinkable to millions in the Soviet era -- the student loan. 

Andrei Kazmin, head of Sberbank, told a news conference loans would be made 
available to cover 70 percent of fees of students who failed to qualify for 
free tuition by virtue of marks in entrance examinations. 

Credits, available at favourable interest rates, are to be repaid over a 
period of up to 10 years, a concept unheard of in Soviet times when education 
was supposed to be free for all. 

Acting Education Minister Vasily Zhuravsky welcomed the programme, saying it 
would save students from large debts. 

``We tried to do this but there was no money in the budget,'' Zhuravsky told 
reporters. ``Next year, about 1.1 million people will be paying for their 
education. Many will use the credits.'' 

Under the Russian education system inherited from Soviet times, students must 
exceed a given minimum in entrance exams to qualify for free tuition. 

In recent years, students falling short of the minimum have been admitted to 
universities and other institutions on a fee-paying basis. 

But many students still secure admission by paying a bribe to an appropriate 
official and large numbers of professors have bolted to the private sector 
where salaries are higher. 


July 25, 2000
New Born Baby Dies in Power Cut

On Monday in the city of Vladivostok in Russia’s Far East, a new born baby
who was in an incubator machine receiving artificial suspiration died due
to a power failure. The town’s authorities have already announced that they
are not to blame for the tragedy, despite the fact that the city’s mayor
could have once again alerted the federal authorities to the protracted
energy crisis in the region. 

The deputy director of Russia’s electricity monopoly, United Energy
Systems, Sergei Pinchuk offered the following comment: ”Of
course the baby’s death is a tragedy for the parents and relations and we
offer them our condolences. However, I want to reject the reproaches
addressed to our daughter company Dalenergo, which was neither directly nor
indirectly involved in the tragedy. A year and a half ago when several
people died in operation theatres in Kemerovo due to the electricity being
switched off, there was an outrage when the media unfoundedly placed all
the blame on United Energy Systems (UES)” 

Pinchok went on to say that the supply of electricity to the housing
sector, schools and hospitals is the responsibility of municipal
enterprises, which resell electricity. These enterprises are departments of
local administrations and are responsible for supplying electricity to the
consumer. They own the electricity sub-stations. According to Pinchuk, in
this case Gorelectroset is responsible for supplying the maternity hospital
with electricity and Dalenergo has already carried out a check and come to
the conclusion that either an accident had occurred or that their had been
a failure on the part of Gorelectroset. 
However, Pinchuk did not rule out that the maternity hospital itself, which
does not have its own diesel powered generator, may be responsible.
Hospitals, maternity hospitals and strategic military objects should be
equipped with generators in case of such power failures. 
“There is never any systematic disconnection”, Pinchuk asserted. 
“And do you have any statistics on how many hospitals and maternity
hospitals have had their supply cut off this year?”, we asked. 
“We don’t have any such statistics” 
“So it’s difficult to control such disconnections?” 
“It’s very simple. There are strict rules on disconnection. It’s a complete
procedure from several warnings to limitation of supply. Electricity is
switched off as a last resort. 
“And what was the reason for the disconnection in this case?” 
“According to our assessment, it’s very unlikely that there was a
disconnection. There was either an accident or a failure on the part of
Gorenergoset. In my opinion it was purely a PR move by the local

Gazeta.Ru was interested in the Health Ministry’s opinion. Irina
Kagromanova, a spokeswoman for the Ministry, wrote down our questions; how
many hospitals in Russia are without generators and who is responsible for
providing maternity hospitals with generators. However, an hour later she
still could not give us any answers because, she said, it was the end of
the working day. It turned out that the press department of the Health
Ministry found out about the Vladivostok tragedy from Gazeta.Ru. 

We then turned to a Moscow maternity hospital in search of an explanation.
The head doctor on duty in Moscow’s 17th maternity hospital, Valentina
Yakimova told us that parents to be in Moscow have no reason to fear for
the lives of their unborn children because all of Moscow’s maternity
hospitals are equipped with their own generators. 

“In our maternity hospital there are two types of generator; post and
mobile. There are post generators on every floor and every ward. They are
situated at the nurses’ posts along with essential medicines. These
generators switch on automatically in emergency situations. In the
post-natal and paediatric wards and the pathology department there are
mobile generators. If necessary, it’s possible to move them to any section
of the maternity hospital. They’re very bulky and difficult to move because
of their heavy accumulators, but they’re better than nothing.” 

Elena Alexandrova, staff writer 


From: "Juliette M. Engel, MD" <>
Subject: Zabaikalsky "Chernobyl"
Date: Tue, 25 Jul 2000 

>From Larissa Maskina, The Association of Outcasts, Chita, Russia 

The Zabaikalsky region used to be the so called "raw-materials appendage"
for Russian central part for a long time. Nowadays it is cheaper to buy
metals from abroad than to produce it in Russia.

There was a Mining-Concentrating Plant (MCP) in our region which extracted
tin. It used to take the 1-st place in quality and quantity of tin mined.
Some years ago it stopped to function. But the miners' settlement called
"Sherlovaya Gora" still exists and it is in danger. There is the so called
"tails"- repository left after that plant -- it's a repository of wastes
of the extracting process. When the MCP functioned, those wastes
(primarily heavy metals) were covered with water in order not to let the
winds blow them over around.
Nowadays the former MCP doesn't have an owner -- so, nobody is responsible
for it any more. There is no water covering those wastes and the winds
carry them out right in the direction of Sherlovaya Gora and two more
settlements. Statistics say, that during last years the level of cancer
deseases tragically increased; if smb gets ingured it takes a lot to cure
him -- one hardly can fight illness; people drink terribly much; there are
more and more babies newborn with anomalies. There's nowhere to
work.People just exist and wait for death. Moreover, the
"tails"-repository is only 500 metres off the settlement and there's a real
danger that rains will water out the sands protecting the
"tails"-repository and that 17 mln km3 of dangerous wastes (including
arsennic, strontium, other heavy metals and elements -- practically the
whole Mendeleyev's table) would cover 3 settlements.They call this place
"Zabaykalsky Chernobyl".

According to our "soviet economy", from 8 to 20% of tin were taken out.
The rest 80% are still in rocks mined out that now lay as huge useless
mountains around the former MCP in the open air. There are silver, gold
and many other minerals in those rocks beside tin.

There were some comissions which checked whether itis dangerous to live in
Sherlovaya Gora. The results were frightening. Practically all heavy
metalls are present in water, vegetables, air in concentrations ten-,
hundred-, thousand-times higher than dozes permitted. Psychological status
of people is also dangerous: they cannot support themselves financially;
thay cannot leave the place -- they don't have money to start from
nothing, they have nowhere to go.

They also don't have money to hire official experts to prove the danger of
their living. They cannot even asphalt the streets in order not to let
their children breath dangerous sand. Local authorities are inable to do
anything to help. Regional authorities do nothing about it. State
authorities are too far away to get interested in it. Even people are so
tired and hopeless that they have stopped to struggle and to ask for smth.

But there still are people concerned. They founded the Association
"Sherlovaya Gora" -- Association of Outcasts. If there's no help inside
Russia, we decided to ask for it from abroad.
We plan to work in two directions:
1st: to ask for charity -- goods (food, technics, technical devices,
clothes, medicines) and money (for asphalting, sick children, hiring
professionals, buying millions of necessary things) would be equally usefull.
2-nd: maybe somebody would get interested in restoring the MCP in order to
extract and concentrate the minerals left. It would create hundreds of
working places to people, give a chance to get money to support families,
and maybe the main thing -- hope for the better.

So, if you are concerned, I'm ready to give you the information you need.
If no, I still thank you for your attention and ask, if it is possible,
to spare me information about a Foundation or organisation whom we can ask
for help.

Sincerely, Larissa Maskina, 
vice-director of the Association of Outcasts, Chita, Russia.

Please post on JRL.
Juliette M. Engel, MD
MiraMed Institute, Founding Director
Moscow, Russia
095-953-1535/747-6183 cellphone 


Los Angeles Time
July 26, 2000
[for personal use only]
Putin Turns Russia Eastward Again 

MOSCOW--With President Vladimir V. Putin's trip to Beijing last week, 
Russia's ties to China have now drawn closer than at any time in the past 40 
The Russian president signed a joint statement with President Jiang 
Zemin that was startling in scope. Russia and China agreed to work together 
not just in opposing the U.S. missile defense system but in many other areas 
of foreign policy, including Central Asia and Taiwan. 
"We've come a long way in three years. In 1997, it took time for our 
foreign ministers to negotiate just a short declaration on Iraq," says Leonid 
Moiseyev, a Russian diplomat who accompanied Putin. "Now, our presidents can 
quickly sign a long communique covering a wide range of international 
The military aspects of the Sino-Russian relationship continue to deepen 
"There's a high degree of dependency already between Russia's defense 
industries and the Chinese market," says Dmitry Trenin, deputy director of 
the Carnegie Moscow Center. "And the Chinese know that the Russians are in a 
position where they can't afford to say no." 
Russia already has sold China advanced Sukhoi warplanes that Russia's 
own military doesn't have the money to buy, along with destroyers, missiles 
and other hardware. 
Russian military experts say there may well be more to come. Pavel 
Felgenhauer, a Russian defense analyst, predicts China may seek Russian help 
to stop American aircraft carriers from intervening if there is a crisis over 
"For decades, Soviet [weapon] designers were working on ways to kill 
U.S. carriers," said Felgenhauer. "We [Russians] have lots of things on file, 
basically anti-carrier weapons, and we could share some of these with the 
Nevertheless, one can detect in Russia more than a little ambivalence 
about the country's new China connection. 
Russian military leaders have opposed giving high-tech planes and 
missiles to China that they fear might some day be used against their own 
country. Economic officials gripe that China doesn't buy enough Russian 
products beyond the arms supplies. 
And many other Russians voice the fear that the sparsely populated areas 
of Siberia will be overwhelmed by an influx of Chinese. 
"We're probably losing the territory" of Siberia, says Alexei Bogaturov 
of the Russian Academy of Sciences. "Russians are leaving, while the number 
of Chinese is rising." 
Valery Zaitsev--an Asia expert at IMEMO, a leading Russian research 
institute--says his country perceives a "China threat. . . . The Russian Far 
East is rich in resources and scarce in population. It's a natural place [for 
China] to expand." 
Amid such conflicting currents, Russian scholars say there can be no 
return to the era a half-century ago when the Soviet Union served as the 
patron of Mao Tse-tung's fledgling Communist state. 
"We don't want an alliance with China," says Evgheny Bazhanov, one of 
Russia's leading Asia specialists. "We know that if we did, the alliance 
might collapse, and then we'd have a confrontation like we did in the late 
1950s. We're big powers, and sometimes our interests diverge." 
Besides, Russians admit, times have changed. Back then, an impoverished 
China treated Russia as its big brother. Now, Russia is much weaker, and the 
Chinese have become the economically dominant partner. 
In courting Beijing, Putin was following in the footsteps of his 
predecessor, Boris N. Yeltsin. But a day later, Putin made history of his own 
by visiting North Korean leader Kim Jong Il. 
No leader from Moscow, Russian or Soviet, had ever set foot in Pyongyang 
before. In the early 1990s, Russia cozied up to South Korea and at the same 
time threw the North Korean economy into turmoil by cutting off oil 
Putin, however, was eager to win North Korea's help in heading off the 
U.S. missile defense program. When the North Koreans pleaded that Putin 
should visit only Pyongyang and not South Korea during his Asia trip, the 
Russians obliged. 
Kim responded gratefully, turning out massive crowds for Putin and 
staging a banquet where old North Korean generals recalled Russian-language 
songs they hadn't sung for decades. 
Back in Moscow, some Russians were appalled. "I hate for him to go to 
this country and legitimize it," said magazine editor Masha Lipman. "I hate 
for him to be photographed getting scarves from Young Pioneers." 
But the North Koreans seemed to be attracted to Putin, with his ex-KGB 
background and his desire for a more powerful government. The Korean hosts 
recited for their Russian guests an old saying that a weak country needs a 
strong king. Everyone understood. 
North Korea keeps in a Pyongyang museum the railway car in which the 
Great Leader Kim Il Sung sojourned overland to Moscow decades ago. That trip 
took a month, with Soviet officials throwing lavish feasts to toast Kim. 
Kim Jong Il may visit Moscow soon, Russian officials say, but he won't 
be wined and dined in the same fashion. "We can't afford it anymore," says 
Moiseyev wanly. 
Putin's trip made it clear that Moscow is again playing the Great Game 
in the Far East. But for a weaker Russia, life in Asia just isn't what it 
used to be in the Soviet heyday. 


Financial Times (UK)
26 July 2000
[for personal use only]
Russia stakes Caspian claim
By Charles Clover in Moscow

Russia flexed its muscles in the struggle for predominance in the Caspian
Sea region on Tuesday as three of its largest oil and gas companies formed
a consortium to explore for oil. A significant Caspian oil discovery was
announced on Monday. 

The Caspian Oil Company, formed with one-third participation of two oil
companies, Lukoil and Yukos, and Russia's gas monopoly, Gazprom, will add
another player to an already crowded field of companies trying to strike it
rich in the Caspian. 

Valery Remizov of Gazprom said on Tuesday at the signing ceremony: "Each of
us has an interest in the Caspian region, the more so that Russia has a
geopolitical interest there." 

The company plans to explore for oil in Russia's section of the north
Caspian, near where Lukoil has already been working. On Monday Okioc, the
consortium of western oil companies drilling for oil in a neighbouring
geological formation off Kazakhstan, announced it had struck oil. 

Russia's new consortium has greater ambitions and might take part in
projects alongside other Caspian states, company officials said. 

Some analysts thought that giving the company a greater role in developing
the Caspian's resources might help solve some of the obstacles confronting
western companies: the uncertainty of the sea's legal status and the
logistics of getting the oil to market. 

"In order to solve these problems, other western companies have learned
that one needs a strong Russian partner," said Sergei Glazer, an oil and
gas specialist at Alpha Bank in Moscow. 

The six Caspian states are wrangling over how to divide up the sea and its
resources. Russia has proposed dividing the sea bed but keeping its waters
as a common resource. 

In the absence of an agreed legal framework, there are virtually no rules
for developing hydrocarbons, according to Russian company officials. "It is
a situation today where any company in principle could legally work in any
part of the Caspian," said Ravil Maganov of Lukoil. 

"It is a case where whoever develops reserves first will have the right of
way," said Mr Glazer. 


Komsomolskaya Pravda
July 26, 2000
[translation from RIA Novosti for personal use only]
Famous Kremlin Political Technologist Gleb PAVLOVSKY 
Reveals the Oligarch's Latest Secret in an Interview with 
Komsomolskaya Pravda's Olga VANDYSHEVA.

PAVLOVSKY: Boris Berezovsky always plans his actions. 
Giving up the deputy's mandate is a well-weighed PR move; it's 
his usual policy. Each time Berezovsky made a certain 
mysterious step, we tried to guess what was behind it - a drama 
or a tragedy. I do not want to be too critical. However, from 
my point of view, his latest move is admission of his failure. 
By using his usual means - the mass media, money and 
connections with the displeased, Berezovsky wanted Putin to 
make dependent on him. But he has failed. Putin depreciated the 
political market on which Berezovsky had strong positions. 
Power stops being a wholesale consumer of corruption services, 
the market is falling and the busy spot of intermediaries on it 
is not worth anything any more.

VANDYSHEVA: Is this why Berezovsky is so actively against 
the reformation of the Federation Council?
P.: Small wonder that Berezovsky regards the federative 
reform as something, which is just a step short of the collapse 
of the state system. For him the state was the shadow balance 
of politics with constitutional roles such as "governor", 
"party" and "mass media" being pseudonyms of the illegal spots 
of power sale.
Having swallowed the state, the democratic revolution of 
the 90s regenerated into a pirate confederation. Chechnya is 
the most outrageous variant towards which the whole of Russia 
was moving.
Shooting, gold, unrestricted freedom but grief for the 
The Federation Council was the legal base of the shadow 
power and the exchange of financial and political deals between 
the center and the regions, that is the place where Moscow 
democracy could bargain with dozens of provincial tyrannies, 
buying their consent to loyalty through intermediaries. 
Senators were paid by money transfers, offsets, taxes and 
complete non-interference in their tyranny. The budget was 
legally led into the shadow and some minor personalities, 
mysterious "democrats," were blamed for all that. The 
outstanding thing is that the vast market of corruption 
services was perfectly legitimate. Billions of dollars stolen 
from the federal budget were siphoned off to the shadow "State 
No. 2." And Berezovsky, who was an outstanding operator of this 
revolutionary-financial machinery, cannot put up with the fact 
that an end is coming to all this.

V.: Do you mean that the reforms proposed by the President 
are aimed, first and foremost, to undermine the shadow market?
P.: That's right. Our pirate-intermediaries have fewer and 
fewer chances to blackmail the regime legally. It was easy for 
them to manipulate governors as long as power trade was reduced 
to the obedience of regions. But it is difficult to bring 
pressure to bear on the President's representatives in the 
federal regions.
If Putin postponed an onslaught on "State No. 2" and 
allowed its bosses to look around and forestall his actions, he 
would most likely bogged down in a quagmire and we would see 
another Gorbachev hobbling from one crisis into another. But 
the shadow politics bosses still remain in their seats. They 
are rather quiet and frightened but unwilling to surrender yet.

V.: Do you mean oligarchs?
P.: Not only them. Oligarchs have created a myth of their 
omnipotent power and claim that they have elected Yeltsin and 
Putin and are now managing all the affairs in Russia. If that 
were true, they would do something in August 1998. In all 
dangerous cases the "great" and "horrible" oligarchs hid under 
Granddad Yeltsin's wing. They were just a detail of the system, 
which was only too obvious and an eyesore to all. Genuine 
oligarchs are the regional supervisors of local people and 
local budgets.

V.: It so happens that there is no room for Berezovsky in 
the new system of coordinates, doesn't it?
P.: You are quite right. The old positions are shaking, 
and Berezovsky is in a hurry to find a new field and create a 
party of "collective Berezovsky". I do not think that it is a 
very prudent strategy. Berezovsky is confused.

V.: When giving up his deputy's duties, Berezovsky said, 
among other things, that he wants to be an equal among equals 
with those oligarchs who are now in an uneasy situation. Could 
you comment on this?
P.: I do not think that Berezovsky's situation largely 
differs from the situation of other big businessmen. It is more 
likely that he hoped to rally members of big business around 
himself to take the place of an intermediary in this group.

V.: Is it true that you and deputy chief of presidential 
staff Vladislav Surkov are the only people who have any 
influence on Putin today?
P.: It is another of Berezovsky's myths. I am not an 
influential person. My role as an advisor is rather small. 
There is a great distance between power and consultants. There 
are people who adopt decisions. It is easy for them to change a 
consultant or simply ignore him.


Putin's Tax Reform Raises Skepticism Among Businesses

Moscow, July 26 (Bloomberg)
-- In most countries, companies such as candy maker OAO Krasny Oktyabr 
would welcome government plans to slash tax rates and lower mandatory 
contributions for staff. Not in Russia. 

As lawmakers approved President Vladimir Putin's proposal to overhaul the tax 
system, Krasny Oktyabr Board Chairman Mikhail Chebotarev said he's skeptical 
it will encourage compliance. His company, Russia's biggest chocolate 
producer, won't benefit as long as enforcement remains lax, he said. 

``Until Russia is split between those who pay taxes and those who don't the 
system will be flawed,'' Chebotarev said. ``Businesses should be allowed to 
develop by keeping taxes low and making sure everyone pays them.'' 

Putin, elected in March, has made changes to the tax system a cornerstone of 
his economic reforms, saying high taxes have been a major obstacle to 
economic growth and led to widespread evasion. The plan includes lowering to 
a flat 13 percent personal income tax rates that now are as high as 30 
percent, cutting the revenue tax companies must pay in addition to corporate 
tax and reducing social contributions paid by employers. 

Putin said his the tax changes and other reforms will help keep the economy 
growing by at least 5 percent a year and lure more investment. 

Russia's upper house of parliament approved the tax reform package in a final 
vote today following endorsement by the lower house. 

Foreigners' Complaints 

For years, foreign investors have complained Russia's tax rates are too high 
and the system too complicated to follow. 

To stay competitive and pay less tax, many companies falsify salary levels to 
pay lower income taxes for employees, use barter to report lower profit 
figures and skirt export taxes by reducing prices on contracts, analysts 

The government also has given different tax treatment to different companies, 
often negotiating before agreeing to how an individual business must pay in 
taxes. The Tax Ministry last year concluded separate agreements with the 14 
biggest oil companies to force them to pay all of their taxes in cash and 
repay arrears. 

``The tax reform, including changes to income tax, will result in making many 
tax evasion schemes unprofitable and unsustainable,'' said First Deputy 
Finance Minister Sergei Shatalov. ``The purpose of tax reform is to create a 
stable and predictable tax system.'' 

Yet even foreign executives are wary Putin's plan will work. 

``It is certainly not going to stimulate foreign investment,'' said Jim 
Belashek, deputy director at Deloitte & Touche LLP in Moscow and chairman of 
the American Chamber of Commerce. ``Taxes alone don't address all of the 
structural problems in the economy.'' 

More important reforms such as improving protection of private property 
rights, reducing corruption and enhancing enforcement of laws would help spur 
investment, he said. 

Legislators in Russia's upper house of parliament approved the tax package 
after it was endorsed in three votes by the lower house. It has yet to 
approve a law needed to put the tax changes into force. 

Some governors in the upper house opposed the tax changes because of concern 
they would cut revenue that local governments receive from tax on communal 
services and company sales. The revenue is used by regional governments for 
road construction and other projects, analysts said. 

Putin wants to increase federal control over that money and compensate 
regions through other taxes. 

``The government wants to have a better budget by taking away more from the 
regions,'' said Moscow Mayor Yuri Luzhkov. ``We have two problems in Russia - 
fools and roads. Now, we could improve the roads, but the fools aren't 
letting us.'' 


Tough competition ahead as Russia braces for internet boom

MOSCOW, July 26 (AFP) - 
Predictions of a on-line boom have prompted a scramble for a share of 
Russia's Internet market by web pioneers prepared to ignore the recent 
shakiness of hi-tech stocks in the West.

Entrepreneurs have launched a series of ventures aimed at cashing in on 
Russia's e-revolution, once it finally bears fruit.

Only 2.2 million Russians currently use the Internet, but that figure is set 
to rise dramatically, reaching 15.3 million or 10.5 percent of the population 
by 2003, according to investment company Brunswick Warburg.

"On-line sales are set to explode", Brunswick said in a study published last 

eHouse, one of Russia's biggest e-commerce service providers, posted turnover 
of 5.7 million dollars in the first half of the year from its on-line 
shopping services.

Last year's on-line sales, worth one million dollars, proved that Russia's 
"e-commerce is expanding faster than expected", according to Tom Adshead, 
analyst at Troika Dialog bank.

Brunswick has predicted that in three years' time, e-commerce in Russia will 
be worth 900 million dollars.

However Russia's hi-tech sector is still embryonic, as few internet companies 
are more than a few months old and advertisers are only just waking up to the 

On the surface Russia offers few prospects for further Internet growth. Only 
4 percent of households are equipped with personal computers, compared to 28 
percent in western Europe. Ordinary phone lines are poor quality and scarce, 
and credit cards nearly non-existent. And with an average monthly income of 
just 70 dollars, Russians are unlikely candidates to become e-shopaholics.

But PC prices are falling, along with costs for internet access, and the 
number of computers installed in private homes will more than double over the 
next three years to reach 12.9 million, according to Brunswick.

Moreover, Russians are typically open to new technologies and boast leading 
computer scientists.

Experts also point out that mobile phone sales are rising even faster than 
computer sales, suggesting that mobile phones could become the number one 
Internet access point for Russians.

This rosy outlook has sparked a plethora of business ventures aimed at 
reaping the rewards of Russia's eagerly awaited Internet boom.

Among the biggest projects underway are plans by Golden Telecom to buy 
Internet portal InfoArt for 8.3 million dollars, in what would be one of the 
largest investments so far in the industry.

Ru-net Holding, which was set up last March, "is in negotiations with fifteen 
sites and two or three projects should come together very soon", said 
Jean-Michel Broun, investment director for the Baring Vostok investment fund 
which is Ru-net's main shareholder. 

Ru-net is also trying to improve the running of its on-line book-selling 
service, which has a monthly turnover of 100,000 dollars. Work to 
build up stocks and cut delivery delays "will make us stand out from our 
competitors", Broun said.

NetBridge, which is controlled by the US investment fund New Century 
Holdings, is trying to establish itself across all sectors of the Russian 
internet, and is now spreading to Eastern Europe.

The company has just launched on-line auction sites in Ukraine, Romania, 
Bulgaria and Poland, with another planned for Hungary. The sites are modelled 
on, which has become one of the most popular on-line auctioneers 
in Russia.

Russian Internet companies are still at the teething stage however, and none 
has been listed on the stock exchange so far.

But competition for dominance on the web, once it takes off, is expected to 
be fierce. "Only those companies capable of bringing together dynamic 
management teams" and of laying out clear and realistic development 
strategies "will come out on top", warned Brunswick.


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