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Johnson's Russia List
11 October 2000
[Note from David Johnson:
1. Reuters: Lennon joins Lenin on Russian town map.
2. Reuters: Russian lawmakers condemn U.S. vote on alleged spy.
3. Kennan Institute dinner October 18.
4. Sharon Tennison: Postscript to Piece on JRL #4572.
5. The Globe and Mail (Canada): Geoffrey York, Russian voters
silent about signs of fraud. 'All our officials are corrupt...people
6. Moscow Times: Boris Kagarlitsky, The Logic of Gain. (re Russian
military aid to South Africa)
7. Jamestown Foundation Monitor: YELTSIN DENIES HAVING PROPERTY OR
BANK ACCOUNTS ABROAD.
8. Robert Brown: Money for the Bears.
9. Ron Pope: To Know or Not to Know English.
10. The Times (UK): Power comes at a price. In the second extract from
his memoirs, Boris Yeltsin tells how both he and Bill Clinton suffered
from systematic campaigns to destroy their presidencies.
11. Financial Times (UK): Martin Wolf, Avoiding the trap of transition:
The former communist countries that have done best have ensured that
goods can be bought more freely than judges.
12. BBC MONITORING: HERO OF THE DAY INTERVIEWS RUSSIAN PARLIAMENT
DEPUTY SPEAKER IRINA KHAKAMADA.
13. Moscow Times EDITORIAL: It's Time for EBRD to Make News.]
Lennon joins Lenin on Russian town map
YEKATERINBURG, Russia, Oct 11 (Reuters) - Most Russian cities have a Lenin
Street, but Chelyabinsk, a smokestack industrial city in the Ural
Mountains, will become the first to have a Lennon Street.
Valery Yarushin, a one-time Soviet rock star and lifelong Beatles fan, told
Reuters by telephone that deputies on the Chelyabinsk city council had
voted overwhelmingly to back his proposal to name a street after murdered
Beatle John Lennon.
``At the City Duma hearing there were only two opponents of the idea,'' he
``They said there were plenty of people in Chelyabinsk who had brought
glory to the city, and they deserved the honour. But good sense won out and
all the other deputies voted 'Yes'.''
Yarushin said he had initially proposed renaming the city's central Soviet
Street after Lennon, who was killed by a fan 20 years ago and would have
been 60 this year.
In the end the city council had not decided whether to rename an existing
street or name a new one, he said.
The Beatles were hugely popular in Russia during Soviet times, when fans
braved official disapproval to collect records of Western rock groups.
Russian lawmakers condemn U.S. vote on alleged spy
By Ivan Rodin
MOSCOW, Oct 11 (Reuters) - Russian lawmakers denounced the U.S. House of
Representatives on Wednesday for asking President Bill Clinton to consider
restricting financial aid to Russia over the case of an American charged
The case of Edmond Pope, a former naval intelligence officer jailed in
Moscow since April on charges of illegally seeking information about a new
torpedo, has strained diplomatic ties between the two countries.
The U.S. House had passed a resolution on Tuesday calling on Russia to
release Pope immediately and asking Clinton to consider cutting aid to
Russia if it does not.
The Speaker of Russia's State Duma lower house of parliament, Communist
Gennady Seleznyov, told reporters the House resolution was ``crude
interference in our criminal procedural legislation.''
``President Clinton, it seems, has decided that America can do anything it
wants,'' he said. ``This cannot stand.
``The Americans should send over fewer spies. Then we can waste fewer
resources catching them and proving their guilt.''
Washington says Pope was carrying out a legitimate business deal involving
military technology. It also says Pope, who has suffered from bone cancer,
is not getting proper medical care.
Pope is due to go on trial as early as next week and could face up to 20
years in prison if convicted.
Alexei Arbatov, deputy head of the Duma's Defence Committee and a member of
the liberal, pro-Western Yabloko party, called the House resolution ``a
great stupidity'' and said Clinton would probably ignore it.
``Sanctions against Russia would cause a crisis of international scale,''
he said. ``Who would do that over this?''
The Russian Foreign Ministry condemned the State Department last week for
issuing a warning to U.S. citizens that doing business with Russia's arms
industry can be dangerous.
The warning said in part: ``Any misunderstanding or dispute in such
transactions can attract the involvement of the security services and lead
to investigation or prosecution for espionage.''
Date: Tue, 10 Oct 2000
From: "JOSEPH DRESEN" <DRESENJO@WWIC.SI.EDU>
Subject: Kennan Institute dinner
On October 18, 2000, the Kennan Institute for Advanced Russian Studies will
hold its second annual benefit dinner in Washington, DC. This event will
be held at the Embassy of the Russian Federation. The evening's program
will include remarks by Ambassador Yuri Ushakov and a performance by the
Kozlov Dance International Youth Ensemble.
Corporate tickets are $500.00. The Kennan Institute is also pleased to
offer a limited number of tickets at the Government/Non-Profit rate of
Wednesday, October 8, 2000
6:30 p.m. Cocktails / 7:30 p.m. Dinner
The Embassy of the Russian Federation
2650 Wisconsin Ave., NW
For security reasons, we regret that we cannot accept registration at the
door. If you would like to attend or if you have any questions, please
contact Mr. Joseph Dresen at the Kennan Institute (Tel. 202-691-4100 or by
e-mail firstname.lastname@example.org) by 3:00 p.m. on Friday, October 13. Please
register by credit card (Visa or Mastercard):
Card Number & Type:
Tickets, less the cost of the dinner, are tax deductible. A receipt
detailing your tax deduction will be mailed after the event.
Date: Tue, 10 Oct 2000
From: Sharon Tennison <email@example.com>
Subject: Postscript to Piece on JRL #4572
Dear Johnson Readers,
Thanks for the response to my Oct 9 piece on US-based Internships for
Russians and the usefulness of these internships for non-English
My submission was sent at the end of day before I made my last edits
which included a host of minor points (if you are interested I can
send individually) but the most important is that PEP is funded by
the U.S. Department of State under the Bureau for Educational and
Cultural Affairs, American civic clubs and volunteers, and the
Russian entrepreneurs themselves. The State Department being the
Center for Citizen Initiatives
Presidio of San Francisco
P.O. Box 29912
San Francisco, CA 94129
The Globe and Mail (Canada)
Russian voters silent about signs of fraud
'All our officials are corrupt . . . people are
indifferent,' GEOFFREY YORK is told in Moscow
While millions of Yugoslavs have just overthrown a president who tried to
falsify election results, most Russians barely utter a peep in reaction to
reports of large-scale fraud in their own vote this year.
The evidence, gathered by a Moscow newspaper in a six-month investigation,
suggests that Russian authorities falsified more than two million votes in
the election in March, manufacturing a landslide victory for President
Without the massive fraud, the newspaper concluded, Mr. Putin would not have
captured a first-round victory by taking more than 50 per cent of the vote.
Instead, he would have needed a second round to win, damaging his aura of
The investigation by the English-language Moscow Times documents widespread
evidence of ballot-stuffing, vote-buying, bribery, administrative pressure
and the rigging of official vote counts to supply an estimated 2.2 million
extra votes for Mr. Putin.
Remarkably, however, the investigation has been greeted with deafening
silence. The evidence has been ignored or dismissed by Russia's top officials
and almost all its media outlets. Most ordinary voters have reacted with
cynicism or apathetic shrugs, even though they believe the fraud reports are
"There's no use in protesting," said Larisa Telina, a 61-year-old Moscow
pensioner. "It was always useless to fight against the authorities and now it
may even be dangerous. People are depressed and they hope Putin will help to
change things, so they don't pay attention to how he came to power."
Viktor Tarasov, a 43-year-old Moscow driver, said the Russian people are
accustomed to election fraud from the Soviet era. "All of our officials are
corrupt and people have learned not to believe anyone. That's why the people
The Moscow Times found fragments of burned ballots in a pit in the Russian
region of Dagestan, where a witness said he saw officials burning sacks of
votes for opposition candidates. An estimated 550,000 votes were added to Mr.
Putin's total in Dagestan by falsifying the vote tallies, the report said.
It also documented a mysterious increase of 1.3 million in the number of
registered voters between the December parliamentary election and the March
vote. And it noted that Mr. Putin implausibly claimed to have won 51 per cent
of the vote in Chechnya, which his army has bombed for months.
The report concludes that Mr. Putin actually received less than 50 per cent
of the vote, not the 53 per cent he officially won. That means he should have
been forced into a second-round runoff against Communist leader Gennady
A small independent newspaper, Novaya Gazeta, is one of the few Russian
publications to recount the Moscow Times's findings. Many of its own readers,
however, denounced the article, accusing the paper of seeking "the
destruction of the Russian state" and of trying to "bury our President, whom
all the people love."
One of the biggest Russian newspapers, Izvestia, wrapped itself in the
Russian flag and condemned the "American press" for meddling in domestic
affairs. The Moscow Times, however, is owned by Dutch and Russian investors.
Anton Ivanitsky, a Novaya Gazeta journalist who wrote about the
election-fraud investigation, said the cynical reaction is an example of
Russia's loss of faith in democracy.
"Ordinary people believe that all of their misfortunes are caused by
'democracy.' Now they are afraid of democracy, and they are longing for a
strong hand. They see this vision in Putin, so they don't mind any
Fear is another strong factor, he said. "The authorities have become tougher,
and the people are not so eager to argue with them."
Evidence of fraud has circulated after almost every Russian election. There
were strong indications, for example, that authorities manipulated the number
of registered voters to ensure a majority for Boris Yeltsin's new
constitution in December of 1993. But few people responded to that evidence
"For a decade, Russians have been vacating the public sphere, retreating to
their private lives and activities," said Dmitri Glinski Vassiliev, a
researcher at the Russian Institute of World Economy and International
Relations. "As a result, officialdom faces no serious opponent on its turf."
Voters, he said, have struck a bargain with Mr. Putin: "Take as much power as
you want, and let us live our private lives without another collapse."
Western governments also have largely ignored the evidence of vote rigging.
Paul Saunders, director of the Nixon Center in Washington, criticizes the
U.S. government for touting each Russian election as a major step toward
"The Clinton administration has never been willing to acknowledge the
existence of large-scale fraud in Russian elections.
In a sense, electoral fraud in Russia is like the pink elephant in the room:
No one can avoid seeing it, but few are willing to talk about it."
Western countries sent almost 400 observers, including three Canadians, to
monitor the presidential election on March 26. The observers were
co-ordinated by the Organization for Security and Co-operation in Europe,
which issued a positive report on the vote, praising it as a "benchmark" for
Russia's evolution as a democracy.
However, the OSCE also reported "serious" evidence of irregularities.
Officials from the Canadian Department of Foreign Affairs said they are
concerned about the evidence revealed by the Moscow Times investigation.
October 11, 2000
The Logic of Gain
By Boris Kagarlitsky
Boris Kagarlitsky is a sociologist. He contributed this comment to The Moscow
Novaya Gazeta recently published material that in any European country would
elicit a deep political crisis. But in this country, the Oct. 5 piece was
just another article whose political significance went almost unnoticed. It
didn't even become a sensation or topic for further discussion by the media.
We're talking here about none other than the delivery of Russian military
equipment to South Africa during the period of apartheid.
According to Novaya Gazeta, in 1991-93 the government organized the transfer
to the South African state defense corporation Armscor aviation equipment
worth $80 million, to be used for modernizing Mirage planes for the defense
of the apartheid regime. In other words, at a time when United Nations'
sanctions forbade the delivery of such military equipment to South Africa,
the higher-ups in the Russian government, with the personal approval of
then-President Boris Yeltsin, sent plane engines and military rockets to
South Africa ostensibly for "technical experiments." And since government
structures couldn't work directly with the South African government, they
operated through the firm Marvol Management Ltd. The military equipment was
sent to Africa f and never returned. The Russian state lost $80 million f and
the equipment deliverers pocketed the money for their services.
The history of post-Soviet Russia is full of such incidences. Theft is not
just a part of its administrative and political life; it is its goal, its
essence, almost its raison d'Ðtre. But this incident goes totally beyond the
usual bounds of pilfering from state coffers and technologies.
What is truly amazing is that even Stanislav Sumskoi, author of the article,
sees here nothing other than run-of-the-mill theft. He is bothered by the
theft and by the fact that secret military hardware was sent abroad even
though its export was forbidden. He also points to the authorities' crude
flouting of the laws of their own land. But the main point here is not the
theft, but that the Russian authorities perfectly consciously violated the UN
sanctions (which Russia had publicly supported), that our government assisted
the military machine of a racist regime. One gets the impression that in
today's Russia, everything comes down to the bottom dollar f bottom ruble f
and that no one is capable of seeing a moral or political problem.
Explaining this history in terms of the incompetence of the Kremlin
leadership of that period is pointless. In the first place, incompetence is
never a justification. In the second place, it is clear from the supporting
documents Sumskoi presents that this deal went through with the full
knowledge of the Russian authorities. In response to the proposal of working
out a military partnership with South Africa, Yeltsin introduced a
resolution: "To work energetically, but carefully, considering the
development of the internal situation in South Africa and the [UN] sanctions.
Not to give an opportunity for [us to be] accused of violating the
sanctions." Those in Moscow knew exactly what they were doing.
Theoretically, it would be possible to justify the position of the
authorities, if not formally and legally, then at least from the political
point of view that, in South Africa in the early 1990s, there were movements
afoot toward democracy. But in 1992, the question of general elections was
still up in the air, and delivery of arms to the regime was actually a factor
in preventing its move toward democracy.
Worse yet, Sergei Chemezov, general director of Promexport, in speaking to
the press about the development of trade with South Africa, noted that the
coming to power of the black majority would put the brakes on military
cooperation. In other words, hopes were placed on the white-minority regime
because it would be easier to engage in "possible military cooperation"!
After the lifting of sanctions, South Africa's military structures could
renew their relationship with traditional Western partners f and Russian
contraband shipments would no longer be needed.
The political meaning of the actions of the Russian leadership was a
violation of sanctions f nothing else. It's telling that no one even thinks
of negating the actual fact of the deal; no one denies the legitimacy of the
documents published in Novaya Gazeta. They're only arguing about whether the
deal was advantageous, and to what degree there was theft on the Russian
Documents show that the authorities understood that their actions conflicted
with international norms, but they went forward with the plan. It's hard to
know what inspired the Kremlin: a desire to make money from a contraband
shipment of military hardware, or ideological solidarity with the apartheid
What followed was understandable. In trying to keep the matter quiet, the
government had to entrust the deal to a shady middleman, which then got the
better of inexperienced Muscovite bureaucrats.
This story is coming to light only after all the main players have retired.
Yeltsin has full amnesty for past actions. And the new president answers only
for the period he has held office since the March election. In a similar
circumstance in the United States, articles about secret deals between the
U.S. leadership and Iran became a huge political scandal, causing people to
mistrust both Ronald Reagan and the entire Republican administration.
But in Russia, there's no scandal. That, in itself, is the biggest scandal.
Not only the authorities, but even its critics, are no longer capable of
thinking along generally accepted moral lines. Duty, honor, responsibility f
they all yield to the logic of gain.
Many say they find national humiliation in the fact that we can't finish up
the genocide of a small people in the northern Caucasus. But almost no one
sees national disgrace in our country's delivering military equipment to
South African racists.
Jamestown Foundation Monitor
October 10, 2000
YELTSIN DENIES HAVING PROPERTY OR BANK ACCOUNTS ABROAD. The Mabetex scandal
has also splashed mud on former President Boris Yeltsin and members of his
family. Last year, the Italian newspaper Corriere della Sera claimed that
Mabetex chief Bahgjet Pacolli had told Swiss investigators that he had
provided more than US$1 million to President Boris Yeltsin, his two
daughters and former presidential security chief Aleksandr Korzhakov as
"pocket money" for a 1994 trip to Budapest, Hungary. According to other
reports, Pacolli made funds available to Yeltsin and his daughters via
credit cards. Both Pacolli and the Kremlin categorically denied the
stories. In 1997, Britain's The Independent reported that Mabetex had
brokered the purchase of two boats for Yeltsin in Britain, costing more
than US$490,000 (see the Monitor, August 26, September 9, 1999). The weekly
newspaper Versiya reported last year that Yeltsin, his daughter Tatyana
Dyachenko and Borodin held accounts in Switzerland's Banca del Gottardo,
and published a facsimile of what it said was a 1995 agreement to open an
account in the bank bearing Yeltsin's signature. Officials with the bank
called the alleged bank agreement a "blatant forgery" (see the Monitor,
November 19, 1999).
Yeltsin, in a CBS interview which aired over the weekend, denied having any
bank accounts or property abroad and put his net worth at US$300,000.
Excerpts of the interview with Mike Wallace, host of "60 Minutes," CBS's
weekly news magazine program, were shown last night on Russia's NTV
television (NTV, October 9). Yeltsin has been giving interviews timed to
coincide with the publication of the third volume of his memoirs. Over the
weekend, Ruslan Tamaev, the Prosecutor General's Office official leading
the probe into Mabetex, extended the life of the investigation by one
month. On December 24 of last year, just a week before Yeltsin resigned as
president, Tamaev had extended the Mabetex probe for six months so that
investigators could conduct a detailed review of the presidential
administration's finances (see the Monitor, October 9, January 3).
Date: Tue, 10 Oct 2000
From: "Robert Brown" <firstname.lastname@example.org>
Subject: Money for the Bears
As Cohen presents in his book, the technical assistance "crusade" has for the
most part failed.
Mere attempts at replication of the USA in Russia and FSU did not work, and
actually continued the old system of getting money for nothing. The komsomol
boys and girls quickly realized that foreign money could be had by saying the
right words and writing the right reports and promising to foster free market
and civil society. The only adaptation in the lexicon of funding requests is
the elimination of the passe building socialism and five-year plans and the
inclusion of de riguer impact indicators and deliverables. Gullible foreigners
were smitten by the allure of Russia and their own idealistic dreams of making
a new world happen.
Does this sound familiar? Like the turn-of-the-century Russian
who took up the cause to create a new communist state, the foreigners became
the vanguard and tried to change Russia into something that the Russians did
not even envision for themselves. Therefore, it is no wonder that under the
nose of the foreigners -- the believers in the great ideal -- the Russians
advantage of the foreign good will to line their lairs for their own future.
The lining of lairs brings to mind the recent expose about the ingenious scams
run in the CIS to relieve people and organizations of their cash and quickly
send said monies to offshore accounts, (Money Trail, Moscow Times, Lucy
Komisar). These scams, I wager, are employed by clever persons in many of the
operations of foreign donor agencies in the CIS.
Additionally, the charges by the United States against Harvard University,
Professor Andrei Shleifer, Jonathan Hay and their wives, and especially
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 raise questions about the crusading
managers of technical assistance funds in the CIS.
How can we be assured that funds, distributed via the crusading agencies
EBRD, TACIS, DFID, OSI, Mott, Ford and other foreign groups using nonprofits
and private organizations, have not been similarly absconded? Does anyone
Would someone who appropriates these monies to these agencies care if they
realized the number of pensions, teachers and doctors salaries that could have
been paid inside these countries before these funds were misdirected to fat
With whom should the final fiduciary accountability lay? Should it lay with
the grantee or grantor? Subgrantee, subgrantor?
With the charge against Harvard University for lack of supervision, the
standard for accountability has been stringently defined.
What is an adequate level of supervision?
What is the cost of adequate supervision?
Does any agency conduct adequate supervision for funds distributed in corrupt
Or is supervision just a fashion, a political distraction, and an obstacle to
the means and the ends for the ever committed "crusaders", who would wish to
turn a blind eye so money is kept flowing freely to their pipe dream of a
Russia in the West s likeness.
Date: Tue, 10 Oct 2000
From: RonPope42@cs.com (Ron Pope)
Subject: To Know or Not to Know English
Sharon Tennison, President of the Center for Citizen Initiatives in San
Francisco, makes some good points in JRL #4527. She is absolutely correct in
my opinion in emphasizing the need for well trained experienced interpreters
to work with non-English speaking Russian exchange program participants. The
problem, of course, is that besides CCI's PEP program, almost none of the
exchange hosts have the resources to provide such interpreters, especially
for extended stays. In short, I believe the PEP program's resources are
This does not mean that programs have to be limited to those who already know
English. Russians have a tremendous incentive to learn English because of
its status as the "international language," especially of business. What is
lacking is adequate funding for English language training. Especially in the
provinces, what Russians can afford to pay for good quality courses is
limited. Our American Home Project in Vladimir is probably unique in its
ability to be self-supporting. But even we could benefit considerably from
at least some modest additional funding. For example, we could bring in more
specialists to assist us with developing curriculum materials if we could
cover even just their travel costs. (There are almost no teaching materials
available that are specifically targeted at Russian speakers.) There are
other things that we could very effectively and "profitably" do with
I think both the US government and American foundations are missing out on a
MAJOR opportunity to "make a difference" by not providing substantial funding
for American English programs throughout the FSU and Eastern Europe. If good
programs taught by native speakers are available, many Russians will find the
time to study English. As noted, they have a tremendous incentive to learn
the "international language"--while most Americans have little incentive to
learn Russian. This will then increase the pool of applicants in the years to
come who can get maximum benefit out of visits to the US--without the aid of
expensive interpreters. This will also greatly facilitate communication with
visiting Americans, with the result that there will be more accurate and
effective "cross-cultural communication." We need to be "investing" in the
future, and not just concentrating on current programs.
None of this means that more Americans shouldn't be trying to learn Russian.
(Our offerings in Vladimir now include an Intensive Russian Program.) It is
just that as a matter of practical fact, more Russians are going to learn
English--and we need to provide them with more opportunities to do so from
native speaking Americans. (The British, Australians, and Canadians are
doing more in this area than is the US. Why?)
Ron Pope, President
The Times (UK)
11 October 2000
Power comes at a price
In the second extract from his memoirs, Boris Yeltsin tells how both he and
Bill Clinton suffered from systematic campaigns to destroy their presidencies
Bill Clinton will be remembered not so much for his accomplishments as for
Monica Lewinsky. Fortunately, he was not removed from office. But the
interrogations and testimony of the President became public knowledge. That
is the price of power. Every step and every word are examined under a giant
magnifying glass. God forbid that you should stumble or make a mistake.
Nothing is forgiven.I empathise with Clinton because I have suffered the
indignity of impeachment. Of course, they are two different stories. However,
I consider their simultaneous occurrence as a kind of warning that aggressive
moralising, played as a political card, can be powerfully destructive. In my
case, our leftist Russian parliament blamed the Russian President for the
collapse of the Soviet Union. But behind the smokescreen of ideology there
was the same settling of scores that occurred in Clinton's scandal. The
political establishment (or the leftist segment of it in Russia) could not
forgive us for our stubborn pursuit of our goals. Clinton had so confounded
his political rivals that they had nowhere to go. So they turned to exposure
and provocation. I could say the same thing about the Russian impeachment.
After losing the first and second presidential elections, the Communists
exploited everything: the fall of the USSR was declared a conspiracy; the
mistakes of the first Chechen campaign were called a crime; economic
difficulties were called the genocide of the Russian people. Every move I
made, every word I spoke, all my health problems from my heart operation to
my bronchitis became a pretext for political scandal and for obstruction in
the Duma. Still, I think history will set the record straight.
I recall my first meetings with Clinton in 1993. For me, he was the
personification of the new generation in politics. He lent hope to the idea
of a future without wars or confrontations and without the grim ideological
struggles of the past. Clinton was ready to meet me halfway.
No other US president came to Moscow so many times. (And, as Bill has said,
probably none will do so in the future.) No other US president has engaged in
such intensive negotiations with the leaders of our country or provided us
with such large-scale aid, both economic and political. Sometimes it seemed
that we were establishing a new world order. But Russia's adjustment to
democratic values was more painful than we predicted. International financial
institutions alone could not create the conditions for economic improvement.
Russia and the US often diverged. We had different interests. Every new
disappointment put Russian society into shock, while Americans began to see
Russia as a country of bandits. Americans dissatisfied with the pro-Russian
policy of the White House, and Russians who were trying to disrupt the
Kremlin, were in unholy alliance.
But this setback was temporary and cannot be compared to the gigantic step
forward already made in the era of the Bill and Boris contacts. No scandals,
intrigues or political jockeying could destroy this new Russian-American
interaction. The United States and Russia had ceased to be enemies.
In late 1996, after Clinton's re-election, Russian intelligence sent me a
report that Clinton's enemies intended to plant a young provocateur in his
entourage who would spark a scandal capable of ruining his reputation. The
prediction seemed too far-fetched. In any case, Clinton, with his firm grasp
of reality and his brilliant aides, would surely figure out the plot. During
my last meeting with Clinton, I thought I might give him the text of this
dispatch. But then I decided not to traumatise the man; he had already
suffered too much.
DESPITE the received wisdom, I have never clung to power. In both 1996 and
2000, the decision whether or not to resign was not about myself but what I
would leave behind me. Several times, both before and after 1996, I discussed
with my closest aides the prospect of an early resignation. I told them that
I was tired and that the country was tired of me. But again and again I was
convinced that my departure would threaten the democratic process. Who among
the new politicians could have been nominated as a national leader? Who was
ready to take responsibility for a country with a transitional, crisis-ridden
economy, a leftist parliament and misfiring mechanisms of civil society? Even
while I struggled with these personal decisions, I had to maintain a bold
stance to the world. It was crucial that Russia preserve its international
relations, especially with the leaders of Western Europe, China and Japan.
Thankfully, I had been blessed with two great allies, Helmut Kohl and Jacques
Chirac. Not only had we grown up together at the negotiating table, but we
are also from the same mould. All three of us are from the same generation.
We are direct, outspoken, even harsh. We feel a sincere sympathy for one
Only someone who has attended high-level diplomatic meetings knows how much
depends on the atmosphere and the contact between people. Security and trust
are often built by diplomacy in shirtsleeves, the diplomacy of friendship. I
first came up with the idea of a meeting in shirtsleeves at a forum in
Strasbourg in 1997. We decided to meet in March. Chirac and Kohl flew in to
Moscow around midnight and departed the next day.
It was a memorable occasion. Chirac called it a world premiere. It was
evident even to the most cynical of observers that something unusual was
about to take place. At the same time it was made clear that our informal
diplomacy posed no threat to Atlantic solidarity. The special relationship
shared by Germany, France and Russia was a given for the Atlantic alliance.
Besides, discipline within Nato is firm. Britain and the United States are
the steel backbone of Nato. And I am sure that Kohl and Chirac co-ordinated
our three-way contacts with the Americans. The latter had a fairly mild
reaction to the meeting.
The British did not react so calmly. They started sending signals to our
foreign ministry saying that they too were ready to participate. This pleased
me in one sense but I felt that the presence of the recently elected Tony
Blair would upset the psychological balance. The whole point was to have a
personal, friendly discussion between three old-style leaders. In short, we
sent a reply to the British that the casual three-way meeting should be tried
first. We would then see where to go from there. I proposed to Chirac and
Kohl that we discuss the concept of a Greater Europe extending to the Urals
as the basis for an entirely new pan-European policy.
We discussed a full range of international programmes: a 21stcentury
aircraft; a London-Paris-Berlin-Warsaw-Minsk-Moscow transport corridor,
heading toward Yekaterinburg and Siberia, which would include a high-speed
autobahn and railway; a rapid-reaction force to cope with technological and
natural disasters; an exchange of undergraduate and graduate students; and
the creation of a French-German-Russian university. We agreed to hold a major
Moscow-Berlin-Paris exhibition. We understood that our troika had been called
to counterbalance the disequilibrium that occurred in Europe after Nato
borders came closer to Russia.
To quote Kohl: France and Germany carry a special responsibility for the
policies of the European Union. They want to do all they can so that nobody
gets the impression, in the world or in Moscow, that the processes occurring
in Europe are leading to the isolation of Russia.
The entire meeting was infused with an important idea: something was needed
to oppose the American pressure â€” a will to collaborate, an independent
European determination. The English-speaking world did not share our
enthusiasm. The British press wrote that the three-way meeting was the first
step towards an almost undisguised anti-American bloc in Europe.
Russia's domestic crisis was another setback to casual diplomacy. When our
financial system crashed, the Western European leaders reacted with great
sympathy. They telephoned frequently, offered the help of technical
specialists and made statements of support. But Russia's default and failure
to pay back its loans was a painful issue in international affairs. The
second meeting of the troika had to be postponed indefinitely. And then the
Kosovo crisis struck.
During the course of one year, our relationship went into reverse. The war in
Yugoslavia allowed the Americans to put North Atlantic solidarity back on the
track they wanted. But nothing is in vain. I am convinced that present-day
leaders will come back to the idea of a Greater Europe and the construction
of a new European civilisation, together with Russia. I felt overwhelming
fear, then crushing pain IT HAPPENED on June 26, 1996, a few days before the
second round of the presidential elections. I came home to the dacha from
work about 5pm. It had been a stressful and difficult day. I took a few steps
down the hallway and then took a break in an armchair in the living room. I
thought I would rest then go upstairs and change my clothes. But suddenly a
very strange sensation came over me, as if somebody had picked me up under
the arms and carried me away. At first I didn't experience any pain, just
felt this overwhelming fear. Then the pain sliced straight through me, an
enormous crushing pain. Thank God there was a doctor nearby who immediately
understood what had happened to me. All I could think was Lord, why am I so
unlucky? It's almost the second round. There are only a few days left.
My entire schedule of meetings between the first and second election rounds
had to be cancelled. The pretext was a change in tactics; the President's
victory was assured. At the same time my election team had to try to prevent
any leaks about my illness. I am sure that if we had given the victory to
Zyuganov or postponed the elections, Russia would have suffered a far worse
I decided not to cancel a meeting with General Alexander Lebed. Lebed had
garnered 15 per cent of the votes in the first round. On June 18 I had
appointed him Secretary of the Security Council. Our agreement before the
second round was that without waiting for the votes to be counted he was to
take on the issue of Chechnya. This was vital to both of us.
So on the second day after my heart attack, June 28, we turned the living
room, where they had put my bed, into something like an office. The cameraman
spent a long time figuring out how to get everything extraneous out of the
picture, especially the piano, which had always been there, and the bed. He
covered up the medical equipment.
Lebed was told that I had a cold and he didn't ask any extraneous questions.
I distinctly recall his black shoes, white socks and a loud checked jacket. A
rather unpolitical thought flashed through my mind: He's in his summer
Hour by hour, my strength returned. Still, my doctors forbade me to walk
around and now there were only a few days before July 3 and the second,
decisive round of the elections. The question arose: where would the
President and his family vote? We discussed the various options. The first,
voting on Osennaya Street in the district near our Moscow address, was
immediately rejected. The building had stairs, a long hallway, and it was a
long walk to the street.
The second option was the sanatorium in Barvikha, not far from our dacha,
where I was staying. People always voted at the sanatorium. There was a
polling station there. I continued to worry. I asked: What kind of voting is
it if I'm in my bathrobe and slippers? But in the end I agreed.
With Zyuganov and I running practically neck and neck, everything depended on
Lebed's and Yavlinsky's voters. Who would they vote for in the second round?
Would they turn out at all? I tried not to think about it.
On Sunday, the day of the second round, with an enormous effort I went to the
ballot box. TV companies, journalists and wire reporters followed. I gathered
my strength and smiled and said a few words. Then it was back to my bed where
I awaited the result.
It came quickly enough. And I could hardly believe it. I had won. At the
beginning of the year not even my closest aides believed that it was
possible. I had won despite all the forecasts, despite the low ratings,
despite the heart attack and the political crises that had haunted the first
term of my presidency.
Although I wanted to jump up and dance, I lay on my cot, staring tensely at
the ceiling. Fortunately I had my loved ones and friends around me. They
embraced me and gave me flowers. Many had tears in their eyes.
© Boris Yeltsin 2000. Extracted from Midnight Diaries, to be published next
week by Weidenfeld & Nicolson (Â£20). Buy it from The Times Bookshop,
8080, for Â£17 including p&p
Financial Times (UK)
October 11, 2000
COMMENT & ANALYSIS: Avoiding the trap of transition: The former communist
countries that have done best have ensured that goods can be bought more
freely than judges
By Martin Wolf
The fall of Slobodan Milosevic is more than an important moment in the
history of the Balkans. What was, in effect, the last communist
dictatorship in Europe now starts on its journey towards the west. This is
a crowded path. What can Serbia learn from almost 11 years of transition
Admittedly, its starting point is different. Yugoslav communism was based
on worker management rather than central planning. But property rights are
just as ill-defined. The Milosevic regime was quite as repressive as most,
not to mention vastly more dangerous to its neighbours.
For these reasons, the Serbs have just as much reason to make the journey
as other former communist countries, both to cement their democracy and
secure greater prosperity. As Janos Kornai, the distinguished Hungarian
analyst, has noted, "capitalism is a necessary condition of democracy".*
Similarly, in the long run a market economy will outperform socialism
because it is the only system that rewards innovation. Before the second
world war, the then Czechoslovakia had much the same real income per head
as Austria. Today, the income per head of the Czech Republic is half the
Austrian level. In the same way, compare North with South Korea or the
vanished East Germany with its western counterpart.
A successful transition is more than worthwhile. It can be achieved. In its
assessment of the experience, published in the latest World Economic
Outlook, the International Monetary Fund argues that "where reasonable
fiscal discipline was maintained and meaningful structural reforms were
pursued, inflation typically remained well contained and output recovered
more rapidly than in countries where stabilisation and reform efforts were
less consistent and vigorous". Equally, "the recorded increases in poverty
were sharpest in those countries where the reform process has stalled,
stultifying entrepreneurship and new growth opportunities, and where
privatisation favouring insiders and poor targeting of social safety nets
have permitted a lopsided accumulation of wealth".
Reform works. But countries with the longest experience of communism and
economies most distorted by its mania for large-scale heavy industry, have
also found it hardest either to manage reform or achieve a healthy
recovery. Communism has left a deep footprint - so deep that many countries
are finding it almost impossible to climb out of it.
Intriguingly, the transition countries that are closest to the output
levels of a decade ago are the ones that have either reformed least -
Belarus and Uzbekistan - or have reformed most - Hungary, Poland, the Czech
Republic, the Slovak Republic, Slovenia and Estonia. The former have
compelled unreformed enterprises to continue producing, however useless
their output. The latter have started to show the dynamism and flexibility
of a market economy. In between, neither communist fish nor capitalist
fowl, lie the semi-reformed.
These unhappy countries are stuck in a transition trap. It is no accident
that they were also among those most deeply marked by the communist
experience. But it is possible to describe the trap more precisely. Much
attention has been paid to the supposed failure of many of those advocating
reform to recognise its institutional preconditions. But the error is more
subtle than that. It concerns the origins of personal behaviour as much as
A sophisticated market economy rests on an understanding of the distinction
between what can be bought and what cannot be: goods, yes; judges, no. The
more deeply was communism embedded in people's brains, the more difficult
have they found it to appreciate this distinction. The scale of the rewards
available to those who ignore it has further reinforced socially malign
behaviour. In Russia, for example, the failure to complete price
liberalisation for many valuable commodities opened opportunities for huge
private gain. So did insider privatisation. What economists call
"rent-seeking behaviour" then flourished, to the enrichment of the ruthless
few, and impoverishment of the hapless many.
This process is carefully analysed in a recent paper from the World Bank,
on the basis of a huge sample of enterprises.** The authors distinguish
between state capture, influence and administrative corruption. The first
refers to the capacity of companies to buy the rules of the game they
desire; the second to their ability to achieve the same aim through their
insider connections; and the third to petty bribery, aimed at influencing
the implementation of existing laws, rules and regulations.
The conclusion is that these various ways of influencing the state's
behaviour can be worthwhile for those who use them, but do great damage to
the economy as a whole. Because of the private benefits of state capture,
those who succeed have no interest in promoting a neutral state that would
help their competitors or outside shareholders. Having benefitted from the
partial liberalisation and privatisation that brought them wealth, these
interests have a strong incentive to prevent further reform.
If the insiders succeed in halting the emergence of a law-abiding and
law-enforcing state, anyone engaged in business is forced to behave in the
same way to compete. This creates a downward spiral. It also means that
privatisation of large-scale business undertaken in the wrong policy and
institutional context, far from advancing reform, becomes an obstacle to
Transition has been hard. Inevitably, some wonder whether it has been
worthwhile. The answer for all who care about personal freedom and
political democracy is that it has been. We also know that the combination
of liberalisation with institutional reform and macro-economic
stabilisation does work. Inevitably, however, countries with the longest
and most bitter experience of communism have found it hardest to reform.
Some seem caught in a transition trap, with the state no longer capable of
purposive autonomous action but prey instead to self-seeking private
The lesson of experience is the importance of moving as swiftly as possible
through this trap. The need is to establish the institutional norms of a
proper market economy before entrenched private interests corrode the
effectiveness of the state altogether. To have the right sort of
market-oriented democratic society, one needs the right sort of state.
Creating it is likely to prove as big a challenge for little Serbia as it
already has for its mighty patron, Russia.
*Janos Kornai, "What the Change of System from Socialism to Capitalism Does
and Does not Mean", Journal of Economic Perspectives, Winter 2000.
**Joel Hellman, Geraint Jones, Daniel Kaufmann, "Seize the State, Seize the
Day", Policy Research Working Paper 2444, www.worldbank.org.
HERO OF THE DAY INTERVIEWS RUSSIAN PARLIAMENT DEPUTY SPEAKER IRINA KHAKAMADA
Source: NTV International, Moscow in Russian 1532 gmt 10 Oct 00
The deputy speaker of the State Duma, the Russian parliament lower house,
Irina Khakamada, was interviewed in NTV's 13-minute-long "Hero of the Day"
programme on 10th October by Marianna Maksimovskaya. Khakamada spoke about
the government's decision not to take measures to further strengthen the
rouble. She said that the rouble rate, which she assessed as R18 per
dollar, was very high and "with such an expensive rouble rate we can in
fact kill the growth which is evident within out industry, and thus we will
not stimulate exports and our products will not be competitive, because
there will be huge amounts of imports. Therefore the Central Bank is in
fact keeping the rouble rate down." She assured viewers that the balance of
payments was good, attempts were being made not to take more credits and
inflation was falling. She added that "at the moment an optimal
rouble-dollar rate has been found, and the government and the Central Bank
ought to back up that trend without announcing anything". She added that
owing to the improved financial situation, particularly more favourable oil
prices, there would not be a monetary crisis again.
As co-chairperson of the Union of Right Forces party, Khakamada said that
whatever decision had to be taken by the party would only be in support of
the president and the government if it corresponded to the party's
ideology, that they were in fact "slaves" to their "values". She said that
her party had not set any deadlines with regard to Vladimir Putin's and the
government's performance, because it was pointless, but that her party
would fight any attempt to curb freedom of speech and information and
Asked whether the president had defined his policy, she replied "I think
so. His main priority is to make Russia strong, to make it a great power, a
mighty country which can speak as an equal both to the United States of
America and the European Union. And here there are many different threats,
and very often we notice them. But what holds him and those around him back
from tough, authoritarian steps, is that the main instrument in the coming
into being of this great power, that is what the Communists have in their
slogans, is the market, a socially oriented, efficient, competitive economy
which is part of the world market. Therefore this is why the president and
the government seem to have two faces." She added that "I see what Putin is
up to, and where he is drawing support from a liberal economy, I am his
ally, because there is a trap. If the economy becomes liberal, then a new
elite will grow up. New people will come forward. And they will sweep away
an authoritarian regime anyway. If the economy is frozen, if the
bureaucrats have suppressed it completely and new owners, a new mentality,
new people do not emerge, then no matter how much democracy there is, it
will all be a farce, which in actual fact is just a guise for that same
Khakamada talked about the controversy surrounding the Yabloko-Union of
Right Forces campaign in the St Petersburg elections. She concluded that
she regarded herself as a member of a "constructive opposition".
The video showed Khakamada being interviewed in the studio.
October 11, 2000
EDITORIAL: It's Time for EBRD to Make News
When the television industry evaluates itself later this month by handing out
its highest annual awards, the TEFIs, there will be no award for best news
programming. It seems that last year there was no news as such. It was all
lies and propaganda.
The TEFI cancellation is another minor yet clever chess move in the Kremlin's
endgame against NTV. Why worry, for example, that NTV's parent company
Media-MOST is being hounded into the grave by the Kremlin? After all, NTV
never existed in the first place. There already is no news broadcasting in
Russia f the entire TEFI category has had to be canceled.
Even as they voted to scrap the news TEFI, television academy members freely
conceded that NTV committed far fewer propaganda sins against its viewers
than any other station. But as ORT's Konstantin Ernst so memorably put it,
"All the big channels were engaged in political agitation last fall þ [and]
the TEFI award is for 'best information program,' and not 'least effective
So NTV is to be pilloried as dishonest f but also scorned for being
ineffectively dishonest. (After all, ORT got its man elected. Where's the
TEFI for "best proto-fascist manipulation of the popular will"?)
The Kremlin's greatest PR triumph since the election is the way Vladimir
Putin has edited himself out of the discussion of NTV's "business problems."
Yes, NTV owes Gazprom money. But that was never a problem right up until the
day Gazprom's CEO emerged from a Kremlin meeting to mutter something about
not liking NTV's news coverage. From then on, it's been one "business
dispute" after another f right up to the arrest of Vladimir Gusinsky and his
amazingly cynical release from jail in return for signing away his company
under the watchful eye of Press Minister Mikhail Lesin.
To argue that Gusinsky is having "business troubles" is roughly equivalent to
asserting that a man being clubbed to death with a bat is a poor baseball
"Business" is simply the weapon of choice being used on NTV. It has no other
Now Gazprom is shopping around for a "foreign investor." About a year ago in
this space, we suggested the EBRD, which is charged with fostering democratic
freedoms via its investments.
Instead, the EBRD is pondering sinking $300 million into Gazprom and LUKoil f
where its investments aren't needed, thanks to windfall world oil prices, and
will have no broader influence.
The EBRD should wise up, buy into NTV, leave the existing journalists in
charge f and aim for next year's TEFI.