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Johnson's Russia List


November 10, 2000    

This Date's Issues: 4630   4631


Johnson's Russia List
10 November 2000

[Note from David Johnson:

  3. The NIS Observed: An Analytical Review: Miriam Lanskoy, CAUCASUS: KA-BOOM. (re 1999 bombings)
  4. the eXile: Too Hot To Handle. (About the secret dossier of Putin's criminal misdeeds)
  5. Moscow Times: Sarah Karush, Life of Suffering on Edge of the Earth.
  6. Ekonomika i Zhizn: REDUNDANT HANDS. (Unemployment)
  7. Toronto Globe & Mail: John Helmer, THEY EAT HORSEMEAT, DON'T THEY?
  8. BBC Monitoring: Head of Russian electoral agency says US experience should not be repeated.
  9. Interfax: Russian Communist leader outlines three main issues facing his party.
10. Reuters: Russia agrees crunch-time military cuts.]  

 MOSCOW. Nov 3 (Interfax) - Pollsters have said 32% of Russians are
sure that former Russian President Boris Yeltsin still influences
Russia's policy.
 Only 7% of the population approve of this supposed influence while
25% disapprove of it.
 At the same time, 47% believe Russia's first president enjoys no
political weight, the Public Opinion foundation said in reporting an
opinion poll in which 1,500 people, both urban and country residents,
were questioned nationwide.
 According to the report, 58% believe current President Vladimir
Putin is pursuing an independent policy rather than continuing Yeltsin's
line. This view is held by 71% of Putin's supporters, people who would
still vote for him if another presidential election were held today.
 On the other hand, 30% think Putin is following his predecessor's


 MOSCOW. Nov 9 (Interfax) - The majority of Russians, 53%, believe
Russia now has an opposition to Putin and his government, while only 25%
believe the opposite, the All-Russia Public Opinion Center told Interfax
on Thursday.
 The data is the result of a representative poll of 1,600 Russians
on October 30. The statistical margin of error is within 4%.
 When asked whether Russia currently needs an opposition to Putin
and his government, 47% of those polled answered positively and 29%
 In spite of Putin's popularity with Russians, 38% of respondents
said there is now a need for impartial criticism of his actions in mass
media. However, 34% said the media should fully support the Russian


The NIS Observed: An Analytical Review
Volume V, Number 17 (8 November 2000)

by Miriam Lanskoy <>

Last week the defection of Aleksandr Litvinenko, an FSB lieutenant
colonel, again focused attention on the questions surrounding the
authorship of the bombings in Buinansk, Moscow and Volgodonsk which
killed hundreds of Russian citizens and served as the pretext for
Russia's invasion of Chechnya last fall.  Litvinenko said that repeated
threats and "ceaseless persecution by the Russian special services" were
the reasons for his defection.  His attorney commented that Litvinenko
"fears for his life also because he knows about a lot of things,
including the explosions of the apartment buildings in Moscow last year."
(Jamestown Foundation MONITOR, 2 Nov 00)

The defection has raised expectations of sensational revelations about
FSB involvement in assassinations (the so-called "wet affairs,"
terminology the KGB had borrowed from the prison slang "zamochit"),
high-level corruption in the FSB and information about security services
complicity in the Moscow bombings.  For instance, a very well-regarded
Russian journalist, Masha Gessen, writes in US News and World Report,
"People close to the case say that he can prove what has been rumored:
that the bombings were organized by the FSB, which was then headed by the
man who is now Russia's president, Vladimir Putin." (US NEWS AND WORLD
REPORT, 13 Nov 00)

While Kremlin insiders, the Russian public and Russia-watchers the world
over await new information with bated breath, it is useful to review the
available information linking the security services with the bombings. 
Although the explosions were blamed on the Chechens, no evidence of their
complicity has surfaced so far. What we have instead is fragmentary and
circumstantial evidence of FSB involvement.  These details constitute the
background to any  revelations which may be forthcoming from Litvinenko.

What do we know?

1) The sites of the bombings in Moscow were demolished very quickly,
leaving doubts as to whether the investigation had been completed.  An
early report by Michael Waller suggested that  the FSB rushed to bury the
crime scenes.  "The Moscow Times notes in an editorial that the Ulitsa
Guryanova bombing site was buried just 10 days after the explosion, and
the Kashirskoye Shosse site was never secured before rubble clearance
began the day of the blast.  'Is this ignorance?' asks the Times.  'In
the capital city of a country where the current prime minister, Vladimir
Putin, was once its top security official, the assumption sells the FSB
short.  The Federal Security Service has the equipment, know-how and
political clout required to perform a proper investigation.... Few
bombing sites are destroyed as quickly as those at Ulitsa Guryanova and
Kashirskoye Shosse.'"  (RUSSIAN REFORM MONITOR, 1 Oct 99)

2) Writing in the Independent on 6 January 2000, Helen Womak described
film footage brought out of Dzhokhar in December. In the film, a military
intelligence (GRU) officer, Alexei Galtin, says: "I did not take part in
the explosions of the buildings in Moscow and Dagestan but I have
information about [them].  I know who is responsible for the bombings in
Moscow (and Dagestan). It is the FSB (Russian Security Service), in
cooperation with the GRU, that is responsible for the explosions in
Volgodonsk and Moscow."  Since Galtin had been taken prisoner by Chechen
fighters, it is possible that his testimony was given under duress. 

3)  The most serious allegations of FSB involvement in bombing apartment
buildings concern a bomb that did not go off in the provincial city
Ryazan.  As related by the respected Russian human rights activist,
Sergei Kovalev (at Harvard University's Davis Center for Russian Studies
on 23 February), local residents called the police fearing they had
discovered explosives in the basement.  They were evacuated from the
building and spent the night outdoors.  First the authorities said that
the substance found in the basement was sugar.  Then they said there were
explosives and the sugar was there to facilitate the reaction.  Then the
police identified the suspects.  Then they said it was all a training
exercise for the local police and MVD.  "The nation shuddered at this
test of vigilance but, ultimately, believed the story," Kovalev explained.

Chechen Foreign Minister Ilyas Akhmadov related the events in similar
terms but added a few revealing details (at a 25 January appearance at
the Davis Center).  Neither the Ryazan police chief nor the Ryazan civil
defense chief were aware of this "exercise."  The MVD went to work in
earnest looking for the culprit -- and arrested an FSB agent.  At that
point there emerged the need to concoct the story of the vigilance

4) In March 2000, during the runup to the presidential elections, Unity,
which was Putin's party, blocked efforts by the opposition to launch a
legislative investigation into the Ryazan "exercise."  In March Moscow
newspapers Novoya gazeta and Versiya had investigated the possibility
that the FSB was engaged in a cover-up in Ryazan.  Based on those
reports, the YABLOKO Duma faction moved to hold a parliamentary inquiry
into the Ryazan incident on 17 March.  The initiative was blocked by
other Duma factions, Putin's Unity faction chief among them.

5) An NTV broadcast about the events in Ryazan brought to light other
revealing details. 
After the tenants discovered a bomb in the basement, the local police and
local FSB immediately evacuated the building and forced its inhabitant to
spend the night outdoors.  An investigation was opened.  In the morning
the local FSB chief, Gen. Sergeev, congratulated the tenants, saying that
today is "your second birthday."  In Moscow MVD Minister Vladimir
Rushailo made a statement thanking the tenants for their heroic vigilance
and saying that an investigation was in progress.

Two days after the bomb was discovered, FSB Minister Nikolai Partrushev
came out with the statement that there was no bomb: just an FSB training
exercise.  Apparently the MVD in Ryazan had detained an FSB agent for
questioning in this case.  After Patrushev's statement, he was released

The NTV program brought together the tenants from the building, FSB
experts and spokesmen, and various persons from Moscow for a very stormy
discussion.  Five hours of filming on 17 March (during which the tenants
flung four-letter epithets at the FSB personnel) was condensed into a
45-minute program which was aired on 24 March.

The show put the FSB and by extension the government on the defensive.
Public officials had to confront irate citizens -- a rare occurrence of
public accountability in Russian society.  Moreover, by giving vague,
contradictory and evasive responses, the FSB officials and spokesmen
looked dumb, callous and hostile in front of a national audience.

The tenants expressed bitterness and anger over the fright they
experienced and what they regard as the FSB's shameless lies.  Moreover,
the audience raised several very troubling questions which the FSB were
simply unable to answer.  Why is there still an open investigation into
"terrorism" in Ryazan if it was a training exercise? (Having an open
criminal case under the terrorism statute allows the FSB -- not the MVD
-- to carry out the investigation and to keep their files secret.)  Under
Russian law, training is supposed to involve the personnel being trained
only; on what legal basis were ordinary citizens used in this "exercise"?
If this was training, why wasn't there an observer present at the scene?
How can you draw conclusions if there is no one watching the performance
of those being tested?  Why the two-day delay before Patrushev's
announcement?  How could the local officers mistake sugar for the
explosive hexogen which they initially said was in the bomb? 
[NEZAVISIMOYE RASLEDOVANIYE (Independent Investigation), NTV, 24 Mar 00]

The show humiliated the FSB, including top officials like its spokesman
Alexander Zhdanovich, and seriously undermined the official dogma.  If a
real bomb in Ryazan was set by the FSB, perhaps the other, very deadly
bombs in Russian cities were also set by the FSB.  At least, that is what
the tenants of that Ryazan building told the nation.

6)   Igor Malashenko, the deputy director of Media Most, the parent
company of NTV, said that the "Ryazan Sugar" broadcast was a major
irritant in the company's relations with the FSB and the government.
(Speaking at the JFK School of Government, 24 Oct 00)  Information
Minister Mikhail Lesin had told Malashenko on several occasions that by
airing that show NTV "crossed the line and that we were outlaws in their
eyes."  Similarly, on 12 May Moskovski komsomolets, one of Moscow's
largest papers, commented on the "Ryazan Sugar" broadcast and noted
"Putin took it very personally."  According to the paper, the broadcast
prompted the raid against the corporate headquarters of Media Most,
during which employees were held at gunpoint for several hours while
masked men ransacked the offices. 


Date: Thu, 09 Nov 2000
From: "Mark Ames" <>
Subject: new eXile material/Too Hot to Handle

About the secret dossier of Putin's criminal misdeeds

Too Hot to Handle
the eXile
November 9, 2000

Moskovsky Komsomolets had it. So did Versiya. In fact, the following
document - a dossier on then-Prime Minister Vladimir Putin, prepared first
by the FSB, then added to by the investigative department of the MVD under
Vladimir Rushailo - has been circulating around the newsrooms of Moscow
publications for over a year. Until this week, when the eXile's sister
publication, "Stringer", decided to run it, the information in the document
has only been hinted at in the press.

Some history on this story. Last summer, when the Russian political elite
finally became disenchanted with then-Prime Minister Sergei Stepashin, a
conflict arose over who should take over the reins of government. As has
since become clear, the successor to Stepashin needed also to be a suitable
replacement for Boris Yeltsin, whose departure from the scene was already
being prepared for. Anti-Kremlin oppositionist politicians Yevgeny Primakov
and Yuri Luzhkov were enormously popular at the time and seemed a realistic
threat to sweep the upcoming Duma and Presidential elections. According to
various sources, Kremlin insiders (including the key members of the
"Family", i.e. Boris Berezovsky, Anatoly Chubais, Alexander Voloshin, and
Tatiana Dyachenko) were sufficiently alarmed by Luzhkov's and Primakov's
popularity that they focused on siloviki, members of security structures,
as potential replacements for Yeltsin. The reasoning behind this strategy
was that the future head of the government had to be a person who could be
relied upon to resort to unconstitutional measures to keep the current team
in power. In this atmosphere two apparently-qualified candidates emerged
who attracted the interest of the family-then-head of the FSB Vladimir
Putin, and Interior Minister Vladimir Rushailo.

According to Stringer's sources, Putin was the favorite of Dyachenko,
Chubais, and Kremlin Property Chief Pavel Borodin. Rushailo, on the other
hand, had the support of Berezovsky and Voloshin.

Both sides prepared mightily for the behind-the-scenes campaign. Putin's
team prepared their own dossier on Rushailo, bits and pieces of which
leaked out in the local press. Among other things, reports surfaced in a
number of Russian newspapers that Rushailo owned a dacha next to Berezovsky
and former ORT director Badar Patarkatsishvili. Rushailo was also linked to
various Chechen warlords in reports which asserted that Rushailo's
effectiveness in negotiating the release of hostages from Chechnya was due
to the fact that he kept close relationships with the bandits.

Rushailo's team, meanwhile, prepared its own attack on Putin. Among other
things, it obtained and prepared for public release an existing dossier on
Putin that had been prepared by the FSB, several years before, after Putin
was first called to Moscow to work for Borodin. The FSB at the time was
headed by Nikolai Kovalev, considered an ally to Berezovsky. To this FSB
report Rushailo apparently added information from the files of RUBOP, the
anti-organized crime squad which he had headed before assuming control of
the Interior Ministry.

Information from this dossier appeared in the reports of the newspaper
Versiya and in Moskovsky Komsomolets, in the articles of Alexander
Khinshtein, throughout last fall. Versiya, for instance, mentioned Putin's
connection to Petersburg casinos on a number of occasions. But the full
document was never published.

The eXile's sister publication, "Stringer", decided to publish the document
this month after holding on to it for several months. While the paper was
ultimately unable to confirm independently the information in the document,
it was able to confirm the source of it - the FSB. When they presented the
document to us, we agreed to run it only after satisfying ourselves as to
the reliability of their sources. We can't reveal who those sources are,
but we can say that it was an official very close to Kovalev who confirmed
the authenticity of their report.

In any case, without further ado, here is the "Spravka v otnosheniye V.V.

Putin Vladimir Vladimirovich, born in 1952, graduated from the legal
faculty of Leningrad State University (LGU) in 1975. From 1975 through
1990, he was in the employ of the Soviet KGB, worked in Germany, then
worked as an assistant on international questions to the dean of LGU.

In 1990, he became an assistant to Mayor A. Sobchak. From 1990 through 1996
he worked in the mayor's office in St. Petersburg. In 1994, he was named
first deputy to the mayor of St. Petersburg. A. Sobchak called him his
After the defeat of A. Sobchak in the 1996 elections, Putin moved to
Moscow, where he assumed the post of deputy to the director of the Kremlin
Since 1998, he has worked as the director of the FSB. [This and other
passages were apparently added to the original FSB document. -ed.]

In the opinion of many people who know Putin well, the latter's
determination to achieve personal enrichment, as well as his absence of
moral barriers, appeared from the very beginning of his career.

In the middle of 1990 a group of deputies from the Lensovet, under the
direction of Marina Saliye and Yuri Gladkov, undertook a special
investigation connected with Putin's role in the distribution of licenses
to export natural resources and precious metals. The Petersburg lawmakers
accused Putin of ineffective use of his authority and of corruption. In
particular, the conclusion of the commission related a story involving the
distribution of licenses for the export of natural resources in return for
shipments of food products, which in fact never arrived in Russia. A.
Sobchak was advised to released Putin from his duties.

Putin was involved with privatizations, including:
* BMP, or Baltic Sea Shipping. Control over BMP allowed for the sale of
Russian ships at reduced prices. In addition, all of these actions were
conducted through the criminal group headed by I.I. Trabera;
* The "Samtrest" alcohol distillery (the privatization handled through the
criminal gang headed by M.M. Miralashvili, or "Misha Kutaisski");
* The Astoria Hotel.

In the fall of 1998 a tender was held for the sale of 40% of the shares in
the Astoria Hotel. Putin tried to increase the size of his own personal
stake in the company that won the tender. He did not succeed: the shares
instead went to the directory of the alcoholic beverage factory "A.F.B.-2",
A.V. Sabadazh. Putin threatened that he would destroy the factory and deal
personally with the director. In the end, a compromise was reached:
Sabadazh paid off Putin with a one-time payment (about 800 thousand U.S.

In the course of the privatization (with Putin's participation) of TV
Channel 11, the St. Petersburg Channel, and its sale to the station
"Russian Video," violations of the privatization law occurred.

A criminal case has been opened in connection with "Russian Video". The
case is being overseen by the senior detective in the department of
extremely important matters of the Prosecutor's office of the Russian
Federation, Y.M. Vanyushin. On the basis of the evidence in the case, the
director of Russian Video, Dmitri Rozhdestvensky, was arrested.
Rozhdestvensky financed trips abroad for Putin's wife.

Pornographic films were shot illegally by "Russian Video". Leading this
effort was Rozhdestvensky and Roman Linkov, the assistant to deceased
former State Deputy Galina Starovoitova. The deputy to the director of the
General Prosecutor's department of extremely important matters, V.A.
Lysenko, has additional materials on the case. Deputy General Prosecutor
Katishyev is familiar with the situation around the "Russian Video" case.

Putin is attempting to influence the direction of this case independently.

As vice-mayor of St. Petersburg, Putin was responsible for the distribution
of licenses to casinos. He received between 100 thousand and 300 thousand
dollars for each license given out. Beyond that, he is listed as one of the
legal founders of many of the elite nightclubs in St. Petersburg.

Putin's closest commercial contact is R.I. Tsepov, the director of security
for the company "Baltic-Export" (a company founded by a certain Zolotov,
who in the past worked as the head of personal security for A. Sobchak, now
head of personal security for Putin). In 1994, Tsepov was charged according
to article 222 of the Russian criminal code, i.e. for improper possession
of a firearm.

Despite this, Tsepov remains a registered officer of the 7th department of
RUBOP in St. Petersburg. It was Tsepov who personally collected all the
money for the licensing of casinos in the city. For example one can look at
the "Konti" casino, in which Miralishvili makes a monthly payment to Putin
through Tsepov. The firm "Farmavit" pays Putin $20,000 a month.

In 1995 Tsepov gave Putin's wife an emerald which he had won at cards from
"Botsman", a local crime lord. The latter had stolen the emerald in 1994 in
South Korea. The emerald is listed in the 1995-1996 Interpol catalogue as a
missing item. Tsepov offered his services to Putin in exchange for the
guarantee that Putin will "cover" for his activities. Through Putin, Tsepov
has received 5 separate documents, identifying him as a member of the staff
of such organizations as the FSB, the SVR [foreign intelligence
agency-ed.], and the MVD.

In March of 1998 the Deputy General Prosecutor Katishev revived a criminal
case against Tsepov (the case is under the direction of the above-mentioned
Vanyushin). At the current moment Tsepov is hiding from the authorities in
the Czech republic, to whence he traveled with false documentation (a
foreign passport made up under an assumed name by the UFSB in St.

The security structures Putin relies upon the most are the FSB and RUBOP.
It was former RUBOP heads Shakhanov and Milin, together with Putin and the
head of the St. Petersburg UFSB, Grigoriev, who arranged the emigration of
A. Sobchak to France. Just prior to the planned interrogation of Sobchak, a
special rapid reaction unit (SOBR) of RUBOP transported Sobchak to the
hospital at Putin's request. There, at the hospital, the chief of the
Military-Medical academy, Mr. Shevchenko, arranged for a "false" diagnosis.
Later, a similar diagnosis would be made for R. Linkov.

In the criminal case conducted by Vanyushin, there exist materials which
describe how, at the request of Sobchak and Putin, Shakhanov and Milin
conducted an illegal search of the home of former Sobchak aide Y.T. Shutov,
the goal of which was the seizure of tape recordings in which Sobchak
allegedly converses with an agent of the French secret services. In 1992,
an attack on Shutov's person was organized, the result of which was a
skull-brain trauma which left Shutov in the hospital.
Also according to Vanyushin's report, the former head of the St. Petersburg
bureau of ritual services, one Makutov, made a regular monthly payment to
Putin of $30,000.

With the help of St. Petersburg vice-governor Grishanov (the former
commander of the Baltic Fleet) Putin, through the Lomonosov port, sold
military sea vessels.

The abovementioned port, located on the territory of a former military port
and created by Sobchak, Putin, and Cherkesov, has been a key throughpoint
through which contraband natural resources have been exported out of
Russia, and through which foreign products have been imported. The latter
functions of the port were at least partially controlled by the marine
department of Russian Video.

In the spring of 1996, during the re-election campaign of Sobchak, some $30
million were sent from the "Tsarskoselskiy" bank to a Swiss bank. The
transfer was undertaken by Putin, Cherkesov, and Grigoriyev. (Information
about this transfer is kept in the office of the chief of SKROSO UFSB, B.O.

The chief of the administration of the Vasiliostrovsky Region, V. Golubev,
is an acquaintance of Putin going back to the days when they both served in
the first department of the UKGB in Leningrad. The former colleagues
organized a series of companies, through which budget money first
"circulated", then was ultimately taken.

As Vice-Mayor, Putin organized the sale of military submarines abroad
through the Leningradsky Admiralteisky Union. In 1994, the deputy director
of this Union was killed (one of the versions was that he was killed for
refusing to illegally export military property).

BFG - the Baltic Financial Group (run by General Director Kapish) -
provides financial assistance to Putin and Cherkesov every month. In
1994-95, a disagreement arose between one of the founders of the petroleum
terminal at the marine port and Kapish. Kapish ordered the murder of the
port founder. For $50,000, Putin convinced the founder of the port to
settle his differences with Kapish, after which he convinced him to
emigrate to Israel.

According to information in our possession, Kapish in 1996 gave Putin $6
million, ostensibly for the Presidential campaign. The money went through
one of the oblast banks, which was subsequently closed.

During the 1998 crisis, Putin worked closely with V. Gusinsky in the
planning of aggressive political actions, including the announcement of the
arrival of the so-called "Vremya-Ch" (the materials on this investigation
are located in the files of Y.M. Vanyushin, in the interrogation of

The "XX Trust", created by Putin in conjunction with Lensovet deputies
Nikeshin and Goldman, sent budget monies - including those allocated for
the "Peter the Great" business center - to Spain, where they were used to
buy a hotel in Torviecho. A portion of the stolen monies was used to buy a
villa for Putin in the Spanish town of Benidor (materials related to this
investigation are located in the files of the KRU of the Ministry of
Finance of the Russian Federation).

Putin and Cherkesov in 1997 illegally sold the building belonging to the
newspaper "Chas-Pik" (a case is extant in arbitration court on the matter).
The newspaper "Moskovsky Komsomolets" lost several hundred thousand dollars
on the deal.

Putin is preparing kompromat materials on the current governor of the
Leningrad region, V.A. Yakovlev, and is preparing for early elections
(Chubais and Kudrin are being put forward as candidates).

For the realization of these plans the necessary funds are being sought and


Moscow Times
November 10, 2000
Life of Suffering on Edge of the Earth
By Sarah Karush
Staff Writer

UST-PORT, Northern Siberia -- The helicopter alights on the edge of this
remote Arctic settlement and clatters impatiently as a group of Red Cross
employees and journalists, who arrived a few hours earlier, attempt to heave
themselves aboard. Inside, about a dozen passengers shake their heads
vehemently: There is no more room on this flight back to Dudinka, the nearest

"Another helicopter will pick you up later!" the pilot shouts before slamming
the door. The would-be passengers have no choice but to take his word for it.

For most of the year, the occasional passing helicopter is the only way in or
out of Ust-Port, a fishing village located 100 kilometers from Dudinka. The
word "remote" barely begins to describe the isolation of such settlements in
Taimyr, the only one of the country's 89 regions located entirely above the
Arctic Circle.

When the helicopter lifts off, the 450 residents of Ust-Port, a cluster of
wooden houses with no running water or sewage system, are on their own,
surrounded by an endless Arctic tundra. On one sunny, mid-October day, the
temperature hovered around minus 25 degrees Celsius f not cold enough to keep
children, who ran around with runny noses and giant fur hats, inside.

Located on what feels like the edge of the earth, such northern settlements
are among the worst affected by the collapse of Soviet-era subsidies. The Red
Cross has responded over the past four years with tens of millions of dollars
worth of aid to keep people in the north from going hungry. Now, with no sign
that the crisis is letting up, the organization has launched another appeal
for the country's polar regions.

The residents of Ust-Port are a diverse bunch, including indigenous people,
descendants of Russian exiles and those lured north decades ago by high wages
or romantic idealism. Long-running ties to the region and the lack of a place
to go keep many people from packing up and leaving.

Their only connection to the mainland, as they call central Russia, is
satellite television, which shows the state-owned channels ORT and RTR, and
the telephone f although often the latter does not work. It's no wonder they
sometimes feel forgotten.

"After perestroika, from 1992 to 1997, very little attention was paid to the
village," said Alexei Marchenko, head of the Ust-Port administration.

Although things are looking up f in large part thanks to recent injections of
money into the region's budget from nearby metals giant Norilsk Nickel f the
people of Ust-Port remain vulnerable. The harsh Arctic climate wears on
everything from power lines to houses, and the village does not have the
means to improve its aging infrastructure.

"We should be replacing two houses a year," Marchenko said. "The last house
we built was completed about eight years ago."

More than half of Taimyr's 44,000 residents live below the region's official
poverty line. Salaries at the fishing and reindeer-herding companies f the
main employers in rural areas like Ust-Port f are the region's lowest.

Dina Tuglakova, who lives with her son in a one-room house that is almost
bare save for a broken television, says her pension of 790 rubles ($28) is
not enough to make ends meet. Because of the village's remoteness, prices at
the two stores are high. A loaf of white bread, which costs about 5 rubles in
Moscow, goes for 15 rubles in Ust-Port. Eggs, which cost 13 rubles for 10 in
Moscow, cost 20 rubles in the village. Little remains in Tuglakova's budget
for Arctic essentials like warm boots.

"I'm not happy with my life," Tuglakova sighed.

This year, the Red Cross added Taimyr to a list of impoverished northern
regions where it provides winter assistance. Its newly formed local committee
is overseeing the distribution of 230 tons of aid f food, clothing, hygiene
supplies and first aid kits.

The international aid organization is also seeking to raise $10 million for
next year's program, which will deliver assistance to 209,000 people in the
most vulnerable northern regions f Taimyr, Nenets region, Magadan, Kamchatka,
Chukotka and Sakha. The impoverished Tuva republic is also being targeted
even though it is located at a lower altitude than the other regions.

The Red Cross is best known as an organization that responds to emergencies.
But this emergency is chronic. In communities like Ust-Port, there are few
opportunities that can take the place of the stability offered by a planned
economy. As elsewhere in the world, economic depression here has come hand in
hand with other social ills, which the village does not have the means to
cure. Recently, a woman who had been drinking burned down her house with
herself and her four children in it, said Olga Busovikova, chairwoman of
Taimyr's Red Cross committee.

In October, the tragedy seemed poised to repeat itself.

"We don't work," said an Ust-Port resident who introduced herself as Aunt
Nina and lives a few doors down from Tuglakova's house. Slurring her speech,
she pointed to a black eye that she said she got from falling down.

Nina, 39, and her friend Olga, 37, were both visibly drunk. The house, which
they said belonged to Olga, was poorly heated, and the two sat in their
coats. Matches were strewn on the floor near the door. A teenage boy sat
silently in the next room.

Taimyr officials say the only hope for the region's remote settlements is to
develop the traditional local trades of fishing, reindeer herding and

"It's time to move on to another level of humanitarian aid f technical
assistance," said Deputy Governor Maria Popova, adding that the region needs
factories to process fish, which could then be sold in other parts of Russia.

While such large-scale technical assistance falls more in the realm of the
World Bank than the Red Cross, the relief organization has incorporated
elements of economic development into its aid. In Ust-Port, for example, 100
people are receiving fisherman's boots from the Red Cross this year.

Of all the Siberian regions where the Red Cross has delivered aid, Taimyr is
one of the most logistically challenging and expensive. Taimyr's rivers are
open for navigation only briefly; some communities are accessible for just
two weeks a year. The only year-round means of transport is the helicopter,
which costs 22,000 rubles an hour to rent.

In most regions, transport accounts for 5 percent to 10 percent of expenses,
Red Cross relief manager Alexander Yakovlev said. In contrast, transport
accounts for 22 percent of the combined budget of the Taimyr, Nenets region
and Sakha programs, he said.


Ekonomika i Zhizn
No. 44
[translation from RIA Novosti for personal use only]
Ye. SINDYASHKINA, Cand. Sc. (Economy),
  A. MATVEYEV, Ekonomika i Zhizn observer
     According to statistics, unemployment in Russia declines
every month. Many observers attribute this fact to the beginning
of an economic revival. Is the situation in the Russian labor
market so clear? Is it possible to eliminate unemployment?
     The number of unemployed totalled 7.1 million or 9.9% of
active Russians in late September. Of these, around 1 million
people or 1.3% were officially registered as being unemployed.
Are these figures high or low?
     A positive tendency seems to emerge from this picture. The
number of people without work reached 10.1 million in January,
1999. Of these, only 1.9 million were officially registered as
being unemployed. It is a widely-known fact that employment
figures fail to reflect sharp decreases in wages and so-called
unpaid vacations in the conditions of a deep economic crisis,
especially at the initial period of reforms.
     Employment in the shadow economy increased dramatically.
shadow sector of the economy was created by employers who
illegal incomes and jobs with inferior working conditions, while
Russia was flooded by cheep unqualified labor from the former
USSR republics. Some company executives and local authorities
took advantage of the situation.
     This state of affairs has not changed. A large number of
people would like this status quo to be maintained. Employment
in the shadow sector and undeclared incomes have become common and
     No major changes have occurred as a result of the narrowing
gap between the numbers of registered unemployed and announced
vacancies. A demand for labor even exceeds the number of
redundant workers in some regions.
     This inconsistency is easily explained. The requirements of
the vacancies do not correspond to the surplus workforce.
Companies need unskilled labor. However, about one third of the
people who registered with labor exchanges are professionals and
office employees. Most of the vacancies mean low-paid jobs in
hard and unsafe conditions.
     The Russian economy suffers from a deficit of highly
skilled workers, as a competitive economy cannot be created without such
workers. Skilled labor accounts for an estimated 5% of Russia's
industrial workforce. Several reasons account for this situation:
loss of skills, expansion of the shadow sector and immigration.
The new generation is reluctant to learn industrial skills, as
consumerism is more appealing to young people.
     Civilizing Russia's labor market means eliminating the
negative circumstances and returning the workforce to the legal
sector of the economy. The implementation of government
modernization and restructuring of the labor market are likely
raise registered unemployment. Hands that are actually free will
         Number of unemployed (end of month)
    Month  Total number of unemployed  Amount of officially
registered unemployed

     Thou-        % against  Thou-         % against   
     sand    the same   an sand       the same    an
     period     earlier     period      earlier
     last     period     last period
     year     year
January    8,738    86.4     98.1    1,235      63.7     97.7
February  8,573    82.5     98.1    1,229      62.8     99.6
March      8,170    81.3     95.3    1,202      62.6     97.8
April         7,770    81.0     95.1   1,151       62.3     95.8
May         7,395    81.2     95.2    1,069      61.8      92.9
June          7,296    82.5     98.6   1,009      63.3      94.4
July           7,198    82.6     98.7       990     66.0      98.1
August       7,126    81.9     99.0      986      69.3     99.6
September 7,149    81.4    100.3     968     72.3      98.2
     Source: State Statistics Committee of Russia


From: "John Helmer" <>
Date: Wed, 8 Nov 2000

Coming this week in Toronto Globe & Mail     
From John Helmer in Moscow

In Russia's village markets, they have a saying that the horse-dealer never
trusts himself  -- he always calls on God.

In the international world of horsemeat, however, dealers these days are
calling on Russia to help clear the market overhang of stocks of low-priced
low-quality horsemeat, and drive the price of high-quality horsemeat to
record levels. And for the first time, the horsemeat traders
admit to landing their product in Moscow.

A Russian trading company is offering the horsemeat -- shipped from Uruguay
according to the Europe-based seller -- along with an official-looking
certificate saying it is beef.

A US trade official told G&M he is seeing growing interest on the part
of US producers to sell horsemeat to Russia, and reciprocal interest on the
part of Russian importers to see what it will cost.

"Canadian horsemeat is available," a Canadian trader told G&M, "but for the
time being the price is too high for the Russians."

Despite the catastrophes that have shrunk Russia's borders, diminished
its population, and reduced the country's power, Russians remain
international market-makers in unforeseen ways. This is still obvious in the
meat market, even when the Russians have too little meat to feed their
needs, and can't afford to import.

Take beef, pork, and chicken, for example, the staples of the world's
meat economy. When the rouble crashed fourfold against the dollar in
mid-1998, ruining many Moscow trading houses, the price of these imports
became too high, and imports from the big beef and pork producers in Europe,
and the chicken growers of North America, looked set to collapse.

The European Commission and the Clinton Administration moved swiftly to the
rescue. The Europeans agreed to a special increase in meat subsidies for
exports to Russia, and signed an agreement to despatch thousands of tons of
stockpiled beef and pork to the Russian government, at no charge.

The Americans followed with special aid programmes of their own, to keep
their beef, pork, and chicken order-books filled, and market prices firm.

The aid meat didn't help save Russians from starving, and per capita meat
consumption continued this year on its decade-long decline. The average
Russian nowadays can afford to eat only about half the volume of meat
he consumed a decade ago, before the Soviet Union collapsed.

The aid meat of 1999 did support western meat producers, however, and kept
international prices from freefall. It also caused a severe disruption of
the commercial meat trade in Russia for more than a year.

But now that this meat has all been consumed, and on paper at
least, the Russian economy is growing rapidly, Russia's importers are
looking for new supplies of meat. Only it turns out that Russian consumers
are still too poor to afford the rise in beef and pork prices which Canadian
exporters, and the trade in general, are now offering.

Chicken legs -- the body-part of the fowl which American fast-food
can't use -- have been a beef substitute for poor Russians for more than a
decade. They are so closely identified with an American aid programme of the
late 1980s, they are known in Russian as "noshi Busha" (literally, "legs of
[President George] Bush").

Chicken, however, isn't an effective substitute in the dozens of recipes for
sausage which Russia's biggest meat processors turn out. Chicken smuggling,
which the Americans have resorted to through the Baltic states, has also kept
prices down in Moscow, but the Russian Customs are gradually stopping the
flow. US industry sources say the Russian demand for chicken is still strong
enough to have reached pre-1998 levels. At that time, chicken was the leading
export of the US to Russia at over US$850 million per annum.

So for months now, the race has been on to find another substitute, while
the domestic farm output of meat continues to shrink. The Australians tried
kangaroo in Bulgaria for a few months recently, but they can't break into the
Russian market. For the first time, it is the horse that may ride to this

Argentina and Uruguay are so far undercutting the North Americans. Horsemeat
from Brazil lacks veterinary certification for import to Russia, claims one
European trader, otherwise it too would be on the table for negotiation, if
not to eat.

Russian import duties on horsemeat are lower than on beef, and trade sources
in Moscow say they suspect that beef may be imported under customs codes
for horsemeat. Meat specialists are able to tell beef from horsemeat, but
probably not customs officers. Traders also suspect that small amounts of
horsemeat may be added into sausage mixes as a way of stretching the protein
as far as possible, while keeping the price from jumping.

Most traders and meat processors say consumers can't be fooled; the big
brand-name producers told G&M they don't want to risk a consumer backlash, if
they introduce horsemeat. Among Russian meat producers, very few plants
specialize in the special horsemeat sausages that are sought after by ethnic
Tatars in southern Russia. In general, a Russian manufacturer says, only
about 20% of plants in Russia use horsemeat at all.

A trade specialist from one of the horsemeat producing countries told
G&M he believes the taste can mislead. "I've tasted horsemeat in
Siberia myself," he told G&M. "It was like lamb. It was locally produced."

The leading horsemeat trader in Europe acknowledges that Russian demand is a
market driver at the moment, and that the price is moving upwards after
a dip last year, when stocks of frozen horsemeat were large. But the trader
cautious. "Everything in Russia very new," he told G&M. "It goes up one
minute, and down the next. I am not sure Russia is a stable market in the
long term."


BBC Monitoring
Head of Russian electoral agency says US experience should not be repeated
Text of report by Russia TV on 9th November

[Presenter Yevgeniy Revenko] Let's go back to the key theme in this bulletin
- the presidential election in the USA. The chairman of the Russian Central
Electoral Commission, Aleksandr Veshnyakov, is monitoring all these dramatic

President Vladimir Putin yesterday joked that Veshnyakov could give the
Americans some advice on how to count the votes quickly.

Aleksandr Veshnyakov is speaking with us in a live linkup from Washington.

Hello, Aleksandr Albertovich.

[Veshnyakov] Good evening, Yevgeniy.

[Q] Aleksandr Albertovich, could you tell us about it briefly? Before
departing [for the USA] you said you were going there to study their
experience. Is Russia going to hold the presidential election the same way?

[A] Experiences vary. There is positive experience - something that we will
borrow. But we, in Russia, will certainly avoid repeating the negative
experience. What is happening during the summing up of the results in Florida
is a negative experience which Russia should try to avoid by all means.

[Q] I have one more question, Aleksandr Albertovich. What do you think of
what is happening in the USA at the moment?

[A] The situation at any elections gets quite delicate if they are won by a
small margin. This is precisely what is happening at the presidential
elections in the United States. In Florida, a margin of just 1,500 [votes]
was registered. However, over 6m voters cast their ballots. You should
realize that this is a minute proportion, a margin of error. In line with the
law of this state, it was decided to recount the ballots. This should be done
by 1700 local time today. The results of the recounting of the votes will
have to be announced. An appeal to the court and court hearings on the
situation are possible if this causes the dissatisfaction of the candidates
and the voters - who think some irregularities concerning the ballot entries
occurred because the position of the names of the candidates on the ballot
caused them to cast their votes in the wrong way. It is possible that the
court will declare the results of the elections in the state or in a
particular county invalid and decide to hold repeat elections.

[Q] Thank you, Aleksandr Albertovich. Our time is running out. Commenting on
the US presidential elections was the chairman of the Russian Central
Electoral Commission. He said Russia would not use the negative experience.


Russian Communist leader outlines three main issues facing his party

Moscow, 9th November: Preparing for the Communist Party of Russia congress
scheduled for 2nd-3rd December is the first of three major issues currently
facing the party, its leader Gennadiy Zyuganov said at a Thursday [9th
November] press conference in Moscow.

The second is the election of administration chiefs in the country's regions
and the third one is the results of the US presidential polls.

Zyuganov said the main document to be adopted at the congress will be "The
Communist Party's Tasks for the Coming Three Years". It has been discussed at
a grass-root level for several months already. The congress will review the
political situation in Russia and address a number of other issues.

In regard to the gubernatorial elections, Zyuganov reported that since the
year began elections have been held in 15 of the country's regions and 10 of
them have elected governors nominated or supported by the Communist party. A
further two regions have elected candidates to whom "the Communist party did
not object", he said.

Commenting on the US presidential election, Zyuganov said that "there are no
principle differences in the programmes of both candidates".

At the same time, the Communist leader added, he finds himself favouring the
Republicans (George W. Bush), with whom Russia "rather quickly reached common
ground on the main problems". The Democrats (Albert Gore) "have in the last
ten years done a lot of harm to Russia by backing 'the [Russian] democrats',
who have proved to be thieves and idlers", he said.

The Communist leader called for long-term relations with the USA so as to
avoid new confrontation between the two countries.

When asked about a higher profile for the Federal Security Service (FSB) in
society and for its representatives in various branches of power, Zyuganov
responded, "Each should do his own business." "On the other hand, corruption
[and] crime have eroded the country so much that all special services should
be made more efficient," he said.

Zyuganov spoke sharply against the movement formed by Sazhi Umalatova in
support of President Vladimir Putin, which has been joined by about 20
left-leaning organizations. "Rather than organizations, these are tadpoles
with no political forces behind them," he said.


Russia agrees crunch-time military cuts
By Martin Nesirky

MOSCOW, Nov 9 (Reuters) - The Kremlin's Security Council approved
controversial large-scale cuts to the military on Thursday which President
Vladimir Putin said were long overdue and essential for Russia's security and
limited finances.

Russian news agencies quoted Council Secretary Sergei Ivanov as saying the
overall cuts would involve 600,000 people over five years as Moscow sought to
create leaner but more mobile, better equipped and more cost-effective

Ivanov applied reforms to himself, asking Putin to remove his rank of
lieutenant-general in the SVR foreign intelligence service. Putin agreed to
the move, which Ivanov said was to make his Security Council job easier.

"A unanimous decision has been taken that we need to carry out military
reform in the broad sense," the agencies quoted Ivanov as saying.

The cuts included Defence Ministry reductions of 365,000 servicemen already
announced. Another council official said the overall tally amounted to nearly
a fifth of the defence forces.

Ivanov said there were more than three million people in uniform in Russia.
This includes police and others not usually included in lower Western
estimates of Russian defence strength.

"That is an excessive burden for our economy," Ivanov was quoted as saying.
"A mobile, well-equipped military organisation is an insurance against any
threat to the country."

Speaking at the start of the session on military reforms, Putin told its
members -- including ministers and intelligence chiefs -- it was crunch time
after months of acrimonious debate.


"We must draw a line under this," Putin said. "The future of the country's
armed forces and military institutions depends on this, as does Russia's very
security. We have discussed this for a long time and moved towards this
decision. Our time is up."

The new element in Thursday's cuts -- and the one that forced Putin to cancel
the last council session -- is a planned reduction of 130,000 in civilian
staff and 105,000 military personnel from the 11 armed organisations not
under Defence Ministry control, such as interior troops and more obscure
branches such as the Railway Troops.

One of Ivanov's deputies, Vladimir Potapov, said the cuts were not
necessarily proportional to the size of each service, but were based on a
detailed analysis of which agencies could parry which perceived security

The cuts would allow Russia to spend more on each serviceman because funding
was not being cut, he said. Putin said the price of military reform was high,
literally and figuratively, and would need to be strictly policed by the
government and Ivanov.

"To maintain such a cumbersome and at times ineffective military organisation
is extravagant and in all senses wrong. In our situation it's simply not
permissible," Interfax news agency quoted Putin as saying in reference to
Russia's meagre finances.

The council, an advisory but increasingly influential body reporting to
Putin, has already twice met and twice delayed taking decisions on where to
cut and how to reshape the defence sector to create a more professional and
responsive military machine after years of stalled reforms and underfunding.

Putin made clear commanders had fought their corners.

"The arguments have been intense and at times difficult," Interfax quoted him
as saying. "It was a discussion of interested parties."


Potapov noted the leadership's view was that Russia would not be in a
position to wage a full-scale conventional war for at least 10 years,
although it would not be defenceless -- a reference to Russia's still potent
nuclear deterrent.

Russia's military is significantly depleted from the Soviet days when it
stood as Washington's main foe. Now Russia barely figures, including as a
factor in the still inconclusive U.S. presidential election.

Last week, Putin sought to squeeze more juice from the defence lemon when he
merged the two state companies which carry out weapons sales. He said the aim
was to boost Russian chances in the competitive multi-billion-dollar world
weapons market.

Defence analysts said it also strengthened Kremlin control over arms exports
and put one of the president's own men -- ex-KGB officer Andrei Belyaminov --
in charge.

It was not fully clear why Ivanov, another Putin associate, wanted to lose
his military rank. Defence experts said it mattered little whether Ivanov was
a general or ex-general, and the move could be linked to future personnel
changes, including a possible civilian defence minister.

Ivanov said no changes to military leadership were discussed at Thursday's
Security Council session.


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