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Johnson's Russia List


October 6, 2000    
This Date's Issues: 4563  4564  


Johnson's Russia List
6 October 2000

[Note from David Johnson:
1. AP: Russian Births Beset With Problems.
2. Nataliya Gevorkian, Who Is Behind Yeltsin's Memoires?

4. Laura Belin: Taibbi and MT on Gusinskii.
5. Moscow Times: Ana Uzelac, State Duma Lays Down the Law of the Land.

8. Leonard Latkovski: Re: 4561-Rowell/Exchange Programs.
9. Guy Netscher: Visitor exchange programmes.
10. Dale Herspring: McFaul on Putin.
Who Is Next on the List? 



14. Reuters: Communists, Agrarians to Oppose Russian Budget.
15. Los Angeles Time: Maura Reynolds, Yeltsin Casts a Dry Eye 
Backward. Russia: Former president recalls in his upcoming memoirs the 
excitement he felt at resigning. And no, those weren't tears at the end. 

16. Moscow Times: Zoya Kaika, Gref Wants a Public Blacklist Of All 
Delinquent Managers.]


Russian Births Beset With Problems
October 5, 2000

MOSCOW (AP) - More than two-thirds of births in Russia are marred by 
complications, and every second newborn discharged from a maternity clinic is 
suffering health problems, medical officials said Thursday. 

The number of normal births declined from 45.3 percent in 1992 to just 30 
percent last year, said Olga Frolova, head of the statistics department of 
Russia's Academy of Medical Science. She attributed the decline to the spread 
of heavy drinking and drug use, complications caused by sexually transmitted 
diseases, and the nation's overall worsening health. 

A lack of medical equipment in clinics, inadequate prenatal care and parents' 
disorders also mean that 53 percent of newborns discharged from maternity 
clinics are already suffering from a chronic ailment or a disease requiring 
prolonged treatment, Frolova said. 

``People must understand that health is an important factor of social 
well-being, and a responsible attitude to one's health, especially among 
teen-agers, needs to increase,'' she told a news conference. 

Russia's population is also shrinking at an unprecedented rate for an 
industrialized country, from 148 million three years ago to slightly more 
than 145 million now, said Vladimir Kulakov, head of the Academy's research 
center and maternity clinic. 

About 1.2 million babies are born in Russia each year, while the country 
needs 2 million babies to reverse the population decline, Kulakov told the 
news conference. 

Most countries in Europe have a low birth rate, but in Russia it is combined 
with a staggeringly high death rate, which reached 14.7 per 1,000 people last 
year, according to Frolova. 

Unlike in the rest of Europe, Russia's declining birth rate is a result of 
economic hardship. 

Many women decide they can't afford to have more than one baby and Russia has 
the world's highest abortion rate. Two in three pregnancies end in abortion, 
according to official figures. 

Russia's Health Ministry estimates that 10 percent to 25 percent of Russian 
couples are infertile, but no precise figures are available because many 
never seek professional help. 

While between 35 percent and 40 percent of infertility cases could be solved 
by modern treatment, the huge country has only a dozen clinics that 
specialize in the problem, Kulakov said. Most Russians live far from such 
clinics, or simply don't have the money to afford treatment. 


October 5, 2000
Who Is Behind Yeltsin's Memoires?

Is it just a twist of fate, a mere coincidence, or is it on purpose that the 
presentation of former president Boris Yeltsin's new book has been scheduled 
for October 7th, President Vladimir Putin's birthday? Nataliya Gevorkian, the 
co-author of the book-interview with Putin, "In The First Person", gives her 

I asked Yeltsin for an interview immediately after he resigned. A 
president on his way out is more interesting a person to me, than a newcomer. 
The internal drama, and it is always a drama, no matter what and how the 
"former" himself perceives it, always engrosses me much more than a 
newcomer's triumph. Even from that standpoint, Yeltsin was more interesting 
than Putin. And now Clinton is more interesting than Gore and Bush. 

But everything turned out differently: I interviewed Putin but never had the 
chance to interview Yeltsin. The formal reason was that Yeltsin was short of 
time. He was working on his book and had to finish it. 

I have read only excerpts from that book, published in Argumenty i Fakty 
(a Russian daily newspaper). Of course it is not a mere coincidence that the 
interview with Yeltsin and the excerpts from his book were published namely 
in Argumenty. Apparently the paper's large circulation predetermined the 

And, of course, the choice of excerpt to publish was no coincidence. It is 
the only episode in the book that really depicts the link between Yeltsin and 
Putin, the episode about Yeltsin relinquishing power to Putin. It's an 
episode about the transfer of power. 

I've heard Putin's interpretation of the transfer. But Putin could only 
attempt to explain why he agreed to accept power, i.e. he could not explain 
why Yeltsin relinquished it.

And I still cannot help wondering why Yeltsin resolved, (or agreed? or maybe 
he thought that he resolved but in fact he agreed) to relinquish it (power). 

I read the excerpt from his book and I do not believe it. The result is a 
trivial, empty and polished picture purposely stripped of inner depth. It is 
hard to say who, but somebody was definitely overzealous in their efforts to 
ensure there were no blemishes.…Yeltsin is far more vigorous and 
controversial a figure, far less ordinary than the person depicted in that 
excerpt from the book. 

And that's without mentioning the fact that there has never been and there 
still is no explanation as to why he resolved to abdicate his post… Not why 
it happened namely on the 31st, on the New Year's Eve 1999, but why it 
happened at all? 

In the excerpt, Yeltsin comes across as a cantankerous little old man, who 
all of a sudden takes a decision that above all needs to be kept secret. 

Of course, it is hard for him, he is upset but at the same time he chuckles 
softly to himself thinking, "what a New Year present I have prepared for 
all!" And then, with a sense of relief, standing by a Christmas tree like a 
Santa Claus, he pulls tree that key present to the nation out of his sack- a 
young man whom nobody knows but whom the nation was ordered to trust. 

But that's not how it was! Is the author really trying to say that Yeltsin 
changed on New Year's Eve? And, according to his memoirs, on the TV screen 
during his address to the nation he did not shed a tear, but simply tried to 
get something out of his eye. 

If really it is true then thanks for being so honest. But why then was the 
event not re-shot? Why was the "speck" not removed during editing? Was it to 
give the impression that it was a teardrop after all? Is that honest? And 
could it be, maybe, that something got stuck in his throat? 

As for me, I listened to his address on the radio but did not watch it on TV 
and I guessed from his voice the moment when the speck got in his eye. 

I still have the impression that the chapter (published in Argumenty & Fakty) 
was written and edited with Putin in mind. And I would prefer if it if they 
had considered Yeltsin. 

I understand it would be hard to do because the same people who were with 
Yeltsin to his very last day in power are now with Putin. 

Indeed, it is the same team and that team sees the difference between the 
former and latter better than all of us. And the part of that team that was 
close to the former is trying to extend and to secure a bond that links the 
two, (or, maybe, to remind the present-day president of that bond? Such a 
reminder could have harmed Putin during the elections, but they are now long 

And that is why that excerpt in particular was published. And that is why the 
presentation is scheduled for the new president's birthday. 

I must admit it is rather difficult for me to write about all this. I'm on 
good terms with Valentin Yumashev and Tatyana Dyachenko. My relations with 
them have developed since Yeltsin's resignation. From my point of view at 
least, I consider those relations to be purely informal. But I believed, and 
they knew it, and now I am sure of it and no matter how much they want it to 
be otherwise, that Putin has eradicated much of what Yeltsin did. Putin, by 
the very nature of his life prior to becoming president, is no supporter to 

He may feel grateful towards Yeltsin (and there are certainly reasons for 
that), but Putin is of a different blood group. 

The same happened with (Anatoly) Sobchak who had helped Putin to integrate 
into a new life and to survive his leaving KGB. And Putin remained grateful 
and loyal to him, albeit that Sobchak was not of the same kidney. 

But Putin under Sobchak and Putin under Yeltsin was different from what Putin 
is now, as a head of state. That is another story and it is yet to happen. 
But he is no successor and not even an interpreter of his predecessor. 

They are too different. Their lives, the stories of their coming to power are 
different. Intellectually and in terms of their political talent, including 
even their mistakes, they differ a great deal. 

I do not know what Yeltsin liked about Putin. Maybe it was because of the 
fact that they are beyond comparison. And there is no need to compare them. 
And therefore it's all the more insulting that in that small excerpt, Yeltsin 
is polished to fit Putin. I feel sorry for Yeltsin. 

Natalia Gevorkyan



Moscow, 5th October: The human rights situation in Bashkortostan and Kalmykia 
is the worst in Russia, the leaders of Moscow's Helsinki Group said at the 
presentation of an alternative report on human rights in Russia's regions, 
prepared by Russian human rights organizations. 

There is not a single region in Russia where the observance of human rights 
would meet international requirements, the chairperson of Moscow's Helsinki 
Group, Lyudmila Alekseyeva, has said. She noted, however, that "in Novgorod 
and Samara Regions the authorities are at least not hampering the formation 
of a developed civil-state system". 

The four-volume 1,800-page report includes a section on the human rights 
situation in various spheres, as well as reports on the situation in 60 
Russian regions. The project was financed by the US Agency for International 

Russia has no alternative civilian service, the situation in prisons and 
detention facilities remains poor and citizens' election rights are being 
violated, she said. 

"But the main problem is our judicial system," Alekseyeva said. "In many 
instances, the Supreme Court makes unlawful decisions even after all the 
court proceedings," she said. 


Date: Thu, 05 Oct 2000 
From: (Laura Belin)
Subject: Taibbi and MT on Gusinskii

The plight of Vladimir Gusinskii's Media-Most empire has very worrying
implications for all Russia-based media. At the same time, it can be hard to
stomach Gusinskii's attempts to depict himself as a champion of the free
press. The Moscow Times editorial torn apart by Matt Taibbi (JRL 4562) was
wrong to imply that "financial responsibility" of the media is more
important than freedom of the press. However, in a different sense I agree
that Gusinskii has tried to have it both ways.

Taibbi is right that politics, not debts, are behind the state's pressure on
Media-Most. State and para-statal institutions have used the huge debts of
Gusinskii's holding company as leverage to influence the editorial line of
NTV and related media. (Sympathetic television networks' large debts have
not been called in.) Gazprom started criticizing NTV's coverage and
demanding money back from Media-Most only after Gazprom's chief executive
made a deal with Putin earlier this year. When Gusinskii tried to raise cash
by selling Most Bank in April, Putin personally intervened to make sure the
sale would not go through and the debts would remain unpaid. 

Gusinskii and other Media-Most executives made bad financial decisions, and
thereby left themselves more vulnerable to pressure, but that does not
justify the outrageous tactics used by Putin, Voloshin and Lesin to bring
Media-Most under state control.

So yes, watchdog groups and advocates of a free press must oppose the
attempts to force Gusinskii out of the picture and turn NTV into a friendly
mouthpiece. As far as I can tell, just about all of them are doing so.

But (to use that rhetorical format loathed by Taibbi) the unfortunate truth
is that for years, NTV and Media-Most benefited from politicized Kremlin
decisions regarding the media. Gusinskii and his subordinates did not
complain about arbitrary decisions that gave them an unfair advantage over
their competitors. For instance:

In January 1996, a deal was struck to allow NTV to pay far lower fees for
transmission services than any other Russian commercial broadcaster. A
presidential decree enshrined this privilege in January 1998. (Under acting
President Putin, this deal was revoked in early 2000, and NTV cried foul.
Yes, it was NTV's politics that led to the decision, and yes, if NTV had
backed Unity and Putin they would still be enjoying cut-rate transmission
fees. But can anyone give a good reason why NTV should pay far less for
transmission services than TV-6 or any other commercial broadcaster?)

In September 1996, NTV was granted the full use of channel 4, without any
kind of auction or competition for the frequency. At the time, Gusinskii did
not have a problem with bureaucrats rewarding the president's allies in the

The Russian government later guaranteed a loan to finance the Bonum
satellite project, even though a presidential decree had prohibited the
government from granting such guarantees. Media-Most benefits from the new
satellite, and the government takes the risk if the loan can't be repaid.

When Gusinskii, Malashenko or other Media-Most executives are challenged
regarding politically biased or inaccurate coverage (e.g. their whitewash of
the "money in a box" scandal of June 1996), they always fall back on the
same argument: we had to support Yeltsin's re-election to prevent a
Communist takeover. This is a successful smokescreen, implying that the 1996
campaign was the only time political considerations colored the editorial
line of NTV or other Media-Most outlets. But:

What about NTV's egregious coverage of Aleksandr Lebed during the weeks
before and after his ouster as Security Council secretary in October 1996?
(Many JRL readers will remember Yevgenii Kiselev's infamous prime-time
interview of the interior minister, in which the NTV star lent credibility
to baseless allegations that Lebed was plotting a military coup.) 

What about NTV's friendly coverage of Chubais, which lasted until the
Svyazinvest controversy in late summer 1997? (Many of Chubais's dubious
actions, often cited by the eXile and by Stringer editor Leonid Krutakov,
were well known long before NTV began criticizing them.) 

What about NTV's friendly coverage of Berezovskii when Yeltsin removed him
from the Security Council in November 1997? 

What about NTV's coverage of the Kirienko government's confrontation with
Gazprom in July 1998, which was very sympathetic to the gas monopoly and
happened not to mention that Gazprom was a major NTV shareholder?

I do not know how much Gusinskii has historically influenced NTV's editorial
policy. I do know that off the record, over the years various stories have
circulated about editorial interference at print and electronic outlets in
the Media-Most family. No doubt this is not news to Taibbi; he is not making
Gusinskii out to be a hero, merely "a scumbag in the right in this

When Gusinskii complains that the rule of law is being flouted in Putin's
Russia, he is right. I am NOT saying that Gusinskii deserves what he's
getting now because he used the system to his advantage in the past. I am
NOT saying that we shouldn't worry about the demise of NTV, which has
consistently provided better news coverage than the other major Russian
networks. I just wish more mainstream western reporting on Gusinskii's
problems would mention that he is, to paraphrase Al Gore, an "imperfect
messenger" on the subjects of fair play and media independence. I suspect
the MT's editorial may have been an overreaction to the prevailing western
coverage of the Gusinskii saga.


Moscow Times
October 6, 2000 
State Duma Lays Down the Law of the Land 
By Ana Uzelac
Staff Writer

Remember to grab your passport when you don a robe and slippers to take out 
the garbage in the morning. If you forget, the police may soon be able to 
fine you 80 rubles. 

Driving over the middle divider of the road could lead to a fine from the 
traffic police of 240 to 400 rubles. 

And the refusal of an HIV-positive individual to divulge the identity of the 
person who infected him could cost 400 to 800 rubles. 

So reads the new Administrative Code that passed 366-1 with two abstentions 
in a final reading by the State Duma on Thursday. The 500-page document, 
which now goes to the Federation Council and then the president for approval, 
sets out the laws that guide everyday life f from driving a car and 
remodeling an apartment to fishing and hunting. 

The new code will apply to all Russians and foreigners who visit or live 

It is meant to replace the 16-year-old Soviet administrative code and its 
outdated provisions banning drinking, gambling, trading and even feeding 
cattle with bread. Subsidized bread was at one time cheaper than grain. 

While the bill is seen as a step in the right direction, critics are already 
concerned that it leaves room for civil liberties to be curtailed and 
encourages bribe-taking. 

The code explicitly states that citizens must be presumed innocent, but in 
the same breath increases the number of governmental organizations that can 
administer fines from 38 to 58. 

"This [the new code] was just a cosmetic change. Eighty percent of the code 
is still just a club to beat over the heads of ordinary people," said Lev 
Livenson, one of the Duma aides who worked on the code and was clearly 
disappointed with the results. 

Livenson is an assistant to Duma Deputy Sergei Kovalyov, a human rights 

But, as the overwhelming vote of confidence suggests, the code does have 
staunch support. 

Nikolai Shaklein, a member of the Duma committee on state-building and a main 
author of the code, said the final draft of the bill was "the best that the 
Duma could do at the moment. 

"We managed to make order of a jungle of amendments and decrees that were 
adopted over the last 10 years in order to bring the code closer to reality," 
he said. "Now we finally have it all in one book." 

Despite the broader authority given to demand fines, the code also places a 
much heavier responsibility on state officials, Shaklein said. 

"Three-fourths of the provisions envision fines for state officials that are 
much higher than the ones for normal citizens," he said. "There are also 
whole paragraphs dealing with bureaucratic offenses." 

Paragraph 5.39, for instance, levies a fine of 400 to 800 rubles on officials 
who refuse to divulge information or who give out partial or false 
information to citizens. 

However, Livenson said, even with the fines there is no one to keep the 
officials in check. 

"There is one basic thing missing in the code: how to enforce the 
responsibility of the state bureaucracy," he said. 

Take Chapter 12, which expands the powers of arguably the most infamous of 
bureaucracies: the traffic police. Lawmakers engaged in the fiercest fight 
over that chapter and lopped off more controversial aspects such as a 
provision that would have allowed police to impound any improperly parked 

But critics say other worrisome aspects remain. Among them is a provision 
allowing a traffic police officer to ticket a driver or confiscate his 
license on the spot. 

"It's easy to imagine a policeman offering the transgressor a deal: You pay 
an amount more than the fine and I won't take your license away," Livenson 

Shaklein and other backers of the new code rebuff such criticism, saying that 
corrupt officials will take bribes no matter what the law says. 

"These things happen anyway," Shaklein said. "If a policeman wants to take a 
bribe, he'll take it with or without the code. Our provisions don't differ 
that much from the ones in power elsewhere in the world." 

Shaklein may have a point. U.S. cities and states have for years had odd laws 
on their books. For example, in Hartford, Connecticut, residents are 
forbidden from crossing a street on their hands and from teaching their dogs, 
according to the Dumb Laws web site. 

But in the meantime, residents in Russia may soon have to remember to carry 
their passports with them at all times, as stated in section 19.15 of the 
code. But don't forget to make sure the passport contains a valid 
registration stamp, or you could face a fine of 80 to 240 rubles. 


Text of report by Russian newspaper 'Izvestiya' on 30th September 

On Friday, the State Committee on Statistics disseminated the regular data on 
the structure of income of Russian citizens based on the results for August 
(September, naturally, has not yet been computed). Since our bad habit of 
looking in someone else's wallet is incorrigible, and the information of 
Goskomstat [State Committee on Statistics] allows us to do this anonymously, 
without infringing upon anyone's personal dignity - let us begin. 

Slowly but surely, the population of Russia is increasing its income. These 
are not the intrigues of statisticians, but a certain reality. The overall 
sum of monetary income of Russians in August comprised R311.5bn as compared 
to R300.5bn in July and R303bn in June. At the same time, our expenditures 
are also increasing: In August, Russians spent R306.3bn, as compared to 
R291bn in July and R280.4bn in June. Please note: We are spending less than 
we are earning. At the same time, even at the end of last year there were 
months when we spent more than we earned - that is, we ate up our old 

And, while we are on the subject of savings. They too are gradually 
increasing. Growth of public savings in August comprised 3.4 per cent of the 
sum of monetary income of Russians, as compared to 5 per cent in July and 5.5 
per cent in May and June. While for the most part remaining rather poor 
people, Russian citizens are nevertheless gradually making their way out of 
total poverty, into which they were cast after 17th August 1998. 

As before, the bulk of our income is eaten up by consumer services. For these 
purposes, Russians spend an average of R8 out of every R10 they earn during 
the year. Public expenditures for purchase of currency remain rather stable: 
They are balanced in the region of 6-7 per cent of the overall sum of income. 
In August, this indicator comprised 7.5 per cent. For comparison: In July, it 
was 6.8 per cent, and in June and May it was 6 per cent for each month. The 
record month in this regard is still March: In the first month of Spring, 
Russians spent 8.2 per cent of their income on purchase of currency. 

However, the growth of income of the population is most impressive if we 
compare its overall sum for the 8 months of the current year with the same 
period of last year. Based on the results of January-August 2000, monetary 
income of Russians comprised R2,207.1bn. During this same period of 1999, 
this indicator equalled R1,675.3bn. Thus, the population became richer by 
R530bn. This is quite a sizable sum, if we consider the fact that, during all 
of 2000, the income of the federal budget will comprise somewhere around 

Of course, we should not forget that all this growth of income is rather 
relative, and that the overwhelming majority of Russians have still not 
restored even their income level of 1997 and the first half of 1998, and 
finally - that income is growing on the background of an economic uplift 
which does not depend on us, but which is caused by the world oil boom. One 
thing is obvious: In principle, it is possible to earn money in Russia. And 
provision of stable growth in solvent demand becomes one of the most 
important government tasks. 


Text of report by Russian newspaper 'Nezavisimaya Gazeta' on 5th October 

Political scientist Konstantin Truyevtsev wrote in `Nezavisimaya Gazeta' on 
11th December last year [as published - in fact 30th November] on the 
possible reasons for the creation of an artificial aura of mystery around the 
figure of Saudi billionaire Usamah bin-Ladin, who has been the focus of 
attention of the Russian mass media in connection with the Dagestani events 
and the antiterrorist operation in Chechnya. Yesterday, answering 
journalists' questions at the Mir Novostey press centre, Truyevtsev added new 
information to his `Nezavisimaya Gazeta' article. 

Truyevtsev told journalists about his meeting with bin-Ladin's brother, Tariq 
bin-Ladin, in Moscow in 1999. Tariq bin-Ladin did not deny his brother's 
closeness to the royal family and his importance in Saudi Arabia's political 
life. During their talk Truyevtsev also learnt other interesting facts, but 
preferred not to speak of them at the press conference, stressing once again 
the absurdity of the "enigmatic nature" of the Saudi billionaire since 
"capital of this size cannot go unnoticed in world monetary dealings". It is 
notable that bin-Ladin's brother intended to fund the creation of an Arab 
centre in Russia but these plans were not acted on because of the collapse of 
the USSR. Truyevtsev noted that Russia will not withstand a head-on collision 
with Islamist extremism and so "dialogue and transparency" are the only 
correct approach in Russia's relations with the Muslim world. 

Truyevtsev also confirmed bin-Ladin's involvement in acts of terrorism on US 
territory but suggested that the latter has links with US intelligence 
services and that the United States may want to orchestrate terrorism for its 
own purposes. The political scientist said that he has no logical explanation 
for the paradoxical nature of this link. 

Date: Thu, 05 Oct 2000 
From: Leonard Latkovski <>
Subject: Re: 4561-Rowell/Exchange Programs

This is a brief response relevant to David Rowell's commentary on Russian 
Visitors Programs in the U.S. It is not meant as a direct rebuttal to his 
comments or his experiences but merely my experience with,and reflections 
on, such a program just concluded here in Frederick, Maryland (45 miles 
northwest of Washington.D.C).
There were four Russian middle-level officials from outlying areas (two 
men, two women, two appointed and two elected) ages 37-41 who were the 
members of the group that visited here. They were here from September 17 
to 25 and in the U.S. for a few days prior to coming to Frederick. They 
were brought as part of the Library of Congress Russian Leadership 
Program. Their posts in Russia are : Deputy Head of a Regional 
Administration, Chairman of Mass Media Relations in a large city in the 
Urals, People's Deputies Council Member in the Far East, Municipal Duma 
Member in the Far East.
Locally they were hosted by the Rotary and they had jam-packed 
daily programs of visits, conferences, seminars, interviews, tours, etc 
of large and small businesses, county and municipal offices, newspaper 
offices, local tv studios, medical facilities and colleges, including Hood 
College where we hosted them for half a day. They very plainly said that 
they learned an awful lot in the many meetings that they had. They were 
interested, serious, attentive, and professional. They had long days packed 
with events in which they took an active part. Their visit to our campus 
was at the end of a gruelling day while still jet-lagged. Yet they stayed 
until 10 p.m. to participate in a public forum that was a great 
success. And they did not go shopping until the second last day here! But 
I heard they had a good time at the mall.
Also they visited a military medical research site that they would 
not have been allowed to see in the Cold War era. I think there were other 
such examples of a new openess between our countries that is to be commended.
None of them spoke much English which I think is an issue, but 
they had a minimal understanding of it. I do think English competency is a 
point to be considered in selecting exchange participants.
I think they were sincere when they said that they had learned a 
lot about how things work here and found useful ideas to implement back 
home. They saw a great variety of institutions, organizations and public 
officials here. They said that they were here to work and to learn. And 
that is what they did. At the end of the week one of them pointedly 
remarked, among other things, about the importance and value of small 
businesses in America and his hope of implementing measures to support 
them in his region. Only time will tell whether or not they are able to 
apply certain things that they saw here but there is no question in my mind 
that this exchange was worthwhile and that more such visits are to be 
If anything I felt that their stay in America was too brief.
Len Latkovski
Professor of History
Hood College
Frederick, MD 21701


From: Guy Netscher <>
Subject: Visitor exchange programmes
Date: Thu, 5 Oct 2000

While I agree with most of the basic points of David Rowell's comments on
Russian visitor exchange programmes (JRL 4561), I am intrigued to know
whether he would apply his statement regarding language skills equally to US
visitors to Russia as he does to Russian visitors to the US, i.e. does he
believe that "a person that can't speak or read [Russian] may as well spend
their time in [Russia] with their eyes closed and their ears blocked. How
can they possibly fully experience the full rich tapestry of the [Russian]
way of life, its commerce and its community, when they don't understand a
thing that is going on around them?" I sense a certain double-standard (as
is so often the case).

Guy Netscher
Account Manager
21-25 Earl Street 
London EC2A 2AL


Date: Thu, 05 Oct 2000
From: (Dale Herspring)
Subject: McFaul on Putin

I found Mike's piece on Putin very interesting, and while I am still 
digesting parts of it, I wanted to comment on one aspect. In his 
conclusion, Mike struggles with the question -- is Putin a democrat 
or a dictator? I would argue that he is neither. Instead, he is a 
problem solving bureaucrat. If democracy helps him to solve 
problems, he will utilize it. If it gets in the way, he will ignore it. 
This does not mean that he is a dictator. Rather, he wants to solve 
the country's problems. True, he could find himself on a "slippery 
slope" to dictatorship, but I think we have to go beyond our 
tendency to see everything in terms of democracy or dictatorship 
when it comes to Russia. Like everyone else, I would love to see a 
birth of democracy -- like we see it here in Manhattan, Kansas -- 
but I doubt that is going to happen. Russia is Russia, and Kansas 
is Kansas. As the Germans say, "other countries, other customs."

Instead, I think we need a more instrumental approach, one that 
will focus on the man and his mentality. In short, I have the 
impression that the key question for Putin is "will it work." 
Ideology means little. 


From: "stanislav menshikov" <>
Subject: AMERICAN CORRUPTION IN RUSSIA Who Is Next on the List?
Date: Thu, 5 Oct 2000 

"MOSCOW TRIBUNE", 6 October 2000
Who Is Next on the List? 
By Stanislav Menshikov

Two recent events, seemingly unrelated to each other, are in fact strongly
correlated: Anatoly Chubais is heading for Switzerland for a month to
upgrade his managerial talents; and US attorneys are suing Harvard
University et al. and claiming damages worth at least $40 million.

Mr. Chubais is seen by some as a brilliant manager. On the basis of that
record, he hardly needs wasting time in a Swiss business school. He is also
widely known as the main architect of Russia's privatisation considered one
of the greatest financial swindles of last century. On that basis, there
are grounds to believe that his mission in Switzerland is to prepare for a
permanent exit. But how is that connected to Harvard?

The US complaint is against Harvard University, its professor Andrei
Schleifer, project manager Jonathan Hay, their wives Nancy Zimmerman and
Elizabeth Hebert. These persons allegedly used their positions as leaders
of the Russian project of the Harvard Institute for International
Development (HIID) in 1992-1996 for their personal benefit in defiance of
their contract funded by USAID and requiring impartial advice on
privatisation and opening capital markets. Employees on the project were
specifically prohibited to make investments in Russia, play the stock
market, etc. The project involved substantial sums of US taxpayers' money.

However, according to the US government claim, Schleifer, Hay and their
wives were making investments, using inside information and influence and
advancing their own business interests in Russia. $200,000 were invested in
various companies and government bonds. Investments in oil were concealed
by using names of close relatives. Activities included creating mutual
funds in securities and running a real estate firm. These activities were
never reported and, in fact, were carefully concealed. USAID funds were
diverted, abused and wasted. When these activities came to light, the
Harvard project in Russia was suspended and ultimately terminated. The HIID
was closed.

Actually, this is an old story given plenty of publicity by the media a few
years ago. Books have been published explaining what happened (cf.
"Collision and Collusion" by Janine Wedell, St. Martin's Press, New York,
1998). It is not often that we hear from America itself about US corruption
in Russia. The news is mainly about Russian corruption at home and abroad. 
Because such instances are rare it is worth going into some of their wider

It is noteworthy that US law officers are not concerned about the negative
effects of Russian privatisation resulting from the work of Harvard et al.
However, those persons were principal foreign advisers to Mr. Chubais, then
minister for privatisation, Maxim Boiko, his top aide, and Serguey
Vassiliev, then chairman of the government Committee for Securities
Markets. Harvard was the main channel by which US government money was
poured into agencies and organisations controlled by Chubais and Boiko.
Those were billions, not hundreds of thousands of dollars. But the US
attorney claim says nothing about how those billions were used. In fact, as
documented by Wedell, they were spent to support companies and
organisations close to Mr. Chubais and his friends and to promote dubious
projects like the infamous loans-for-shares deal in which state owned
assets were sold at bargain basement prices. The principal aim was also
political, "to help democrats". "If Boiko said that the recipient was a
democrat, that was all we needed", confided a top man from USAID. As a
result, much more US money was misused and wasted than in the
Schleiffer-Hay petty speculations.

Inside information used by the Harvard gang came from Chubais, Vassiliev
and their people. Using inside information is not considered a crime in
Russia. Ergo the Moscow officials concerned easily escaped prosecution. But
the ethical issue remains, particularly when such information is supplied
to nationals of those foreign countries where its use is illegal.
Incidentally, when Chubais was caught red-handed concealing his income from
market trading, he first claimed that the source of his extra income were
honoraria from Harvard University. And when Chubais's friends from high
places in Washington quietly passed the word that HIID was in trouble,
Chubais, as vice-premier, immediately cut off his personal and official
relationships with that institution explaining that its services were no
longer required "by Russia". US attorneys are mum about these aspects of
Harvard activities which amount to indirect bribery of foreign government
officials, a felony by US law.

We are not sure that Russian law enforcement agencies will get interested
in these activities, either. But Mr. Chubais in his role as top man in RAO
EES has become a nuisance not only to US investors but also to the Russian
public and officials, particularly because of his practice of switching off
electric power to plants, communities and military units. This activity is
used to discredit Vladimir Putin's administration. The word is that the
Kremlin is getting fed up with the man. The Harvard case is a timely
signal for him to accept an ambassadorship or professorship abroad. Not
that he deserves them, but purely out of compassion for a corrupted


Source: 'Nezavisimaya Gazeta', Moscow, in Russian 5 Oct 00 

A shortfall of 4.5m tonnes is expected in the country's harvest of feed 
grain, 'Nezavisimaya Gazeta' reported. The newspaper said that 10m tonnes of 
grain had been lost because of shortages of harvesting equipment and oil 
products. The shortfall will reduce output of meat and milk, the newspaper 
noted. The following is the text of a report by the Russian newspaper 
'Nezavisimaya Gazeta' on 5th October. Subheadings have been inserted 

It seems that another food crisis may befall Russia. This conclusion has to 
be drawn on the basis of the interim results in the harvest campaign made 
public by Russian Federation Deputy Prime Minister Aleksey Gordeyev. 
According to him, 63.1m tonnes of grain have now been threshed in Russia from 
88 per cent of the sown area - that is, harvesting has been completed on 
nine-tenths of all the areas. Unfortunately, according to forecasts by 
experts at the Institute for Agrarian Market Conditions, the overall 
situation with regard to the country's provision with grain during 2000-2001 
remains not too good, despite quite decent results. According to the 
institute's data, Russia's overall requirement for grain will be of the order 
of 80m tonnes. This figure has been obtained with due regard for the 
so-called carryover stocks of grain, which were practically all used up last 

The agroindustrial complex is now faced with a difficult task - not only 
providing the country with food and feed grain for the coming year but also 
forming an adequate quantity of carryover stocks. Whereas there will most 
likely be no problems with food grain this year and, what is more, experts 
are predicting a surplus of approximately 1.5m tonnes, things are bad with 
regard to feed grain. 

Feed-grain shortage to affect livestock 

The shortage precisely of feed grain constitutes the overall deficit. 
According to the estimates of the Institute for Agrarian Market Conditions, 
it is equal to 4.5m tonnes. Despite the fact that there has been a fall in 
the total numbers of livestock this year, the feed grain shortage remains 
very substantial and will inevitably affect the condition of the entire 
livestock-raising complex - which will most likely lead to growth in the 
prices of basic foodstuffs. It is natural that there are only two ways out of 
this situation. Either to use the excess food grain as feed grain (although 
there is, all the same, not enough of it) or, as in past years, to buy it 
abroad. Against the background of the worldwide tendency for wheat prices to 
increase, this way out can hardly be called acceptable to Russia. 
Particularly as the recent increase in petrol prices will not have the best 
effect on price formation anyway. 

Russia has already lost approximately 10m tonnes of grain during this 
grain-harvesting campaign - which in money terms totals approximately 1bn 

Shortage of harvesting equipment and fuel 

The disastrous condition of grain-harvesting equipment and the low level of 
provision of fuels and lubricants to peasant farms can be named as reasons 
for the situation which has now taken shape in the agroindustrial complex. On 
average, approximately 20 per cent of the grain-harvesting equipment is not 
being used in the present harvest because of faults of various kinds. 
Precisely this has resulted in such colossal losses. If the government does 
not take real steps to normalize the situation in the agroindustrial complex, 
the consequences for this basic sector of the economy could be irreversible. 
Because of such grain losses there will be a sharp drop in the supply of feed 
for livestock raising, with the result that the shortfall of meat will come 
to approximately 1m tonnes, and that of milk to 6.6m tonnes. 

Unfortunately, the shortage of equipment may also have an adverse effect on 
next year's harvest. According to specialists' forecasts, by the start of 
field work in 2001 it is necessary to repair 230,000 tractors, 113,000 
grain-harvesting combines, and more than 42,000 reapers. The cost of this 
work is estimated at almost R10bn. However, the actual potential does not 
exceed R4.5bn. The agrarian complex needs substantial federal support to 
reinstate such a quantity of agricultural equipment. 

Budget allocations 

Taking returnable funds into account, the 2001 draft budget provides for the 
allocation of R49.3bn to the agro-industrial complex. It is planned to 
channel these funds, above all, into the development of credit provision for 
seasonal work, including the recreation of the Rosselkhozbank's credit 
system, and into other measures to stimulate the activity of the 
agro-industrial complex. In addition, a more than twofold increase in 
appropriations is planned in the sphere of insuring the harvest of 
agricultural crops, and a certain proportion of the funds will be allocated 
to supporting elite seed growing and pedigree livestock raising. It is 
possible that the planned measures will produce some result next year, 
although we should not expect a cardinal improvement in the situation this 



Moscow, 5th October: The first deputy head of the Russian Armed Forces 
General Staff, Col-Gen Valeriy Manilov, thinks that Russia might have a 
civilian defence minister in the future. 

"The possibility is being considered in the light of the reform of the 
military," Manilov said on Thursday [5th October]. "The issue is not being 
discussed in the practical sphere, it's rather theoretical and prospective," 
he said. "In fact, the president could appoint a civilian as defence minister 
at any moment." 

It is a matter of "the division of powers into the political-administrative, 
which are assigned to the defence ministry, and operational, which are vested 
in the General Staff as the key institution of operational control," Manilov 

"As soon as that division is fixed in the system, the possibility of having a 
civilian defence minister will become real," Manilov said. 


Communists, Agrarians to Oppose Russian Budget

MOSCOW, Oct 5 (Reuters) - Leftist factions in Russia's parliament said on 
Thursday they would oppose the 2001 budget draft despite fierce government 
lobbying, leaving the outcome of Friday's vote hanging in the balance. 

After meeting Finance Minister Alexei Kudrin, Communist Party leader Gennady 
Zyuganov told reporters his faction and its Agrarian allies would vote 
against the blueprint, which aims to balance revenues and spending for the 
first time. 

"Everyone unanimously took the decision to vote against this budget," 
Zyuganov said. "The new government is continuing old harmful policies which 
can only worsen the situation in the country." 

Agrarian leader Nikolai Kharitonov said: "We shall vote as a bloc against." 

The State Duma, the lower chamber of parliament, is scheduled to debate the 
draft in the first of four required readings on Friday in what will be a 
major challenge for Prime Minister Mikhail Kasyanov and his government. 

The Communists are the biggest faction in the 450-seat chamber, with 87 
votes, while the Agrarians have 42. Two other factions -- Fatherland-All 
Russia and Russia's Regions -- are also likely to reject the draft. 

However, pro-government and liberal factions support the draft and the 
government may still muster enough undecided and independent deputies to push 
the document through its first reading at the first attempt -- an 
unprecedented feat. 

"I think the government's chances (for approval of the draft on Friday) are 
50:50. That is why there will be fighting for each vote," Mikhail Zadornov, a 
former finance minister and now a Duma budget committee member, said in a 
newspaper interview. 

The government has drawn up a $40-billion balanced budget which forecasts a 
four percent gross domestic product and 12 percent inflation. But many 
deputies believe projected oil export revenues have been underestimated. 

The government is eager to have the draft approved before an International 
Monetary Fund mission comes to Moscow in November for talks on a new lending 

An IMF-approved plan is necessary for the government to strike a 
restructuring deal with the Paris Club of state lenders to reduce Russia's 
debt burden for 2001. 


Kudrin sounded optimistic about the budget passing after meeting Duma 
factions earlier this week. He warned of the dangers of losing precious time 
by haggling over possible extra revenues from high world oil prices. 

The government proposes splitting any surplus revenues in half between 
foreign debt servicing and domestic needs. 

But deputies want concrete spending commitments laid down in the budget 
draft. The Communists have called for more to be allocated to defence 
spending and social welfare. Kudrin has already pledged to increase spending 
on agriculture. 

Zadornov told daily newspaper Komsomolskaya Pravda that if the government 
failed to put on paper where each extra rouble would go, it could spend the 
cash without parliamentary control. 

"If we do not write into the budget what the government must spend the money 
on, I can assure you that the finance minister will be able to use it at his 
own discretion," he said. 

"No one will be able to control him. Such is the budget legislation." 

Zadornov said he also opposed government plans to place more budget revenues 
under the control of federal authorities at the expense of regions to ensure 
more regular welfare payouts. 

"By depriving regional authorities of part of their traditional financial 
inflows the centre risks depressing the will to earn money more actively in 
the regions," he said. 

"Moreover, some governors will shun responsibility for the social problems of 
their regions." 


Los Angeles Time
October 5, 2000
Yeltsin Casts a Dry Eye Backward 
Russia: Former president recalls in his upcoming memoirs the excitement he 
felt at resigning. And no, those weren't tears at the end. 
By MAURA REYNOLDS, Times Staff Writer

MOSCOW--Now we know: It was dust. 
On New Year's Eve, when Boris N. Yeltsin raised a chubby finger and 
wiped his eye while reading his resignation speech, many wondered whether he 
might be shedding a tear, perhaps for his presidency, perhaps for his 
But no. According to excerpts from Yeltsin's new memoirs, the soon-to-be 
former president was brimming with excitement and jubilation, and the cause 
of the gesture was no more than a stray mote of dust. 
"I tried to read my inner emotions, what I was feeling, what kind of 
mood I had," Yeltsin wrote in excerpts published Wednesday by the newspaper 
Argumenty i Fakty. "And with a little surprise, I realized I was in a good 
mood. Very good, even jolly." 
The memoirs, titled "A Presidential Marathon," are Yeltsin's third and 
presumably final volume of recollections. The book will be released this 
weekend in Russia; international editions are scheduled for release Oct. 18. 
The lengthy extract details Yeltsin's last hours as president--down to 
sips of water, the ticking of clocks, the color of folders and the New Year's 
decorations at the Kremlin. 
But woven through the minutiae is a clear political message: that 
Yeltsin was not the bumbling, incapacitated president he appeared to be for 
most of his second term, and that he was not in the thrall of powerful 
advisors who pressed him to resign. 
On the contrary, according to the excerpts, Yeltsin made the decision on 
his own and carried it out largely in secret, taking great pleasure in 
surprising even his closest aides. 
"No one should think that I'm resigning because of illness or that 
someone forced me into this decision," Yeltsin recalls thinking as he 
reviewed the draft text of his speech. "I simply understood--I must do this, 
and I must do it now." 
The excerpts include little introspection and shed little light on 
crucial questions, such as why Yeltsin settled on dour former KGB chief 
Vladimir V. Putin to be his successor. The 69-year-old ex-president doesn't 
even comment on the most remarkable aspect of his resignation speech, an 
apparently humble apology for the mistakes of his volatile eight-year tenure. 
Instead, Yeltsin depicts his resignation as a kind of political joy 
ride. For instance, he seems to take great glee in having refused a phone 
call from President Clinton, asking the most powerful man in the world to 
call back later. 
"I can let myself do such things now," Yeltsin writes. "Now I'm just a 
But perhaps unwittingly, the excerpts appear to confirm that in his 
final days as president, Yeltsin was closest to just a trio of advisors, key 
members of what was often referred to as "The Family." They were his daughter 
Tatyana Dyachenko; his cunning chief of staff, Alexander S. Voloshin; and his 
biographer and aide, Valentin B. Yumashev. With the exception of Yeltsin's 
wife, Naina, other people play inconsequential roles. At least in the 
excerpts, the former president's doorman gets more ink than his defense 
Yeltsin writes that he made the decision to resign even before 
parliamentary elections Dec. 19 demonstrated swelling support for Putin, who 
was his prime minister. Yeltsin says he informed Putin of his plans Dec. 
14--and that no one else knew until much later. The excerpts appear to 
suggest that he kept his decision a secret even from "The Family" until Dec. 
28, and from his wife until the morning of Dec. 31. 
It will be up to historians to evaluate the worth and veracity of 
Yeltsin's version of events. But in the meantime, political analyst Leonid A. 
Radzikhovsky said he doubts the book will become a bestseller, at least in 
Russia. Most citizens here, weary of Yeltsin's erratic leadership, greeted 
his resignation with unfettered relief. 
"The public at large is sick and tired of Yeltsin posing as a reckless 
clown," Radzikhovsky said. "['The Family'] must have designed this book as a 
toy for Yeltsin to play with and prove primarily to himself that he is still 


Moscow Times
October 5, 2000 
Gref Wants a Public Blacklist Of All Delinquent Managers 
By Zoya Kaika

Economic Development and Trade Minister German Gref has come up with an 
ingenious way to protect able businessmen from those who are not worth 
trusting f blacklist the delinquents. 

Gref proposed on Tuesday that the government create a publicly available list 
of all enterprises in the country that have gone bankrupt. 

"In the West, having your enterprise go bankrupt is a disgrace, while here 
someone who tricked the state several times becomes a national hero," Gref 
told a Moscow conference on the deregulation of the economy. 

"Swindlers must go to prison, and those who simply did not manage to do the 
job must be put on the blacklist and become outcasts in the world of 
business," Gref said. 

Gref said he was not speaking only about public reprimands, but about 
administrative and criminal liability, as well as prohibiting further 
business activities if a person ends up on the list. 

Many of the businessmen attending the conference supported Gref's idea. 

"The list will serve two purposes f it will damage the reputation of inept 
managers, so that no one will offer them more work, and it will reveal 
information concerning the real cause of bankruptcy," said Alexander 
Buyevich, managing director of Volga. 

"Almost everyone who does business in Russia knows or can guess how many 
bankruptcies can be blamed on unscrupulous or incompetent directors," said 
Yury Lastochin, general director of Rubinskiye Motors. "In more than 50 
percent of bankruptcy cases, it is the management that is responsible." 



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