September 22, 1999   
This Date's Issues: 3517 • 3518 •   

Johnson's Russia List
#3518
22 September 1999
davidjohnson@erols.com


[Note from David Johnson:
1. Reuters: Muscovites pay last respects to Raisa Gorbachev.
2. AFP: General warns Russian invasion of Chechnya would be too bloody.
3. Segodnya: Deterrent Is The Kremlin's Weapon.
4. RFE/RL NEWSLINE: KREMLIN CHANGING ATTITUDE TOWARD DEFENSE, NEWSPAPER 
SAYS and ANOTHER CONSPIRACY THEORY FOILED? 
5. Bloomberg: Bank of NY Probe Examines Links With Yeltsin's Family, 
WSJ Says.
6. The Electronic Telegraph (UK): Marcus Warren, Yeltsin's enemies pour
scorn 
on the Family spirit.
7. AP: Russian Duma Nixes Power Curbs.
8. Nicolai N. Petro: Creating Social Capital in Russia.
9. Reuters: IMF sees Russia economic growth in 2000, but risks.
10. Reuters: IMF's Camdessus sees no sign Russia misused loan.
11. Financial Times (UK): Alan Beattie, WORLD BANK: Economist rebuked over 
Russia. (Stiglitz) 
12. The Guardian (UK) letter: Tribute to Gorbachev.
13. NTV: Arbatov: Military Unprepared for Dagestan.
14. Itar-Tass: Putin Has "Good Chances" to Become President -- Primakov.
15. Reuters: Free market friction if Luzkhov led Russia-analyst.
16. Toronto Sun: Matthew Fisher, Where capitalism means corruption.
The plundering of Russia is proceeding at a fantastic pace. 
17. Reuters: Russia says only UN can authorize intervention.
18. Itar-Tass: 225 District Electoral Commissions Formed in Russia.
19. Interfax: Kremlin says Yeltsin has no resignation plans.] 


******


#1
Muscovites pay last respects to Raisa Gorbachev
By Elizabeth Piper

MOSCOW, Sept 22 (Reuters) - Curiosity and a touch of sympathy kept hundreds 
of Muscovites queuing on Wednesday for a final glimpse of Raisa Gorbachev, 
the glamorous former Soviet first lady who died this week. 


Russian Prime Minister Vladimir Putin and other top officials joined ordinary 
Muscovites filing past Raisa's body, which lay in a white silk-lined coffin 
covered with white roses. 


She died on Monday in a German hospital after suffering from leukemia. She 
was 67. 


``She looks like she's sleeping now, it's clear that she was very ill -- look 
how thin she is,'' said Nina, 62, placing the wilting flowers she brought 
from a Moscow suburb. 


``That's a nice touch,'' she said, pointing to a picture of a smiling Raisa 
surrounded by red roses which greeted visitors at the top of stairs leading 
to the ornate, flower-filled room where her body lay. 


Black chiffon, draped from the ceiling over crystal chandeliers, brushed near 
the heads of Raisa's family. 


Mikhail Gorbachev, who was with his wife when she died in the early hours of 
Monday morning in Germany, sat close to his only daughter Irina. His eyes 
were red with grief. 


Putin, who gazed into the coffin, and Naina Yeltsin, the wife of Gorbachev's 
one-time enemy President Boris Yeltsin, both had long conversations with 
Gorbachev and laid wreaths to the sound of classical music performed by a 
string quintet. 


``She was a most cultured lady, who was first to show what a president's wife 
should be,'' Yegor Stroyev, speaker of the Russian parliament's Federation 
Council upper chamber, was quoted as saying by RIA news agency. 


Many Muscovites said they came to say goodbye to a mother and wife, not the 
stylish first lady whose clothes and jewellery were so often scrutinised in 
newspapers. 


The day of mourning was extended by two hours to allow all wellwishers to 
pass through, Ekho Moskvy radio reported. 


``She was a good wife and mother, and her death of course is tragic,'' said 
Irina, who had brought a newspaper with her to protect her clothes as she sat 
on windowsills while she waited. 


Others, who felt little sympathy for Gorbachev, the man they considered sold 
them out to the West, said they came out of curiosity. 


``I had a free afternoon, so I thought I'd see what was going on,'' an 
elderly gentleman called Pyotr said. 


``To be honest, I think Mikhail Sergeyevich (Gorbachev) was a coward. Look at 
our country now, hundreds are dying everyday,'' he said, expressing anger 
that many Russians feel over Gorbachev's role in ending the Soviet Union. 
``But I suppose she did all she could,'' he added in reference to Raisa. 


She will be buried at the exlusive Novodevichy cemetery in central Moscow on 
Thursday. Former German chancellor Helmut Kohl, Chancellor Gerhard 
Schroeder's wife Doris Schroeder-Koepf and German Parliamentary Speaker 
Wolfgang Thierse are due to attend the funeral. 


******


#2
General warns Russian invasion of Chechnya would be too bloody


MOSCOW, Sept 22 (AFP) - A Russian general on Wednesday said a ground invasion 
of Chechnya would cost too many of his soldiers' lives but vowed to seal the 
rebel republic's border and pound suspected terrorists based there.


Deputy Interior Minister Igor Zubov cautioned that Russian intelligence had 
learned Saudi billionaire Osama bin Laden had just shipped 30 million dollars 
to two top Chechen guerrilla leaders to help finance a new incursion into 
southern Russia.


He also accused Turkey, Yugoslavia and Afghanistan of failing to clamp down 
on suspected terrorist training camps in those countries which Moscow 
officials contend are being used as launching pads for attacks on Russia.


Insurgency led by the feared Chechen warlord Shamil Basayev into the volatile 
Russian republic of Dagestan have killed some 250 government soldiers in six 
weeks of fighting.


Nearly 300 more Russian civilians have perished from apartment block bombings 
this month which Moscow has accused Basayev and his cohorts of masterminding.


Moscow has ordered 30,000 federal troops to dig in along Chechnya's border in 
a military operation which much of the Russian media finds eerily reminiscent 
of the runup to the bloody 1994-96 Chechen war of independence from Moscow.


Several top Russian generals have refused to rule out a ground offensive into 
Chechnya aimed at permanently destroying alleged terrorist and guerrilla 
fighter training grounds.


Chechnya's bid for independence, never officially recognized by Moscow, cost 
80,000 lives and many Russians are wary of another war there.


So far federal troops have resorted to daily artillery and air raids against 
rebels in Chechnya. Unidentified Russian security officials told Interfax 
that nearly 100 rebels were killed in fighting early Wednesday.


General Zubov praised Russia's efforts to seal off the Chechen border and 
warned that a ground offensive would be bloody and only turn Chechen 
civilians against the Russian forces en masse.


"We have no plans to enter Chechen territory," Zubov told journalists.


"If we enter Chechen territory then the Chechen population may unite against 
Russian forces," he said, adding that it was "theoretically possible" that up 
to 30,000 Chechens would enlist should the Russians invade.


"An invasion will lead to a great loss of life. The tactics we have chosen 
now are correct and working," he added.


Zubov stressed that the Russian army was well-prepared and would follow 
through on orders to enter Chechen territory should such orders come from 
Moscow.


"The federal forces are morally and physically prepared to conduct such an 
operation, but I do not think it is useful to launch such an operation right 
now."


Pointing to the other side of the Chechen border, Zubov said that forces 
loyal to Basayev and his deputy Khattab are currently 5-7,000 strong and 
include mercenaries from Yugoslavia, Turkey and Afghanistan.


"We have especially serious grievances against Turkey," Zubov said, noting 
that Russian counter-intelligence had discovered several bases on Turkish 
territory where alleged terrorists are trained.


Zubov added that Basayev has recently offered to purchase Stinger 
shoulder-launched anti-aircraft missiles from Taliban forces in Afghanistan 
for 80,000 dollars a piece.


Basayev has slipped out from under officials Grozny control since he resigned 
as Chechen President Aslan Maskhadov's prime minister in the summer 1998.


Grozny officials, fearful of being pulled into a war they do not want and 
cannot afford, on Wednesday pleaded for President Boris Yeltsin to urgently 
meet with Maskhadov in a bid to restore order in the region.


"The war could have been avoided in 1994 if Yeltsin had met (the then) 
Chechen President Dzhokhar Dudayev," Chechen Deputy Prime Minister Aslan 
Makashev told a press conference in Grozny


"Today, a Yeltsin-Maskhadov meeting is indispensable if a new war is to be 
avoided." 
******


#3
Russia Today press summaries
Segodnya
September 22, 1999
Deterrent Is The Kremlin's Weapon
KREMLIN ADMINISTRATION IS PREPARING FOR ARRESTS AND SAVING MONEY
Summary
The Kremlin administration has a secret plan which would allegedly include 
several moves.


One would be frightening the media that have become too active in publishing 
anti-Yeltsin materials. According to Segodnya's source in the Kremlin 
administration, they are now considering the arrest of Moskovsky Komsomolets 
correspondent Aleksander Khinshtein. This young man recently published the 
transcript of Kremlin oligarch Berezovsky's phone conversation with Chechen 
leaders.


Another move would be frightening the businessmen who are too close to the 
opponents of the Kremlin. Sources say that the arrest of the AFK Sistema 
board of directors chair Yevtushenkov is very probable. Yevtushenkov's 
Sistema is a major commercial structure working with Moscow Mayor Luzhkov - 
nowadays the main enemy of the Kremlin.


The third move would be the disorganization of the enemy. We can expect a new 
wave of compromising materials against Luzhkov's wife, entrepreneur Yelena 
Baturina.


And the fourth move would be obtaining more control over financial flows. 
This is done for two reasons. One is to be able to bring Yeltsin's 
"successor" to power. The other is just to deprive the Kremlin's opponents of 
this money.


And all this will happen against the background of a new deployment of 
Russian ground troops in Chechnya.


*******


#4
RFE/RL NEWSLINE Vol. 3, No. 185, Part I, 22 September 1999


KREMLIN CHANGING ATTITUDE TOWARD DEFENSE, NEWSPAPER SAYS. In
its 21 September issue, "Nezavisimaya gazeta" argues that a
"serious change" is evident in the Kremlin's attitude toward
defense matters and that the administration is intent on
"comprehensively strengthening" the armed forces and
military-industrial complex. The newspaper puts this
development in the context of incidents such as U.S. fighter
jets' intercepting two Tu-95 Russian Bear bombers off the
coast of Alaska (see "RFE/RL Newsline," 20 September 1999),
noting that the West, used to the "stupor" of the Russian
armed forces over the past eight to 10 years, is trying to
present any such maneuver in international air space as a
"threat." It also sees as significant Vladimir Putin's recent
trip to Arkhangelsk, where the prime minister attended the
launching of a new submarine for the Northern Fleet and
reportedly stressed that the "new priority" is the production
of arms for Russia's own strategic needs. "Nezavisimaya
gazeta" is funded by media magnate Boris Berezovskii's
LogoVAZ group. JC


ANOTHER CONSPIRACY THEORY FOILED? Central Election Chairman
Aleksandr Veshnyakov appeared to pour cold water on State
Duma deputy Aleksandr Shokhin's theory, outlined in a recent
article, that Russian President Boris Yeltsin will resign
(see "RFE/RL Newsline," 20 September 1999). Veshnyakov said
on 20 September that a candidate for the parliament has the
right to simultaneously run for president. Shokhin had argued
that Yeltsin would resign on 19 October so that his main
opponents would have to choose between running in the
presidential elections and in the parliamentary elections.
Shokhin speculated that the commission and Russian courts
would likely interpret articles of the law on basic suffrage
guarantees and the right of Russian citizens to participate
in referenda in such a way that a candidate would be barred
from running twice in the same district. JAC


******


#5
Bank of NY Probe Examines Links With Yeltsin's Family, WSJ Says


New York, Sept. 22 (Bloomberg) -- U.S. 
authorities investigating alleged money laundering at the Bank of New York 
Co. are examining two offshore accounts at the bank that are beneficially 
owned by Russian President Boris Yeltsin's son-in- law and hold $2.7 million, 
the Wall Street Journal Europe reported, citing people familiar with the 
matter. The funds were deposited in Cayman Islands accounts and their 
recipient was Leonid Dyachenko, an adviser to Yeltsin and married to his 
daughter Tatyana. Investigators haven't so far found any links between the 
Cayman Islands accounts and the nine frozen Bank of New York accounts at the 
center of the probe, the Journal said. 


Russian lawmakers said Monday they'll attend U.S. House Banking Committee 
hearings in search of evidence that Russian businessmen and officials 
laundered an estimated $10 billion through U.S. banks, including Bank of New 
York. 


******


#6
The Electronic Telegraph (UK)
22 September 1999
[for personal use only] 
Yeltsin's enemies pour scorn on the Family spirit
By Marcus Warren in Moscow


A BRAND of vodka called Family and advertised as "real poison" is the 
latest weapon deployed by President Yeltsin's enemies to destroy him, his 
relatives and his closest advisers.


Peering out from the label under a picture of the Kremlin are the faces of 
four of Russia's most powerful figures, known as "The Family". One of the 
four is Mr Yeltsin's daughter, Tatanya Dyachenko, whose husband, Leonid, was 
yesterday named by the New York Times as one of the subjects of an FBI 
inquiry into money laundering.


Mrs Dyachenko, one of her father's closest aides, was recently accused of 
using a credit card backed by a clothes shop in Lugano, Switzerland, which is 
linked to a firm which won major contracts from the Russian government. The 
Kremlin has described claims of corruption in Mr Yeltsin's close circle as 
"filthy fabrications" designed to "stain the image of Russia".


Those interested in buying Family - which the label says is distilled using 
the same methods used to make the "opium of the people" - are invited to ring 
a Moscow number which turns out to be that of the office of Alexander 
Voloshin, Kremlin chief of staff and one of the quartet on the label. The 
other two are Valentin Yumashev, a former chief of staff and the ghostwriter 
of Mr Yeltsin's memoirs, and Roman Abramovich, the secretive head of Sibneft 
oil.


It is unclear how many bottles of the vodka are circulating, but several 
bottles were sent to a Russian newspaper to prove its existence.


More than 50 metal kegs containing 200 litres of raw alcohol were washed up 
on the Crimea peninsula in Ukraine last week, reported the Fakty newspaper.
The adult population, who regularly drink raw spirit, gathered with shopping 
carts and tractors to haul the treasure home but a day later police arrived 
to wrest away the kegs.


******


#7
Russian Duma Nixes Power Curbs
September 22, 1999
By NICK WADHAMS


MOSCOW (AP) - Russia's lower house of parliament today voted down a draft 
amendment that would have required the president to get approval before 
hiring or dismissing the prime minister and several high-ranking ministers.


The amendment was introduced by Communist lawmakers, opponents of President 
Boris Yeltsin who have blasted him for repeatedly firing his entire Cabinet 
with little warning or reason. The current prime minister, Vladimir Putin, is 
Russia's fifth in 18 months.


``It is our duty to adopt this amendment to protect the government and to 
make the leapfrog games we've been witnessing lately impossible,'' said 
Communist lawmaker Svetlana Goryacheva.


But the lower house, or State Duma, fell 79 votes short of the 300 needed to 
pass the first reading of the bill. The amendment would have had to go 
through two more readings in the Duma before going to the upper house, 
Yeltsin and regional legislatures for final approval.


The amendment would have greatly boosted parliament's power, requiring its 
approval for hiring and dismissing the prime minister, his deputies, and 
seven others: the finance, defense, foreign, emergency situations and 
interior ministers, as well as the heads of the Federal Security Service and 
the Foreign Intelligence Service.


Currently, the president must get parliamentary approval for his choice of 
prime minister, but can fire him at will. He doesn't have to consult the Duma 
at all to appoint or fire the other ministers.


Parliament also failed to pass a similar draft amendment that would have 
required Duma approval for the president to dismiss only the prime minister, 
and shot down a third that would have increased the power of the prosecutor 
general.


The legislative body did pass the first reading of an amendment that would 
require witnesses to obey summons to testify in parliamentary hearings in 
some instances. That bill came after parliament debated this spring whether 
to impeach President Boris Yeltsin and most witnesses didn't show up.


The Duma was unsuccessful in its bid to impeach Yeltsin.


******


#8
Date: Wed, 22 Sep 1999 
From: "Nicolai N. Petro" <kolya@uri.edu>
Subject: Creating Social Capital in Russia


I have just completed a 40-page report for the National Council for 
Eurasian and East European Research (NCEEER). It is entitled "Creating 
Social Capital in Russia: The Novgorod Model." The study finds a high 
correlation between social capital, trust in government, and economic 
performance in the Novgorod region of Russia, and attributes this to the 
local government's efforts to promote a cultural framework that contrasts 
Novgorod's heritage of mercantilism and democracy to Moscow's heritage of 
political and economic centralization. Taking advantage of a consensus 
among the local elite regarding these liberal "Novgorod" values, the 
regional government has successfully tackled one of the most serious 
problems facing societies in transition--cultural discontinuity.


The Novgorod region's success shows how, even in the absence of a national 
consensus, local governments and elites can forge common values and 
priorities for their communities. The key to success is minimizing the 
disruption of old institutions where they continue to serve public needs, 
while simultaneously embracing new institutions and values but placing them 
firmly within the context of traditional cultural values.


Anyone interested in receiving an advance copy of this report by e-mail may 
contact me directly. The final text copy will probably be out next month 
and can be requested from Jonathan Mogul at the National Council 
(jmnceeer@erols.com).


******


#9
IMF sees Russia economic growth in 2000, but risks

WASHINGTON, Sept 22 (Reuters) - Russia's long-suffering economy should grow 
next year but Moscow must push ahead with tax and bank reforms to ensure the 
fragile recovery lasts, the International Monetary Fund said on Wednesday. 


The IMF's World Economic Outlook, a twice-yearly assessment of prospects in 
IMF member states, said Russian output would rise 2 percent next year, the 
strongest growth since Russia started its transition from communism to 
capitalism. 


Inflation would fall to 23 percent next year, from a projected 88 percent in 
1999, but would be near the top of the IMF's inflation range for the 
countries of central and eastern Europe. Belarus, which has shunned most 
economic reforms, will be the only country with significantly higher price 
rises. 


"Some recent developments suggest that the economic decline is being 
reversed," said the IMF, which has poured more than $20 billion into Russia 
since the tentative reforms began. 


"Assuming the implementation of a coherent stabilization and reform program, 
IMF staff now project zero growth in 1999 as a whole, followed by growth of 2 
percent in 2000." 


But the IMF said the outlook would deteriorate if Russia did not press ahead 
with essential reforms. 


"Without a reinvigorated effort to move ahead with banking sector 
rehabilitation, fiscal and other structural reforms, the recent macroeconomic 
stabilization and turnaround in industrial output are unlikely to last," the 
report said. 


Russian economic output has more than halved since the collapse of the Soviet 
Union and World Bank President James Wolfensohn said on Tuesday that 40 
percent of the population was now living in poverty. "There are obviously 
things that are wrong in Russia," he said. 


Russia's economy hit a new low last year when the government, bowing to 
market pressure, devalued its currency, the rouble, and defaulted on some 
domestic debt. 


The IMF said this had curbed investment and boosted already high capital 
flight, but more expensive imports had helped domestic firms increase 
production. Monetary policy was now "reasonably firm," inflation had fallen 
and gross foreign exchange reserves were rising, it said. 


The IMF report said nothing about future IMF loans to Russia, but fund 
officials have said they are waiting for the outcome of an independent audit 
on the fate of previous loans before releasing more money from a $4.5 billion 
loan. 


In an unusual development, money from this loan is not actually reaching 
Russia but is being used to repay previous credits from the IMF. 


The IMF said Russia should close or rehabilitate ailing banks and halt the 
nonpayments that are dogging the economy. 


Russia needed to streamline its tax system and control spending commitments 
at individual ministries to meet its promises of a 2 percent primary budget 
surplus, excluding interest payments. 


******


#10
IMF's Camdessus sees no sign Russia misused loan


PARIS, Sept 22 (Reuters) - The International Monetary Fund has no evidence a 
loan to Moscow has been misused and sees no reason to change its lending 
programme, IMF Managing Director Michel Camdessus said in a French radio 
interview on Wednesday. 


Camdessus told RTL radio that ``the most irresponsible hodgepodge'' of 
rumours had developed about corruption in Russia supposedly involving money 
from IMF loans. 


He indicated he had not yet made up his mind about paying out the $640 
million second tranche of a $4.5 billion IMF credit approved in July, but 
said he saw no reason to change the direction of IMF policy. 


He said the IMF had stated it would not disburse the second tranche of the 
credit until its investigation showed its funds were not being misused. An 
IMF technical mission studying the financial operations of the Russian 
central bank and finance ministry finished its work in Moscow at the end of 
last week. 


Asked whether he was sure now, the IMF head responded: ``Not yet. I have not 
yet read those studies.'' 


U.S. Treasury Secretary Lawrence Summers said on Tuesday that Washington 
would not back new international loans to Russia until such funds were better 
protected. The next IMF tranche is due to be paid out in October. 


``When we have proof, as was the case in Indonesia, we stop our aid,'' 
Camdessus said. 


With Russia, he said, the only link between the IMF and a corruption case 
that has put its lending into question was the fact that a former Russian 
representative to the IMF had married a banker at the Bank of New York, which 
is suspected of laundering billions of dollars from Russia. 


``You can see that there is not a sufficient reason for us to change the 
direction of our action,'' he said. 


``We remain vigilent, but what is more important in Russia today is 
that...the programme is working very well and it is respected scrupulously. 


``While one expected a total collapse of Russia this year -- just remember 
August of last year -- we are pleased to see that Russia is finally back on 
the path of growth,'' he said. 


Russia, a member of the IMF for less than 10 years, is already its biggest 
single borrower, with loans totalling more than $20 billion since 1992. 


Russia is using money from the current $4.5 billion credit only to repay old 
debts. 


******


#11
Financial Times (UK)
September 22 1999 
[for personal use only] 
WORLD BANK: Economist rebuked over Russia 
By Alan Beattie in Washington


James Wolfensohn, the president of the World Bank, yesterday rebuked Joseph 
Stiglitz, his chief economist, saying Mr Stiglitz's views on the failure of 
market reform in Russia had been made with the benefit of perfect hindsight.


Speaking at a press conference just before the annual meetings of the World 
Bank and the International Monetary Fund in Washington, Mr Wolfensohn said he 
did not doubt that mistakes had been made in implementing the liberalisation 
programme in Russia. "But to say later that you would have done it 
differently earlier is to be a little generous to yourself," he said.


Mr Wolfensohn also said there was no evidence that World Bank lending to 
Russia had been misappropriated. Allegations have grown recently that money 
lent to Russia by the IMF in June last year was diverted to private bank 
accounts in New York. But Mr Wolfensohn said that a continuing audit process 
of all the Bank's lending had yet to turn up any evidence that money had gone 
missing.


He added that the current investigation into the allegations of theft and 
money laundering was a positive development and should be seen as a chance to 
get the matter "into the open".


Mr Wolfensohn's comments about Mr Stiglitz referred to a paper delivered at 
the World Bank's annual conference on development economics in Washington in 
April. In it, Mr Stiglitz said the "failures" of Russia's transition towards 
a market economy were not just due to sound policies being poorly implemented 
but to "a misunderstanding of the foundations of a market economy".


Referring to his chief economist as a "free spirit", Mr Wolfensohn implied Mr 
Stiglitz's views did not reflect those of the Bank as a whole. "I am always 
interested to see what Joe is saying on behalf of the Bank," he said.


Mr Stiglitz's views were widely believed to have caused a rift between the 
World Bank and the IMF, which was instrumental in implementing market 
reforms. Mr Stiglitz had said the "Washington consensus" which advocated 
rapid privatisation of state-owned enterprises and liberalisation of markets 
failed to take into account social and institutional factors, which ensured 
that those policies failed.


******


#12
The Guardian (UK)
September 22, 1999 
Letter
Tribute to Gorbachev 


The death of Raisa Gorbachev (Revolutionary first lady dies of leukaemia at 
67, September 21) reawakens the significance of the events of 1991 when 
Yeltsin opportunistically put down a coup against the leadership of the 
Soviet Union, for which he was hailed by the west as the saviour of Russia. 
The real coup was by Yeltsin himself. He was president of the Russian 
Federation, Gorbachev was president of the Soviet Union. Yeltsin hit on the 
simple ploy of destroying the Soviet Union, regardless of the enormous 
implications of such a venture, thus making Gorbachev redundant. 


If anyone doubts the folly of that move let them look at the plight of Russia 
today. Prostrate as a great power, its economy ruined by criminals and the 
rich "mafia" created mainly by those who loudly proclaimed Yeltsin's 
"democratisation" of Russia, and with a much reduced standard of living for 
the great mass of the people. 


When things became difficult for Gorbachev, the west hastily abandoned all 
pretence of support for him: had he received even a few of the billions of 
dollars lavished on Yeltsin - much of which has been siphoned off by 
corruption in the highest places - Russia would not be in its present plight.
Frederick Hughes
Ripon, North Yorks 


******


#13
Arbatov: Military Unprepared for Dagestan 


NTV
19 September 1999
[translation for personal use only]
Live studio interview by Yevgeniy Kiselev with Aleksey Arbatov, 
State Duma Deputy and Deputy Chairman of the Duma Defense Committee; 
>From the "Itogi" newscast 


(Presenter Yevgeniy Kiselev] We continue the 
"Itogi" programme. Our studio guest is Aleksey Arbatov, a State Duma 
deputy and deputy chairman of the [State Duma] Defence Committee. Good 
evening, Aleksey Georgiyevich. 
[Arbatov] Good evening. 
[Q] I know that you have just come back from Dagestan where you stayed 
for a rather long time. What are your impressions? What is happening 
there now? 
[A] I went there as a member of a group of deputies, together with 
deputies [Yuriy] Shchekochikhin and [Nikolay] Bezborodov. Our main 
impression is that, unlIke the war in Chechnya, an important element in 
Dagestan is support of the local population and this, of course, makes a 
fundamental difference and has effect on the conduct of the operation and 
on the troops's moral. As for the rest, as regards provisions for the 
troops, coordination between different departments, armaments, the state 
of hardware, preparations for conducting a military operation of this 
kind, the delivery of air strikes - unfortunately, to my great regret, 
there is little progress compared with the war in Chechnya and in some 
respects the situation has perhaps become even worse. 
[Q] Can you give some specific examples? 
[A] For example, I can tell you about a rather funny episode. We were 
talking to commanders in Novolakskiy District and asked them what we, as 
representatives of the State Duma, could do to help them, meaning some 
legislative or financial help. One commander looked at us sarcastically 
and said: Can you help us organize a bath since soldiers have not washed 
for three weeks? This begs the question: Can't our army and Internal 
Troops take care of such simple things? It is just an example. But there 
are other incidents: when aviation bombs its own troops, when rebels 
enter places without meeting any resistance, when after long fighting and 
mass destruction of houses, of villages, involving the death of local 
people, for some reason many rebel detachments succeed in escaping 
without meeting any resistance because roads have not been blocked. All 
this happens all the time and is very regrettable. 
[Q] What are the military saying? I've heard from many that to block 
their withdrawal after villages in the mountains are stormed is in fact 
almost impossible because of the terrain. 
[A] Nothing of the kind. What are you saying? On numerous occassions our 
army had to fight in the mountains, our border guards defended our 
borders in the Pamir mountains and other regions - there is such 
experience and there are possibilities. One should block roads not after 
but before fighting, before an advancement or attack on the occupied 
populated area starts. One can use mines, of course. When we were trying 
to find out why the roads were not mined, we were told that they did not 
have enough mines or mine experts. That is what I was talking about. 
[Q] Are you saying that it is not a question of the Dagestani mountains 
being impassable but it is a question of a shortage of sappers and mines? 
[A] Let's make a distinction. It is one thing when a group which 
illegally occupied a village is being eliminated and the village has to 
be blocked from all directions. And it is another thing when we talk 
about reinforcing the border between Dagestan and Chechnya, for instance. 
We are forced to turn this administrative border into a cordoned off 
quarantine zone, or a defence boundary, and there are lots of ways to do 
so in those mountain areas. Above all, to mine and set up strong points. 
For 50 years we had a border on the Pamir and even now our border guards 
are protecting the border in Panj and Mountainous Badakhshon, so one 
should not portray it as a problem that cannot be solved. There are ways. 
In some respects, it is even easier to do that in the mountains than on a 
plain where the passage is possible in any direction. In the mountains 
the passage is through paths and roads and, relying on the support of the 
local population, it is not technically difficult to do that. Financial 
assistance is needed, funds should be allocated for these purposes. It 
will not be cheap but, I think, to engage in a military operation similar 
to the one in Dagestan and to free occupied populated areas by almost 
totally destroying them, as we have just seen, is much more expensive, 
not to mention the death of our soldiers - our losses are extremely high 
for an operation of this scale - and the death of local people. 
[Q] If I understood you correctly, to sum up your reply, the 
reinforcement of the protected border between Chechnya and Russia is 
quite realistic. 
[A] I wouldn't call it "border" because we don't recognize Chechnya as a 
foreign state. 
[Q] Of course, from the point of view of political correctness, of 
course it is not a border - 
[Arbatov, interrupting] It is important, because if Chechnya is a
constituent 
part of the federation, any state providing military or financial 
assistance to it becomes our enemy and we have the right to regard it as 
an enemy and act against it. It is a very important aspect. 
In principle, you are right, essentially it must be a reinforced 
border, similar to our most troubled borders, in particular at present it 
is the southern border with Tajikistan and some other places. It should 
be protected by border guards who know how to protect a border, one 
wouldn't get away with other troops there. An amendment to the law on 
state border would be needed to allow in exceptional circumstances use of 
border guard troops for these purposes. They would use the army as a 
cover to prevent serious attacks. The Interior Ministry would ensure 
safety in the zone itself and, using the support of the local population, 
it would be easy to do so. And, of course, financing because without 
money nothing is possible. Financing would be needed to build up the 
border guard forces, to reinforce the border, to finance permanent 
deployment of federal troops there, both Internal Troops and Defence 
Ministry. An infrastructure of all social facilities, like in a town, 
would be needed, so that people can live there normally. Even if 
temporarily, it would be more than a year anyway and provisions should be 
made so that people should live not in the ground as our soldiers now but 
so that they can live and serve normally. 
[Q] I understood you, Aleksey Georgiyevich. Could I ask you the 
following. In newspaper articles I have come across the view that to 
fully reinforce one kilometre of the border will cost one million 
dollars. Is it true? 
[A] No, it is completely untrue. In new prices, to reinforce one 
kilometre of border costs about R10m. 
[Q] In other words, if we multiply 650 km of the border - I mean the 
perimeter of the border with Chechnya - by - 
[Arbatov, interrupting] Let our viewers multiply it for us because we can't 
do these calculations quickly in our heads. Anyway, it is not an expense 
that absolutely cannot be afforded. Moreover, we don't have to do it 
along the whole border at once. It can be done in several stages, in some 
areas where rebels are massing where it is dangerous, for example in 
Dagestan or Ingushetia it can be done quickly. In other areas - in the 
mountains - it can be done gradually. 
Another thing I wanted to draw your attention to is the current 
concentration of our troops along the perimeter and the air strikes are a 
very correct tactic. I hope we won't try and occupy Chechnya again but to 
force illegal armed formations to be on the defensive and live in 
constant fear, waiting for an attack, is a very important tactic. They 
will have no time for their sorties. 
[Q] Aleksey Georgiyevich, we are running out of time, so briefly could 
you answer the following question. I have heard from many people saying: 
perhaps we should let Chechnya go, perhaps we should reinforce the border 
but recognize Chechnya's independence and forget about it. 
[A] You see, if one could have sent it to the Moon, then one should have 
seriously thought about doing that. But by reinforcing the border and 
recognizing Chechnya's independence, we won't stop what is happening 
there. Because Chechnya is isolated from all directions, 80 km of its 
border with Georgia are not enough for its existence and in conditions 
when we have a bandit republic there on the whole, a bandit regime, it 
would have lived by constant expansion and constant sorties. In other 
words, we wouldn't have resolved any of the problems. We would have 
created many new problems because some Arabic states, some terrorist 
regimes would have recognized Chechnya as an independent state and would 
have been able to provide assistance to it with more freedom and we would 
have encountered enormous additional problems. 
The most correct tactic with regard to Chechnya is its isolation and an 
operation aimed at breaking down and, eventually, eliminating these 
illegal armed formations and their leaders, bandits whose names are well 
known. Had we adhered to this tactic since 1994, by now, I am sure, 
Chechnya would have calmed down and normally reintegrated. Instead, we 
began a war there and everyone knows how it ended. But one must correct 
one's mistakes - better late than never. 
[Q] Thank you, Aleksey Georgiyevich, for your replies. Let me remind you 
that live in our studio we had Aleksey Arbatov, a State Duma deputy, who 
has just come back from Dagestan and who shared his views with us as to 
what needs to be done next on the borders with Chechnya. 


********


#14
Putin Has "Good Chances" to Become President -- Primakov.


MOSCOW, September 22 (Itar-Tass) - Prime Minister Vladimir Putin has "good 
chances" to become the next president of Russia, Yevgeny Primakov said. 


"A lot will depend on how much independent he will be," Primakov told 
Itar-Tass on Wednesday. 


Primakov said he respects Putin. "I think he is doing very well, gaining 
political weight. He is a decent person," he said. 


Primakov is the chairman of the coordinating council of the Fatherland-All 
Russia election bloc. 


*******


#15
Free market friction if Luzkhov led Russia-analyst


HELSINKI, Sept 22 (Reuters) - The economic views of Moscow Mayor Yuri 
Luzhkov's centrist Fatherland movement are incompatible with the West's hopes 
for a free market in Russia, a Finnish analyst of Russian affairs said on 
Wednesday. 


``In terms of economic policy doctrine, Luzhkov and the European Union have 
very different positions,'' Christer Pursiainen, of the Finnish Institute of 
International Affairs, told a news conference. 


The Institute has published a new report on what would happen if Russia was 
led by Luzhkov. 


Pursiainen said Luzhkov stood for an ad hoc ``case-by-case market economy'' 
involving tight administrative control, active intervention in the economy 
and fixed-term concessions to Western corporations -- not an unfettered 
Western-style market. 


``Everything (in the economy) is supposed to happen under close 
administrative supervision,'' he said. 


``This might suffice for some Western companies...but of course it would not 
correspond to the West's longer-term goal that Russia should become a genuine 
market economy,'' he said. 


Pursiainen said Luzhkov's economic policy also rejected the International 
Monetary Fund's intervention in Russian economic affairs almost as sternly as 
the Communists. 


Luzhkov has joined forces with former prime minister Yevgeny Primakov in an 
alliance to fight the December elections in hope of replacing the Communists 
as the biggest bloc in the State Duma lower house of parliament. 


Luzhkov intends to support Primakov's push to succeed Russian President Boris 
Yeltsin in elections next year. 


*******


#16
Toronto Sun
20 September 1999
Where capitalism means corruption
The plundering of Russia is proceeding at a fantastic pace 
By Matthew Fisher <R_MatthewFisher@compuserve.com>


Washington, D.C. - It is a wonder and a disgrace that anyone at the World
Bank, the IMF or in the Clinton administration is surprised by allegations
that senior officials in Moscow stole between $10 billion (U.S.) and $15
billion and stashed it in the West.
As Bill Clinton, John Major, Helmut Kohl and Jean Chretien were
slapping Boris Yeltsin on the back in the lavish renovated state rooms of
the Kremlin a couple of years ago, congratulating the Russian president for
having transformed his country into a market economy and democracy, and
doing everything they could to encourage Yeltsin's countrymen to re-elect
him, the plundering of Russia was already proceeding at a fantastic pace.
Even VIP's travelling to Moscow for just one or two days in a
coccoon of bodyguards and advisers could have got a sense of what was going
wrong there if they had wanted to. Sweeping into the capital in high speed
motorcades, they would have to be blind not to notice that although Russia
always has a begging bowl out, there are far more top-of-the-line Mercedes
and BMW's on the road than in any western city except, perhaps, Beverly
Hills.
It is not uncommon to see $100,000 black Mercedes four-by-fours
bearing presidential administration plates parked until the wee hours of
the morning outside casinos where weapons scanners and sky high betting
limits are de rigeur. It is the same obscene story near outrageously
expensive hotels such as the Metropole and the National or Russia's state
bank. While swarms of babushkas beg for kopecks in the Metro tunnels
nearest to the Kremlin, fleets of chauffeur-driven German luxury sedans
wait for thousands of faceless politicians and bureaucrats.
Western investigators would do well to talk frankly with foreign
businessmen and financiers about what tricks they employ in a country where
corruption is as commonplace as vodka. They should also take closely
examine the books of every western company doing significent business in
Russia. If written up honestly, many of these books would stink.
In big, small and often imaginative ways, westerners have gleefully
abetted those who have looted Russia.
The former manager of a Finnish company with extensive operations in
Moscow which cater to Russia's obscenely well-healed elite told me how she
kept everything running smoothly there for years. She sent platters piled
high with smoked salmon and other delicacies to leading municipal
administrators every morning.
A British gent who works for a well known multi-national explained
to me recently what it took for him to get permission for his company to
build a big factory in Moscow. Scores of municipal officials whose approval
was required were handed British visas and tickets to London. The trips
were ostensibly to familiarize the officials with the company's operations.
In fact, the bureaucrats were given rooms at swank hotels by Hyde Park and
several thousand dollars for "expenses." The factory manager chortled as he
explained that the travellers invariably spent their days shopping and
their nights at grand restaurants and clubs.
A respected American investment bank spent a small fortune to hire
a well connected former Soviet oil executive as the boss of its Moscow
office. The man's principal duty was to arrange lunches and dinners with
very senior government officials so that the bank could discuss the
placement of western loans.
This same bank often arranged British, German and Swiss visas for
meetings with government officials which could have been held much more
easily in Moscow. The officials, whose expenses were all paid for by the
bank, insisted they wouldn't discuss anything about money that Russia was
being given unless they could travel to the West.
At a chance meeting in a restaurant in London last summer a senior
investment banker from the same company volunteered that his company's
Moscow operation attracted snakes willing to close their eyes to almost
anything because it was possible to make very, very big bucks there.
Investigators tracing what has happened to the billions given to
Russia and the billions which have disappeared from privatized former state
enterprises should cast a wide net. A good place to start might be with
real estate agents who work London's toniest neighbourhoods. Several of
these agents gleefully acknowledge that an endless parade of Russians with
bottomless pockets, including diplomats and government officials, have
replaced Saudis and Iranians as their best customers.


******


#17
Russia says only UN can authorize intervention

UNITED NATIONS, Sept 21 (Reuters) - Russia's Foreign Minister Igor Ivanov 
made clear on Tuesday that only the 15-nation U.N. Security Council, where 
Moscow has a veto, could authorise military intervention on humanitarian 
grounds. 


``Unlawful means can only undermine rightful ends,'' he told the U.N. General 
Assembly in an apparent reference to Yugoslavia where Russia opposed NATO's 
bombing of Serbia. 


``In general we should take an extremely careful approach to coercive 
measures and, what is more, not allow them to turn into a repressive 
mechanism to influence states and peoples regarded by some not to their 
liking,'' Ivanov said. 


Ivanov spoke shortly after U.S. President Bill Clinton justified NATO's 
action over Kosovo and a day after Secretary-General Kofi Annan chastised the 
Security Council for not enforcing its decisions and being paralysed in face 
of humanitarian disasters, whether in Kosovo earlier this year or during the 
massacres in Rwanda in 1994. 


Russia, along with China, held off approving any military action during the 
Kosovo crisis, although Moscow played a leading role in reaching a peace 
deal. The United States, on the other hand, has held back in authorising U.N. 
peacekeeping operations, particularly in Africa during the Rwanda crisis. 


But Ivanov said the Security Council needed to be reformed and made more 
representative, without abrogating the veto rights of its five permanent 
members. 


Ivanov, whose country is undergoing numerous separatist challenges in the 
northern Caucuses, said denounced ``militant nationalism, separatism, 
terrorism and extremism'' as a common challenge claiming countless victims 
around the world. 


``The international community and, first of all, the United Nations should 
decisively clamp down on any manifestations of separatism and strictly and 
consistently defend the principles of sovereignty, territorial integrity and 
inviolability of the national borders,'' he said. 


``It is necessary to completely eradicate instances of encouragement and 
support for separatist forces from without,'' Ivanov added. 


Without mentioning Iraq by name, Ivanov also said sanctions in the Security 
Council should be guided by clear criteria to impose and to lift them. 


The council, he said, ``should not allow any free interpretation of adopted 
decision, much less to allow their use by anyone for selfish political or 
economic ends.'' 


Russia has been negotiating with the United States, France, Britain and 
China, on a resolution to get U.N. inspectors back into Baghdad in exchange 
for some easing of nine-year-old U.N. trade sanctions. 


Turning to Russian nationals in the Baltic states of Latvia and Estonia, 
Ivanov denounced ``arbitrary action of authorities'' that deprived thousands 
of people of their citizenship and the right to use their native language. 


``Civilized integration rather than latent assimilation -- this is the way 
out of the prevailing humanitarian situation in these countries,'' he said. 


Ivanov said he hoped Mary Robinson, the U.N. high commissioner for human 
rights, would ``make her contribution'' to efforts under way by the 
Organisation of Security and Cooperation in Europe, the Council of Europe and 
other groups. 


******


#18
225 District Electoral Commissions Formed in Russia.


MOSCOW, September 21 (Itar-Tass) - A total of 225 district electoral 
commissions have been formed in all the constituencies of Russia but 
Chechnya, Chairman of the Russian Central Electoral Commission Alexander 
Veshnyakov said on Tuesday. 


The nomination of candidates in single-mandate electoral districts started on 
September 20, he said. Second phases of congresses nominating the candidates 
are underway. The Central Electoral Commission hopes to receive the first 
documents by the end of this week. The next sitting of the Commission is 
scheduled for Saturday, September 25. 


This year the period for nominating candidates in single- mandate electoral 
districts is minimum due to the State Duma's failure to approve a new scheme 
of the electoral districts. Thus, the period is cut to 35 days. The documents 
for the registration of candidates in single-mandate electoral districts and 
election blocs will be received by the Central Electoral Commission till 
18:00, Moscow time, on October 24. 


******


#19
Kremlin says Yeltsin has no resignation plans 
MOSCOW. Sept 22 (Interfax) - Deputy chief of Russian President
Boris Yeltsin's staff Vladislav Surkov denied rumors of Yeltsin's
pending resignation. "I can definitely say that there is no scenario for the
president's stepping down before his term expires," Surkov told the Obschaya
Gazeta.
Asked about the Kremlin's alleged war with the Fatherland-All
Russia election alliance, Surkov replied that "we are not fighting with
them but rather they are with us. I am not speaking about all members of
this bloc. For instance, [former Prime Minister and current leader of the
alliance] Yevgeny Maksimovich Primakov adheres to a very balanced position.
The same can be said about regional leaders. Unfortunately, [Moscow
Mayor] Yuri Mikhailovich Luzhkov and several other people always accuse us
of something," he said.
Concerning reportedly close ties between well-known entrepreneur
Boris Berezovsky and the Kremlin, Surkov said that "it was Berezovsky who
created the impression of this connection. His remarks give the
impression that he maintains close contacts with the Kremlin. Boris
Abramovich is a politician and thinks that such methods bear fruit and
help earn political capital. It certainly is fictitious. It obviously
discredits us but we cannot deprive him from freedom of expression."
"Unfortunately, powerful businessmen can resort to numerous steps and
influence the political situation, spread rumors. These people want to show
that they decide everything. The reality is that they decide nothing. The
public conscience simply retained a list of 10 figures who are constantly
gossiped about. The same is true about several presidential
candidates who are being played out in a game of solitaire. We will add new
names to this pack of cards and the game of solitaire will be different,"
he said. "We have not officially announced that [Prime Minister
Vladimir Putin] will be a presidential candidate," he said. A new person
might emerge on the scene. "If you have a pack of five cards, why not expand
it to ten," he said.


******