This Date's Issues: 4541•
Johnson's Russia List
27 September 2000
[Note from David Johnson:
1. AP: Vodka Dispute Shows Russia Chaos.
2. AFP: Top Chechen official slams "insignificant" Russian aid.
3. PRNewswire: United States Sues Harvard and Others for False Claims
Relating to USAID Program in Russia, Reports U.S. Attorney.
4. San Jose Mercury News: Rep. Christopher Cox, Clinton-Gore team
aided Russian economy's demise.
5. Minnesota Daily: Khrushchev's son discusses Russian economy,
politics at U.
6. The Sunday Pioneer (India): Tatiana Shaumian on Russia's
demographic implosion and India.
7. Robert Bruce Ware: Reply to Herspring JRL# 4538.
8. Ilvi Cannon: JRL #4536 and #4508/Patriarch and KBG.
9. Trud: RUSSIA IS A NORTHERN MEXICO. But It Does Not Know
What to Do With $300bn. (Views of Mikhail ZADORNOV)
10. The Annual World Convention of the Association for the
Study of Nationalities (ASN). Call for papers.]
Vodka Dispute Shows Russia Chaos
September 26, 2000
By JIM HEINTZ
MOSCOW (AP) - Heading the Kristall vodka distillery should be a businessman's
dream - the chance to manage one of Russia's most prestigious enterprises,
with a world-renowned array of products, a diligent work force and awards
from the government. But it's closer to a waking nightmare.
For seven weeks, Kristall has been split between two men, each claiming to be
the manager. One runs the executive offices, the other runs the production
floor, and both are backed by squads of guards.
The standoff highlights the perils of doing business in Russia, where the
legal system is often ineffectual. How the dispute is resolved could indicate
whether President Vladimir Putin's government can improve the business
climate by upholding the law and public accountability.
Kristall is among the most famous of Russia's approximately 180 vodka
distilleries, producing the Western hit Stolichnaya as well as home-country
favorites such as Gzhelka. The plant's red-brick complex on a leafy Moscow
side street looks like a 19th century fortress. The resemblance was
especially strong on Aug. 4, when gun-toting men arrived in waves.
First came masked tax police, who seized documents as part of a tax-evasion
Within hours, Alexander Romanov and his private guards showed up and moved
into the building's executive offices. Romanov said he was staking his claim
to the post of general director, to which the board had elected him in May.
Before the day was over, Vladimir Svirsky and another group of guards moved
into the production facilities. Svirsky, who had been Kristall's acting
director since April, pointed out that a Moscow court had voided Romanov's
But on Sept. 1, the same court reversed itself. Svirsky said an appeal has
The dispute is further complicated by allegations of deceptive stock trading.
Romanov says that about 20 percent of company stock that once belonged to the
factory workers' collective has gone offshore.
``I admit that 19 percent of the stock belongs to an offshore company in
Cyprus,'' Svirsky said. ``But this is a friendly company, and the stocks
never vanished: they are working for the collective.''
Romanov spent the first couple of weeks of the standoff living in the
executive offices, saying he was afraid to leave because ``I see many men
with guns out there.'' But recently, he has had to go out occasionally on
business duties because the office phone lines have been cut.
Vodka is a cornerstone of Russian life, despite attempts by a succession of
leaders right up to Mikhail Gorbachev to curb drinking. And Kristall has done
its part in slaking Russians' thirst. Despite the tensions, it met its usual
monthly production level of over 2 million gallons, said Kiril Peskov, a
The guards, meanwhile, seem relaxed and amused.
``I never saw such a situation as this,'' said one guard, laughing and
glancing at his rivals a few yards down the street.
Russia, however, has seen many such disputes over lucrative firms. Workers
seized a paper mill last year to protest foreign ownership of the plant, and
troops shot one worker when they raided the plant to end the occupation. This
month, rival factions brawled for control of a chemical plant in
But the Kristall dispute is in a class of its own because the state owns 51
percent of its shares. It is also notable because the government had lauded
Kristall's previous management, naming the plant Russia's Outstanding
Taxpayer of 1999 ($89 million on profits of $142 million, according to
Analysts say the Kristall case sends a discouraging message to foreign
investors who have been otherwise heartened by the Russian economy's recent
tentative expansion after years of decline.
``We're watching it closely. What happens to a Russian company can just as
easily happen to a foreign one,'' said Scott Blacklin, head of the American
Chamber of Commerce in Russia.
At the least, he said, it seems to demonstrate a pattern that has plagued
Russia under czarism, communism, and nascent democracy: ``The power elite has
never been a friend of the entrepreneur.''
However, Z. Blake Marshall of the Washington-based U.S.-Russia Business
Council said the attention-grabbing dispute could be seen as ``a step
forward'' if it is resolved in court.
Top Chechen official slams "insignificant" Russian aid
MOSCOW, Sept 26 (AFP) -
The top civilian official in Chechnya criticised Tuesday Russia's failure
to pour aid into the war-torn republic, and admitted he was virtually
powerless to improve the situation.
Akhmad Kadyrov also dismissed as "unrealistic" a claim by Council of Europe
chief Walter Schwimmer that 18,000 people had gone missing since federal
troops stormed the rebel republic last October.
Kadyrov, the province's former religious leader, named civilian
administrator by President Vladimir Putin in June, was in Moscow for
parliamentary hearings on the breakaway province.
"There is no (Russian government) programme to rebuild the economy," he
complained during an interview with AFP.
"We have only received money to meet pension and social security payments,
with a bit to help to finance the health and education systems," he said.
"At the moment we are getting only moral support from Moscow, even though
the situation is very difficult. People don't have a roof, they don't have
work," he said.
"All the humanitarian aid goes to Ingushetia," he added, referring to the
neighbouring Russian republic which houses the bulk of the refugees who
fled following the October 1, 1999 invasion of Chechnya by federal forces.
Kadyrov also accused the Ingush leadership of exaggerating the number of
refugees living in the republic.
Ingush President Ruslan Aushev says his impoverished republic is playing
host to some 200,000 refugees, but Kadyrov puts the figure at 115,000.
Kadyrov, who backed the rebels in the 1994-96 conflict which left Chechnya
with de facto independence from Russia, said he split with Chechen
President Aslan Maskhadov over last summer's armed raids on southern Russia.
Attempts to recreate a 19th-century Islamic republic embracing Chechnya and
the neighbouring Russian republic of Dagestan, led by field commanders
Shamil Basayev and Khattab, helped trigger Russia's ongoing crackdown in
the separatist province.
In his hour-long interview, Kadyrov also complained that the failure by
Russia's federal parliament to pass legislation on the rebellious province
had left him in a legal void.
"Neither the army, nor the interior ministry forces, have been subordinated
to me, even though we work together," he said.
"It would have been preferable for there to be one line of command, for all
the forces to be under my authority, but that's not realistic," he concluded.
He also repeated his warning that the brutal tactics employed by Russian
forces in Chechnya were counterproductive and could lead to more strife in
the unruly republic.
However, he took issue with claims by the Council of Europe that 18,000
people had disappeared since federal troops rumbled into the republic
nearly 12 months ago.
"The figure of 18,000 missing is not realistic," he said.
"There are around 400 localities in Chechnya, and there would have to be 40
missing people in each village, which isn't possible," he said.
"The number of missing may be in the hundreds but not the thousands. There
might be 18,000 dead, but not 18,000 missing," he added.
The official said Vladimir Kalamanov, the Kremlin's envoy to the breakaway
republic, had recently said that 379 people had been officially listed as
missing since Russian forces entered Chechnya on October 1, 1999.
Schwimmer advanced the figure of 18,000 missing in remarks to a Russian
parliamentary hearing on Chechnya last month. He did not say how the figure
had been calculated.
Kadyrov said he hoped the war would be over by year's end but said that the
guerrillas, while disunited, retained the ability to carry out "terrorist"
The official admits that he too could be the target of the separatists, who
have branded him a traitor and sentenced him to death.
The 46-year-old Kadyrov said he had learnt how to "live with stress,"
having escaped several assassination attempts.
"When my time comes, I will die where fate had decreed," he concluded.
United States Sues Harvard and Others for False Claims Relating
to USAID Program in Russia, Reports U.S. Attorney
BOSTON, Sept. 26 /PRNewswire/ -- The United States has filed today a civil
Complaint which alleges as damages at least $40 million which the United
States Agency for International Development ("USAID") paid to HARVARD
UNIVERSITY in connection with a USAID-funded project in Russia.
United States Attorney Donald K. Stern and Assistant Attorney General for
the Civil Division of the Department of Justice David W. Ogden announced
that the United States has filed a civil Complaint against HARVARD
UNIVERSITY, Professor ANDREI SHLEIFER, SHLEIFER's wife NANCY ZIMMERMAN,
HARVARD project manager JONATHAN HAY, and HAY's wife ELIZABETH HEBERT.
The Complaint alleges that in 1992 and 1995, USAID and HARVARD entered into
two Cooperative Agreements. The agreements required HARVARD to provide
impartial and unbiased advice with respect to a USAID funded project in
Russia. HARVARD utilized its now defunct Harvard Institute for
International Development to implement HARVARD's project for USAID.
The HARVARD project included economic and legal advice regarding the
privatization of Russia's national assets, and the creation of laws and
institutions required for functioning and open capital markets in Russia.
To ensure that the advice provided by HARVARD was impartial and unbiased,
the agreements prohibited HARVARD employees working on the project from
making any investments in Russia.
The United States claims that, despite the clear terms of the agreements,
SHLEIFER, a tenured professor in HARVARD's Economics Department and the
Project Director, and HAY, HARVARD's Moscow-based representative in charge
of the project, were making prohibited investments in Russia in the areas
in which they were providing advice. The Complaint further alleges that
SHLEIFER and HAY were using their positions, inside information and
influence, as well as USAID-funded resources, to advance their own personal
business interests and investments and those of their wives and friends.
U.S. Attorney Stern commented: "The United States paid Harvard for
impartial and unbiased economic advice, both in fact and appearance.
Despite clear prohibitions against investing in Russia, Harvard advisors
abused their positions and attempted to tip the playing field to their own
private financial advantage." Stern continued, "We hope that today's
complaint will make clear that those who abuse the resources of the United
States will be held accountable."
The Complaint alleges that while they were acting on behalf of USAID,
SHLEIFER and HAY, along with ZIMMERMAN and HEBERT, engaged in the following
prohibited investments and businesses in Russia:
(1) SHLEIFER and his wife ZIMMERMAN invested and reinvested $200,000
through Renova-Invest, a United States/Russian investment entity, in
various Russian companies and in Russian government debt;
(2) SHLEIFER, ZIMMERMAN and HAY purchased several hundred thousand dollars
worth of shares in Russian oil companies, and concealed the ownership of
those shares by using the name of SHLEIFER's father-in-law;
(3) HAY, ZIMMERMAN, HEBERT and SHLEIFER participated in the launching
and/or financing of: (a) Russia's first licensed mutual fund, which was
started by HEBERT, HAY's then girlfriend (now wife), and (b) Russia's first
licensed mutual fund depository, the First Russian Specialized Depository
("FRSD"), which was started by HEBERT's business partner;
(4) HAY and HEBERT participated in creating a real estate firm to start a
real estate mutual fund, and to conduct business with a project to which
HAY was a key advisor; and
(5) HAY and ZIMMERMAN used USAID-funded staff and offices to trade in
short term bonds and other Russian government debt.
The United States claims that SHLEIFER, HAY and HARVARD never disclosed any
of these personal business activities and/or investments to USAID, and, in
fact, SHLEIFER and HAY actively concealed such activities.
The Complaint alleges that as a result of the misconduct of the defendants,
USAID funds were diverted, abused and wasted. Not only did the defendants
make prohibited investments, but the Complaint also alleges that the
defendants diverted USAID funded resources for their own use. For example,
USAID funded staff was used to perform research in connection with SHLEIFER
and ZIMMERMAN's oil and other investments, and HAY took USAID funded staff
to Siberia to investigate various private real estate opportunities. The
Complaint alleges that HARVARD personnel other than SHLEIFER and HAY were
aware of improper conduct on the project, but HARVARD failed to provide
adequate oversight and administration to correct the problems.
As a result of the defendants' misconduct, USAID suspended and ultimately
terminated the HARVARD project in Russia.
The Complaint is based on the False Claims Act, which prohibits the
submission of false or fraudulent claims for payment to the United States.
The United States' Complaint also includes claims for common law fraud, and
allegations that HARVARD and its advisors breached the terms of the
agreements between HARVARD and USAID, as well as their fiduciary duties of
loyalty and good faith to the United States. Pursuant to these common law
claims, the United States seeks the return of all funds paid to HARVARD and
its conflicted advisors, as well as the profits earned from their improper
This action is being handled by Assistant U.S. Attorney Sara Bloom of
Stern's Civil Division and Trial Attorney Alicia Bentley of the Department
of Justice's Commercial Litigation Branch, and was investigated by agents
from the Inspector General's Office of USAID, with the assistance of agents
from the Federal Bureau of Investigation.
SOURCE U.S. Attorney
San Jose Mercury News
September 24, 2000
Clinton-Gore team aided Russian economy's demise
BY CHRISTOPHER COX
Rep. Christopher Cox, R-Newport Beach, is the chairman of the Speaker's
Advisory Group on Russia and chairman of the House Policy Committee. He
wrote this article for Perspective.
The collapse of the Soviet Union brought to an end one of the cruelest,
most violent, least humane and most viciously ideological empires in the
history of the world. The West's victory in the Cold War presented America
with its greatest foreign-policy opportunity since the end of World War II:
Just as America's defeated enemies, Nazi Germany and Imperial Japan, became
free-enterprise democracies and close U.S. allies, so, too, might the new
In the final days of the Soviet Union, Communist Party General Secretary
Mikhail Gorbachev desperately sought billions of dollars in foreign loans,
and many in the West endorsed a policy of providing enormous amounts of aid
in an attempt to save the collapsing Soviet economy. But President Bush
believed this would not work. ``A shortage of foreign capital is not what
plunged your economy into crisis, nor can your economic ills be cured by an
infusion of cash,'' he told the Moscow State Institute for International
Relations in a speech July 31, 1991, five months before the Soviet Union
Bush's advice for Soviet state Instead, Bush stressed the importance of
building free enterprise and
deconstructing the Soviet state.
This approach produced dramatic early success. Before 1993, Moscow worked
harmoniously with Washington across virtually the entire spectrum of
international issues -- including Operation Desert Storm, waged against the
Soviet Union's client state Iraq, and arms control, culminating in a START
2 treaty that will slash U.S. and Russian nuclear arsenals by 66 percent.
At the outset of the Clinton administration, building a relationship
withthe United States was the highest priority for Russia.
But the Clinton administration failed to capitalize on this opportunity. It
used America's enormous influence not to build the fundamentals of free
enterprise, but to strengthen the finances of the Russian government and
transform state-owned monopolies into private monopolies. Billions of
dollars in Western aid to Russia thus amounted to mere temporizing, and
doomed the corrupt insider ``privatization'' schemes to failure.
Worse, by using massive lending and aid to plug the gap in the Russian
government's operating budget, the Clinton administration exposed these
funds to theft and fraud, and destroyed incentives to reform. The loans
also added to Russia's growing foreign debt, which continues to burden the
central government's operating budget.
In addition, the Clinton administration's unquestioning support for a small
circle of Russian favorites, despite their corrupt conduct, damaged Russian
perceptions of America. By ignoring and suppressing evidence of
wrongdoingand failure by officials, including Victor Chernomyrdin and
Anatoly Chubais, the Clinton administration contributed not only to the
spread of corruption, but also to Russia's failure to overcome it.
CIA officials say they provided Vice President Al Gore in 1995 with
information about Chernomyrdin that was ``more detailed and conclusive than
allegations of bribery and insider dealing that have been made in the
Russian media and elsewhere.'' Yet when asked on ``Meet the Press'' as
recently as July whether Chernomyrdin is corrupt, Gore replied: ``I have no
The Clinton administration also contributed to a climate in which organized
crime has flourished by failing to focus its attention on replacing
communism with the basic elements of free enterprise.
The culmination of the Clinton administration's advice to Russia occurred
in August 1998, when Russia's default on its debts and devaluation of the
ruble led to the nation's economic collapse. The disaster was worse than
America's Crash of 1929.
The disaster that began Aug. 17, 1998, spread immediately throughout
Russia. Millions of men and women who had deposited their money in Russian
banks lost everything.
In America's Crash of 1929, stock prices fell 17 percent by year's end;
they weren't down 90 percent until four years into the Great Depression
that followed the crash. By contrast, the Russian stock market lost 90
percent of its value in 1998 alone.
Millions of senior citizens, whose meager pension income had been suspended
for months, were cut off completely. When the dust finally settled in March
1999, the ruble -- and with it, every Russian's life savings -- had lost 75
percent of its value.
Many Russians, not surprisingly, blamed the United States for intentionally
leading Russia down the path of ruin. The heavy-handed and wrong-headed
involvement of the Clinton administration in Russian economic policy made
America an obvious focus of citizen anger. Since the beginning of the
Clinton administration, U.S. officials had urged a steady diet of borrowing
to mask the Russian economy's fundamental weaknesses, deepening the
The failure of the Clinton administration's economic strategy for Russia
has had profound implications for Russia's policy on proliferation of
weapons and technology, and therefore for U.S. national security. The need
for hard currency provided an incentive for Russia to sell sensitive
weapons and technology as quickly as possible to any nation or groups that
would buy them.
Consensus on foreign policy
Russian policy soon evolved into a rationalization of these arms sales.
Under the rubric of ``strengthening multipolarity,'' the purpose of the new
Russian consensus on foreign policy and national security is to check the
power of the United States. This consensus helps allay any concerns that
Russian officials, scientists and businesses might have about transferring
weapons or military technology to such countries as Iran, Iraq, North
Korea, Libya and the People's Republic of China.
Eight years ago, when President Clinton took office, the stated objective
of the Russian government was a formal alliance with the United States.
Russia pursued a strongly pro-American foreign policy, and the United
States enjoyed unprecedented affection and admiration among ordinary
Russians. According to identical U.S. State Department polls, 70 percent of
Russians held a favorable view of the United States at the beginning of the
Clinton administration. This year, only 37 percent held this view.
After eight years of mismanagement by the Clinton administration -- and
despite a U.S. taxpayer commitment of $20 billion -- the U.S.-Russian
relationship is in tatters. In place of the promising future foreseen in
1993, Russia's policy toward America is characterized by growing hostility
and divergent perceptions of international realities and intentions.
Because of Russia's current and future importance, the consequences of this
failure are difficult to overstate: They almost certainly exceed the
consequences of the American defeat in Vietnam and the fall of the
pro-American government in Iran.
The task ahead for Russia this year is essentially the same as it was in
1992. Because so little progress has been made toward building free
enterprise, that work must now begin in earnest. But whereas conditions in
Russia in 1992 were eminently hospitable to such an undertaking, the
ensuing years of policy failure have squandered that advantage, and now the
necessary work will be much more difficult.
America and Russia have lost a decade. The growing estrangement of Russia
from the United States, the hostility to American interests reflected in
Russia's foreign policy, and the telltale signs of authoritarianism in the
post-Yeltsin era provide ample evidence that Russia faces a more formidable
task because U.S. foreign policy was weak, and did not lead.
But it is not too late for the United States to stop impeding and start
assisting the transition from communism to free markets, from
authoritarianism to democracy, and from disorder to order. It simply
requires that we begin anew -- but this time, with a clear purpose.
September 26, 2000
Khrushchev's son discusses Russian economy, politics at U
By Nathan Arnold
Dr. Sergei N. Khrushchev, son of former Soviet Premier Nikita
Khrushchev, discussed the current economic and political situation in
Russia on Saturday at the Hubert H. Humphrey Institute of Public
He also gave some insight on his father and his actions during the Cold
Sergei argued that the West's interpretation of why the Soviet Union
attempted a transition to a market economy was incorrect and that the
assumption of Soviet defeat in the Cold War was wrong.
Instead, it was the country's lack of innovation and the growing
difficulty of centrally managing an ever-more-complex economy that
continually dogged the Soviet economy.
"In the 1980s, it became clear that the system must be changed," Sergei
He explained the market economy of the West presented a more efficient
model than the Soviet command economy, where the government controls and
plans production and distribution of goods and services.
The young reformers of the post-Soviet era stopped following the
writings of Marx and turned to the economic theories of the Western
economist Milton Friedman. The problem, Sergei said, was that while
Friedman wrote about running a market economy, he did not explain how to
transform a command economy into a market economy.
The new Russian economy failed because, although the rules for a market
economy were put in place, there was no foundation for the market economy
to rest upon, he explained.
Sergei became an American citizen in June of 1999 amid much fanfare of
how the son of a Soviet Premier who led the Soviet Union through the height
of the Cold War, the Cuban Missile Crisis and the Space Race, could choose
to become an American.
The former premier was well known both for his loud, outspoken manner
and for his atypical antics. During a United Nations assembly, for example,
he once removed his shoe and banged it on the podium to make a point.
Sergei has far different memories of his father's political career than
those who observed him from the West. The younger Khrushchev said he saw
his father as a peacemaker and, despite his firm belief in Communism, he
was not a proponent of the Cold War.
During his father's time, there was an "arms race in the U.S. only" and
his father's main goals were not military might but housing construction
and agrarian improvement, Sergei said.
The former premier reduced the Soviet Army in size from 5.5 million men
to 2.5 million, his son said, and was more interested in spending resources
to improve the lives of everyday people than on expensive military
Sergei was born in 1935 and accompanied his father on many major
foreign trips. He was a control systems engineer, worked in the Soviet
space and missile programs, and was also involved in the development of the
Soviet cruise missile.
The younger Khrushchev is published extensively on the topics of
Russian security, politics and economy. His most recent book about his
father is titled "Nikita Khrushchev and the Creation of a Superpower."
Sergei, a senior research fellow at the Watson Institute for
International Studies, currently resides in Rhode Island.
(Story on eve of Putin's Trip to India)
The Sunday Pioneer, New Delhi
October 1, 2000
By Tatiana Shaumian
MOSCOW -- A new grandson was born to me last week, a joyful event
that got me thinking about one of Russia's unhappiest problems. As distinct
from India, which suffers from a so-called population explosion, Russia is
beset by what might be described as a demographic implosion -- that is,
there are fewer and fewer of us every year.
Over the past decade the population of Russia has shrunk by nearly
5-million people, or half a million annually. Not only has this vast country
got fewer people, the balance between young and old is shifting
disastrously. By the year 2003 there will be just two working-age Russians
for each pensioner and within 20 years the ratio will be one-to-one. That is
economically insupportable. The growing mass of pensioners will gobble up
any economic growth we experience.
The demographic crisis has come about because post-Soviet Russia, in
many ways, is afflicted with some acute First World problems combined with
growing Third World-like ones. For over two decades birthrates have been
plunging as well-educated, urbanized young Russians put off having children
well into their 30's. The current birthrate is about 1.3 children per woman,
well below the 2.3 kids per woman that would be required to sustain the
population. This, of course, is a phenomenon very similar to that in Western
Europe and North America, and by itself would be nothing to worry about.
But over the past decade deathrates among productive adults in their
30's and 40's have risen dramatically. This is due to a post-Soviet cocktail
of bad news, including mass impoverishment, deteriorating environmental
conditions, skyrocketing rates of alchoholism, the return of
formerly-eradicated diseases like cholera and tuberculosis, more industrial
and two bloody civil wars against the separatist republic of Chechnya.
The population disaster is part of what the Kremlin and Russian
parliament are warning is an onrushing "2003 crisis". A special commission
has been created to examine the convergence of three potentially
catastrophic problems 3 years from now. Experts say the country's
infrastructure will be 80 per cent exhausted by then, and much of the
economy may grind to a halt. I've written about that problem in this space
already. At the same time the burden of pensioners will become unbearable,
and Russia's external debt repayments will balloon to $17-billion -- an
amount that is equal to the size of the entire state budget for 2003. All
hope for economic prosperity, or even comfortable survival, will go down the
I know that politicians often require a slogan to focus their minds,
but the problems under discussion are very real indeed. Some of the
solutions being bandied about are quite harebrained, including the idea of
mass labour levies to rebuild roads, bridges and electric power stations
(shades of the Stalin era!). Some talk about restoring the Soviet-style
command economy for an emergency period. Serious experts are suggesting
Russia should jettison its hard-won -- and already fraying -- democratic
freedoms in order to fight corruption, crime and capital flight.
But I believe some much more intelligent solutions are staring us in
the face, and I fervently hope that when President Vladimir Putin visits
India in the coming week he will get an inkling of what they might be. First
of all, tough economic conditions are no excuse for scuttling democracy.
India is living proof that free institutions can be built and survive even
amid mass poverty. Second, economic cooperation with countries like India is
far more useful and productive for Russia than our often futile courtship of
the rich West. When it comes to making do with incomplete infrastructure,
promoting high tech industries and implementing the information revolution,
India is far better positioned to show us the way forward.
Finally, back to our demographic problem. Isn't it obvious that
Russia needs to encourage immigration from heavily-populated countries to
redress the imbalance in its own society? That is a path Western countries
have taken, and they haven't suffered as a result.
A few million young workers from other countries could revive our
industry and create a solvent tax base to support our pensioners. Already
many thousands of migrant Chinese peasants work in our agricultural sector,
mainly in Siberia. They are very competent and hard-working farmers, and
their contribution is bringing ruined Soviet-era collective farms in some
places back into production. But Russia's archaic laws and xenophobic social
prejudices against accepting outside labourers are a big obstacle to
immigration on any meaningful scale.
India has more energetic and capable entrepreneurs than it can
absorb. That is precisely the type of people Russia needs to modernize and
activate its economy. For example Moscow, a city of 12-million people,
boasts a pitiful handful of Indian restaurants. We will be able to say we've
really joined the 21st century world when there's an Indian business on
every Moscow street corner.
From: "Robert Bruce Ware" <email@example.com>
Subject: Reply to Herspring JRL# 4538
Date: Tue, 26 Sep 2000
I appreciate Mr. Herspring's clarification of his positon regarding the
possibility of an observer mutually acceptable to the United States and
Russia for an examination of submarine exteriors. However, the fact that
Mr. Herspring off the top of his head, over the weekend, is unable to
locate the address of such an observer is something less than a persuasive
argument against the possibility. Indeed, even the exterior of Mr.
Herspring's argument in JRL #4538 would appear to require further
observation: On the one hand, he begins by insisting that the examination
of the exterior of a submarine is a sophisticated exercise requiring a
technically trained citizen from either a NATO member country or Russia or
China. On the other hand, his argument concludes with his assertion that
exterior damage from the collision of two submarines would be so obvious
that "(s)hipyard workers, sailors, someone would have already leaked it."
So which is it, sophisticated or obvious to any ordinary "someone"?
Submarine exteriors are made of material. All materials respond in
characteristic ways to stress, and the world is full of materials engineers
who make their living examining the effects of stress (including recent
repairs) on various materials. Perhaps even Switzerland has managed
somehow to train a few, NATO membership not withstanding. Nor does Mr.
Herspring need to strain his rolodex. We have international organizations
whose function is to mediate disputes between states.
Date: Tue, 26 Sep 2000
From: Ilvi Cannon <firstname.lastname@example.org>
Subject: JRL #4536 and #4508/Patriarch and KBG
The recurring revelations about Alexy II, the Patriarch of the Russian
Orthodox Church, and his collaboration with the KGB (JRL #4536) help to
explain the results of a recent poll in Estonia which revealed that half
of ethnic Estonians believe non-Estonians not to be loyal to the state
of Estonia (JRL #4508). Alexy II, and ethnic Russian, was born in the
Republic of Estonia before World War II, and served as an Orthodox
priest here until he was chosen to go to Moscow during the Gorbachev
era. The information in Keston Institute’s report on Alexy’s long ties
with the KGB is indisputable.
When a person of such stature is found to be collaborating with a
dreaded institution representing foreign power (Estonia was occupied by
the Soviet Union almost 50 years), presumably out of loyalty (but he
also received material benefits), is it, then, not normal for the
average ethnic Estonian to wonder where the loyalty of Russians living
RUSSIA IS A NORTHERN MEXICO
But It Does Not Know What to Do With $300bn
Active consultations on the draft budget for 2001 began in
the State Duma. The positions of deputies and the government on
economic development guidelines do not always coincide. Will
economic growth continue? What will be the dollar's exchange
rate? What are the projected inflation numbers? Will the oil
price remain high (this is, indeed, a very important question
for us)? Well-known politician and economist Mikhail ZADORNOV
gave his answers to these and other questions when he talked
with Trud's Alexander DYACHENKO.
Only some ten years ago, when speaking, for instance,
about the structure of the Russian economy some evil tongues
from the journalists' corps called Russia "the Upper Volta with
missiles." Today we see that the country and its economy have
changed. We can now not only fall but also grow, even though we
have paid a very high price for this.
Our present situation depends to a large degree on the
world market situation. This concerns not only the oil and gas
This year, exports are expected to exceed imports by upwards of
50 billion dollars, which is an unprecedented number. At the
expense of what has this result been obtained? Whereas a year
ago proceeds from oil and gas constituted less than 40%, at
present the corresponding figure is 55%. In terms of the
structure of its gross domestic product and exports Russia can
be compared with Mexico, Venezuela and a number of other
countries. The only difference between them and us is that in
addition to energy resources we also export ferrous,
non-ferrous and precious metals.
It is perfectly clear that the federal budget receives
additional proceeds mostly thanks to a good situation in the
international markets of raw materials. This year additional
budgetary proceeds will amount to 300 billion rubles, or 11
billion dollars. This is 40% more than planned, which allows
our government to feel confident.
On what are these additional profits spent? Half of them,
or about five billion dollars, will be used to make payments on
our external debt, as we will not receive those loans from
international financial organizations on which we counted. The
remaining five to six billion dollars are partly channeled into
the economy and partly to settlements between the government
and the Central Bank. Frankly speaking, considerable sums of
money will be swallowed by hostilities in Chechnya.
By and large, we witness not only economic growth but also
improvements in the efficiency of our fiscal services. The
federal budget collected 10% of the GDP in 1998 and 13.5% last
year. The corresponding number for the first seven months of
this year is 17% (Sic!).
But there is always a fly in the ointment. The problem of
surplus money has arisen. Just judge for yourself. According to
the Central Bank's estimates, money supply was to increase by
27% to 28% this year. But as early as July 1 it has already
increased by 30%. As of August 1 the money base grew by 50%
(Sic!). All in all, our economy has accumulated from 930
billion to 950 billion rubles.
How does all this money work? Banks keep 100 billion
rubles on their Central Bank deposits but 70% of this money
belongs to the Sberbank. With inflation at the rate of 20% the
banks receive only 9% on their Central Bank deposits. Another
100 billion rubles, which belong to the federal budget, the
Pension Fund and regional budgets, are also on Central Bank
deposits, plus 85 billion rubles, that is, the free remainder
of commercial banks on their correspondent accounts. So,
neither commercial banks nor the government uses about 30% of
money supply. According to preliminary tallies, money supply is
to increase by another 100 billion rubles by the end of the
year. It is only natural that such a mass of money, which is
literally out of circulation, creates, along with the inflation
of costs, pressure on all the prices in the economy. It is very
unlikely that the situation will cardinally change next year.
The parameters of the monetary policy of the government
and the Central Bank will be analyzed later. However, some
forecasts can be made even now. By the end of this year
inflation will be at the level not lower than 21% to 22%. The
thing is that the growth of consumer prices has continued by
approximately 2% a month on a stable basis since May. The
optimistic number of August - 1% - does not reflect the real
picture. It is only the result of the seasonal drop of the
prices of farm produce. At the same time, tariffs and paid
services became 3% and non-food products 1.5% costlier. It is
also to be remembered that in September the Railways Ministry,
or MPS, raised passenger and freight tariffs by 18% to 25% and
the Unified Energy Systems, or RAO UES, made plans to increase
electricity tariffs. Furthermore, a number of municipalities
raised their tariffs on rents and public utilities as of August
1. MPS and RAO UES announced that they would continue raising
their tariffs. So, the inflation of costs in industry is
ensured for us next year. There is the ground to presume that
if the present trends persist wholesale prices will grow by
upwards of 20% and consumer prices by 15% to 18% next year.
Will economic growth continue? For a whole year after the
depreciation of the ruble in 1998 economic growth continued at
the expense of an increase in pure exports and improvements of
the world market situation. This ensured around 70% of
increment in the GDP. In the past six months these factors have
been giving no more than 10% of such increment. Different and
rather promising factors have moved to the forefront. First of
all, it is growing household consumption, that is consumption
by the population. This factor now ensures from 50% to 60% of
the GDP growth. The matter is that even a very insignificant
growth of real per capita incomes (which has increased by 8% to
8.5%) leads to an almost equal growth of consumption. This is
an absolute must for stable economic development. If the
government succeeds in strengthening this trend, the
development of the food, light, printing and other industries,
which are directly oriented to the consumer, will continue next
Another positive trend is that for the first time in many
years investments rose by 15%, compared with last year. This is
not much money in real terms, but it is of importance as a
factor of economic growth. I would like to hope that this is
only the beginning.
We have recently estimated the spending of the additional
proceeds, which our exporters received thanks to the growth of
prices on Russian commodities. This year's oil export
constituted about 20 billion dollars this year, or nearly
doubled, compared with last year. The smallest part of these
additional proceeds has been used for investment. At the same
time, capital flight grew in the first quarter at the level of
up to 2.2 billion dollars a month.
In 2001 economic growth will continue in Russia, but it is
unlikely to be as high as the government forecasts it - plus 4%
of the GDP. I am sorry to say but growth rates are already
reducing. There are only two ways to arrest this trend: to
increase investments and support real consumption. We cannot
rely on the growth of exports. It is more likely than not that
the exports will shrink by approximately five billion dollars.
It goes without saying that much will depend on oil prices.
But it is practically impossible to predict their dynamics for
a whole year. So, let us proceed from a sufficiently
conservative forecast of the government. According to it, the
price of our Urals brand oil will be 21 dollars per barrel. In
that case, Russia will have a 40-billion-dollar positive trade
balance and the Central Bank's gold and currency reserves will
grow by 7 billion to 8 billion dollars. The real strengthening
of the ruble against the US dollar will constitute 6% to 8%.
The supply of free money will increase by 20% to 25%, thereby
only exacerbating the problem of surplus money supply.
It is yet unclear how this problem will be solved. The
following variants are offered. The Finance Ministry intends to
issue 70 billion rubles' worth of treasury bills, including 30
billion rubles' worth of GKOs and 10 billion rubles' worth of
savings loan bonds. At the same time, approximately 60 billion
rubles' worth of TBs will be redeemed. This means that the
Finance Ministry will offer investors to exchange old papers
for new ones.
It is not the first year that discussions are on
concerning the possibility to tie part of free money by making
settlements between the government and the Central Bank. The
government owes the Central Bank approximately 5.5 billion
dollars and 240 billion rubles. With its current budgetary
possibilities the government could pay a considerable part of
its debt, especially, because the Central Bank counts to
receive only 45 billion to 50 billion rubles. However,
agreement has been reached on the return of only 15 billion
rubles. It is hardly possibly to change anything radically in
this context, because the solution depends on State Duma
deputies, among others. And it is more important for them to
increase the financing of the agro-industrial sector and the
army than to allocate money for some incomprehensible payments
to the Central Bank.
By and large, there are no signs that there will be any
serious upheavals for our purses next year. And this per se
gives us hope for the better.
Date: Tue, 26 Sep 2000
From: Dominique Arel <email@example.com>
Subject: 2001 ASN WORLD CONVENTION
Call for Papers
"Nation-Making, Past and Present:
Community, Economy, Security"
ASN 6th Annual World Convention
International Affairs Building,
Columbia University, NY
Sponsored by the Harriman Institute
5-7 April 2001
The Annual World Convention of the Association for the Study of
Nationalities (ASN) has become the most attended international
scholarly gathering dealing with issues of national identity,
nationalism, ethnic conflict and state-building in Central and
Eastern Europe, the former Soviet Union, Central Asia, and adjacent
areas. The Convention continued its impressive growth in 2000 with a
record 600+ attendees and 100 panels. More than a hundred
participants travelled from overseas for the event, particularly, but
not exclusively, from Western and Eastern Europe. Panelists'
disciplines included political science, history, anthropology,
sociology, economics, geography, and sociolinguistics.
The central theme of the 2001 Convention addresses the interface of
identity politics with economic issues and security/foreign policy
concerns, either in the past or in contemporary developments.
Proposals can focus on particular cases, theoretical questions, or
cross-regional comparison. Papers or panels comparing cases of the
post-Communist world with cases from other regions of the world are
encouraged. Due to continuing instability in the Caucasus and the
Balkans, proposals dealing with these areas are particularly
solicited. Unlike most conventions, ASN accepts individual paper
proposals, although full panel proposals have a greater chance of
being accepted, due to space constraints.
The ASN World Convention's yearly theme specifically refers to a core
number of panels. Since the Convention is far larger in scope than a
thematic conference, we invite, as in previous years, proposals on a
wide range of topics related to identity, nationalism, conflict and
state-building in Central and Eastern Europe, the former Soviet
Union, Central Asia, and adjacent areas.
Russia-related themes in 2000 included:
Nationalism and Federalism in the Russian Federation
The Russian-Chechen War(s)
Military Tactics and Operational Art of Yeltsin's Second Chechen War
Dagestan in Comparative Perspective
Russia's Regions and Republics
Ethnicity and Regionalism in Siberia
Russia In Search of Itself
Extremist Variants of Russian Nationalism
Orthodoxy, Ethnicity, and Civil Society in Russia
Conflict and Identity in Russian Foreign Policy
Security, Energy, and Foreign Policy South of Russia
Valery Tishkov and the Anthropology of Russia
and many more.
The ASN web site (http://asn.uno.edu) contains a complete list of the
Videos/Films. The 2000 Convention was enhanced by the highly
successful screening of short videos (10-15 minutes), accompanying
presentations in regular panels, as well as medium- and full-length
documentaries or feature films in video format, shown as special
screenings followed by a general discussion. The British
documentaries The Valley, on Kosovo, and A Cry from the Grave, on
Serbenica, were some of the highlights of the 2000 Program. For 2001,
proposals partly or entirely revolving around video, film, or
audio-visual material (including slides and power point
presentations) are strongly encouraged. As a rule, the convention
intends to show video or film material produced within the past year
or two. Throughout the convention, one or two of the convention
meeting rooms will be exclusively devoted to the screening of video
material. All suggestions and proposals should be sent to the Program
Chair, Dominique Arel (address below).
Location. The Convention will be held by the Harriman Institute at
Columbia University, New York (address below), and co-sponsored by
the Watson Institute, Brown University, Rhode Island.
Schedule. The convention will begin on Thursday, April 5th, at 1 PM,
and end on Saturday, April 7th in early evening. No panels will be
held on Sunday, and the dates do not coincide with the Jewish and
Orthodox religious holidays, which all take place later in the month.
Panel/Roundtable/Roundtable Proposals. There is no particular
application form to fill out. The vast majority of proposals were
e-mailed to the Program Chair last year, but proposals sent by fax or
regular mail are also accepted. For instructions on the proposals,
see the "Application Information" below. All proposals must be sent
to the Program Chair, Dominique Arel (address below).
Registration. Registration fees are $40 for ASN Members, $60 for
Non-Members ($30 for East European Non-Members) and $25 for Students.
All panel participants have to pre-register by March 15th, 2001.
Non-panel participants are also urged to pre-register early. Please
note that the Convention will be unable to refund preregisterees
after March, 15th, 2001. Pre-registration by panel participants and
attendees can be done electronically, by fax, or by regular mail. A
registration form can be downloaded from our ASN web page
(http://asn.uno.edu), or be requested from Gordon Bardos (address
Funding. Participants are responsible for seeking their own funds to
cover all travel and accommodation costs. ASN is unfortunately unable
to assist participants financially, including applicants from Central
and Eastern Europe, the former Soviet Union, and Central Asia.
Accommodation. The Convention does not have particular arrangements
with hotels. Our ASN web site (http://asn.uno.edu), however, provides
a list of several hotels, in various price ranges. Participants and
attendees are strongly encouraged to reserve as early as possible.
Advertisements/Exhibitors. Several dozen publishers and companies had
exhibits and/or advertised in the Convention Program in 2000. Due to
considerations of space, advertisers and exhibitors are encouraged to
place their order early. For information, please contact the
Convention Director Gordon Bardos (address below).
Convention Papers. The convention papers will be available for sale
at the Convention for $1.50 apiece. That policy has proven a huge
success in the past.
Web Site. Our web site (http://asn.uno.edu) provides continuously
updated information on the ASN World Convention.
Membership Subscription to ASN. A yearly membership to ASN is $50,
and $30 for students. Members receive the journal Nationalities
Papers (four times a year), the periodical Analysis of Current Events
(ACE, four times a year), the newsletter ASNews (twice a year) and a
registration discount at the ASN Annual World Convention. Since 1999,
ASN Members also have the option of subscribing to Europe-Asia
Studies at the cut-rate of $55 yearly. A membership form can be
downloaded from our ASN web page (http://asn.uno.edu), or be
requested from Gordon Bardos (address below).
We look forward to seeing you at the convention!
Dominique Arel, Program Chair
Gordon Bardos, Convention Director
ASN is accepting proposals for panels, roundtables, or individual
papers. There is no particular form to fill out. Proposals can be
emailed (preferably), faxed or mailed to the Program Chair (address
Proposals for panels with presentations based on papers must include:
*a chair, no more than three paper-givers and a discussant
*the title of the panel, as well as the title and an abstract (200 to
500 words) for each of the papers
*the affiliation, postal address, telephone, fax, and email (very
important) of all participants
*a one-paragraph cv of each participant
Proposals for roundtables must include:
*a chair and no more than four presentors
*the title of the roundtable
*the affiliation, postal address, telephone, fax, and email (very
important) of all participants
*a one-paragraph cv of each participant
Proposals for individual papers must include:
*the title and an abstract (200 to 500 words) of the paper
*the affiliation, postal address, telephone, fax, and email (very
important) of the applicant
*a one-paragraph cv of each participant
If audio-visual equipment is required, please indicate so in your application.
As before, applicants must abide by three golden rules:
*No participant may be listed more than once on a given panel
*No participant may present more than one paper at the convention
*No participant may appear more than twice in the convention program
The proposals must be sent to Dominique Arel (address below). Email
applications are encouraged. An international Program Committee will
be entrusted with the selection.
Deadline for proposals:7 December 2000
For information on panel and paper proposals:
ASN Convention Program Chair
Brown University, Box 1831
130 Hope St.
Providence, RI 02912
401 863 9296 tel
401 863 2192 fax
For information on exhibits
and advertisements in the convention program:
420 W. 118th St.
New York, NY 10027
212 854 8487 tel
212 666 3481 fax
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