#1
Moscow Times
June 11, 1999 
U.S. Praises Russia's Part In Bringing End to War 
By Valeria Korchagina
Staff Writer

The United States paid its respects to Russia on Thursday for its help in 
reaching the Kosovo peace agreement, with President Bill Clinton putting in a 
personal telephone call to President Boris Yeltsin. 

Clinton also sent a top envoy to Moscow - Deputy Secretary of State Strobe 
Talbott - to express U.S. gratitude in person and try to mend relations that 
were so badly strained during the NATO bombing campaign. 

"A couple of weeks ago when I was here, it was snowing. I asked what had 
happened to the spring in Moscow, and I guess somebody heard it," Talbott 
said at a sweltering news conference Thursday evening at the U.S. 
ambassador's residence, Spaso House. 

"Maybe to stay with the metaphor - spring is back in the Russia-U.S. 
relationship. It certainly isn't as chilly as it was for awhile," Talbott 
said. 

Yeltsin welcomed NATO's decision to suspend its bombing campaign as a "step 
in the right direction." But, he added, "we consider the main goal a full end 
of bombing of the territory of Yugoslavia. A pause is good, but not enough." 

In his statement, Yeltsin also appealed for renewed diplomatic efforts to 
cement the peace. 

He made a similar appeal in his telephone conversation with Clinton, who 
called the Russian president to thank him for his help in bringing the 
conflict to an end, the Kremlin said. 

Behind the scenes Thursday, Russian and U.S. officials were trying to work 
out the sticky question of Moscow's role in a planned NATO-led international 
peacekeeping force for Kosovo. 

NATO says its forces will make up the core, but Russia says it will not put 
its troops under NATO's command. 

Talbott held talks with Russia's special Balkans envoy Viktor Chernomyrdin 
and later with Prime Minister Sergei Stepashin. Separate talks between 
Russian, U.S. and Finnish generals focused on the military aspects of the 
Kosovo deal. 

No breakthroughs were announced, though both sides expressed optimism that a 
compromise could be reached. Talks were to continue Friday. 

Talbott ruled out any Russian sector in Kosovo, saying this would amount to 
partition of the province. 

However Colonel-General Leonid Ivashov, head of the Defense Ministry's 
international cooperation department, said as he arrived for the military 
talks at the Foreign Ministry that Moscow still hoped for its own zone in 
Kosovo. Defense Minister Igor Sergeyev has said Moscow could commit up to 
10,000 troops in Kosovo, but has made clear they would be under Russian, not 
NATO command. 

The Defense Ministry said it received a "preliminary order" Thursday to 
prepare a brigade of paratroops to join the international force. Interfax 
said the brigade would consist of about 2,500 troops. 

But acute cash shortages could hamper Russia's participation in the Kosovo 
operation. Stepashin told a Cabinet meeting Thursday that the armed forces 
were in a "catastrophic state" and would need more help from the budget. 

In his later talks with Talbott, Stepashin said Russia had made "major 
concessions" to the West in its bid to broker a deal between NATO and 
Belgrade. "But they are justified because an end must be put to the war,'' he 
said. 

The State Duma, meanwhile, approved a non-binding resolution urging Yeltsin 
to sack Chernomyrdin, whom they accused of betraying Moscow's interests in 
Yugoslavia. 

Talbott paid special tribute to Chernomyrdin. 

"If Mr. Chernomyrdin and [Finnish] President Martti Ahtisaari had not 
undertaken their joint mission a week ago, I don't think we would be sitting 
here talking about peace tonight," Talbott said. 

According to Talbott, Chernomyrdin came up with a diplomatic approach he 
called the "hammer and anvil." 

"So Chernomyrdin was the hammer, and Ahtisaari was the anvil, and Milosevic 
was in between," the U.S. envoy said. 

"There is peace in Yugoslavia today. And lets all knock on wood that it 
lasts. Because the international community came together. Russia played an 
absolutely critical and even decisive role," Talbott said. 

"And now we are going about the business of deciding what steps we will we 
take together to implement peace." 

Talbott indicated that determining Russia's role in the peacekeeping force 
may take time. 

"We are not going to operate under a sense of an artificial deadline," he 
said. 

"There is a place for Russia in all aspects of the implementation of peace in 
Kosovo. We'll just need to get it right, which means that Russia will need to 
get it right by its standards, and NATO has its own standards."

#4
US billionaire Soros says rule of law can save Russia

MOSCOW, June 10 (AFP) - US billionaire George Soros said Thursday he is
"tremendously disappointed" with recent events in Russia and called for
robber capitalism to be replaced by rule of law to improve the situation.

The financier and philanthropist said he will be watching this fall's
parliamentary elections to see whether Russia can clean up its political
and financial troubles.

"I think everything will depend on the clarity of the political system and
I hope that out of the elections some clarity will emerge," he said.

But Soros agreed that elections in Russia heavily criticized for falsified
results are somewhat of a farce.

"You just have to end the farce and have a serious attempt to introduce the
rule of law, but I have no silver bullet," he told journalists.

Soros, who visited Moscow this week to review his Soros Foundation's
education, public health, cultural, media and legal projects, said despite
his criticism he will provide 100 million dollars for the programs this year.

"I am very satisfied with the work of the foundation otherwise I wouldn't
spend this amount of time and money, but I am tremendously disappointed by
the course of events" in Russia, he said.

Throughout the week, Soros has decried the system of robber capitalism here
in which the country's wealthiest businessmen have too much political
influence.

The US billionaire singled out controversial tycoon Boris Berezovsky,
widely portrayed as an eminence grise who masterminded the formation of
premier Sergei Stepashin's new government, as a prime example of what's
wrong with Russian capitalism.

But the US billionaire praised Grigory Yavlinsky, head of the liberal
Yabloko party, and former premier Sergei Kiriyenko's liberal government.

Yavlinsky, who Soros described as a "personal friend," "certainly has a
better understanding of economics than most people I see around in official
positions."

Soros said Kiriyenko's government, which was sacked shortly after the
August 16 financial meltdown, "had the greatest potential, but it never got
a chance to show whether it could deliver or not."

An emergency credit of seven billion dollars to prevent the August 16
collapse when the Russian ruble devaluated and the country defaulted on its
debt would have bought Kiriyenko's government time and stabilised the
situation until the end of 1998.

"I'm not saying they would have delivered, but there was a better chance
... than with any previous government," Soros said.

Even so, Soros warned against concentrating power in a central
authoritarian government and said more power should be given to the provinces.

After announcing he drastically reduced one educational program this year
after the government failed to provide matching funds, Soros said now even
provincial governments are asked to provide money up front for his new
programs.

Asked about Russia's investment climate, Soros said the abuse of
shareholders' rights was the main reason foreign investors are avoiding the
country.

With his own investment of 980 million dollars in Svyazinvest, Soros said
he was actively trying to "create value" in the telecoms giant and he had
"not given up hope."

That hope for Russia's future is also what drives the stock market, he said.

"Russian stocks are valued not like stocks, but like options on a better
future ... as options they have some value," he added. 

#5
Balkan War Seen Causing 'Sober Look' at Military Power  

Moskovskiy Komsomolets
9 June 1999
[for personal use only]
Report by Yuliya Kalinina: "High-Precision Bombing by Homeless; 
Military-Industrial Complex's Hour Has Come" 

The war in Yugoslavia has probably played a 
positive role in a certain respect. It has compelled President Yeltsin to 
take a sober look at Russia's military might. The sober look has noted 
that there is nowhere further to fall. There is a catastrophic shortage 
of military power to compel NATO to listen to us. Moreover, if, god 
forbid, NATO attacks Russia, we will not even have anything with which to 
fight back. 

Having pondered the matter, the president has steered a course toward the 
priority development of the military-industrial complex and the 
safeguarding of national defense and state security. The president was 
supported by the deputies. In 1999 some 164 billion rubles [R] (28.5 
percent of the entire federal budget) was earmarked for these purposes. 

According to our yardsticks this is an enormous amount of money. The lion's 
share of all planned expenditure will go on national defense. Only 
slightly more -- R166 billion -- is earmarked for servicing the foreign 
debt while all the rest (science, medicine, education, social services, 
support for the regions, maintenance of the state apparatus, state 
subsidies, roads, transport, and so forth) gets just R275 billion. 

We are almost like Minin and Pozharskiy [boyars who took part in fight 
against 1611 Polish-Lithuanian invasion]. We take off our last shirt and 
give it for the defense of the Motherland. 

Actually, in our country the troops are kept in such a way that their last 
shirt is no hindrance to them. They get it just in time to cover their 
modesty. According to the information of the Chief Military Prosecutor's 
Office "as of April 1999 unpaid wages to the Armed Forces personnel 
totaled over R7.5 billion. The subsistence minimum for a family of three 
for the North Caucasus region alone is four times higher than the salary 
of the junior officers' corps.... The number of servicemen without 
apartments as of early 1999 was 93,400. Moreover, 43,200 servicemen are 
in need of official living quarters while 7,000 servicemen scheduled for 
release have not been released because of lack of housing....While the 
medical service requires R19.5 billion to buy medical equipment and 
materiel, in 1998 a money limit of R600 million was approved and only 
R62.5 million arrived. The situation is the same this year.... Funding 
for food supplies in 1995-1999 was 53 percent of requirements. As a 
result arrears of over R5 billion have formed. The personnel's food 
allowance does not comply with the norms.... Purchases of military 
materiel were funded to only 25 percent of minimum requirements. Arrears 
to officers and ensigns for materiel that has not been issued to them 
total R2.6 billion." 

The military are being kept like animals, that is their rights are being 
flouted. The Chief Military Prosecutor's Office notes that this cannot 
fail to be reflected in the rise in crimes against property (theft, in 
other words). Compared with 1997, in 1998 the number of official crimes 
in this category rose 104.4 percent. 

...Thanks to the dry figures we can see the scale of the task more clearly. 
How can this ruin be turned into something combat-capable? 

To judge by the terse information from government sources, it has been 
decided to emphasize the provision of high-precision [title of article, 
"Vysokotochnyye Bomzhi," ("high-precision homeless") is pun on word for 
homeless, "bomzhi," and "bomby," or "bombs"] powerful weapons for the 
army. Vice Premier Klebanov has said it will be "re-armed with a 
consideration for the experience of Yugoslavia." Emphasis is being placed 
on funding for the military-industrial complex and on creating five new 
defense agencies which will engage in an inventory of defense enterprises 
and the creation of industrial concerns. 

As for returning debts to the army, feeding and clothing the 
servicemen, repairing the barracks, settling officers in apartments, and 
raising their salaries -- there is no separate talk of this at the 
numerous meetings of the state's top officials. It remains to be hoped 
that the army's "daily routine" issues will nonetheless be resolved 
somehow since our military might will hardly be successfully raised high 
through high-precision weapons and priority funding for the 
military-industrial complex alone.

#6
Russia Plans To Sign Agreement Banning Land Mines  

COLOGNE, June 9 (Itar-Tass) -- Russia intends to 
sign the international agreement banning the production and use of land 
mines, Russian Foreign Minister Igor Ivanov said. 

The agreement, signed in Ottawa, entered into force on March 1, 1999. It 
has been ratified by 80 countries. 

At their meeting in Bonn, the foreign ministers of the world's seven 
major industrialised countries and Russia discussed at length the 
prevention of conflicts in the world and fight against organised crime. 
Special attention was given to ways of combatting illegal trafficking in 
arms and military hardware. 

#7
Russia: U.S. Official Says Aid For Ex-USSR Critical
By Julie Moffett

Washington, 10 June 1999 (RFE/RL) -- A senior U.S. State Department official 
says it is in America's national security interest to continue to provide 
both long and short-term economic aid to Russia and other former Soviet 
countries.

Bill Taylor, coordinator of U.S. assistance to the newly independent states 
at the State Department, made the statement Wednesday at a hearing of the 
U.S. House of Representatives International Relations Committee. The hearing 
was held in order to review what U.S. aid programs in Russia have achieved 
over the last seven years.

Taylor said it is critical for the U.S. to keep funding both economic and 
technical assistance programs in the former USSR in order to promote 
democracy and economic reforms and to help stabilize the region.

But committee chairman Benjamin Gilman, (R-New York), expressed concern that 
Russia has already received close to $20 billion in loans from international 
lending institutions and several reschedulings of its debts, but still wants 
more money.

Gilman said Russia cannot even repay what it already owes the International 
Monetary Fund, is unable to adequately account for much of the last loan 
installment of over $4 billion received just last summer, and probably cannot 
meet the economic and budgetary reform conditions that it should meet to 
receive further loans.

"Today we see a Russian government that is broke, and we read reports of 
billions of dollars in Russian capital that has been squirreled away in 
foreign bank accounts. We'd like to know what purpose will be served by 

furthering such loans, and for how long."

Taylor acknowledged the severe economic difficulties in the region, 
especially the Russian financial crisis last August, but said America must 
continue to encourage democracy because the future course of reform in the 
former Soviet Union could "dramatically affect U.S. national security."

"It is clearly in our national security interest to have a democratic, 
market-oriented set of countries in the place where there was the Soviet 
Union in the past. If these new countries go down one road, our security is 
enhanced. Market reform, democratic reform, the secure disposition, reduction 
and non-proliferation of the former Soviet arsenal of weapons of mass 
destruction are obviously good for the U.S....But if these countries go down 
another road, Americans are clearly less secure."

Taylor said the U.S. assistance programs should be guided by two principles 
of engagement.

First, he said there needs to be a balance between the programs that address 
immediate threats, and programs that promote a lasting generational change in 
that part of the world.

The second principle, Taylor said, is that the U.S. should use a policy of 
"selective engagement" based on a country's willingness to reform. He said 
the U.S. needs to increasingly differentiate between reforming and 
non-reforming countries when designing these aid programs. 

As a result, Taylor said the U.S. will increasingly provide technical 
assistance only to those governments where leaders and citizens demonstrate a 
clear commitment to reform.

"Let's be frank. Some of the countries are making good progress. Economic and 
political reforms, however, are not going well in other countries. In 
Moldova, Kyrgyzstan, in Georgia -- commitment to reform is genuine. In 
Belarus and Turkmenistan, however, we see little such commitment on the part 
of the government."

As an example, Taylor said the U.S. recently provided additional funding to 
Moldova in the area of land privatization because it is the one country in 
the region that has "moved the farthest on agricultural reform and support 
for private farmers." 

He also said the U.S. has redirected its agricultural programs away from the 
central government in Ukraine, and toward pilot regions where work is ongoing 
with the private sector.

In Russia, Taylor said the U.S. has largely cut off funding for agriculture 
and energy projects because there is "very limited prospects for our programs 
to have an impact on development in these sectors." He also said the U.S. has 
suspended support to the election commissions in Kazakhstan and Uzbekistan.

But Taylor stressed that U.S. assistance programs of some kind are critical 
for all the countries in the former Soviet Union.

"Engagement is more important after the events of last August, both because 
of the immediate threats posed by the economic crisis, including increased 
risks of poverty, proliferation, and regional instability, and because 
engagement ensures that we can influence the long-term evolution of these 
societies toward markets, democracy, sovereignty and independence."

Taylor said the U.S. programs should include short-term goals such as 
humanitarian aid and to promote non-proliferation. But he said the U.S. must 
also invest in long-term political and economic reform by supporting academic 
exchanges, non-governmental organizations, Internet access and businesses.

Taylor testified that the U.S. currently spends about 1,032 million dollars 
annually for its Freedom Support Act programs in the countries of the former 
Soviet Union to encourage economic and political reform. He urged the 
Congress to approve a similar level of funding over the next five years, a 
proposal issued earlier this year by U.S. President Bill Clinton.

#9
Jamestown Foundation Monitor
10 June 1999

RUSSIAN MINISTER CALLS FOR IMPROVED TIES WITH WASHINGTON. Despite the many
tensions between Russia and the United States over developments in the
Balkans, Russian Foreign Minister Igor Ivanov suggested in Cologne yesterday
that Moscow hopes to rebuild friendly relations with Washington. Ivanov's
remarks followed a meeting with U.S. Secretary of State Madeleine Albright.
Ivanov told reporters that NATO's bombing campaign against Yugoslavia had
hurt bilateral relations between the two countries, and warned that the
"negative atmosphere" will linger. But, with the conflict now seemingly
winding down, he called on the two countries to start the "process of
restoring a normal partnership-like relationship." Russian-U.S. relations,
he said, had not suffered any permanent damage from the events in Yugoslavia
(AP, UPI, Russian agencies, June 9).

Ivanov's remarks would seem to continue Moscow's recent Jekyll-Hyde behavior
toward Washington. Russian leaders remain embittered over developments in
the Balkans, and belligerent, anti-American rhetoric will undoubtedly
persist in the Russian capital. The Russian government can also probably be
counted on to energetically exploit ambiguities in the Kosovo agreement in
order to mitigate the effects of its diplomatic setback over Kosovo.

At the same time, Moscow seems concerned over the wide rift which the Kosovo
conflict has opened between Russia and the West. The diplomatic concessions
which Russia made during the negotiations over Kosovo in recent days
probably reflect a desire to improve Russia's ties with the West. The
Kremlin in particular probably also seeks to ease tensions with the West in
the run-up to next week's summit of the G-7 countries and Russia in Cologne.
Some observers have speculated that President Boris Yeltsin wants not only
to improve the chances for Russia to win promises of financial assistance
during the summit, but also to arrive in Germany wearing the mantle of
Kosovo peacemaker.

PRIMAKOV HINTS HE WILL RETURN TO POLITICAL FRAY. Yevgeny Primakov gave the
first indications yesterday that he is contemplating a return to Russian
political life. Asked about his plans, the former prime minister, who was on
his way to Switzerland to receive treatment for chronic back pain and to
deliver a lecture, said: "The future will reveal itself. I do not exclude
anything" (Russian agencies, June 9).

Anonymous sources in Primakov's inner circle were less coy about his plans:
Russian information agencies today quoted one of them as saying that
Primakov is "thinking over various offers and is not rejecting any options."
These sources were quoted as saying that Primakov may make a decision on his
next political step when he returns from Switzerland next week. They were
also quoted as neither confirming nor denying that Primakov will join
Fatherland (Otechestvo), the movement founded and headed by Moscow Mayor
Yuri Luzhkov. Earlier this week, Artur Chilingarov, a top Fatherland
official, said that Luzhkov's movement had invited Primakov to join it, and
that Primakov was sympathetic to the movement. Anonymous Fatherland
officials were quoted today as saying that Primakov's sympathies toward
Luzhkov and the movement are both political and personal. Russian media have
reported that Primakov may be asked to head Fatherland's ticket in the Duma
elections set for December of this year (Russian agencies, June 10).

The possibility of Primakov and Luzhkov joining forces is not new. Earlier
this year, some of Primakov's key allies--such as foreign policy expert and
former Kremlin adviser Sergei Karaganov--openly called for such a union. A
Primakov-Luzhkov alliance would undoubtedly be viewed with horror by the
Kremlin inner circle, particularly by key insiders such as tycoon Boris
Berezovsky, who openly feuded with Primakov during the latter's premiership,
and who is known to dislike Luzhkov. Luzhkov and Primakov, it should be
noted, have been open in their disdain for Berezovsky. Luzhkov, who is one
of Russia's main contenders for next year's presidential election, has
openly charged in recent weeks that the Kremlin administration is mounting a
campaign against him (see the Monitor, June 2,7-9).

#10
Christian Science Monitor
June 10, 1999  
Power splinters in Russia
Regional bosses gain influence as reforms fail in Moscow. They may control 
Duma. 
By Judith Matloff, Staff writer of The Christian Science Monitor

The flag that flutters across this regional capital is not Russian. The 
semi-autonomous government of Tatarstan also has its own Constitution, and 
its defense policy often contradicts that of Moscow, 500 miles away. 

All across Russia, regional rulers conduct affairs largely as they please. If 
Mintimer Shaimiyev, Tatarstan's president, has his way, their power will 
spread to Moscow itself. 

"Regional politicians have become the most important force in Russia thanks 
to the vacuum of authority at the center," says Olga Kryshtanovskaya, 
director of the Institute of Applied Politics, a Moscow think tank. "Now they 
are uniting to collect the political power that seems to them to be lying 
about the streets of Moscow." 

In a move that could redraw the political landscape, Mr. Shaimiyev is trying 
to organize many regional leaders to win control of parliament's lower house, 
the Duma, in elections scheduled for December. If they are successful at 
unseating Communist domination of the Duma, regional leaders would control 
both houses. They already run the Federation Council, parliament's upper 
chamber. 

Such a coup would mark the first time in Russian history that parliamentary 
power would be based on territorial interests rather than ideology, which has 
polarized the country for most of the past century. 

"Failure in reform strategy has plunged Russia, a wealthy country, into a 
state of national catastrophe," St. Petersburg Gov. Vladimir Yakolev told a 
founding meeting of a new regional bloc, All Russia, at the end of May. 
"Attempts to reform Russia from the top have not worked. It must be from down 
below, from the regions." 

The party is one of three loose coalitions formed in recent months by 
provincial governors to compete in the December elections, with an eye to the 
presidential ballot six months later. 

Central power, so rigid under the czars and then communism, has eroded since 
the Soviet Union collapsed in 1991. 

Little in common 

In many cases, federal authority is largely symbolic in the vast Russian 
Federation, which is made up of 89 regions and territories - including 20 
semiautonomous ethnic republics - and spans 11 time zones from the Baltic Sea 
to the Pacific Ocean. 

Finding common ground will be a challenge, however. Only 13 regions, mostly 
raw-materials producers plus Russia's two largest cities, Moscow and St. 
Petersburg, are wealthy enough to contribute a tax surplus to the central 
government. The rest are net recipients of federal subsidies and tax relief. 

"The chasms among Russian regions are not just geographic and ethnic but also 
economic," says Ms. Kryshtanovskaya. "The economy is postindustrial in 
Moscow, raw materials-based in Irkutsk, agrarian in Krasnodar, and pastoral 
in Kalmykia. It's almost impossible to speak of common political ground." 

Only the republic of Chechnya has gone so far as to attempt secession, in a 
disastrous 1994-96 war. Moscow maintains the Muslim-majority region is still 
part of Russia, while the Chechen government considers itself independent. 

Less violent feuds with the federal government are legion. Notable is the 
campaign by the Buddhist republic of Kalmykia to withhold tax earnings from 
Moscow. Others, particularly the 13 "donor" regions, control much of their 
own finances, gold and oil sales, and trade. They draw up their own laws 
governing religion and education. 

The trend toward greater autonomy turned an important corner during the 
economic crisis last August and September. In order to ensure their own 
survival, regions sought greater control of their economies, such as setting 
price controls and withholding from Moscow revenues from industry and 
exports. 

The center-periphery chasm is mainly economic, but it also reflects the 
political instability provoked by President Boris Yeltsin's poor health and 
frequent Cabinet changes. 

"Basically he has tried to maintain the appearance of national unity while 
permitting a drastic redistribution of power in favor of the regions," says 
Andrei Ryabov, an analyst with the Carnegie Endowment in Moscow. 

The near-bankrupt central government has been forced to cede authority to 
local leaders, whose strength and prestige grew as they took over 
central-government functions such as maintaining infrastructure, raising 
taxes, and even feeding military garrisons. Since 1996, governors have been 
elected, rather than appointed by the Kremlin, enabling them to forge what 
are often their own private fiefdoms. 

Lacking a 'party of power' 

A key Yeltsin failure has been his refusal to build a presidential "party of 
power" to bring together regional elites behind a single vision of economic 
reform, experts say. 

"Yeltsin has created a kind of monarchical system, in which the president 
stands above the political fray," says Kryshtanovskaya. "In consequence he 
has left the electoral field open to the Communists, who are the only truly 
nationwide party." 

Whoever becomes the next president will need the endorsement of regional 
bosses, political analysts say. If regional blocs also gain control of the 
Duma, they would have an ideal platform to increase their financial 
independence and wield even greater control over policies. 

The kingmakers 

In negotiations to join forces, one of the kingmakers is Shaimiyev, the 
driving force behind All Russia. The bloc unites some of the most prominent 
regional figures, including the leaders of Bashkortostan, St. Petersburg, 
Omsk, Astrakhan, and Ingushetia. So great is its potential that the movement 
has received overtures to form an alliance from Moscow's powerful mayor, Yuri 
Luzhkov. Mr. Luzhkov is widely viewed as among the top contenders for the 
2000 presidential race, but what his Fatherland Party lacks is the support of 
leading governors. 

Sources close to Shaimiyev say he would prefer to join forces with Samara 
Gov. Konstantin Titov and his Voice of Russia movement. Speculation is rife 
that these two men will back, not Luzhkov, but Yevgeny Primakov, the popular 
former prime minister recently fired by Yeltsin. 

In theory, a three-party alliance could snatch 220 of the Duma's 440 seats - 
the number currently held by the Communists and their allies. The jury is out 
as to whether this goal is realistic. 

Whatever happens, it will not be easy sailing, says Raphael Khakimov, an aide 
to Shaimiyev who spoke at length about the problems of reconciling 
conflicting interests and egos. 

"The main thing that unites us is the desire to oust the Communist majority 
from parliament. We're talking about coordinating efforts, but it's unlikely 
that we would fully merge." 

*Fred Weir in Moscow contributed to this report. 

#11
Moscow Tribune
June 10, 1999 
Luzhkov Faces Ex-PM In Poll 
By By Dmitry Polikaprov 

Moscow Mayor Yury Luzhkov is considered by many to be a top presidential
contender in the next elections, which are scheduled for the year 2000. But
this weekend, he faced serious confrontation with the Kremlin in what
analysts described as the start of an anti-Luzhkov campaign.

Just weeks after the leader of the Liberal-Democratic party Vladimir
Zhirinovsky offered to abolish the post of Moscow mayor, Kremlin ally and
former premier Sergei Kiriyenko said he may challenge Luzhkov at the next
mayoral elections.

Kiriyenko said on Saturday that he will run for mayor if the polls are
moved forward to this December. The mayoral elections were initially
scheduled for June 2000, but Luzhkov, who also wants to run for president
next year, is trying to move it to this December apparently to free himself
up for the next presidential campaign. Luzhkov won with over 80 percent of
the vote in 1996.

Kiriyenko, who has no chance of defeating Luzhkov in the polls, also
accused the mayor of ineffective economic policy and corruption.

The ex-premier accused Luzhkov of running Moscow through bribe-making and
bribe-taking.

"No serious issue can be solved in Moscow without paying a bribe,"
Kiriyenko said, adding that Luzhkov had established a "pocket media empire"
to advocate his activities.

Luzhkov countered by threatening to sue Kiriyenko for slander. Luzhkov said
on Monday, "Let him run. He is a competitor who can be useful because of
his supreme weakness."

Kiriyenko's statement came during the celebrations of Pushkin's 200th
anniversary, apparently considered by Luzhkov's campaigners as an important
stage of the mayor's election campaign in the run up to both the mayoral
and presidential polls. Luzhkov's spin doctors tried to use his active part
in the event to boost his image as a national, rather than a regional,
politician.

The Kremlin's attack on the mayor is not unexpected as he is considered the
worst possible successor to Yeltsin by the presidential team. Luzhkov
recently made several hostile statements about the president's "inner
circle," including his image-aide and daughter, Tatiana, and controversial
tycoon Boris Berezovsky, who played an important part in the formation of
the new government.

Luzhkov was rejected several times by Yeltsin as potential premier after
Viktor Chernomyrdin and left the government in 1998. He used his speech at
the celebrations of the 275th anniversary of the Russian Academy of Science
on Wednesday as an opportunity to lash out at the government.

He also accused former Russian cabinets of a lack of clear economic
planning, evidently targeting Prime Minister Sergei Stepashin who is trying
to push through the Duma a package of economic measures aimed at boosting
budget income.

Meanwhile, with almost a year left before the polls, Luzhkov himself is
still far from becoming the most popular presidential candidate. The Itogi
program on NTV said on Sunday that not only Communist Party leader Gennady
Zyuganov, but also former premier Yevgeny Primakov was still ahead of
Luzhkov in recent surveys.

In April Luzhkov and a group of regional leaders joined forces to run for
the Duma in the December election. The mayor, who is also member of the
Federation Council, finally received the support of several political
heavyweights including Tatarstan President Mintimir Shaimiyev, governor of
the Leningrad area Vladimir Yakovlev and the Samara regional boss
Konstantin Titov, who are all members of the Vsya Rossiya (All Russia)
centrist movement.

The new block which was called Vsya Rossiya -- Otechestvo (All Russia --
Fatherland) may have a good chance of overcoming the five per cent barrier
established by electoral law.

Luzhkov's Otechestvo party, which was established last November, advocates
the free market, but also champions strong state control over the economy.

This agreement between Luzhkov and the Federation Council representatives
is the first attempt to "monopolize" the centrist sector in the run up to
the Duma polls.

The support of regional leaders will play a key role not only in the next
Duma elections, but also in the presidential race as most Russian areas are
currently led by powerful politicians who may seriously influence the
choice of local voters. Several analysts believe that Luzhkov doesn't have
any other choice but to run for the Kremlin in the year 2000.

However, Luzhkov's attempt to establish himself as centrist leader may
still face some serious challenges from other influential politicians,
including former premier Chernomyrdin. Primakov is also still seen by
several powerful local governors as a prospective candidate for the
presidency.

#12
Moscow Times
June 10, 1999 
SEASON OF DISCONTENT: Oligarchs No Friends for West or Russia 
By Andrei Piontkovsky 

The August crisis demonstrated the obvious failure of the recurrent attempts 
at economic reform in Russia. The Balkan crisis has transformed the relations 
between the U.S. and Russia back into those of the Cold War era. In the 
American political establishment a debate has begun on this unfavorable turn 
of events, accompanied by a natural search for the guilty parties in the 
failure of U.S. policy toward Russia. 

Seminars and conferences given on such subjects as "Russia: What went wrong, 
how the West influenced events and what could have been done differently" 
have become extremely popular. I would like to say frankly that I do not see 
the wrong-doers on the other side of the Atlantic. Russia is an enormous 
country with its own dramatic history which has developed according to its 
own laws. And all those guilty of Russia's troubles today are here - they are 
the main characters in our history and the brainless, arrogant, thieving 
Russian ''elite.'' 

Outside influence on the course of events in Russia even by such a superpower 
as the United States was, in my opinion, fairly limited. But even if we 
nonetheless admit such an influence then I do not know of any more 
concentrated formula to convey all the shortfalls and the mistakenness of 
America's policy toward Russia than the words of one who, if not a creator of 
such a policy is at least an active advocate of it. 

Leon Goure, reputed to be one of the leading American experts on Russia, more 
than two years ago wrote: 

"Moscow cannot afford to wage confrontational policies with the United States 
or NATO. There are powerful influential forces, in particular the business 
and banking oligarchy which controls 50 percent or more of Russia's economy 
and is directly represented in the Russian government, which strongly oppose 
any real break in Russia's relations with the West. The primary motivation of 
these influential elements is making money, which is obtained largely from 
foreign commercial relations. NATO's enlargement is less likely to threaten 
the interests of these elements than Moscow's overreaction to it, which may 
lead to Russia's isolation." 

The author certainly confirmed his reputation as an expert on Russia. He knew 
that the oligarchy controlled about 50 percent of financial budget sources 
and channeled them into their companies. He knew this was possible precisely 
because they were "directly represented in the Russian government." The 
distinguished expert also had no illusions about the "primary motivation," 
about the basic instinct of these new rulers: exporting oil and other natural 
resources they privatized for a song. 

Yet he supposed that precisely these people were the best defenders of 
Western interests and Western values in Russia. 

I understand the logic and the healthy cynicism of this judgment. But it 
saddens me a bit. Once, the West put its moral authority behind a different 
sort of people, with different motivations, such as Andrei Sakharov and 
Alexander Solzhenitsyn. We, the liberals in Russia, used to think we shared 
some values with our colleagues in the West: human rights, social market 
economy, human dignity. But it turns out that for the West there were no 
common values. There were only primary motivations and basic instincts. This 
was a shortsighted and counterproductive policy, even from the Western 
perspective. Above all, from the Western perspective.