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Johnson's Russia List


October 29, 2000    
This Date's Issues: 4607   


Johnson's Russia List
29 October 2000

[Note from David Johnson:
DJ: I want to thank those who have responded to my questions
in recents issues of JRL. It is very helpful (and usually
encouraging) to me to get feedback and advice from the recipients.
My query today: Why are you interested in Russia? This is a
question addressed both to professional concerns and broader
motivations. I will pass on interesting responses--if you give
me your OK.

1. AFP: Putin to visit exiles' last home from home.
2. BBC Monitoring: Russia's Yavlinskiy urges army reform, better 

3. BBC Monitoring: Russian navy is a shadow of its glorious past, 
TV says.

4. The Russia Journal: Vera Kuznetsova, Marriage, divorce and a 
lack of romance. (re businesmen and the Kremlin)

5. The Russia Journal: Andrei Piontkovsky, Who is Mister Gore?
RUSSIA COMMENT. ("examining the roots of conflict in the North Caucasus, 
Shy Zakya blames the rebirth of Russian nationalist feeling for the 
gathering tensions.")

7. Peter Lavelle: Russia’s Peculiar Ruble.
8. Marian Dent: Stratfor article on ADRs/4604.
9. Arthur McKee: Re: Uhler (4603).
10. Wladislaw George Krasnow: Lieven/Huntington. (re Russophobia)
11. Vlad Ivanenko: Six Russophobic assumptions.
12. Daily Express (UK): Victoria Fletcher and Ken Hyder,
Hackers 'pass Microsoft code to the Kremlin'] 


Putin to visit exiles' last home from home

The cemetery at Sainte-Genevieve-des-Bois, the final stop on President 
Vladimir Putin's visit to France that commences Sunday, provides a graphic 
illustration of Russia's turbulent 20th-century history. 

Tsarist princes lie alongside Soviet-era dissidents, agents of Moscow hobnob 
with artists and exiles among the more than 10,000 Russians who have found 
their last resting place in this town south of Paris whose only other claim 
to fame is the abundance of its floral displays. 

Since the Russian expatriate community in France decided to open an old 
people's home at Sainte-Genevieve in 1927 to cater to the needs of the 
swelling number of post-revolution emigrants, the Russian corner of the 
municipal cemetery has continued to expand, taking in successive generations 
of exiles. 

In time the cemetery's fame became such that thousands of Russian emigrants 
opted to settle in the town and the nearby suburb of Saint-Michel-sur-Orge. 

The "Russian home" still shelters around 80 pensioners, although only half of 
them now are Russian. 

It also houses the throne to the former Russian empire, moved there from the 
Russian embassy in Paris after the Bolshevik regime was recognised as the 
ruling authority in Moscow. 

Next Wednesday Putin will place a wreath on the graves of the 1933 Nobel 
literature prize-winner Ivan Bunin, who emigrated from Russia in 1920 and 
died in Paris in 1953, and Viktoria Obolenskaya, a heroine of the resistance 
who was tortured by the Gestapo in front of her husband, a Russian priest. 

The date chosen for the visit, November 1 (All Saints' Day), had no 
particular significance, said Jean de Bouishe, grandson of the tsarist-era 
princess Meshcherski who founded the "Russian home". 

"In Russia the dead are remembered every day, and particularly at Easter," he 

"Since the fall of the Berlin Wall, the Russian authorities have taken an 
interest in this cemetery because the people buried here include not only the 
White (anti-Bolshevik) Russians but the whole progressive intelligentsia of 
the period 1880-1930." 

Other noted residents of the Russian cemetery are prince Felix Yusupov, the 
aristocrat who instigated the murder of Rasputin in December 1916 and died in 
Paris as late as 1967, grand-duke Gabriel Konstantinovich, great-grandson of 
the 19th-century tsar Nicholas I, writer Viktor Nekrasov, filmmaker Andrei 
Tarkovsky, singer Alexander Galich and several dancers, notably Serge Lifar, 
Olga Preobrazhenskaya and Rudolf Nureyev. 

Nureyev's grave, one of the most visited in the cemetery, is dominated by a 
sculpture by Ezio Frigerio representing an oriental carpet (the dancer was an 
enthusiastic collector of carpets) draped over a travelling bag. 


BBC Monitoring
Russia's Yavlinskiy urges army reform, better funding 
Text of report by Russian NTV International television on 28th October 

[Presenter] A congress of the Yabloko party has opened in Moscow Region's
Golitsyno. In line with tradition, the congress will be held behind closed

No sooner had it begun than party leader Grigoriy Yavlinskiy made a
statement of some importance. Our special correspondent Aleksey Pivovarov,
who has been following developments at the congress, is now joining us live. 

Hello, Aleksey: What is the agenda of the congress and what did Grigoriy
Yavlinskiy tell the delegates? 

[Correspondent] Good evening, Tatyana: This is Yabloko's ninth congress,
whose agenda envisages the election of its leadership body, the Central
Council. They say that there will be many more representatives of younger
generations on the council. Also today, the delegates heard Grigoriy
Yavlinskiy's political report. In addition, it is planned that an appeal
will be made to Russian President Vladimir Putin. And this is the reason
for the appeal: 

Experts from Yabloko have studied next year's budget and have concluded
that a total of R88bn, or some 3bn dollars, was not taken account of by the
government as revenue. In its turn, Yabloko has already thought about how
the billions could be spent. Its view is that the money can be used to
complete the reform of the military and, as early as next spring, make
drastic cuts in the number of those called up for military service through
the channelling of the money into doubling the pay of servicemen, both
contractual-service soldiers and officers, as well as into social security
payments and the provision of housing for them. 

Yabloko leader Grigoriy Yavlinskiy has agreed to be interviewed. Good
evening, Grigoriy Alekseyevich: My only question is that how can it be that
whereas neither the president nor the government know about the R80bn of
revenue, Yabloko does? 

[Yavlinskiy] In reality, the government is very well aware of the money in
the form of revenue. Moreover, the government has already acknowledged the
existence if one of the three billion dollars, that is R28.5bn, and has
already used it. It has been given back to regions as VAT. That is, the
R28.5bn has been given to regions by way of financial decentralization,
something for which have pressed all along. 

However, the remainder, some R55bn, is more than enough immediately to make
cuts in the number of those called up for military service, for the call-up
to be phased out within a year and for the transition to be made to
contractual service and professional instruction of the military, together
with the doubling of pay as correctly mentioned by you. 

The government knows about the money. The simple fact is that if it is not
in the budget, it can be spent anyhow. If, on the other hand, it is
reflected in the budget, in principle there can be control over the use of
this money. The congress is looking at the detail of the issue, as it is
more general in its nature. Furthermore, the congress plans to adopt an
appeal to the president to the effect that it is his duty, no less, to
tackle this country's major problems, particularly so against the backdrop
of the incidents that have plagued the armed forces. 

[Correspondent] It remains to be added that it will be an appeal to the
president rather than the prime minister, since, as Yavlinskiy explained,
it is down to the president to deal with this issue and it will have to be
Vladimir Putin's personal decision. 


BBC Monitoring
Russian navy is a shadow of its glorious past, TV says 
Text of report by Russian Public TV on 29th October 

In the 21st century only a powerful fleet, supported by a striking aviation
group, can defend the state's geopolitical interests. In the next 10 years
the navy forces of foreign countries will double their offensive combat
capabilities. Over this period of time more than 1,500 foreign warships
will be launched. At the same time, a third of these ships will join the
fleets of Asian countries and Australia. What can one say about the leading
powers when even small countries are trying to have powerful fleets? 

The latest naval policy of our country can also be told in figures. In 1989
the USSR shipbuilding industry built 78 submarines and ships, while in 1998
only four ships were built. Over the past nine years the total number of
Russian warships was reduced by a factor of seven. The share of the navy
funding is less than a quarter of the military budget. And the amount at
the disposal of the Russian navy is currently 25 times less than the amount
available to the US navy, for example. As a result, after pooling their
resources, all four of our fleets can currently equip at the most four
submarines and between eight and 10 warships for combat duty. The others,
owing to a lack of fuel, are standing anchored. 

Only 12 of our nuclear submarines, 10 diesel submarines and 37 ships are
regarded as fully combat ready in this country. For comparison, the Turkish
navy currently has 27 submarines and 118 warships combat ready. According
to official information of the navy's main staff, at present in the Baltic
Sea Sweden has three times the strength and Germany five times the strength
of Russia's naval power. In the Black Sea the Turkish navy has twice the
strength, compared with us. 

Forecasts of military specialists give little comfort. The 120 ships of
main classes which Russia is to have by 2013 are unlikely to ensure
security of our naval borders. There is only one way out of the situation:
to revive the Russian navy which we will have to go through for the fifth
time in the history of our fatherland. Let this revival be decisive and the
last one. 


The Russia Journal
October 28-November 3, 2000
Marriage, divorce and a lack of romance
By Vera Kuznetsova
A group of prominent Russian businessmen ­ Anatoly Chubais, Vladimir
Potanin, Oleg Deripaska and Mikhail Fridman ­ declared their intention to
head the Russian Union of Industrialists and Entrepreneurs (RSPP), last week.

They were to be joined by Kakha Bendukidze (general director of Uralmash),
Mikhail Komissar (president of Interfax), Oleg Kiselyov (chairman of the
board of directors of Impexbank) and Vladimir Mordashev (general director
of Severstal). 

The media broke the news, but as the players didn’t particularly want to
explain their plans, an awkward silence followed. Not everyone understood
why a group of such well-known businessmen suddenly decided to unite under
the umbrella of a staidly conservative organization like the RSPP. 

But there’s a whole story behind the "equally distanced" businessmen’s
efforts to create their own Solidarity. The authorities have shed old and
worn oligarchs Boris Berezovsky and Vladimir Gusinsky and got themselves
some new ones instead. There aren’t many of these neo-oligarchs, but
they’re already on everyone’s tongues. They are Roman Abramovich, owner of
Sibneft and de-facto owner of Russky Aluminy, Oleg Deripaska, Abramovich’s
partner from Russky Aluminy and Alexander Mamut, the head of MDM bank. Of
the old guard, the only oligarch to stay on is Fridman, president of Alfa

The authorities look to have everything sorted out now. The rigorously
applied equal distance principle is for public consumption, and the
just-as-rigorous selection of "close" oligarchs is for internal use. But
society, including many businessmen, still hope to change the rules somewhat.

President Vladimir Putin’s round table meeting with representatives of big
business was the first attempt to put the dialogue between big business and
the authorities on a new footing. For a long time, the Kremlin feigned not
to understand what businessmen wanted. The equal distance principle had
been proclaimed, after all, and the businessmen were supposed to sit quiet
and not complain. But the businessmen, who have tasted enough pluralism by
now, didn’t want to be tame creatures in the hands of Putin and Prime
Minister Mikhail Kasyanov. 

True, upon weighing the political situation, the businessmen decided, of
their own accord, that they wanted to stop being oligarchs. But even if
equal distance is for everyone, the question naturally arose in the
business community: How to ensure that the rules of the game are equal for
all, and without any neo-oligarch tricks?

It was at this moment, just after the round table with the president in
July, that some businessmen formed a "discussion club" to look at how the
business community would work in the new political environment. The club’s
members included Chubais, Potanin, Bendukidze, Kiselyov, and even a couple
of oligarchs ­ Fridman and Deripaska. 

The mission wasn’t a simple one ­ to reach an agreement that the overall
interests of the business community were more important than the corporate
interests of specific sections of it. Once this agreement was reached, the
task was then to talk with everyone else ­ with the authorities, the public
and the press.

A single conversation with the president wasn’t enough to satisfy the
businessmen, nor did they welcome the creation of a half-tame Council on
Enterprise. Some of the participants of the discussion club said they
needed a professional association to defend the interests of Russia’s young
business class in a still-developing economy. 

They had two options, either to create a business Solidarity, or to use a
pre-existing organization. The RSPP seemed to fit the bill for what the
businessmen were looking for, though it would be easier to just close the
reddish union headed by Arkady Volsky and open a new club of interests than
go through the lengthy and politically perilous process of reforming it.
Reform is fraught with the danger of public conflict and new wars between
the oligarchs, which would only further undermine the already weak
political positions of Russian big business. 

Moreover, the reformers (whose plans were unexpectedly revealed without
their authorization) haven’t reached agreement among themselves. But it is
not easy for a group of such ambitious individuals to make a show of unity.
For this reason, the new business association could end up stillborn. At
the moment, negotiations are still going on, and deadlines for implementing
the project are periodically postponed. 

The main opponents of any sudden change to the status quo are those who
have already found themselves a niche closer to the new authorities. The
only reason this group is still playing the equal rules game is the
instability they feel looking at the "cold" and indifferent Putin. Also, if
they can’t stop the process, they may as well head it. In the second week
of November, we should know in more detail how this romantic attempt by
Russian businessmen to unite in a time of complete divorce from the
authorities will end. 

(Vera Kuznetsova is a member of the governmental and presidential press
pools and an long-time observer of the Russian political scene.)

The Russia Journal
October 28-November 3, 2000
By Andrei Piontkovsky

In Russia, an acting president can decline to participate in television
debates. It’s enough to speak with a serious face the ridiculous phrase
thought up by some speechwriter ­ "I don’t want to discuss in public the
difference between Tampax and Snickers."

It’s not clear who the acting president thought he was in this case, Tampax
or Snickers. But it is only in Russia that voters can elect a man who no
one knows to be their president and then spend the next few years asking
each other: "Who is Mr. Putin?"

America’s Mr. Putins would, maybe, just love to avoid participating in TV
debates and all the other wearying trials that await them on the road to
the White House. But, in the United States, this would be equivalent to
political suicide.

The team of Texas Gov. George Bush was anxious as the three-round debate
between the presidential candidates drew near. Before the debates, Bush
lagged behind his Democratic rival, Al Gore, by several points. Most
experts, both American and foreign, figured that as a more experienced
polemicist and orator, Gore would easily win the debates and decide the
fate of the presidential campaign.

The self-confident Gore flew onto the stage with a beaming smile and blew a
kiss at the crowd. He revealed an arsenal that included dozens of similar
images worked out in the finest detail, each one a marvel of perfection and
chef d’oeuvre of the spin doctor’s craft. 

The range of masks was extraordinary ­ decisive intonations, wise nods of
the head, ironic glances hiding seemingly bottomless depths of secret
knowledge and competence not given to the common mortal. There were
skeptical sighs and condescending mimicry during his opponent’s replies;
solemn sorrow, carefully rehearsed stage movements, touching concern for
the little old lady and her poodle who came from the back of beyond to hear
how Gore planned to defend her prescription drugs, and the modesty of the
brave as he recalled his "military feats" in Vietnam.

But the very perfection of these masks unmistakably gives away their
artificial nature, making their falseness visible to any observant viewer
and voter. This kind of "virtual" or "plastic" politician who is nothing
more than a collection of images reflects not a purely American phenomenon
but a general world trend. (British Prime Minister Tony Blair is an
example, as is Vladimir Putin in many respects. This is why robot-President
Putin, programmed by his PR specialists, looked so helpless and
unconvincing when he came face to face with the Kursk disaster, not
foreseen by his spin doctors.)

George Bush looked less polished and more on the defensive. He allowed
himself to seem vulnerable, and this made him seem much more natural and

The snap poll, asking who won the debate after the first round, gave the
following results: 48 percent for Gore and 41 percent for Bush. But winning
debates is not the same as winning hearts, and after the first debate, the
drift began in the other direction. 

Al Gore also "won" the final debate, by a margin of 48 percent to 46
percent. But when voters were asked, in the same survey, which candidate
they thought was more believable, the outcome wasn’t even close. It was
Bush by a 50 percent to 41 percent margin; more honest and straightforward
­ Bush by 45 percent to 29 percent; more likeable ­ Bush by 60 percent to
31 percent. This was a verdict that now only remains to be sealed by the
Nov. 7 elections. 

(Andrei Piontkovsky is director of the Center of Strategic Research.)

From: Institute for War & Peace Reporting <>
Date: Fri, 27 Oct 2000 


COMMENT. In the second of a two-part series examining the roots of conflict
in the North Caucasus, Shy Zakya blames the rebirth of Russian nationalist
feeling for the gathering tensions
By Shy Zakya in Nalchik
Shy Zakya is a political commentator in Nalchik, the capital of

The conflicts which have racked the North Caucasus over the past decade
have, for the most part, been triggered by growing nationalistic trends in
the highest echelons of Russian government.

It seems clear that the Kremlin is actively working to create a "Greater
Russia" at the expense of the federation's ethnic minorities. The Russian
passport no longer carries a "nationality" clause; the term "Russian
Federation" has almost disappeared from the state media. Most importantly,
the nation has been divided into seven "provinces" (okrugi) which coincide
with the old Soviet military districts.

In fact, this is no coincidence - many of the provinces are run by governors
with a military background who make no allowances for the ethnic diversity
of their subjects. The idea is simple: no nationalities, no problems.

Duma deputies, government officials and the state-controlled media all
conspire to promote the concept of a unified Russian state. Ethnic Russians
represent the majority, they argue, whilst "people of Caucasian nationality"
(popularly known as "blacks") have somehow insinuated themselves into the
federation. In fact, many genuinely believe that the Caucasian tribes
originally came from abroad and drove an indigenous Russian population from
the region.

It is these "blacks" who won't leave Russia in peace, who should be "rubbed
out even on the toilet", to quote President Vladimir Putin's immortal
phrase. They are convenient scapegoats for the surrounding chaos and the
ongoing economic malaise.

And so, history turns full circle. The Russian people are content to look on
their president as "the good tsar" and submit themselves to his will. It is
a legacy that dates back to the days of Ivan the Terrible when the vast
majority of the population were serfs who imagined the tsar would bring
order to the nation and provide for all.

The dignified and freedom-loving nature of the Caucasian peoples came in
sharp contrast to the cowed subservience of their Russian neighbours.
Naturally, the Russian empire devoted considerable efforts to stamping out
their "bad influence".

Now, once again, the Russian Federation is attempting to fulfil its
imperialist ambitions - even though it no longer has the strength of will or
the economic resources to do so. In 1994, the state was eager to launch its
"small, victorious war" in Chechnya and demonstrate the extent of its
powers. The second war is being waged to satisfy the ambitions of generals
who were denied victory in the first.

Consequently, the Russian people are caught in a vicious circle. The
politicians and bureaucrats continue to finance imperialist wars while they
secretly ransack the state till. In compensation, they give their subjects
"a great idea" - the belief that they are the "chosen people" who will one
day inherit a powerful empire.

Russia's imperialist policies are largely responsible for the growth of
religious extremism in the North Caucasus. And, to a certain extent,
Wahhabism and Islamic fundamentalism are reactions to the dramatic rise of
the Russian Orthodox Church as an official state body.

In a bid to fill the ideological vacuum left by the collapse of Communism,
the Kremlin has resurrected the old formula of "Orthodoxy, Autocracy and
Nationality" - a belief encapsulated in the words "Holy Russia" which have
begun to figure widely in speeches, newspaper reports and political
manifestos across the Russian Federation.

Consequently, after 80 years of suspended animation, the Orthodox Church has
finally come to its own. Now, the Church takes an active part in state
politics, refusing to condemn the war in Chechnya and often sharing the
public stage with Kremlin politicians.

A TV report from Chechnya on the eve of the Orthodox Christmas well
illustrates the point. The footage showed a Russian artillery officer
cheerily yelling, "Merry Christmas" as he ordered his battery to fire on a
rebel-held Chechen village.

Equally disturbing are the falling standards in education across the Russian
Federation. Many young people are being fed conflicting information about
religious groups and persuasions, with the result that some later embrace
highly subversive religious movements which prey on the na<ve and gullible.

And ignorance is not confined to the darker reaches of the former Soviet
Union. Recently, a television host on the programme Play the Harmony
interviewed delegates from the Greek Cultural Centre. "What, are you Russian
Orthodox too?" asked the TV host in astonishment. The delegates patiently
explained that it was the Greeks who bought Christianity to Russia 10
centuries ago.

The situation is much more serious in Islamic religious circles where
philosophy, history and culture have been severely eroded by the years of
Soviet rule. Today, extremist groups have gained a wide following amongst
the Chechens, the Karachai and the Balkars, especially in remote mountainous

In some areas, religious beliefs have become blended with the idea of
Pan-Turkism - the creation of an Islamic state which would embrace all the
Turkic peoples from Siberia to the shores of the Mediterranean. 

Pan-Turkism was given a new lease of life by the breakdown of the Soviet
Union and today continues to inspire many disaffected North Caucasian
peoples looking for new ideological banners under which resistance to
Russian rule can be united.

The change in the balance of power that has taken place in Russia has
serious implications for the whole of the North Caucasus. Peace and
stability cannot be achieved through force or political manoeuvrings. Any
diplomatic initiatives in the region must take into account the specific
nature of the Caucasian peoples - their mentality, traditions and historical


Date: Fri, 27 Oct 2000 
From: "Peter Lavelle" <>
Subject: Russia’s Peculiar Ruble 

SKATE’s Capital Markets Russia: Peter J. Lavelle, Russia’s Peculiar Ruble 
(re the lighter side of ruble)

Money in Russia is certainly problematic. In terms of its value,
attractiveness, and symbolic meaning the Russian ruble remains an ambivalent
enigma at home and abroad. The fate of the ruble, in a fitting way, very much
parallels the journey Russia has embarked upon since 1991. It has had its
highs and lows, hopes and tragedies, as well as a number of mutations. 
Throughout, it has remained a barometer of Russia’s complicated transition
toward a new future. 

What really is money and what is the value (or rather the meaning) of the
Russian ruble? Literally, the word money is derived from the Latin term
which was one of the names of Juno, the Roman goddess whose temple was used as
a mint. Historically and in practice, anything acceptable in payment of a
can be called money, its acceptance is sufficiently widespread, but the
principle application of the term is to any sufficiently universal medium of
exchange, such as minted coins (i.e. liabilities of the government) and back
credit notes. 

In less developed economies the coin itself is of value i.e. an intrinsic
capacity to exchange against other goods, independently of the state’s promise
to sustain or enforce that exchange when that coin is made of gold or another
precious metal. The reliance on ‘valueless’ tokens as embodiments of official
promises indicates a confidence in the stability of the economy: where this
confidence disappears, barter may come to replace the monetary system. A
strong currency is about certainty and economic stability. 

Money has the following functions: it is a medium of exchange which replaces
barter, and so facilitates transactions; it is the store of value, which
facilitates savings, it is a unit for the measurement of value, which
facilitates accounting. In all of these its value lies in no use apart from
its potentiality to exchange against what is useful independently. Money is
like oil that lubricates the entire economic machine. If it is of low grade,
the economy is no better. 

Money also plays an important social-symbolic role. Money, or this case
currency, represents the place of its origin. More to the point, currencies
represent countries and their economies’. Strong currencies represent strong
economies, weak ones weak economies. Very much akin to a passport, some
currencies are welcomed everywhere, while some are shunned. 

Russia’s recent history with money has been a challenge. Prior to 1991,
banknotes and the very meaning of economic value were suppressed or
nonexistent. A wealthy person was not necessarily one with money, but
rather a
well-connected individual with access to privileges provided by the state. 
Since 1991 access to or the ability make money gave some freedom while others
have been sentenced to a new form of serfdom. This is not the same divide of
rich and poor seen everywhere else in the world. The difference in Russia is
two-fold. First, being paid for one’s labor is not universal. Second, some
earn more valuable foreign currencies. Thus, Russia has at the very least a
two-tier monetary system; three if we include barter transactions. Like
Russia’s famed internal passport, some Russians have more access to the
domestic market and the world than others do. 

Russia’s currency has another problem. The ruble, if it is not too
impolite to
say, is not a very attractive currency. In a telltale sign about this
country’s current historical situation, Russian banknotes do not portray
Russians (historic, contemporaries, or otherwise). The statute on the 500
ruble banknote is just that, a depiction of statute depicting a person. Other
human representations are from mythology - in of itself an interesting
comment. Most countries choose from a wide array of politicians and
individuals from the world of the arts. However, like it or not, for good or
bad, politicians appear to be the most common personage printed on a nation’s

The ruble is different. Why aren’t there depictions of people on Russian
banknotes? The reason is very simple: whom would you put on? Politicians
never been in great favor in Russia. Politics is all too often understood as
power (power usually used toward unpleasant ends). What about musicians
then? Russia has produced some of the finest classical music composers.
but is the national tradition about classical music, especially dated from the
19th century. No, not really. This applies to artists as well. While many
great works come to mind, which engenders the essence of Russia for the
Russian today? Difficult to determine to say the least. How about a
figure? Well, the Orthodox faith took a real battering in the past century;
most Russians probably can’t name an important religious figure in their
history, or they simply might object to having a religious figure on their
currency. And writers? Surely Russia’s rich literary tradition deserves to
represent the nation. Well, there are some drawbacks here as well. Most of
Russian literature is either politically motivated or perceived to be
politically motivated. 

Russia has had the best or worst combination of having writers who were into
politics and politicians who were writers. However, there is an exception and
possible solution for Russia’s less than attractive banknotes. A solution
just may engender greater pride and, who knows, a greater sense of value for
Russia’s currency. At the very least, Russian money could be unique and
aesthetically engaging. 

What I propose is unorthodox. The answer is Pushkin. During last year’s
200th anniversary of his birth, Alexandr Pushkin was the pride of all
Russians. Last year, Russians could not get enough of him. He was not 
only a great talent, but
also a symbol of what Russia was then and what Russia can be in the future.
My solution is the introduction of the “Pushkin banknote series”; a series
celebrating his life and work not just his face. I am not aware of such
experiment in the world. But then again this Russia, a country with very
specific problems, demanding unique solutions. 

In a telling way, a county’s currency is a snapshot of its financial, social,
and historic present. What would be the world like if Russians could be as
attached to a “Pushkin” as Americans are to the “greenback”? In such a world,
I can’t help but believe the goddess Juno would be proud to be the “Pushkin”

Peter J. Lavelle
Head of Research
IFC Metropol
Moscow, Russia


From: "Marian Dent" <>
Subject: Stratfor article on ADRs/4604
Date: Sat, 28 Oct 2000 

Regarding the recent Stratfor article on Increasing the Risk of Investing in
Russian Companies, I am not personally an expert on the subject of ADR
voting rights, but I have had some long discussions with someone who was
involved in drafting the particular amendment in question and it seems to me
that there is a second side to the story.

Apparently, as currently practiced, the nominal ownership position of the
depository banks is not protecting ADR holders and this is what prompted the
amendment. It is precisely the bank's ability to turn voting control of the
stock over to the company directors, as Stratfor mentioned, that causes the
problem. I understand that, in the competition to become a depository bank
for an ADR issuance (which is apparently quite lucrative), it has become
customary for the depository bank/nominal shareholder to agree with the
Russian issuer to allow the issuer's directors to vote the stocks that
underly the ADRs. Apparently this way to raise money without actually
losing any control is a big portion of the great attraction of issuing ADRs
for Russian companies.

I understand that the current proposal to allow the ADR holders, in other
words the beneficial owners rather than a mere nominal owner, to vote
directly is designed to return control to those who have a real incentive to
vote in their own interest. Stratfor's comments about the bank losing the
ability to force the issuer to act is valid, but only if we assume that the
bank is actually exercising that influence. And the negative effect of that
loss is only valid if we further assume that the ADR holders are small
holders rather than large funds that might themselves have some influence
over an issuer's actions.

Moreover, I understand the proposed amendments go further than just making
the issuers responsible to the ultimate holders rather than to the bank. I
haven't seen the draft myself, but from what I have been told, a provision
in it states that when ADRs are not voted by the ultimate holders, and when
part of the issuing company is owned by the Russian state (as is usually the
case), then the unused voting rights would revert to the state and not to
the company directors. So basically the amendment substitutes the Russian
state for the depository banks in cases when the ultimate owners choose not
to exercise the rights themselves.

This reassertion of control by the state might itself have some real
drawbacks of course (which I don't think I need to get into), but the idea
is to exercise more control over the actions of the issuing company
directors rather than to exercise less. So that is the second side to the

As I mentioned, I'm merely speaking on the basis of information I've been
told by a friend, so I have forwarded the Stratfor article to that friend
(who is an expert but who unfortunately is not JRL subscriber) in the hopes
that he can provide more detailed comments.

Marian Dent
ANO Pericles
ABLE (American Business & Legal Education) Project
Tverskaya Ul 10, Suite 319
Moscow 103009 Russia


Date: Fri, 27 Oct 2000 
From: "W. Arthur McKee" <> 
Subject: Re: Uhler (4603)

Critics of the so-called totalitarian school such as Walter Uhler do
little good when they paint their opponents with such a broad brush.

Though Martin Malia, Richard Pipes, and Zbigniew Brzezinski may have all been
anti-Soviet, the intellectual bases of each of these "school members" was very
different from the others. To mention only the most obvious differences,
Martin Malia believes that Soviet Communism was largely the product of the
application of Marxist ideology to real-world politics, while Pipes views
it as
more of a product of Russia's long-standing patrimonial political traditions. 
Malia took a much more historical approach to Soviet Communism than did
Brzezinski, whom Uhler rightly criticizes as having an altogether too static
view of the system.

The main difference between Malia and Cohen is NOT that Malia believed that US
foreign policy forced the reform policy of Gorbachev and therefore the
of Soviet Communism, while Cohen believed that change was generated from
within. Episodes of reform communism are a necessary part of the system,
according to Malia. Where Cohen and Malia differed was in their belief in the
viability of reform communism -- Cohen believed (and perhaps still
believes) in socialism with a human face, whereas Malia does not

It is ironic that Uhler criticizes the totalitarian school for focusing on the
effect of US foreign policy on Russia. Aside perhaps from Brzezinski, the
other two members of that "school" that he mentions now argue that Russia's
current muddle is mostly of its own doing -- a product of decades of illiberal
policies and contemporary missteps. Cohen's most recent work, on the other
hand, takes US and western statesmen to task for foisting a neo-conservatist
ideology on Russia and argues for a far more activist policy to save Russia. 
Who now suffers from illusions of western power?


Subject: Lieven/Huntington
Date: Fri, 27 Oct 2000 
From: "Wladislaw George Krasnow, PhD" <>

Anatol Lieven raises an extremely important issue when he points
out "the existence of deliberately structured prejudices in Western
media coverage" of all things Russian (JRL #4587, Oct. 17). Calling
those "structured prejudices" Russophobia, he gives a number of
persuasive examples. His
critics miss the point, if they think Lieven is calling for
Russo-philia. As I understand his appeal, Lieven is calling for greater
balance, objectivity, and fairness in coverage of Russia.

I have no doubt that he can defend himself against his critics. However,
I cannot help noticing that Maris Ozols, while picking on minor points,
simply ignores Lieven's main argument that Communist crimes cannot be
blamed only on the Russians, that, for instance, "Red Latvians had
played a key part in Lenin's revolution, and returned in large numbers
to Latvia to help impose Stalinist rule on their Latvian compatriots."

As to Miriam Lanskoy's response, one may sympathize with her implicit
concern with possible misuse or even abuse of the "highly emotional
label 'russophobe.'" But again, I don't think that Lieven uses it
indiscriminately. He would not want to--and neither do I-- in any way,
stifle objective criticism of Russian government (or U.S. government)
or even Russia's (and Western) historical traditions and records. What
needs to be discerned and condemned is the "sin" of russophobia, not
those who occasionally might indulge in it, due to ignorance or fashion.

And the "sin" is real, pervasive, ubiquitous, and afflicting not only
media, but scholarship and policy-makers. In fact, the indulgence in
Russophobia was one of the key factors that prevented Western
sovietologists from understanding the true nature of Communism--and from
predicting its downfall. More than twenty years ago I debated against
Professor Richard Pipes who alleged in his writings that Soviet
expansionism was due more to the alleged "Russianness" of Soviet
leaders, especially to their peasant origin, than their Marxist ideology
("Richard Pipes's Foreign Strategy: Anti-Soviet or Anti-Russian?"The
Russian Review, April 1979; reprinted in the British Encounter magazine
in April 1980)

Later, in my book, Russia Beyond Communism: A Chronicle of National
Rebirth (published by Westview Press, 1991, under the name of Vladislav
Krasnov), I argued that the resurgence of Russian nationalism in the
wake of glasnost should be welcomed, that, besides its extreme and
anti-Western manifestations, there were benign, moderate, and healthy
such as Solzhenitsyn's nationalism (he prefers to call it Russian
patriotism, as distinct from the ideological "Soviet patriotism") which
deserve sympathy and understanding, if not support from the West.

I also predicted that the resurgence of Russian national self-awareness
woul be the key factor in the (then forthcoming) fall of Communism in
the Soviet Union. Condemning Russophobia as morally reprehensible and
politically blind, I took to task the Russophobic tendencies in the
writings of Zbigniew Brzezinski, Henry Kissinger, Richard Pipes, and
Hugh Ragsdale, all of whom seemed to prefer Soviet Empire to a new
Russia, if it were constituted on national foundations. They feared, in
Kissinger's words, that, should the Soviet Union disintegrate, "In the
end, Russian nationalism may outweigh liberalism and provide the motive
for cohesion that communism seems to have lost...The West will be faced
with an autocratic state stretching over two continents and possessing
30,000 nuclear weapons what emerges will be most comparable to the
imperial Russia of Czarist times." (Now we may wish that there were such

In contrast, I argued that "Only by re-establishing its own national
identity--by restoring itself as a unique civilization that has
something of Europe, something of Asia, and much more that is entirely
its own--can Russia assume its rightful place in the global community"
and "serve as a magnet for a commonwealth of good neighbors" gravitating
toward the Russian civilization.

Of course, arguments, such as this, were roundly ignored by U.S.
foreign policy-makers. Instead, apparently yielding to Russophobia and
triumphalism after the collapse of the Soviet Union, they did everything
to bend the emerging new Russia to its knees, weaken it and reduce it to
the status of raw materials supplier.

The results are well-known: instead of a free-market economy we helped
to create "nomenklatura capitalism," instead of democracy--oligarchy,
instead of the rule of law--ubiquitous corruption, presided over by the
autocratic (and erratic) ruler of the Kremlin to whom the White House
gave its blessings. The results were also: the shrinking of Russian
economy well beyond what America had experienced during the depression,
the collapse of social and healthcare services, and the loss of life
like in war time. Russia was, still is, on the brink of demographic

Characteristically, we delivered our "assistance" to Russia in violation
of our own free-market principles: the U.S. government simply granted
the monopoly on giving macro-economic advice to Yeltsin's government to
a group from Harvard University. The requirement for open bidding was
circumvented "For foreign policy considerations." Some of the principals
of that Harvard group are now criminally charged by U.S. court..

In addition to our cynical meddling in the feeble new Russia's domestic
affairs, we added insult to injury by a reckless expansion of NATO,
followed by the "humanitarian" bombing of Russia's historical ally,

No wonder that, while completely failing to re-make Russia in our image,
we only succeeded in weakening it to the extent that its very survival
became precarious. We also succeeded in discrediting Western-sponsored
reforms, humiliating and antagonizing the Russian people to the point
distorted, malignant, caricature varieties of Russian nationalism, like
the Zhirinovsky movement, asserted themselves.

However, even our success, inspired as it was by Russophobia, was of
dubious nature. Leaving aside the morality and our hypocritically
professed democratic values, our pragmatic sense is challenged by this
cynical question: By weakening Russia the way we did, didn't we succeed
beyond what is good for even our own national security interests?
I certainly think so. For one thing, we created more enemies than
friends among the Russians, the vast majority of whom, rejecting Soviet
propaganda, felt nothing but good will toward the West in 1991.
Secondly, we created a power vacuum in the entire northern half of
Eurasia, a power vacuum that neither the U. S. nor its allies are
capable or willing to fill in. This was an invitation to instability
that flew in the face of our long-term geopolitical interests.

Fortunately, the Russian people had enough sense to put in power a
younger leader who vowed to restore Russia to a great power. Stretching
as it does across two continents, Russia can be only a great power--or
power at all. For, one country's power should be commensurate with the
territory it is expected to control. It remains to be seen whether
Vladimir Putin will be able to fulfill what he promised. Since, by
meddling in the Russian affairs the way we did under Boris Yeltsin we
made Putin's task immensely more difficult, the best thing we can now
do--not only for Russia's sake, but for ourselves--is to stay on the
sidelines and pray that he succeeds. Hopefully, he can do it without
resorting to more autocratic means than his predecessor.

When Mr. Lieven warns against excessive Russophobia, he, in effect,
for less arrogance, more humility and more introspection on our part. He
questions the prevailing assumption that just because the West has a
greater democratic tradition and prosperous economy, it has always acted
right and can do no wrong. I have my list of Western "wrongs," but this
a different subject.

On a more practical level, if I understand him correctly, Lieven
suggests that the indulgence in russophobia is not only unfair to the
Russians, but ultimately harmful to the West's own interests. Instead of
trying to make Russia "bow to US wishes," Lieven suggests that it is
more profitable to seek "limited co-operation" with Russia on many
issues, while opposing on some others. It is this "limited
co-operation," which the West needs as much as the Russians, that "is
threatened by the irrational hatreds and ambitions of Western

Didn't Samuel Huntington remind us, in his book "The Clash of
Civilizations: Remaking of World Order," that what the West, especially,
the "missionary nation" of the United States, in their
self-righteousness, call "globalization" and "universalism," may seem,
to the rest of the world, just plain old Western imperialism? In our
post-Communist triumphalism, bordering on hubris, we certainly behaved
like such imperialists in the eyes of the Russians.

We forgot that, to assert Western values as universal--and I submit
that, in my personal views, many of them deserve to be universally
accepted--we have to
practice abroad what we preach at home: a sensitivity and respect for,
and desire to learn from, the multi-culturalism of the entire
constellation of remarkable civilizations, including the Russian one,
that illuminate our globe. The indulgence in Russophobia deprives us of
such sensitivity.

To prevent "The Clash of Civilization" about which Huntington warns, we
need not only a balance of powers, but a balance of civilizations. And
for this balance we may need to ally ourselves not only with
nation-states, like those in NATO, but with other than Western
civilizations. Russia is both a core nation and
civilizational magnet. We should respect both Russia's national core and
its magnetic field. After all, it may only strengthen a future alliance.

The indulgence in Russophobia blinds us to such eventuality.

W. George Krasnow
Russia & America Goodwill Association


Date: Sat, 28 Oct 2000 
From: Vlad Ivanenko <>
Subject: Six Russophobic assumptions

I watch the debate on Russophobia with selfish interest (for one of my
projects I collect evidence and theories on failed markets in Russia). The
last piece by Edwin Dolan was especially thought provoking and I seized the
opportunity to construct a prototype Russian based on six assumptions
postulated on JRL before. As the working tool I employed the assumption of
individual rationality.

I hoped to generate a concept that I could use later. Yet, what appeared in
the end was a portrait of an old top bureaucrat. Let us check reasoning.

1. "Historical continuity and change resistance". This stylized Russian likes
what was before and likes what is now. Apparently, he was not a rank-and-file
in the Soviet system in order to benefit from it and is still in charge.
2. "Conspiratorial environment and natural lying". The environment, in which
this person operates, is tightly controlled ("nothing happens by accident")
and disinformation pays. Tight control is indicative of principal-agent
relation with the principal exercising wide discretion over the agent who
defends using private information, which is not easy to discover. So, this
environment is hierarchical and, apparently, there are few independent sources
of information available to all sides.
3. “Always expansionist”. The Russian in question has interest in neighboring
areas and uses means that are unavailable to the other party. An average
Russian is not superior to his neighbors, thus, he uses some organizational
mechanism to impose his terms.

Conclusion: since this Russian is a top guy in a hierarchical structure that
can be used abroad, he should be either a multinational or government official
with Soviet career past.

I think, the list of assumptions postulated before is helpful to explain what
kind of information is important (or available) to people labeled as
Russophobes but I fail to see how it advances understanding of transitional
processes in that country.

Vlad Ivanenko,
Univ. of Western Ontario


Daily Express (UK)
29 October 2000
Hackers 'pass Microsoft code to the Kremlin' 

Russian hackers behind the raid on Bill Gates's computer giant Microsoft's 
innermost secrets have stolen the capability to hack into virtually any 
on-line PC in the world. 

And experts fear that information may now also be in the hands of the 
successor to Russia's fearsome KGB. 

Detectives also admit that the technology used to get the company's programs 
from its own headquarters is now so advanced it makes the hackers virtually 
impossible to trace and they are almost certain to escape justice. 

They believe the crimes are part of a highly sophisticated intelligence 
operation that can be linked with elite members of Russian high society. 

One international detective said: "These are very young, extremely 
intelligent computer experts who are committing these crimes. 

"They are highly organised and cover their tracks very well by using a 
complicated network of people and computers. With the poor economy in Russia, 
it is not surprising that they see the wealth in Europe and want some of 

"And with the computer skills they have, they know they can get it. It can 
take months to find out who they are, and even then, pinning evidence on them 
is almost impossible." 

Experts are terrified by the implications of the latest raid. Whoever stole 
the formula at the heart of the ubiquitous Windows program will be able to 
hack into any PC in the world which uses it and is connected to the internet. 

The hack has already been traced back to St Petersburg and it is thought that 
the FSB - the new, post-Soviet KGB - will themselves have a copy of the 
formula because they have access to all local telephone lines. 

A computer security expert said: "The whole telephone network in St 
Petersburg was configured to ensure that the KGB had access to everything 
passing through the lines, so they will have a copy of these source codes 

"Whether they are going to keep them, or whether the material will find its 
way into the hands of criminal gangs is unclear." 

Over the past few years, Russia has become a breeding ground for computer 
hackers as the large number of technical colleges has spawned a generation of 
IT experts. 

Most hackers who have been caught are young graduates, often under the age of 
25. Many answer internet adverts for computer programmers, planted by 
organised crime outfits in Moscow, St Petersburg and Murmansk. With their 
vast technological knowledge, it can take them a matter of mere hours to hack 
into companies around the world to steal data, credit card details and phone 

Last month, experts from banks across Europe warned that the biggest threat 
to security was from Russian hackers. 

At a conference in Geneva, fraud specialists said the scam could be traced 
back to some of the most powerful figures in Russia, who they believe protect 
the hackers from prosecution. 

Earlier this year, a 25-year-old hacker in Moscow stole credit card details 
which were placed onto blank cards and used at ATMs throughout Europe.The 50 
people involved in the scam managed to steal millions of pounds before they 
were caught. The hacker has still not been arrested because of a lack of 



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