#1
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Moscow Times
December 31, 1998 
DEFENSE DOSSIER: Time to Abandon START II 
By Pavel Felgenhauer 
Pavel Felgenhauer is the chief defense correspondent of Segodnya.

   According to plans that were prepared in early December, the State Duma
should have ratified the long postponed strategic arms limitation treaty
START II last Friday. However, the vote on START II was postponed
indefinitely because of U.S. and British strikes against Iraq. Instead, the
lower house of parliament ratified another long-delayed and controversial
international treaty - the friendship pact with Ukraine. 

   Ukraine's parliament overwhelmingly ratified the treaty last January,
but in Russia various groups of nationalists were clamoring against
ratification, arguing that the treaty gave away Russian sovereign territory
and national security interests for no good reason. 

   Russian nationalists claim the mostly Russian-populated Crimean
Peninsula and especially Sevastopol, a military port in Crimea, the home
base of the Russian Black Sea Fleet. The Russian military uses two
strategically important radar and communications installations in Ukraine
that provide early warning of a possible nuclear attack - one near
Sevastopol and the other near the western Ukrainian city of Mukachevo.
Nationalists say Ukraine's increasingly close ties with NATO undermine
Russia's nuclear defenses, so the early warning installations should
continue to be under Russian sovereignty. 

   Communist Party leader Gennady Zyuganov and his comrades want to reunite
the former Soviet republics of Ukraine and Russia as passionately as any
Russian nationalist. But the leadership of the Russian Communist Party was
persuaded by a delegation of Ukrainian Communists that pressing Russian
sovereign rights over small bits and pieces of Ukrainian territory will in
no way help to promote eventual full reunification. Zyuganov made a
decision and the Communist fraction in the Duma did as told - voted for
ratification of the treaty with Ukraine. 

   Such disciplined voting on a treaty that many Communist deputies
genuinely disliked proves that there was a real chance to ratify START II.
If Zyuganov had decided to back START II ratification, the pattern of
voting would have been more or less the same as last Friday. With Duma
elections less than a year away, not many Communist deputies can afford to
disregard the party whip. Zyuganov can take anyone off the party list and
most deputies lack the resources to run as independents. At the same time,
START II is not a serious election issue. Simply opposing START II cannot
get anyone into parliament. 

   However, the window of opportunity has passed. START II is dead, killed
by a provocative and senseless U.S.-British bombing campaign. Officially,
START II will still be on the Duma's agenda in 1999. But because U.S. and
British strikes against Iraq will continue in the future, there will always
be an excuse to postpone ratification once again. 

   In a year and half, or perhaps sooner, President Boris Yeltsin who
signed START II will be out of the Kremlin. Defense Minister Igor Sergeyev,
who in 1992 was chief of the Strategic Rocket Forces and helped to draft
START II, will also be out of office. There will be virtually nobody left
in power with a personal stake in pushing START II forward. At the same
time, while START II is in limbo, it is becoming increasingly obvious that
it is a bad treaty for Russia. 

   In 1992, the Russian military decided to remodel its nuclear forces in
accordance with START II requirements that ban land-based multiple-warhead
missiles. Sergeyev was planning to deploy his pet weapon - the land-based
single-warhead Topol-M. That and sea-based multiple-warhead missiles would
have become the backbone of Russia's nuclear deterrent. But today more than
60 percent of Russia's warheads remain on land, while under START II 50
percent should have been on submarines. 

   Moreover, the nuclear submarine fleet is rapidly deteriorating. It could
virtually disappear in the next decade. During the recent attacks on Iraq,
Russia announced a heightened state of naval readiness. But this
announcement was a deception. Not a single nuclear submarine managed to put
to sea. And even if they did leave port in the event of war, there are U.S.
nuclear attack submarines prowling the Barents Sea that the derelict
Russian navy cannot control. 

   It is increasingly obvious that Russia's nuclear future is on land, so
why ratify START II and abandon for ever the cheap option of deploying
land-based multiple-warhead missiles? The best option would be to scrap
START II altogether and renegotiate. When Yeltsin and other START II
supporters are out of office, this will be possible.

#2
The Independent (UK)
December 31, 1998
[for personal use only]
Home movie moves Russia
By Helen Womack in Moscow 

  Russian television, like its British counterpart, shows many repeats of
comedies that were hardly funny in the first place. Moscow's video kiosks,
meanwhile, offer little more than pirate copies of American kick-boxing and
gangster movies. 

  But Russians are raving about one new film and they are proud of the fact
that, despite the decline of their cinema industry, it was made in Moscow. 

  Land of the Deaf appeared on the big screen earlier this year and won
several awards in Russia. It was directed by Valery Todorovsky, a young man whose
humanity and faith prove not everyone is bad or mad and not all is lost in
this country that produces so much depressing news. 

  The film tells the story of Rita, who manages to run away when Russian
gangsters capture her boyfriend, Alyosha, and torture him for non-payment of a
debt. Rita is befriended by a deaf girl called Yaya, who has also suffered at
the hands of brutal men. In her strange sign language and broken speech, Yaya
tells Rita that somewhere, far away, there is a beautiful "land of the deaf"
where they can find peace and happiness. 

  Rita is drawn back to her boyfriend, who belongs to the world of
violence. By experimenting as a prostitute, then by working as a "translator"
for a deaf gangster, she manages to raise enough money to pay off Alyosha's
debt but her good-for-nothing boyfriend loses it all gambling. 

  The film ends with a shoot-out between the deaf gangster's gang and the
bandits holding Alyosha. Rita either loses her hearing from the noise of
gunfire or chooses to seem deaf, and finally accepts Yaya's invitation of
asylum in the land of the deaf. 

  Escaping in this way appears to mean rejecting the horror and violence of
modern Russia, where mafia crime has made life cheap. "The land of the deaf
could also be the inner self, the life of the spirit," said Todorovsky in an
interview. "But if you choose to take it that way, I won't argue with you." 

  Land of the Deaf was made on a relatively small budget. Much of the action
takes place on a boat that is normally a floating restaurant on the Moscow
River. Todorovsky's small private company, Racoonfilm, rents office space at
Mosfilm, the rambling, old state complex that in better times used to be
Russia's answer to Hollywood. 

  After making Land of the Deaf, his third big movie, Todorovsky, 36, son
of the director Pyotr Todorovsky, was feeling optimistic about the chances
for a revival of Russian cinema. Then the economic crisis struck. 

  "Cinema needs stability. It takes at least a year to make a film and you
need audiences with money in their pockets to enjoy it. Now, it seems we are
back at square one. Yet, I remain an optimist. I love my profession. I cannot 
live with the feeling that everything is over," he said. 

  For the time being, he is surviving by making films for television, based on
the detective novels of Alexandra Marinina, a policewoman turned popular
thriller writer. 

  He rejects the idea of emigrating, as he says a film-maker needs to work in
his own language. Yet he loves foreign cinema, especially British films. 

  Todorovsky first made his name with a 1991 movie called Love about a romance
between a Russian boy and a Jewish girl. With anti-Semitism on the rise in
Russia and a growing neo-fascist movement, this could not be more relevant.
For Todorovsky, differences of race and creed are unimportant and there are
only two nationalities: those who hate and those who love. 

#3
Christian Science Monitor
December 30, 1998 
[for personal use only]
Russia oligarchs: poorer but ... 
Judith Matloff, Staff writer of The Christian Science Monitor 

MOSCOW -- There was a time just months ago when anytime anything of note
happened in Russia, one name was uttered: Boris Berezovsky.

  A change of government? Mr. Berezovsky must be whispering in President Boris
Yeltsin's ear, newspapers speculated. The ruble collapse? Mr. B. must be
moving markets. Rumblings in Chechnya? Ask Berezovsky what's up.

  The oil and media tycoon was the most visible of the oligarchs, who made
nascent capitalism their playground after the Soviet demise in 1991.

  Employing vision, chutzpah, and, some say, crime, this plutocracy sidled
up to politicians to buy privatized state assets at bargain prices. They
speculated wildly on currency and bond markets. The result was political clout,
outrageous wealth, and control of a sizable chunk of Russia's industry, press,
and banks.

  But the men such as Berezovsky, who once shaped public opinion, have been
stumbling from Russia's economic meltdown since August. Their weight is
shrinking from debt, a failed banking system, and a new prime minister,
Yevgeny Primakov, who is cool to their overtures.

  "The soap bubble burst," says Nikolai Petrov, a political analyst with the
Moscow Center of the Carnegie Endowment for International Peace. "The
oligarchs have lost an essential part of their financial and political
influence."

  Speculation is rife that many managed to spirit fortunes out of the country
before the economy imploded. But no giant escaped unscathed.

  Just as pundits are pondering the future of free-market reforms, so they are
predicting a new makeup for the tiny circle that benefited most by them. With
Mr. Primakov favoring more state control and the Communist opposition in the
ascendancy, a new elite, including regional bosses, may compete for the
oligarchs' place.

How mighty have fallen

  The biggest financial jolt was dealt to Vladimir Vinogradov. He has
essentially exited the business elite with the bankruptcy of his Inkombank.

  It has been a bad year, too, for Berezovsky, who previously boasted of his
channels to Mr. Yeltsin. These vanished with the firing in the past year of
the president's Chief of Staff Valentin Yumashev and Prime Minister Viktor
Chernomyrdin. The ORT television station in which the entrepreneur has a big
stake is so troubled that he has sought an alliance with Australian magnate
Rupert Murdoch to save it.

  Analysts advise against writing the business obituary yet of Vladimir
Potanin.  His Interros Group's diversification - iron, oil, chemical plants, 
newspapers - may help it weather the storm.

  Mr. Potanin's Uneximbank felt the full impact of the crisis and has
discussed merging with banks of two rivals, MOST-Bank and Menatep. Potanin was
forced to reduce his newspaper empire, closing down the Moscow-based publications
Russky Telegraf and Financial Izvestia. His Sidanko oil company is under threat of
dissolving. In November, Potanin became the first oligarch to offer to reverse
a privatization, volunteering to return to the state two unprofitable bits of
Sidanko.
 
  Vladimir Gusinsky's MOST-Bank is limping. His media empire, however, has
remained intact despite some belt tightening at Itogi magazine, Sevodnya
newspaper, the NTV television station, and Echo Moscvi radio network.

  Alexander Smolensky's SBS-Agro, the largest privately owned savings bank,
was bailed out by Russia's Central Bank. Its future prospects may be helped by the
sympathy of Deputy Prime Minister Gennady Kulik.
 
  Not surprisingly, those with big holdings in the extractive sector - and not
finance - are adapting best to the challenge. 
 
  The Alfa Group of Mikhail Fridman and Pyotr Aven emerged less damaged than
most. It has enforced its positions in the banking, oil, and iron sectors. Its
Tyumen oil firm has deepened support from local politicians in Siberia, and
the group is expanding iron enterprises in the Urals and eastern Siberia. The
downside is that Alfa owes tens of millions of dollars to foreign investors.
 
  Mikhail Khodorkovsky's Menatep Bank is shellshocked and his Independent
Media is cutting back radically. Mr. Khodorkovsky has managed to stay afloat with
Yukos, the country's second biggest oil company, and other industrial
enterprises. He has cleverly developed close contacts with the government's
economic chief, Yuri Maslukov. However, Yukos has been hit by low world oil
prices and 15 percent of its shares must be sold to pay foreign debts.

  Vagit Alekperov's Lukoil is the largest oil company in Russia. It has been
stung by low oil prices and nose-diving share prices, but as an exporter
benefits from the ruble's devaluation.

  Gazprom under Rem Viakhirev is Russia's largest natural-gas producer and has
stakes in media and banks. It ended the year well, despite a fall in gas
prices, having received hard currency payments.

A comeback?

  Russia even in Soviet days had a clique of powerful economic bosses, and the
next millennium looks to be no different, analysts say.

  The oligarchs realize that without powerful benefactors they cannot operate
and are concentrating on pushing their favored candidates in parliamentary and
presidential elections due respectively in 1999 and 2000. This time, unlike
Yeltsin in 1996, there is no obvious figure to unite them.

  Valery Fyodorov, deputy director of the Center for Current Politics, a
Moscow-based research center, says, "Without a clear favorite, they are 
maneuvering between different candidates so as not to put all their eggs in 
the same basket."

#4
Moscow Times
December 31, 1998 
SEASON OF DISCONTENT: Diplomatic Slaps in Face Well Deserved 
By Andrei Piontkovsky  

   When earlier this year President Boris Yeltsin was embarrassingly
fawning on French President Jacques Chirac and then German Chancellor
Helmut Kohl and made some bizarre and ignorant remark about a
"Paris-Berlin-Moscow axis," we all, including Chirac and Kohl, wanted to
close our eyes from shame. 

   But no one then asked who had suggested that Yeltsin make a clumsy and
primitive attempt to play on the transatlantic disagreements in the Western
alliance. In fact, it could only have been that wise statesman and master
of geopolitics, then Foreign Minister Yevgeny Primakov. 

   During his years in the Communist Party bureaucracy, Primakov mastered
the art of pronouncing in his deep, intimidating voice statements that were
shallow and vulgar but were perceived by his underlings as revelations of
statesmanlike wisdom. 

   Now that all of Russia's apparatchiki are Primakov's underlings,
enthusing about Primakov's exceptional abilities both in diplomacy and
economic science has become an indisputable attribute of political
correctness. And only the most disparate of little boys in Russia's
political fable would ever dare, however timidly, to point out that the
king of politics is quite naked. 

   He made that all too clear once again last week in Delhi when in that
same intimidating basso profundo he suggested "forming a Russia-India-China
strategic triangle." With a sour face but diplomatic politeness and
Oriental inscrutability, China's diplomats have until recently listened to
Russian politicians foisting themselves on China as strategic partners. But
a triangle with India was just too stupid. A Chinese Foreign Ministry
spokesman coldly noted that "China pursues an independent foreign policy.
While it supports cooperation with Russia and other powers, China is not
planning to join them in any alliances or blocs." That was a slap in the
face for Russian diplomacy. The second in a day. 

   The U.S.-British bombardment of Iraq was in the eyes of many experts

counterproductive. That was the reaction of China and France, both
permanent members of the UN Security Council. They criticized the bombing
but tried to wring all the political dividends they could from it. But no
one would say France or China got a slap in the face. 

   But Moscow went off on its own idiosyncratic course. For three days, all
the "Russian political elite" (as they like to call themselves) whipped
themselves up into a frenzy, tore their garments and screamed, "They have
slapped us in the face!" In the end, they convinced the whole world that
they had. That was the impression after Primakov and Yeltsin appeared
demonstratively on television, weary after staying up through the night
pretending to be decisive field commanders hunched over their military
maps. That was the impression after Primakov's warm and highly irregular
kisses of party solidarity to Iraqi President Saddam Hussein's Goebbels,
Tariq Aziz. That was certainly the impression after Russia withdrew its
ambassadors, interrupting talks on debt restructuring and humanitarian aid.
In my opinion it does not make any sense either to ask for aid or to recall
ambassadors. But doing both at once is certainly wrong. 

   Russian foreign policy will keep on getting slaps in the face so long as
it is defined not by national interests and common sense but by an
infantile sense of pique and megalomaniacal complexes about the Cold War
these men so unskillfully fought and lost. 

#5
Russia: A Great Conspiracy And The Lone Assassin--A Book Review
By Charles Fenyvesi

Washington, 29 December 1998 (RFE/RL) - The recent assassination of Galina
Starovoitova in St. Petersburg has revived interest in books about the
assassination of Sergey Kirov in 1934 and the purges that followed. 

   In addition to Arthur Koestler's well-known "Darkness at Noon," ever
more people concerned about the Starovoitova case are now reading "The Case
of Comrade Tulayev" by Victor Serge. Originally written in French in 1942
and first published in English in 1950, the book was reissued this month
and is sold by the New York bookseller Barnes and Noble via the Internet.
Victor Serge's life reads like that of his own characters. A
second-generation Russian revolutionary born in Brussels in 1890, he fought
in the Catalonian anarchist uprising in 1917 and then became a leading
functionary of Lenin's Communist International in Moscow. 

   Serge later broke with Lenin and joined Trotsky's camp. Stripped of his
party membership, he was eventually jailed in 1928. Eight years later
Stalin gave in to French intellectuals and let Serge go to France. But only
a year later, Trotsky excommunicated him. Serge completed his novel, "The
Case of Comrade Tulayev," in Mexico, in 1942. He died in 1947 in Mexico City. 

   No disavowal by the author can obscure the parallels between the
fictional Tulayev case and the actual assassination of Sergey Kirov and the
great purges that followed. Though Serge insisted on calling his book
"historical fiction," it has a ring of truth that many historical studies
have so far lacked, at least partly because authors have been unable to
sort out the reasons behind Stalin's decisions to destroy one old Bolshevik
or ruthless opportunist while sparing others seemingly equally implicated. 

   To Serge, The Chief -- the leader is left unnamed in the book --
institutes his system of terror without a master plan. He picks his victims
at random, and his secret police stooges are baffled by their task of
linking them. 

   Serge writes: "The examiners herded along a motley crowd of prisoners,
all exhausted, all desperate, all despairing, all innocent in the old legal
meaning of the word, all suspect and guilty in many ways." With all the
power in their hands, the examiners keep stumbling. For instance, they
cannot deal with the half a dozen people who used convoluted and
inconsistent arguments, each claiming to have murdered Tulayev. One of
them, an American woman, professed to be in love with Tulayev but said she
wanted to avert a danger that threatened The Chief himself, whom she also
loved. One moment she asked to be shot, but then claimed immunity from
prosecution as an American citizen and tried to send an SOS message to the
American consul -- as if such a message could ever get through. 

   The doctors summoned to examine the people who claim to be the assassins
contend that some of them had connections to the murder. The secret police
chief who dismissed the volunteers as lunatics sends the doctors back to
their patients for a review. But that order causes the doctors to go mad in
their turn, and the secret police chief dispatches the doctors to an insane
asylum under a strong guard. 

   Serge presents a gallery of meticulously described Soviet patriots of
all types thrown together as co-conspirators. He is equally adept in
portraying the investigators. 

   Serge shows how each conspirator was guilty of lingering doubts about
the way The Chief ran the country. He details how each thread of the
investigation was tied to another in a way that was almost plausible. The
plot did link the suspects, whether they had once risked their lives
fighting for communism in the Spanish civil war or tried to build a viable
economy in Siberia. 

   In the hands of the investigators, the plotters are marionettes. But the
investigators are also marionettes, as one director manipulates the others.
The shadow of The Chief hovers over them all. He is the source of all evil;
he is the master weaver of deception and lies. 

   In the end, the chief investigator cleans up his drawer and stumbles
upon the confession of the actual killer, a passersby with a revolver in
his pocket who did not intend to kill Tulayev. But once he saw the leader
responsible for so many deaths, he surprised himself by pulling the
trigger. Then he disappeared in the night. 

  The investigator knows instinctively that he is reading a genuine
confession. But he also knows that it ma kes no sense to catch the lone
assassin. He must burn the letter, which he does. Then he announces that
the case is closed, as all those guilty in the grand conspiracy have been
captured.

#6
Russia Denies Interest in Ongoing Conflicts in CIS 

MOSCOW, Dec 28 (Interfax)--Russian Foreign Minister Igor Ivanov has
refuted statements that Russia is interested in conflicts in other CIS
member states because they allow it to keep troops in these countries.
Russia and Armenia have to limit the development of their trade
because railroad communication between them has been disrupted by the
conflicts in Abkhazia and Nagorno-Karabakh, Ivanov said during a Monday
briefing on the results of his talks with Armenian Foreign Minister Vardan
Oskanian.He said that a full resolution of conflicts  "conforms to Russia's
strategic interests."

  Ivanov was asked to comment on Azerbaijan's concern over the sale of
Russian arms to Armenia.  He said: "When somebody starts feeling concerned,
the concern needs to be clarified.  There are various channels for doing
that, including a trilateral intergovernmental commission."

  Ivanov said that he and Vardanian had discussed the conflict in
Nagorno-Karabakh, including possible direct talks involving the opposing
sides with the help of the OSCE Minsk Group and Russia. Moscow realizes
that this is a complicated process, "and it is ready to provide
comprehensive assistance," he said.

  Ivanov said the opposing sides had the necessary political will to
settle the problem.

  He said he was satisfied with the talks with his Armenian counterpart
with and the development of Russian-Armenian relations. "They should
continue developing,"  Ivanov said.  Specific measures have been considered
for expanding bilateral cooperation in the political, economic and other
spheres, he said.

  Oskanian said he hoped that the Nagorno-Karabakh negotiation process
would resume with the help of Russia and the OSCE Minsk Group.
He praised the present level of cooperation between Armenia and
Russia. "But there is always room for more," he said.

#7
Expert: Russian Army Needs Funds To Maintain Nuclear Forces 

MOSCOW, December 25 (Itar-Tass) -- Russia's 1999 military budget needs
to be substantially replenished with allocations to maintain the country's
strategic nuclear forces, Russian expert, candidate of political sciences
Boris Zhelezov told Tass on Friday [25 December].

  Defence expenditures were recognised as a priority in the 1999 draft
federal budget that was passed in the first reading in the State Duma lower
house of parliament on Thursday.

  Regarding positive aspects of the budget, Zhelezov said that the real
value of spending on national defence and law enforcement acitivy grew to
about a quarter of entire expenditures.  In addition, he has the
information that the budget's purpose-oriented fund will allocate 2.9
billion roubles for the military reform. Other fundations will also earmark
funds for the purpose.

  It is, specifically, planned to channel additionally for the needs of
the army one percent of the income tax, part of extra revenues of the State
Customs Committee and percentage from the receipts of the Ministry of
Nuclear Energy.  Defence expenditures will amount, on the whole, to 16
percent of all expenditures under the budget.

  "These indexes, however, make up barely 2.8 percent of the amount the
US allocates to the Pentagon alone," Zhelezov said.  He said financing of
defence expenditures in industrialised Western countries envisages the
development and introduction of programmes in topical aspects of the
development of the nuclear forces, navy, air force, military science.  This
concentration of funds, the expert believes, makes for rapid advance in
priority directions, achieveing objectives within brief periods at optimum
outlays.A law on purpose-oriented financing of Russia's strategic nuclear
forces has been drafted by the Duma Defence Committee, Zhelezov said.  He
believes there is hope that the state will supply the needed funds and
Russia will usher in the 21st century, being a great nuclear power.

#8
Emil Pain on US Views of Russia 


Literaturnaya Gazeta
9 December 1998
[translation for personal use only}
Interview with Emil Pain, political scientist, adviser to president of
Russian Federation, by Oleg Moroz: "Is Russia Hopeless? Emil Pain,
Political Scientist, Adviser to President of Russian Federation Discusses
What Americans Think of Us"

  [Moroz] Recently we have heard a lot of talk about the notion that the
West, which until recently has unwaveringly supported us in our
transformations, has now changed its attitude toward Russia.  Is this
really true?  I am told you recently returned from a rather extended trip
to the United States.  Were you able to discern the attitudes prevailing
there now?

  [Pain] I spent practically all of November in America.  I was
delivering lectures at universities and participating in seminars there. 
In general I had the opportunity to hear the opinions of essentially all
the largest scholarly organizations that determine the position of
America"s political establishment--the positions of both the
Democratic and the Republican Parties.  I met and had a conversation with
Under Secretary of State Strobe Talbot (an excerpt from the paper on the
situation in Russia that he delivered at a conference at Stanford
University was recently published in Izvestiya).

  [Moroz] And what did you learn from these meetings?  What is the
general view of Russia today?

  [Pain] The view of Russia today is impossibly gloomy.  I have been
travelling to the United States since the end of the 1980s and I can
evaluate the dynamic.  Unfortunately, it is as sad as it can be.  For us.
To be sure, we must make a distinction between the evaluations of our
situation that appear in the press and those of serious analysts.  The
newspapers, as usual, are inclined to overstate our problems.  Just as at
the end of the 1980s and the beginning of the 1990s they exaggerated the
scale of the democratic achievements in our country, now, since 17 August,
they are exaggerating the scale of the crisis.  Almost everything is
presented in a single light: the alliance between the communists and the mafia.
As for the specialists, their assessment is more in keeping with the
actual situation.  One must say that the United States has a huge number of
analytical structures working on Russia.  And they are working in a serious
and thorough way.  Thus the general opinion of political scientists is that
there has been no catastrophe, that Russia will most likely not turn from
the path of market transformations and parliamentary forms of democracy.
But at the same time everyone thinks that the danger of a collapse
still exists.  There is the danger of coups and also of a legal takeover of
power by anti-reformist forces...

  [Moroz] But what are the grounds for what you call the prevailing
confidence on the part of American analysts that Russia will not stray from
the market path?

  [Pain] There are several grounds.  First: A certain consumer demand
has been formed in Russia.  A certain part of the society has become
accustomed to a diversity of consumer goods and a certain quality level
below which they must not drop.  As soon as a new regime offers the people
fewer goods of inferior quality, a certain conflict will arise. 
Approximately of the kind that arose when imported tobacco items
disappeared from the sales market...

  Second: The people have already become accustomed--although perhaps
not all of them are aware of it--to electing governing bodies.  This is
indeed the case.  I frequently visit the republics of the Northern
Caucasus, where until just recently there could not even have been any
mention of electing authorities. Now there is a very powerful demand for
everyone to be elected, even in these republics.

  Next: People have become accustomed to diversity and freedom of the
press.  Regardless of the abuse they take in all segments of the society,
today it is impossible to imagine a situation with the Soviet kind of
uniformity of the mass media.

  Further: The country"s globalization and inclusion in the world
processes are grounds for confidence that the changes in Russia are
irreversible.  I have in mind not only its inclusion in the Big Eight, the
Council of Europe, and other international organizations, but also the fact
that Russia has been included in world commodity exchange. And that since
Perestroyka millions of Russians have traveled abroad for the first time
and have seen how the rest of the world lives...

  Another basis is that there is a new generation in Russia.  People
whose worldview has essentially been formed during the post-Perestroyka
period are entering political life.  They do not remember the Soviet way of
life or communism.  And the probability that they, like their fathers and
grandfathers, will begin to join party cells, be forced to travel to the
kolkhozes, and so forth--to the analysts this probability does not seem
very great.

  [Moroz] And what causes the greatest misgivings in your American
political science colleagues?

  [Pain] The first thing they are worried about is the criminal takeover
of political and economic life.  Unfortunately, there are plenty of
examples in the world in which criminal states have appeared and developed.


  True, as a rule they were small states in Latin America and Africa, where
oligarchs have taken over power and merged it with criminal business.  The
question is whether this is possible in such a huge country as Russia.  But
at least none of my American colleagues with whom I spoke feel that this
can be ruled out.

  Their second serious fear is that Russia might fall apart.  Strictly
speaking, this fear is not new.  It has come up again and again in recent
years.  But, judging from the American press, before 17 August there were
never such intensive discussions of the inevitability of a collapse. 
Although, in my view, recent events, particularly in August and September,
seem to have demonstrated the opposite--there is a small probability that
Russia will collapse and a high level of adaptability to the conditions
that have developed.  The newly fledged Russian market has made itself
fully felt here.  All attempts on the part of certain governors to pound on
the table as they did in former Soviet times and order prices to stay put
have led to naught.  Nobody managed to raise barriers on the path of the
movement of goods from one region to another...

  [Moroz] In the American"s opinion, are the main sources
threatening Russia"s integrity the same today as they were, say,
several years ago, or are they different?

  [Pain] My position, which was supported there and was later reflected
in Talbot"s paper that I mentioned, is that the sources of this threat
are different today.  While during 1991-1993 the main danger was presented
by the ethnic separatists, today on the whole (Chechnya is an exception
here) the separatism problem has become less critical.  Chauvinism and
nationalism are more dangerous today, especially in its extreme and painful
manifestations.  In the form of fascism.  Especially in the south of Russia.

  [Moroz] How do the Americans rate the Russian political leaders? 
Which of them--excuse the tautology--is leading in public opinion overthere?

  [Pain] Of course I have not conducted any sociological polls, but
according to my calculations the one with the most favorable ratings among
the candidates for the Russian presidency is Lebed.

  [Moroz] How is that?  What a surprise.

  [Pain] ...More or less favorable, with reservations and misgivings, is
Luzhkov.  In third place comes Primakov.  And, finally, the fourth of the
top leaders is Zyuganov.

  These are the realistic candidates for president.  As concerns leaders
with a liberal bent, the majority of analysts are inclined to think their
chances are extremely small.  In principle, say, Kiriyenko"s election
would be met much more favorably in the United States than all the four I
mentioned above taken together, but American political scientists do not
think he has any hope of becoming president.

  [Moroz] But why is Lebed in first place?

  [Pain] I asked my American colleagues that question.  Their answer was
that they have nothing against Lebed.  He has not appeared in any
anti-American activities or any other actions that could be regarded as
dangerous.  Moreover, they have the idea that he is teachable.  And the
third thing is that no Russian personages traveling to America say as much
of what Americans want to hear.  True, they agree that in terms of his
level of unpredictability Lebed, of course, is ahead of all the rest.  But,
I repeat, from the American vantage point, he appears to be the
least dangerous.
As concerns Luzhkov, he--and I was surprised to hear this--is regarded
as a fairly acceptable candidate.  Everyone is certain that he would never
abandon the market economy.  They also think that the idea that the
structures linked to Luzhkov will take over everything else is undoubtedly
exaggerated and without justification.  The prevailing opinion is that the
Moscow mayor and the Moscow economic structures linked themselves to
international economic circles better than others and earlier than others
and they have accumulated a huge amount of experience in dealing with them.
  So far in the process of the crisis that has broken out, foreigners have
experienced the least difficulties in connection with Moscow.

  [Moroz] And what about Sevastopol?

  [Pain] I asked that same question.  Their answer was:  What is
Sevastopol?  Nobody is afraid of Luzhkov"s statements regarding this. 
What the mayor says is one thing and what the president can do is something
else...  Ultimately Luzhkov is building residential buildings in Sevastopol
and not armored personnel carriers...
  Americans are more frightened by the people around Luzhkov.  Who will
come with him?  How acceptable are these people to the Western partners of
the potential Russian president?

  There is another misgiving frequently heard in the United States:
Luzhkov will undoubtedly restrict the freedom of the press.  But where are
the arguments for this?  Among other things I advised the Americans to read
the article by the leader of TV-Center, Anatoliy Lysenko.  The essence of
what the author said about his relations with the Moscow mayor was that
these relations are purely businesslike and pragmatic, that he does not
experience the slightest pressure from the Moscow city chief.  Lysenko
explains this by the fact that Luzhkov never was a party boss...

  [Moroz] Why such an indifferent attitude toward Primakov?  Because of
his past MFA [Ministry of Foreign Affairs] activity?

  [Pain] Of course Primakov was the first since Kozyrev to tell the West
"no" and rub them the wrong way.

  But the Americans do not think it very likely that Primakov will make
it to the presidency alone, without the support of any political structure.

  [Moroz] And how do the leading political scientists regard Primakov"s
government?

  [Pain] If you are speaking about the political scientists who form
policy, their assessment is extremely negative.  From their viewpoint this
government has a high level of unpredictability of actions and it gives no
hope of positive economic development for the country.
And in general they think that the Primakov government is temporary.

  [Moroz] Now about Zyuganov...  What do they think about his election
chances and about the chances of communists in general in connection with
Makashov"s fascist escapades and the campaign surrounding them?  Will
all this have an impact on the alignment of political forces in Russia?

  [Pain] The general conclusion is this: These escapades will have no
impact on the communists" chances since the communist electorate is
one of the most nationalistically charged.  In the Americans" opinion
there will be no changes in the alignment of political forces because of
the Makashov affair either.

  The Americans are more concerned not so much about nationalism per se
as the prospects for increased anti-Western sentiments in Russia.  All
analytical centers without exception predict this increase.

  [Moroz] How do you picture American relations with Russia in the near
future--at the state and nonstate levels?

  [Pain] As concerns economic relations, unfortunately, the majority of
leading political science centers are not recommending to those they advise
that they work actively with Russia.  In the analytical structures that are
linked to the Republicans these recommendations are considerably stronger. 
The structures serving the current Democratic administration on the whole
are against isolating themselves from us or putting pressure on us.  This
is understandable: To take any other viewpoint would be to admit the
complete failure of their policy.

  But in general everyone is calling for caution in relations with our
Fatherland.  And they are recommending not granting state guarantees to
firms for economic activity in Russia.  The general opinion is that it is
better to put the money in a Swiss bank directly than to give it to Russia.
Nonetheless there are at least two types of economic subjects that
agree to continue to work actively with our country.  First, there are the
large investors oriented toward oil production and transportation.  Their
investments and profit are so great that they cannot allow themselves to
change their plans to suit the market conditions.  And, second, the Russian
market will apparently not be abandoned by those firms that have already
organized their production here, found reliable contracting agents here... 
These include, say, such companies as Snickers and Pepsi Cola.  They are
not likely to completely shut down operations in Russia.  Incidentally, the
small investor is also prepared to cooperate with us, but under certain
conditions--if the money is invested not in Inkombank and not in SBS-Agro,
but in an American bank.

  [Moroz] Whom specifically do the Americans blame for the bad economic
situation that has developed in Russia?  On whom do they place
responsibility for the crisis?

  [Pain] Here again the analysts and the newspapers have different
approaches.  I have not seen a single word of reproach against the former
Russian governments in any newspaper.  They all say that in Russia there is
no market and no democracy--there is a quasi-market and a quasi-democracy. 
They curse the oligarchs...  The analysts have quite a different view: They
are clearly aware that the Russian leadership has made a number of
strategic errors.  Thus some of them think that the Russian market was
opened up too soon.  Not the financial market--it should have been opened
up--but the goods market.  The Russian producer was absolutely unprepared
for this and was unable to compete.

  [Moroz] What do they think about our middle class?  Do they agree that
the crisis has destroyed it?

  [Pain] We had an argument about that.  Many people in the States
really do think that our middle class is dead.  But I think it has simply
changed.  Some of its representatives actually were pushed out of the
saddle, but new ones replaced them.  They appeared precisely during the
course of the crisis.  On the whole I am confident that this class has been
preserved in Russia.

  [Moroz] Well, let us sum up.  On the whole what is the attitude of
American political scientists toward Russia?

  [Pain] Of course the majority of them do not want further
disintegration and erosion of our country.  This would bring nothing but
unpleasantness to all concerned.  Russia has not been feared as a strong
partner for a long time, but nobody wants to weaken it further.  On the
contrary, the chaos, the expansion of the criminal element, the wave of
emigration out of our country--these are the things that frighten political
scientists today.

  But if they do not fear Russia, they do not respect us either.  And
they are not interested in us.  In general the condition of
Russian-American relations and Russian-Western relations as a whole is
extremely unfavorable now.

  At the same time everyone understands that a country with such a
gigantic territory, with such a population, and with such intellectual and
economic potential cannot but play a significant role in international
life.  So in relations with the West we can see an increase in unpleasant
aspects but no threat of any radical turn.  Nobody subscribes to the idea
of another "iron curtain."

#9
The Guardian (UK)
30 December 1998
[for personal use only]
How last Soviet leader lost his roubles 
By James Meek in Moscow

  Russia's financial crisis claimed its most famous scalp yesterday when
Mikhail Gorbachev, the last leader of the Soviet Union, announced that he 
was flat broke. 

  The man honoured throughout the western world for his role in freeing
Eastern Europe from communism found honour was without profit in his own country 
when the Russian bank in which he had stashed his £50,000 savings went bust with
the collapse of the rouble.

  "All my money is gone," he told Germany's Bunte magazine in an interview
published yesterday.

  Mr Gorbachev, bundled out of office by President Boris Yeltsin and the
Russian parliament seven years ago as the USSR disintegrated, never reconciled 
himself to the lack of gratitude from his countrymen for his role in freeing
Eastern Europe from totalitarian communism and introducing democracy, the free 
market and McDonalds hamburgers to Russia.

  But he was always thought to have handled his personal financial affairs
shrewdly, exploiting his status abroad to win hefty book advances, lecture
fees and lucrative personal appearances.

  He is known to have a large country house outside Moscow, but lives and acts
without the gross ostentation of the small class of super-rich New Russians
whose emergence he unwittingly enabled.

  "You know, I'm not really as rich as many in the west think," he told Bunte.
"The new rich here in Moscow often spend more in one night than I earn in a
whole year." Some of his money was invested in his own charitable foundation.
Thanks to the collapse of the bank, he said, staff at the foundation had not
been paid for several months.

  The former Soviet president is hoping to restore his fortunes by writing
a new book in time to mark the tenth anniversary of German reunification in 
October.

  There were signs that all was not well with the Gorbachev finances earlier
this year when he appeared in a US television commercial for Pizza Hut,
playing himself in an argument between Russian pizza-eaters about the virtues
of consumer capitalism. Shortly afterwards, Pizza Hut, alarmed by the collapse
of the rouble, pulled out of Moscow.

  The shock waves from the August crash are still shaking the foundations of
Russia's new elite. Yesterday the Russian interior minister, Sergei Stepashin,
said that theft or blunders within the central bank up to August could have
cost the country billions of dollars.

  Since the crash, the bank has been under investigation by a group from the
interior ministry, the federal security service and the general prosecutor's
office. A parallel probe is under way by the country's main state auditors and
a western accountancy firm is about to be chosen to audit the bank's books for
1998.