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Johnson's Russia List


September 26, 2000    
This Date's Issues: 45384539  4540 


Johnson's Russia List
26 September 2000

[Note from David Johnson:
1. RFE/RL: Sophie Lambroschini, Military Men Increasingly Seeking 
Political Office.




5. RFE/RL Security Watch: Victor Yasmann, THE KREMLIN PROPAGANDIST 


7. the eXile: Mark Ames, SERFDOM TAKES ITS TOLL. Cubicles and WAP 
phones sweep through Russia. Grueling American-style corporate culture 
ravages young people.

8. Trud: BEWARE OF THE YEAR 2003. Economist Mikhail DELYAGIN makes 
a forecast.

9. TIME EUROPE: Yuri Zarakhovich, Trouble in the 'Stans.' 
Is fundamentalist Islam in Central Asia becoming a threat to Russia? 
TIME talks with expert Alexei Malashenko.

10. Transitions Online: Nickolai Butkevich, Putin Flirts With 


Russia: Military Men Increasingly Seeking Political Office
By Sophie Lambroschini

Last Friday, the campaign began to become the next governor of Kursk in
elections next month. It came as no surprise that two generals are
competing for the post. RFE/RL Moscow correspondent Sophie Lambroschini
reports that the number of military men seeking high office in Russia is
growing, but it's not clear whether this represents a threat to democracy.

Moscow, 25 September (RFE/RL) -- The phenomenon of power ministry officials
and charismatic generals entering politics is not new in Russia. 

In 1996, former paratrooper Aleksandr Lebed made a strong showing in the
presidential election, placing a third. Lebed is now the governor of
Krasnoyarsk. Aleksandr Rutskoi, an Afghanistan war veteran, was Russia's
first vice-president under Boris Yeltsin. Other regional bosses with
military ranks include Ingush president Ruslan Aushev. An average of 12
regular army or interior ministry men were present in the last three Duma

But in the aftermath of a recent Kremlin-sponsored reform of the region
this year, more and more high-ranking military and intelligence officers
appear to be entering politics. 

One of these is General Vladimir Shamanov, the head of the Russian 58th
army. Shamanov is most closely linked to the war in Chechnya, where he was
in charge of operations last year and earned the reputation as a brutal
commander among Chechen civilians. Shamanov is running for Ulyanovsk
governor in elections that are set for December 24. 

Similarly, in Kaliningrad, the commander of the Baltic Fleet Admiral
Vladimir Yegorov is running for governor, opposing incumbent Leonid
Gorbenko, whose administration has been dogged by corruption allegations.
Yegorov recently took a temporary leave from the service in order to run. 

And last week in Kursk, two men with military or intelligence backgrounds
began gubernatorial campaigns there. Former intelligence officer Viktor
Surzhikov, who recently headed the Volgograd branch of the Federal
Intelligence Service (FSB), will be facing former soldier Rutskoi. 

The English language Moscow Times reports that FSB officers are also
planning to run in Voronezh and Chelyabinsk. 

Francoise Deauce, a French political scientist who studies the link between
Russian military and politics, says men like Shamanov and Surzhikov are
entering politics for different reasons from their predecessors. 

She says past military-political careers were often motivated by what she
calls "structural factors," including the drastic cut in troops since 1991
which has left tens of thousands of officers without a job. These military
men often sought higher office, she says, to oppose the government and the
state authorities. 

"Under [Boris] Yeltsin, the generals were usually elected against the
opinion of the president and the central powers. That was the case with
Lebed -- [and] with Rutskoi of course. Letting generals be elected as
governors is sometimes also a way of limiting their political influence on
the federal level. 

This time around, Deauce says, the military and FSB candidates appear to
have the backing of the Kremlin. 

Surzhikov says he has Putin's support. Yegorov has said the "commander in
chief" (eds: Putin) supports his subordinates, but he did not make clear
whether this included outright political backing. 

Putin's apparent preference to promote military men can be seen in his
choice of seven special representatives to lead the country's seven new
super-districts (which coincide with Russia's traditional military
districts). Five of the seven men come from the army, the interior ministry
or the FSB. 

These special envoys, in turn, have tended to favor fellow law-enforcement
veterans for appointments as federal inspectors, where they will be
coordinating work for the special envoy. 

Surzhikov, for example, was recently appointed federal inspector by the
Central district presidential envoy Georgy Poltavchenko, a former KGB

Deauce says the threat of a military-type order in the regions lies less in
the fact that generals are seeking elected office and more in the fact that
increasingly military and intelligence men are being appointed to all types
of higher offices: 

"The thing that causes the most concern is that the government is
appointing military men in the regional administration, specifically as the
president's representatives. Concerning the elected military, the situation
is slightly different because they can have more autonomy than the
appointees and eventually make their own choices in opposition to the
central authority. But it is the fact that military people are entering
both administrative office and elected office on a regional level that
increases the atmosphere and a very authoritarian management-style of
political life." 

Deauce says she doesn't feel that the increase in military men in elected
office is necessarily a threat to democracy. She points out that past
experience shows these men often have their own political agenda, which is
independent from the authorities. 



MOSCOW. Sept 25 (Interfax) - Former USSR President Mikhail
Gorbachev, chairman of the NTV Public Council, has said he believes
Russian President Vladimir Putin could not interfere in the situation
with the Media-MOST holding if others did not interfere in it.
"I think President Putin should clearly state his position,"
Gorbachev told the press on Monday.
The former president of the USSR is scheduled to meet with Putin on
Tuesday. In the course of the meeting Gorbachev said he will discuss the
Media-MOST situation with the president.
Gorbachev said he hopes they will have "a serious, confident and
useful talk."
The NTV Public Council saw outside interference in the recent
actions towards Media-MOST, Gorbachev said. "It is a gross interference
by the minister, who acts as a racketeer. It causes protest and has
become one of the reasons why we have asked the president for a
meeting," Gorbachev said in regard to the so-called Protocol #6 to the
agreement between Media-MOST and Gazprom-Media, which was signed by
Press Minister Mikhail Lesin.
Gorbachev also said he thinks Lesin should resign from his
ministerial post.
Commenting on the mass media situation in Russia in general,
Gorbachev said that "any attempts to again shut, isolate or close down
independent mass media are a gross fallacy."
Gorbachev said in his opinion, Putin needs free mass media in his
struggle with corruption, bribery and actions aimed at strengthening the
power vertical. People "will support" the president in this, he said.



MOSCOW. Sept 25 (Interfax) - The Social Democratic Party of former
Soviet President Mikhail Gorbachev plans to take part in the
parliamentary elections in Russia.
Gorbachev said on Monday that the Fatherland-All Russia Movement
was close to them in their ideology. "The ideas of Gennady Seleznyov's
Rossiya Movement are also consonant to ours. They are so consonant that
it is unclear who has copied whom," he remarked.
As for the position of the Communist Party in modern Russian
society, Gorbachev said, "Communist Party bureaucrats look more or less
respectable only in the eyes of the foreign public." "Although Zyuganov
is close to social democracy, the Communist Party cannot break away from
the past," Gorbachev remarked. "Its chances are diminishing before our
eyes like the shagreen leather_ There is a certain crisis" in the
Communist Party's rank-and-file.
However, the Communist Party will have some chances as long as
protesters exist, Gorbachev said.
Asked about his impression of meetings with Russian President
Vladimir Putin, Gorbachev said that the Russian leader was interested in
having normal democratic parties in the country.
There will not be a two-party system in Russia in the future. It
will have no more than four or five serious large parties instead of the
current 130, Gorbachev said.


Source: 'Kommersant', Moscow, in Russian 23 Sep 00 

By giving military assistance to former Soviet republics, the USA is
boosting the territorial independence of those republics, but this military
cooperation is to some extent anti-Russian in nature, according to a report
published by the Russian newspaper 'Kommersant' on 23rd September. The
following is the text of the report: 

The US Congress yesterday allocated 45.5m dollars to fund a programme of
military assistance for a number of countries of the CIS [Commonwealth of
Independent States]. The money will go to Georgia, Ukraine, Uzbekistan,
Azerbaijan and Moldova, which are united in the GUUAM organization, and
also to Armenia. Washington says that it is trying in this way "to boost
the territorial independence of republics of the former USSR". 

GUUAM (up to 1999, the GUAM, since Uzbekistan joined the organization only
in April of last year), which was formed several years ago with
Washington's most lively participation, was initially created to the slogan
of strengthening economic cooperation. But economic topics were gradually
replaced by military cooperation, of an anti-Russian nature to some extent.
At yesterday's vote Benjamin Gilman, the chairman of the House
International Relations Committee, did not even make any secret of the fact
that the document is aimed against Russia, which he accused of attempts "to
weaken and undermine the fledgling democracies" in neighbouring countries. 

The amount of 45.5m dollars that has been allocated is for a period of two
years. Of these, 25m dollars are being allocated within the framework of
foreign military funding, 12m dollars within the framework of the export
control programme, 5.5m dollars for the programme of international military
training and instruction, and only 3m [dollars] for the fight against
terrorism. What is more, a large part of the money - 37m dollars - will be
transferred only in 2002. The American legislators are evidently afraid
that their wards would spent the money that has been allocated at their
discretion and want initially to satisfy themselves as to their obedience. 

However, this is a comparatively small amount of money. Georgia alone, for
example, has in the past three years received via various American agencies
and programmes military assistance totalling approximately 200m dollars,
and this despite the fact that Georgia's annual military budget in this
time has not once been in excess of 30m dollars. In addition, the United
States has bestowed on Georgia several military patrol craft and
helicopters and has for a symbolic fee trained dozens of Georgian officers
and military specialists of all arms of the service. The United States has
repeatedly rendered Georgia's armed forces assistance with fuel, uniforms
and auxiliary equipment. 

Nonetheless, the GUUAM countries, which are experiencing a want of
resources, are extremely interested in American assistance. Specifically,
Uzbek President Islam Karimov recently told `Kommersant' that the republic
is sorely in need of the building of a modern air defence system and is
prepared to make use of any support for this. Even today Uzbek border
guards are wearing American boots and driving around in American Hummer
jeeps, communicating by means of American radio sets, and employing
transatlantic night-vision instruments. 

Armenia will also get its share. It is not a member of GUUAM and remains
Russia's sole ally in the Transcaucasus. But, in rendering military
assistance to Azerbaijan, the Americans cannot bypass Armenia, the point
being that the United States is a part of the OSCE Nagornyy Karabakh Minsk
Group and must not, therefore, give preference to either party to the


RFE/RL Security Watch
September 25, 2000
By Victor Yasmann

In addition to moving against media outlets via
administrative, economic, and legal means, Russian
President Vladimir Putin's regime is also increasing the
number and volume of pro-government information outlets in
the print, electronic, and Internet spheres. Its activities
on the Internet have so far drawn little attention but they
may provide a clue as to the Kremlin's future plans for the
rest of the media.

In September, the government set up a portal on Runet
that reflects the Kremlin's perspective. Among the
materials carried on that site is -- which is
devoted to Moscow's views about the countries of the
Commonwealth of Independent States. In its 19 September
version, this site carried an article asking "Why are the
Americans Defending Democracy in Central Asia?" The answer
the site provides suggests that the U.S. has created groups
of democratic activists there in order to ensure that their
rights will be violated and thus justify Western
intervention in the lives of these countries.

The man behind this and other similar websites is
Putin's media adviser Gleb Pavlovsky. He told on
20 September that he welcomed what he said was the belated
adoption of the new Russian Information Security Doctrine,
which he said "should prevent the situation from arising in
which any person with a certain amount of money can have a
significant impact on the political agenda and views of the
population at large." According to Pavlovsky, the state is
absolutely defenseless against such "uncontrolled"
information flows. The Information Ministry and FAPSI can
handle only a few aspects of this "threat," he said.
Consequently, Pavlovsky argues that the Russian state must
create a single information center inside the presidential
administration, a center he presumably would head.

One of the projects such a center would oversee,
Pavlovsky suggested, is the maintenance of his current pet
Internet project, the creation of what he calls "a Russian
CNN," "Vremya MN" reported on 19 September. To be based
initially on the web at, this project will unite
all state-owned or state-controlled media outlets at a
single, gigantic multimedia site.

That will allow the Kremlin to ensure that it gets its
message out, Pavlovsky told the paper. He added that the
organizational structure of will follow that of
Putin's new seven super-district regional administrations.
In other comments, Pavlovsky denied reports that there is a
secret provision within the state budget dealing with the
mass media, but he acknowledged that his own Center of
Efficient Policy has had some help in gaining control of
the biggest Russian news portals, including,, and the electronic version of
"Nezavisimaya gazeta," known as



MOSCOW. Sept 25 (Interfax) - The volume of accumulated foreign
investment in Russia amounted to $30.68 billion as of July 1, 2000,
including $14.49 billion worth of direct investment, the Ministry for
Economic Development and Trade announced at a briefing on Monday.
Ministry experts said that $4.78 billion worth of foreign
investment was drawn in the first half of 2000, which was 11.9% more
than in the first half of 1999.
However, the worth of direct foreign investment drawn in the first
half of this year was 22.3% less than last year and amounted to $1.79
Chief of the Ministry's Investment Policies Department Sergei Bayev
has said that "the structure of investments has changed for the worse."
Western companies prefer to wait until the period of changes in the
Russian laws is over, he said.


the eXile
September 14-28, 2000
Pulitzer prize story
Cubicles and WAP phones sweep through Russia. Grueling American-style
corporate culture ravages young people.

MOSCOW—Katya had it all. The beautiful daughter of a wealthy businessman
and his academic wife, she was one of Russia’s golden youth, the privileged
elite of an impoverished society.

She took her vacations in Rome and Paris. She cavorted with foreigners as a
tour guide in Moscow’s Kremlin and museums. She went to rave parties,
regularly consumed ecstasy and cocaine, and later, developed an impressive
heroin habit. She was experiencing life as only a Hollywood star might,
enjoying every minute, pushing pleasure’s limits, and feeling every
delightful sensation that hard drugs and casual sex can offer.

But that changed last year after Katya graduated from a prestigious law
school and took a job with the Moscow office of Schlifkin Kaplan, a
respected New York law firm.

Now, there is little time for joy or pleasure. As an associate at Schlifkin
Kaplan, Katya works 14-hour days that begin at eight in the morning and end
no earlier than ten at night. Often, she is called in to work weekends. The
grueling schedule and demands have left her with no energy to go to clubs
or parties, and a body that is quickly aging. And sagging.

“I’m always deprived of sleep,” she says. “What I want most is to catch up
on my sleep and be left alone.”

What’s more, there is no thought of dabbling in casual drug use or sex. She
rents a one-bedroom apartment in the center of town, decorated in IKEA and
Turkish furniture, making her one of the privileged few of her generation.
But her single-American woman’s life, so common across the Atlantic, is not
all that it’s cracked up to be.

“I can’t afford to spend a weekend doing coke or heroin and crashing, and I
don’t have the energy for sex,” she explains. “I watch videos and pass out
on the couch.”

And the devastation shows. In the past six months, she has put on ten
kilograms, mostly in her buttocks and cheeks. She cut her hair short, and
her calves have swelled in size. A photograph of Katya and her friends from
the law institute stands on her IKEA dresser, revealing an entirely
different person, a young, chiseled face full of life and energy. Now, her
stressed eyes bear unmistakable wrinkles, while her face has become
formless and fleshy.

“I used to be able to have casual sex without any problems,” she said
wistfully. “Now, I don’t even know why, but even the thought of it seems
wrong. I don’t have sex at all anymore. I don’t have time, and I’m afraid
of the consequences.”

Employment in soul-draining Western-style firms has exploded to devastating
levels over the past few years in Russia, an alarming trend which even the
economic crisis has not been able to dent. With the collapse of the Soviet
Union and its state-protected work culture of low-effort and low-pay,
little can be done to stop the flood of American-style jobs and their
attendant devastating effects on the individual. Soviet-era jobs, which
allowed their employees so much time to have fun and engage in loose sex
and binge drinking, cannot compete with the American-style office
juggernauts and their metabolism-breaking levels of sky-high productivity.

Local firms are also synthesizing American-work-habit office cultures,
complete with cubicles, stress, and overtime.

American corporate culture and work ethics, known on the street as “office
serfdom” or “cubicle slavery,” have become so predominant in the
post-Soviet era that it lures hundreds if not thousands of new victims
every month, spreading from Siberia to the Baltic Sea, and is threatening
to make inroads into small provincial towns. As company heads learn that
well-educated young people can be worked to the breaking point in exchange
for the promise of being able to afford a few unnecessary consumer goods,
this trend is bound to only worsen.

Furthermore, as prostitution becomes increasingly frowned upon with the
growing influence of puritanical American cultural values, young Russian
women are bound to “turn to the cubicle,” and find themselves trapped forever.

“Home theater is easy to get now,” Katya says. “It’s a lot easier than
being happy or having casual sex and taking cocaine.”

Igor, a 26-year-old brand manager for a Western multinational consumer
products company, began his soul-crushing descent into American corporate
culture in 1998 because he was attracted by the promise of a good salary
and stability. “It’s a bizarre situation,” he says. “I could have just
continued what I was doing, snorting up speedballs and going to clubs,
talking all night with crazy friends, making music and borrowing off of my
parents or rich friends. It was the best time of my life. But then I
started to feel bad about myself, reading all those articles and seeing all
those stories on TV about how bad my lifestyle was, how I was nobody if I
didn’t work and make money and buy things.

“Well, here I am.”

Igor describes himself as “boring now” but realizes he has few options.
“When you jump into the modern workforce, it becomes an addiction. You’re
afraid of making one mistake, you’re afraid of what life would be like if
suddenly you lost that one pleasure, your salary, and the consumer goods it
buys. So you never leave the world of office serfdom again.

“I don’t have any fun, but I can’t imagine a life without stability,
without a salary and benefits.”

The number of Russian cubicle serfs has more than quintupled in the past
six years, authorities say. They estimate that Russia now has almost three
million cubicle slaves working in American-style offices and parroting
American-style work ethics, including 500,000 in Moscow alone who cannot
remember the last time that they enjoyed their lives. And the number is
rising exponentially, threatening to become as widespread as agricultural
serfdom once was.

Because of the cubicle slavery epidemic, Russia is suffering from one of
the world’s fastest-growing rates of “office ass,” a disease that has
devastated young American women over the past decade, and is now spreading
across the East. The number of new “office ass” cases in Russia last year
jumped by an astonishing 350 percent, and 90 percent of the new cases were
English-speaking young Russian women who caught the disease working
overtime. Interestingly, nearly all of those women also cut their hair short.

The vast majority of the latest cubicle-serfdom Russians are less than 30
years old. “An entire generation will become boring, predictable, stressed,
and unhappy,” warns Dr. Vadim Yorkovsky, a leading Russian sociologist.

“Nobody was expecting it to spread so quickly,” he says. “Most of those who
took American-style office jobs haven’t become flabby and boring yet, but
they are miserable and unpleasant to be around. They will all need to go on
heavy drug and casual sex binges in the next few years. They will need to
take some risks and live a little, but few if any will.”

In some regions, such as the Baltic seaport of Kaliningrad, as many as 70
percent of cubicle-slaves have large asses, he says. Moreover, they tend to
eat at the city’s mushrooming overpriced ethnic restaurants, and talk only
about work or consumer items, and engage in little or no true recreational
activity. “They’ve almost lost the battle.”

At the current spiraling rate of increase, as many as 10 million young
Russian women could be back-heavy and boring by the year 2005, according to
Dr. Yorkovsky. Another 10 million young Russian men will have very
stupid-sounding American accents when they speak “ze English,” work
grueling hours, cease to enjoy their lives, and try hard to fit in. They
will increasingly give up heavy drinking, smoking, and public displays of
mirth in favor of a measured, moderate existence and careful habits.

This, in turn, would contribute to the demographic catastrophe that is
causing a steady decline in the population. By the year 2050, Russia’s
population could fall below 100 million, compared to its current population
of 146 million, some analysts say. American-style work culture has so
successfully atomized and dehumanized young Russians that they are becoming
as afraid of human contact as their counterparts in the United States.

“Now that I work so hard,” says Katya, “I am no longer attractive and have
no time to meet men, nor the energy. I would like to become a prostitute
and worry about simple things like diseases, but I fear it is too late. I
am an office serf, and I cannot break the cycle of consumption and work
that it has imposed upon me. I no longer feel confident.”

Many men in Russia, rather than wasting time having to wine and dine boring
fellow female office slaves, prefer to spend their nights with prostitutes.
Since they too have so little time and so little to talk about, a
prostitute guarantees them a return on their time/cash investment.

“I am no longer charming or interesting,” admits Igor. “Ever since I quit
drugs and going out to clubs, all I can think about are expanding markets
for my brand, improving distribution, direct-marketing ideas,
merchandising, and the like. For me, a prostitute is the only way I can
guarantee that I will get laid. Other than that, I am happy to have a
cellphone with WAP capabilities.”

On the mean streets of Moscow’s gleaming new office-building-lined skyline,
most cubicle slaves are aware of the office ass threat. “In the place where
I work, in our ‘office,’ they say there are three girls who have it,” Katya

At the age of 23, her ass is lumpy, her voice is man-like, and she is
recovering from chronic fatigue syndrome. Sauce from a Jack’s pizza is
stuck to the corner of her mouth as she talks.

After taking the one-hour public transport ride to work, Katya is ready for
another day. She mousses her cropped hair, applies her lipstick, fixes her
designer horn-rimmed glasses, glances into a mirror to adjust her designer
business suit, and walks into the Western-style office building, where she
will earn as little as 300 rubles, (about $21) an hour.

A quarter-gram of heroin costs only 250 rubles—life back in the junkie days
was easy. An Anne Klein business suit, essential to an office slave’s life,
costs up to $500. The office serfs have a lot of expenses. They have to pay
their taxes. And they have to maintain a pricey Western-style appearance
that takes up a large percentage of their take-home pay.

“If I don’t try to appear Western and wear new clothes and cut my hair
short like the other women, the boss will give you a talk and people will
frown upon you, and you won’t get the promotion you need to break out of
the cycle of work-and-consume,” Katya explains.

“Someday, maybe I’ll get allowed into Club XIII,” says Igor. “I’ve bought
myself leather pants and wrap-around sunglasses. I know other office slaves
who do that. But I’m not sure I’ll go all the way and take ecstasy or
heroin, and I know I no longer have the gall to try to hit up a girl for a
one-night stand. It just isn’t right.”

The corporate culture at Igor’s company has made him feel “like a cog in a
wheel,” no longer an individual, but rather, a graph of upward struggle and
productivity. “How can I imagine myself having fun after two years of this?”

Lyuda worked for three years at a Big Five accounting firm, but quit a
couple of months after they instituted an even more dehumanizing feature
into the office culture: open-plan work space. In this new Third Millennium
evolution of the office plantation, cubicles have given way to totally open
office spaces. No employee has a dedicated office, desk, computer, or
cubicle. Firm directors can monitor them at all times, and nothing is
private. Workers sit at any available desk and work on any free computer
hooked up to a central server, regardless of one’s rank within the firm.

“I could no longer fool myself into believing that I was bettering myself,
that I mattered,” said Lyuda. “I realized that I was indistinguishable from
the office furniture, as replaceable and insignificant. Everything they
taught us about the Soviet Union’s dehumanizing effect has only come true
in American-adapted offices.”

But the withdrawal from work was six months of torture. “Every night you’re
dreaming of being a loser and unemployed for life,” Lyuda recalls. “All day
you’re thinking about it, 24 hours a day. You can’t think of anything else
but the fact that you have no health benefits, no stock options, no pension
plan, and no possibility of buying the latest DVD or the upcoming HDTV. You
feel terrible about yourself. You feel your life is over.”

“I try not to think,” Katya says. “I try to go on working. We have to work.”

(Note To Readers: I am entering this article into the Pulitzer Prize
competition, for I believe it fits in the long and venerable tradition of
“harrowing tales of young adults devastated by sobriety and work”
journalism. Wish me well!)


September 19, 2000
[translation from RIA Novosti for personal use only]
Economist Mikhail DELYAGIN makes a forecast 
It has transpired recently that, according to the data of 
the World Bank, Russia is the 10th among industrialised states 
in terms of GDP indicators. This is shown by calculations of 
macroeconomic indicators, which are determined on the basis of 
purchasing power parities. In the opinion of experts of the 
World Bank, the figure cited by Vladimir Putin in his message, 
i.e. the per capita GDP of 3,500 dollars, is correct and is 
constantly increasing.
Meanwhile, the vice-premier of the Russian government 
Alexei Kudrin made a statement, which might seem strange at 
first glance, that economic recession may be expected in this 
country again in the second half of this year. A fall in the 
dollar rate against the rouble, coupled with the continued 
inflation, make the present economic situation and the 
prospects for its development rather vague. In a word, there is 
too much "noise instead of music."

Alexander DYACHENKO, a Trud observer, asked Mikhail 
DELYAGIN, Ph.D. (Economics), director of the Institute of 
Globalisation Problems, to explain what threatens the Russian 
economy now.
This is what Delyagin said.

Today we should be aware of three strategic threats. The 
first one is the financial threat. In the year 2003, our 
payments on foreign debts will grow sharply. Most probably, the 
Paris Club of creditors will not reschedule our debts. Our 
foreign debt payments in this case will increase by nearly 50 
percent - to 17 billion dollars a year. Even considering that 
the Central Bank will be able to increase its gold and hard 
currency reserves to 30 billion dollars, the amount of foreign 
debt payments will be very painful.
The second threat is an investment crisis in key sectors 
of the economy. In 1999, with the overall growth in investments 
by 6.7 percent, and in some sectors of industry - up to 38 
percent, investments in power engineering shrank by more than 
10 percent. The same tendency prevailed in the first half of 
this year. In the economy as a whole, investments grew by 14 
percent, in industry - by 37 percent, in non-ferrous metallurgy 
- by 48 percent, and in the timber complex - by 66 percent. In 
the relatively small glass and chinaware productions, they 
increased by as much as 80 percent. However, there are three 
sectors, i.e., power engineering, oil production and gas 
production, which require huge investment for a long period of 
time. For this reason, private investments become impossible 
because of high political risks.
As a result, investments in the fuel and energy complex as a 
whole dropped by 10 percent.

Question: The events related to the submarine Kursk and 
the Ostankino TV Tower have shown that underinvestment in the 
major sectors and facilities leads to technogenic catastrophes. 
We can only guess what surprises lie in store for us in 
connection with a lack of investment in power engineering.
Answer: Looking at power engineers, we can see that they 
have problems already. But I think that the real crisis may 
erupt in 2004 or 2005. One should also consider such a factor 
as "workers' and specialists' personal heroism" which can 
prolong the existence of any disintegrating system for at least 
a year.
The third threat may materialise in 2005, when a sharp 
fall in oil prices may be expected. I believe that we shall 
have a rather favourable situation on this market until the 
year 2005. World oil prices will not drop below 22 dollars per 
barrel only because otherwise the Saudi Arabia will not be able 
to service its foreign debt. The Russian Urals-brand oil will 
unlikely cost less than 20 dollars per barrel. This is quite an 
acceptable level for our oil producers, even though it is not 
so good for the economy as a whole. But in five years the 
prices will change...

Question: There is quite a lot of time before the 
deadlines set by you. Won't the government be able to find a 
solution to these problems?
Answer: There may be several ways for the government to 
react to mid-term threats of the currency, investment and oil 
The first scenario of the government's policy is set forth 
in the Kasyanov-Gref programme. I would call it a policy of 
social default. It presupposes that the state remains passive 
and ignores the mid-term threats. This is liberalism in its 
most restricted, and therefore, perilous, poisonous form.
This version of the government's programme boils down to 
the following: cuts in state expenditures are regarded as the 
main instrument for ensuring economic growth. Whereas now the 
state's liabilities account for nearly 60 percent of GDP, and 
the liabilities which are being met - for 52 percent of GDP 
(including those financed in a cash form - for 44 percent of 
GDP), by the year 2010 met liabilities are to be reduced to 
32.5 percent of GDP, i.e., by 37.5 percent. They will be 
reduced mostly at the expense of regional budgets, primarily 
social spending.
The basic provisions of the programme, which are 
unacceptable in my opinion, are as follows:
- the volume of social assistance depends on its value;
it is not determined by the people's real need for it, which 
makes it not only insufficient, but also senseless;
- only families whose consumption level is below the 
subsistence minimum will receive state assistance, but even 
state assistance will not help them to achieve the subsistence 
- paid health care and education are introduced for 
families with the income above the subsistence level (even 
though many of them live beyond the poverty line). Hospitals 
are to be privatised without control over the quality of 
medical services, while the reforms planned in the sphere of 
education are not always well-grounded.
I think this policy will inevitably lead to a currency 
crisis in 2003, which will strike a hard blow on the Russian 
economy. After this, economic growth will give way to a new 
spiral of economic recession, while the investment crisis of 
the 2004-2005 period may deal the final blow. Therefore, I do 
not want to speak of what might happen after 2005 if the said 
scenario comes true.
The second scenario: a fuller set of liberal measures are 
added to the Kasyanov-Gref programme. This envisages anti-trust 
policy, de-criminalisation of the bankruptcy procedure, and the 
judicial reform. Apart from this, the Centre's pressure on the 
regions leads to the introduction of external financial 
management of regional budgets, if the region is highly 
subsidized, or if mismanagement is too obvious there. The thing 
is that if 90 percent of the funds spent by the regional budget 
come directly from the federal budget as subsidies or 
transfers, the introduction of such external management is not 
only necessary, but is also justified. At the same time, a 
reasonable transfer policy should be aimed at ensuring minimum 
social standards, as prescribed by the Budget Code.
However, the above measures will not save us from an 
investment crisis in key economic sectors. The thing is that 
investments go primarily to sectors with a short recoupment 
period. This means that the funds earned by the fuel and energy 
complex, for instance, will be invested by it mostly in other 
sectors. Only because it would be too risky for it to invest 
funds in its own production.
And finally, the third and the most optimistic scenario.
To realise it, the above liberal measures should be 
supplemented by state guarantees for non-commercial (i.e., 
political) risks in a limited number of major investment 
projects in the key sectors of the economy. The thing is that 
private companies do not make investments in long-term and 
costly Russian projects because of high risks and long 
recoupment periods. I think there should be about ten such 
projects. They must be connected with the development of our 
power engineering, the oil and gas industry and, perhaps, a 
railway network. For instance, the construction of a 
trans-Euro-Asian railway line from London to Tokyo: an 
international project of such a scale could not be implemented 
without state guarantees.
Practice shows that it is easier to steal money than state 
guarantees, and this gives hope that major projects will be 
implemented. Without them, Russia's energy system may be 
destroyed by 2005-2007.
If the first scenario is implemented, by 2005 we shall 
have zero economic growth (as against 1999). That is, the 
"plus" we are having today, will be lost. The second scenario, 
with emphasis made on liberalism, will give a 7 percent growth 
in 2005 (as compared to 1999), and a prospect of another round 
of economic recession. The third scenario might be realised 
only if persistent investment policy is pursued. In that case, 
the 2005 performance will be better than the 1999 results by 
about 18 percent, sustainable economic growth will be a 
reality, and the investment crisis will be overcome.

Question: Which of the said scenarios will be implemented 
in practice, in your opinion?
Answer: The third scenario is hardly to be expected. The 
thing is that so far the words "state guarantees for 
non-commercial risks" have been associated only with theft.
The first scenario - following the government's programme, is 
also hardly possible. What is written into this programme can 
never be implemented in reality. So, it is more probable that 
the country will develop according to the second scenario.
However, it should be remembered that the five-year 
forecast in Russia is only a forecast. It is hard to predict 
political developments. Take federal districts, for instance.
This is a remarkable invention from the point of view of 
solution of short-term problems. However, until 2005 the 
governors will be able to come to terms with any representative 
of the president in a federal district, just because both the 
governors and the president's representatives are normal 
people. As soon as they come to terms, the president's 
representatives in federal districts will protect the interests 
of their districts in Moscow, rather than the president's 
interests in the district. This will objectively lead to the 
isolation of federal districts.
In his time, Nikita Khrushchev tried to do something of 
the sort by creating councils of the national economy 
(so-called sovnarkhozy). Khrushchev had the CPSU and the KGB 
vertical power structures at his disposal. Councils of the 
national economy meant a sort of economic isolation for the 
eleven territories of the USSR, including the seven territories 
of Russia proper. However, several years later Khrushchev saw 
that this was leading to the economic self-isolation of these 
councils, and, strictly speaking, to the economic division of 
the USSR. When he realised this, he immediately rejected the 
initial idea. Now we do not have the power vertical structures 
of the type of all-powerful CPSU and KGB. Federal power 
structures and federal ministries are coordinated by the 
president's representatives in federal districts. That is, they 
are isolated in federal districts.
Naturally, this will inevitably lead to a rapid isolation of 
economic management systems. Whereas Khrushchev retained the 
vertical power structure and permitted only economic isolation, 
now we give the green light to both. This might lead, if not to 
the disintegration, then to the gradual division of the 
country. The idea will immediately be peddled that Russia 
cannot develop according to uniform mechanisms and standards, 
that specific features of each federal district should be taken 
into account, and all the country will gradually start falling 
More than ten years ago, I participated in the elaboration 
of regional self-financing schemes. All the terms, all the 
explanations concerning regional specifics are heard again now, 
only on the scale of federal districts instead of national 
republics, such as Azerbaijan, Moldova, Estonia, etc.
Unfortunately, history is repetitive. So far, however, the 
state does not seem to notice the coming danger.


September 13, 2000
Trouble in the 'Stans
Is fundamentalist Islam in Central Asia becoming a threat to Russia? TIME
talks with expert Alexei Malashenko

For over a month now government troops in Uzbekistan and Kyrgyzstan have
been fighting Islamic rebels who came through Tajikistan from the
Taliban-held areas of Afghanistan. Worried lest the tide of Islamic
extremism hits its inland Muslim regions, Russia has vowed to render
military support to Central Asian regimes. 

As the Taliban took the key strategic city of Talukan last week, and keep
pushing on to Tajikistan's border with only some 60 km left between them
and the Russian troops who protect that border, serious concerns over the
stability of Central Asia and a possible Russian involvement into a new war
are mounting. 

TIME's Yuri Zarakhovich talked about Central Asian tremors with Alexei
Malashenko, scholar-in-residence at the Moscow Carnegie Center, an
authority on Islam and the political and religious conflicts in the
Caucasus and Central Asia. Excerpts: 

TIME: All Russian media, liberal or communist alike, are beating the drum
about the prospective Taliban invasion of Central Asia and a growing threat
to Russia. 

Malashenko: Central Asian ruling élites have long been explaining their
domestic problems by external interference. Russia buys and supports this
line, as it confirms its own claims that it fights foreign-supported
terrorists in Chechnya. 

TIME: Isn't there external support in both cases? 

Malashenko: They do support local militants from abroad. But young people
are willingly coming to foreign training camps from both the Caucasus and
Central Asia, and willingly pick up the money and the weapons offered them.
The external factor adds to the picture, but the real reason for turmoil is

TIME: What is that reason? 

Malashenko: National idea, reform, democracy — all has been proclaimed and
all has failed in the countries of Central Asia since they attained
independence back in 1991. Nothing works. People exist in poverty under
oppressive regimes. So, what is there left for the desperate to turn to?
Only fundamentalist Islam, that promises a viable state and paternalistic
social justice. Millions of people in Central Asia believe in this
illusion. Which makes fundamentalist Islam a real political force,
particularly in Uzbekistan. 

TIME: This force is engaging the area in war. 

Malashenko: Only because neither Russia nor Central Asian governments have
ever tried to engage it in the due political process. We have seen it all
in Tajikistan: back in 1992, they opposed the pro-communist government
there under Democratic and Islamic banners. Russia and Uzbekistan sided
against the opposition in the Tajikistan civil war, and helped push it out
into Afghanistan. The opposition came back anyway, but exclusively under
the Islamic banners this time. 

TIME: Will the Taliban cross into Central Asian countries from Afghanistan? 

Malashenko: Hardly. They'll have their hands full at home. They will need
to consolidate their power, and address Pakistan's fears of a possible
Pushtun sedition on its soil, should the Taliban set a precedent of
intruding beyond their borders. But their success will definitely encourage
Islamists in Uzbekistan and other Central Asian countries. 

TIME: Last May, Russia threatened preventive strikes against the Taliban
and the Islamist training camps on their territory. Is Russia getting
involved in yet another war? 

Malashenko: Russia's problem is that it seeks to resolve eternal issues
with weapons and troops. Firstly, it does not work, period. Secondly,
Russia does not even have enough troops now. For Russia, this situation is
as catastrophic and desperate as it is self-created. It will be worse than
the Soviet war in Afghanistan. It's a dead-end situation. But Russia is
heading that way in the most obdurate Soviet fashion. 

TIME: How? 

Malashenko: Russia starts with sending weapons and instructors, and will
end up with a full-scale military involvement in yet another war it cannot
win, unless it is tempted to use tactical nukes. But using tactical nukes
opens a whole new Pandora's box. 

TIME: What's the solution, then? 

Malashenko: We must recognize the radical Islamic opposition as an eternal
factor. We must engage this factor into mainstream political processes.
Once fanatics and plain bandits are isolated from recognized political
forces, they either wither, or get wiped out. This is the only way to
contain extremism. But it'll be a long time before we come to that, if
ever. Meanwhile, we'd better brace for a major trouble. 


Transitions Online
September 25, 2000
Putin Flirts With Extremists 
by Nickolai Butkevich 
Nickolai Butkevich is research and advocacy director at the Union of Councils 
for Soviet Jews and a contributing writer for FSUMonitor.Com 

MOSCOW. In a meeting with editors from several major national newspapers last 
month, Russian President Vladimir Putin took the unprecedented step of 
including Aleksander Prokhanov, the editor of the country's most prominent 
anti-Semitic paper, Zavtra. By placing Zavtra on a level with other national 
dailies, Putin legitimized a publication that regularly defames Jews. 

While Putin has made strong statements about the need to combat anti-Semitism 
and extremism, the meeting with Prokhanov indicates that he doesn't see the 
promotion of anti-Semitism as an obstacle to political legitimacy. Equally 
worrisome, under Putin two institutions that have been traditionally hostile 
to Jews—the Federal Security Services (FSB, former KGB) and the 
military—have gained greater political prominence than at any time since
collapse of the Soviet Union. 

A quick glance at Zavtra's typical fare shows its anti-Semitic slant. The 
paper prints articles alleging Jewish conspiracies, interviews with neo-Nazi 
leaders, and once ran an article by the well-known anti-Semite Gen. Albert 
Makashov, in which he defended his use of the word "Kike." 

One can also judge Prokhanov by the company he keeps. On 25 August, former Ku 
Klux Klan leader David Duke began a one-month visit to Russia on the editor's 
invitation. Speaking to a capacity crowd at Moscow's central Mayakovsky 
Museum, Duke declared that, "it is the Jews who have brought us to our 
knees," and called for all dark-skinned people to be expelled from Moscow. 
The crowd responded with cries of "Glory to Russia!" and "White Power!" 

Putin's other major flirtation with Russian anti-Semites took place in April, 
when he awarded Nikolai Kondratenko, the governor of Krasnodar, a medal for 
"service to the motherland." Kondratenko has publicly blamed Jews for 
destroying the Soviet Union and even "inventing" homosexuality. The estimated 
12,000 Jews who live in Krasnodar could not have drawn much comfort from 
Putin's implicit endorsement of such a prominent hater of Russian Jews. 

What about the institutions that Putin has relied on to fill numerous 
high-level position: the FSB and the military? Five of the seven recently 
appointed regional presidential envoys are career KGB or military men. The 
envoy for the North-West region, Viktor Cherkesov, has the dubious honor of 
both making the last ideological arrest in Soviet history and of opening the 
case against environmental whistle-blower Aleksander Nikitin, Amnesty 
International's first Russian "prisoner of conscience" in the post-Soviet 
era. Cherkesov's former press secretary, former KGB man Yevgeny Lukin, 
recently wrote a book that blames Jews for the mass killings committed after 
the Bolshevik Revolution. Lukin went on to become chief of information at 
Petersburg Television, which broadcast a show inciting pogroms shortly after 
his appointment. Lukin is not an isolated case: Two prominent extremist 
leaders, Gen. Aleksander Sterligov, who once declared that he would "not give 
the country to the Jews to tear it to pieces," and Stanislav Terentev, the 
editor of the anti-Semitic newspaper Kolokol, are also former KGB officers. 

In addition, the newspaper Spetsnaz Rossy, whose target audience is FSB 
employees, elite anti-terrorist squads, and private security firms, 
consistently runs anti-Semitic and racist articles. Readers of this 
newspaper, many of whom are highly trained killers, can peruse articles that 
refer to Jews as devil worshipers. 

Furthermore, ultra-nationalist Vladimir Zhirinovsky's party fared 
significantly better in last December's parliamentary elections, and 
anti-Semitic parties like "The Stalinist Bloc for the USSR" have extensively 
advertised in the military's official newspaper Krasnaya Zvezda. The 
newspaper Desnitsa—which ran an article earlier this year asking "Why do
rule Russia?"—is printed by a Defense Ministry printing house. 

Given the current climate, even Kremlin officials seem tempted to dabble in 
anti-Semitism. On 7 September, Aleksander Ignatov, the general director of 
the Information Analytical Agency of the Department of Affairs—part of the 
presidential administration—wrote an article in Nezavisimaya Gazeta
a "Chasidic-para-Masonic grouping" of controlling the process of 
globalization, which will lead to a world government under its control. In 
Ignatov's own words: "This circumstance, the usurpation of power in the world 
government by the Chasidic-para-Masonic group, requires immediate 
correction." Ignatov also called for limits on emigration and the creation of 
an Ideology and Propaganda Ministry in Russia to manage "tasks in the 
ideological sphere." 

For a government that has of late declared its intentions to combat 
extremism, that war so far has almost exclusively targeted Islamic extremism. 
Meanwhile, groups bent on disseminating anti-Semitic and racist hate 
literature and inciting anti-minority violence are often ignored—especially 
in parts of the country where they have formed alliances with local 
officials, such as the Krasnodar region and the cities of Stavropol, 
Balakovo, Kstovo, Bryansk, and Voronezh. The recent arrest by the FSB of an 
extremist leader in Oryol, who had strong ties to the regional administration 
and whose group was implicated in several assaults and murders, was a 
welcome, though sadly isolated exception to this rule. Just last week, on 17 
September, an attack was launched against a Jewish Sunday school in Ryazan. 
No one has been arrested, and a systematic campaign of terror is being waged 
by local neo-Nazis against the Jewish community there. 

The following day, during the opening of a new Jewish community center, Putin 
addressed the crowds, saying that the time of state anti-Semitism in Russia 
is over forever. 

According to Russian law, incitement to racial hatred is a criminal act. In 
that respect, the Russian government has been dangerously negligent. Whether 
Putin's recent flirtations with forces that threaten Russian Jews are a 
temporary phenomenon or a sign of things to come is still unclear. Whatever 
the case, it is cause for worry. 



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