#1
Moscow Times
October 1, 1999 
Would Invasion Be a Disaster? 
By Brian Whitmore
Staff Writer


The Kremlin has reportedly given the ground war a green light. But while we 
still do not know the exact plan, military analysts say this could be a 
disaster in the making. 


For the past several days, media have been floating various ground war 
scenarios. The most common has Russian forces occupying northern Chechnya as 
far south as the Terek River, which flows only about 15 kilometers north of 
Grozny, the Chechen capital. The river is as far as 40 kilometers from the 
border in some spots. 


The daily newspaper Segodnya, however, reported Wednesday that the Russian 
military aims to eventually gain control over all of Chechnya. According to 
Segodnya, Russian forces will attempt to drive guerrilla forces into 
Chechnya's mountains by the winter, isolate them and hope they freeze to 
death. 


Whether that's the exact plan or not, an invasion of some sort is underway. 


Interfax, citing Defense Ministry sources, reported that plans for a ground 
operation are in their final stage. Airborne and infantry units will be the 
nucleus of the strike force, the agency reported, with some 20,000 servicemen 
from both the defense and interior ministries being transferred to Dagestan 
and North Ossetia as reinforcements. 


Military analysts say that Russia could be making a major mistake, especially 
with the cold weather and poor visibility that will be coming soon. 


"This is mass idiocy," said Pavel Felgenhauer, a Moscow-based defense 
analyst. 


"I don't understand Russia's military strategy. I am afraid that Russia is 
headed for a total military disaster." 


"Military strategy says that you should never, ever, initiate a ground 
operation with winter approaching," said Alexander Zhilin, a military analyst 
for the newspaper Moskovskiye Novosti. "This is absurd and ineffective. From 
a military point of view it makes no sense." 


Zhilin said that over the next month the weather will change and cloud cover 
will hinder Russia's ability to conduct airstrikes and give badly needed air 
cover to ground troops. 


He said that from 30,000 to 50,000 troops are necessary to occupy northern 
Chechnya to the Terek River, but that Russian forces have three weeks at the 
most to complete the operation before the weather starts working against 
them. 


"I am afraid that there are going to be massive casualties," Zhilin said, 
adding that while public opinion and media are more or less supporting the 
military right now, this will change as soon as heavy combat losses mount. 


Both Zhilin and Felgenhauer said that the lack of a unified command would 
also hinder coordination between troops under the command of the Interior 
Ministry and regular army units under the command of the Defense Ministry. 


Meanwhile, there is already some evidence that the public and the media are 
starting to question the wisdom of Russia's latest adventure in the Caucasus 
region. 


"Five years later, a tragedy repeats itself," wrote the newspaper Obshchaya 
Gazeta. "The cost, as it was then, is thousands of lives." 


A public opinion poll released Thursday showed that 57 percent of Moscow's 
residents oppose airstrikes against Chechnya - now in their eighth day. 


In 1994-96, a bloody attempt by Russian forces to prevent Chechnya's 
independence drive resulted in 80,000 deaths - mostly civilians and 
inexperienced conscripts. 


Ex-Prime Minister Sergei Stepashin, one of the architects of Russia's 
disastrous 1994-96 war, warned against another ground war, saying it could 
lead to "political catastrophe." 


"Before making a decision on a possible ground operation in Chechnya, one 
should thoroughly analyze the military operations in Chechnya in 1994-96, 
even if this experience is bitter," Stepashin said in remarks carried by 
Interfax. 


"Today, a large part of the population of Chechnya is preparing for 
full-scale combat operations, which will naturally cause serious casualties, 
which, in turn, could completely change the public's attitude to developments 
in the North Caucasus." 


Interfax reported Igor Shabdurasulov, President Boris Yeltsin's deputy chief 
of staff, as saying that Russia's political leaders have approved a ground 
invasion - leaving it up to the military to set the date. 


Putin stopped just short of saying that Moscow was mounting or would mount a 
ground invasion, although he did claim that Russian forces were moving in and 
out of Chechnya with impunity. 


"Chechnya is Russian territory and troop movements can take place whenever 
this is necessary," Putin said in televised comments from St. Petersburg, 
where he was meeting with the security chiefs of other former Soviet states. 


"I can say that troops have entered Chechnya several times." 


By various estimates, from 20,000 to 30,000 federal troops are massed on 
Chechnya's border.  

#5
PBS
The Newshour with Jim Lehrer
RUSSIA'S QUAGMIRE 
September 29, 1999
 
An Islamic insurgency from Chechnya is threatening Russia's control of 
Dagestan. After a background report, a panel discusses the latest unrest in 
the Caucasus.


ELIZABETH FARNSWORTH: And with me to talk about the fighting in Chechnya are 
Dimitri Simes, president of the Nixon Center for Peace and Freedom and author 
of After the Collapse: Russia Seeks its Place as a Great Power. He returned 
from Moscow Saturday. Yo'Av Karny, a journalist whose book about the 
Caucasus, Highlanders, is to be published soon. And Stephen Cohen, Professor 
of Russian Studies at New York University and author of Rethinking the Soviet 
Experience.
   
All out war? 


Dimitri Simes, please expand a little bit on what we just heard about Russian 
strategy in Chechnya right now. Is Russia headed toward another all-out war 
there?


DIMITRI SIMES: It's an interesting and difficult question. I wish I knew 
whether the Russian leadership had a strategy. Certainly, if their strategy 
is a ground invasion, full-scale ground invasion, they're asking for a lot of 
trouble. They don't have enough forces around Chechnya. Their forces are not 
well equipped; the morale is rather poor. Most Russians want to teach the 
Chechens to listen, but they are not prepared to pay for this lesson with a 
lot of blood and treasure, so my hope is that the Russians are posturing, 
that they're using their air force, that they may want to occupy a couple of 
fields to position themselves better and to establish some kind of a buffer 
zone. But if they're trying to start a full-scale invasion, we make a lot of 
escalation and dangerous miscalculation.


ELIZABETH FARNSWORTH: And, Mr. Cohen, your view of Russian strategy at this 
point in relation to what Mr. Simes just said, Russia's Interfax News Agency 
did report today that Russian troops moved into Chechnya, occupying "peaks" 
overlooking two villages. There is no confirmation of that at all?


STEPHEN COHEN: Well, strategy may be too grand a word for it, but militarily 
the Russian government, the Yeltsin regime, to be specific, is viewing 
Chechnya as a kind of cancer in the Russian Federation -- as a plague -- and 
it's attempting either to destroy it with military force or to utterly 
quarantine it from the rest of Russia by some sort of military buffer between 
the rest of the Russian Federation and Chechnya. Politically, the strategy 
would appear to be on the part of this very desperate Yeltsin regime, which 
is loathed by the Russian people, to do something in Chechnya that would gain 
itself some measure of popularity with the Russian people, or at least gain 
it a sense among the Russian people that it's a needed regime, that it can 
protect the people, it's not clear that they'll succeed in either strategy, 
but I think that's what the strategy is.


ELIZABETH FARNSWORTH: And, Mr. Karny, the bombing is of Chechen villages, 
Chechen infrastructure. What's the relationship between official Chechnya, 
the government, and the rebels?


YO'AV KARNY: Well, in Russian mind the government is the rebels and has been 
so since November of 1991, when exactly eight years ago when Chechnya 
declared independence. If I were a knowledgeable Russian tonight, I would be 
close to despair, because there isn't a way out. There might have been a 
considerable way out four, five, six years ago if only Russia had let 
Chechnya go at the time, before the bad blood, before 80,000-odd casualties, 
which incidentally, proportionately speaking, is more than Britain and France 
suffered during the entire period of World War II. What happened between 1994 
and 1996 is probably irreversible, and that is, the radicalization of the 
Chechen population. And the fact that the cause has been to a large extent 
surrendered to a militant, to some extent alien ideology that had never 
existed in the Caucasus before this war... 
  
A history of resistance 


ELIZABETH FARNSWORTH: Okay. Before you go on, expand on that. Are you talking 
about the Islamic ideology and religion that's being put forth by the rebels? 
What do you mean? 


YO'AV KARNY: I do, indeed. The Northeast Caucasus, of which we are talking, 
is of course historically Muslim. But the Islam that prevailed in the 
Caucasus before 1994 had been largely eclectic, idiosyncratic, full of 
indigenous habits, customs and heritage. It was essentially tolerant. It was 
laid back, relaxed, steeped in Islamic mysticism, close to what Muslims call 
Suf-ism. What we are seeing now, the rise of fundamentalism, what is 
attributed to Wa hab-ism, which is basically Saudi Arabia militant school of 
Islam is entirely new, should have never happened. The Russians have 
developed expertise in opening cans of worms in Islamic countries.


ELIZABETH FARNSWORTH: And Mr. Karny, very briefly. I interrupted you before 
you got to answer the question whether there is a tight relationship between 
the Chechen official government and the rebels. 


YO'AV KARNY: That's doubtful. The president of Chechnya, Aslan Maskhadov, who 
is a former Soviet army colonel, wanted presumably to reach some sort of 
agreement with the Russians over de facto independence, perhaps an attempted 
state and nation-building. The warlords, as they are known, fighters have 
nothing to do with that. Shamil Basayev who is the warlord who invaded 
Dagestan last month was offered the prime ministership in 1996. That was a 
clear attempt at allowing him to show his hand in construction. He turned it 
down. 


ELIZABETH FARNSWORTH: All right. Mr. Simes, is there consensus right now 
among the political leadership in Russian about how to deal with the rebels 
in Chechnya, and if so, if there is consensus about the bombing, why, given 
the terrible consequences of the last time that Russia was involved there? 


DIMITRI SIMES: I think there is consensus in Russia now that Chechen rebels 
are pretty terrible people. Shamil Basayev, I have to say, is not just a 
rebel commander; he's a bandit, he's a terrorist, he has a record of 
hostage-taking. I think that anything the Russians can do against him is 
justified, not just strategically but morally. I also have to say that most 
Russians agree that President Maskhadov doesn't control the situation, but 
that is besides the point because the same dilemma as the Israelis in 
Lebanon. If the government cannot control the situation, then you are being 
subjected to terrorist attacks, you have to do something. The trouble is, the 
trouble is that the Russians do not have good options. They know what they 
are against. They have consensus that something has to be done, but they have 
no strategy. They have no forces which could implement an effective military 
strategy. And I think that they are trying to do whatever they can do to hold 
the situation, to manage the situation, but they don't have any real 
solutions. And the danger is that their attempts to intimidate the Chechens, 
these attempts may backfire and lead to a full-scale war. 
   
The conflict's affect on Russian politics 


ELIZABETH FARNSWORTH: And Stephen Cohen, you touched on this, but how do you 
see the politics of this action and the effects on the politics of Russia? 


STEPHEN COHEN: Well, let me dissent from Dimitri just a bit. I don't know 
that we really disagree, but in fact the consensus among the Russian 
political class that he had mentioned existed until about 48 hours ago when a 
number of prominent members of parliament have called upon the government to 
stop the bombing of Chechnya because they're afraid it's going to preclude 
the possibility of any talks with the Chechens. The Kremlin responds, there 
are no possibility of talks with the Chechens, and that may be so. 


As for the political dynamic here, I believe that the basic dynamic is, from 
the Russian point of view, the desperate fear of the Yeltsin regime that the 
day will come, sooner rather than late other, when it will have to leave 
power, and that it will be held responsible inside Russia for what's happened 
inside Russia during the last seven or eight years. And this war gives it a 
chance, if that's the right formulation-- I'm not sure it's going to be a 
possible chance-- but a chance to do something that might win some of the 
allegiance of some of the people. I agree with Dimitri, the government does 
not have many possibilities. But this fear of retribution has led many very 
sensible people in Russia, people who are absolutely normal to ask the 
question of whether it was the Kremlin itself that set off those bombs inside 
Moscow. I mean what kind of government would be suspected of such a thing? 
And the answer is a government that has virtually no legitimacy with its own 
people. And that's the political context in which this terrible war is 
unfolding. 


ELIZABETH FARNSWORTH: Mr. Simes, before I move on to Mr. Karny, do you want 
to respond to that? 


DIMITRI SIMES: Well, I think it's pretty clear that the government in Moscow 
is very unpopular. It is pretty clear that Steve Cohen is absolutely right, 
people suspect this government of all kinds of possible things and indeed 
presidential contender Governor Lebed today said in an interview that he 
thinks the Kremlin is responsible for all these terrorist acts. I have to 
say, however, that if they had a different government, a more popular 
government, a more legitimate government, they would still have to deal with 
the Chechen terrorism. There is no option of ignoring this. The invasion of 
Dagestan was totally unprovoked, and it came from Chechnya. So the Russians 
have a dilemma: To let Chechnya go, or to continue this bloody nonsense. 


ELIZABETH FARNSWORTH: Go ahead. Sorry. 


DIMITRI SIMES: And I think that hopefully the Russians will come to a 
conclusion soon that full independence for Chechnya is the best possible 
alternative. 


ELIZABETH FARNSWORTH: Mr. Karny, what about the effects on all this on the 
Chechens themselves? Are they able to resist this sort much bombing? 


YO'AV KARNY: That's a good question because for a couple of moments, one 
might have thought that we are talking about domestic Russian politics. We 
are talking about a historical confrontation between an imperial Russia and 
the indigenous nations of the Caucasus, something that goes back to the 18th 
century. The Chechens, you see, are a rare phenomenon in a Russian contest. 
There isn't a single ethnic group in Russia which has been as persistent and 
as determined in resisting Russian occupation since the 1780's. The Russians 
have just bombed the Grozny airport named after a fellow by the name of Sheck 
mon suer [ph?]. He was the first resistance leader executed by the Russians 
in the 1790's. Now, we must understand what happened here. The Chechens 
performed heroically in 1994 to 1996, but then their cause has started 
degenerating. It has been abducted. They forgot what they were fighting for. 
They were fighting for their own independence. Now it seems no longer to be 
the case. They are talking about, or some of them, are talking about an 
all-encompassing Islamic union of Dagestan and Chechnya. There fare-- 
therefore I disagree with Mr. Simes, in the sense that letting Chechnya go 
right now will no longer solve the problem. It's too late. 


ELIZABETH FARNSWORTH: And Mr. Cohen, we have a very little amount of time 
left. How is this all likely to affect U.S.-Russian relations? 


STEPHEN COHEN: Well, it isn't going to do it any good. They're already at a 
low, but the thing that worries me is ---- and I may be alone in this - 
nobody seems to mention it -- but this terrible war, this civil war, the 
systematic terrorism is unfolding for the first time in history in a 
nuclearized country and none of us know what that means. I think the bell is 
tolling. I mean we've crossed from an era of reasonable predictability about 
nuclear weapons to utter unpredictability. I mean we can't be certain, God 
forbid, that a terrorist would launch a rocket at a nuclear reactor, for 
example. We are in new territory. We have crossed some kind of Rubicund, and 
the implications are enormous.

#6
Christian Science Monitor
30 September 1999
[for personal use only]
Chechnya bombs threaten US-Russia 'engagement'
Amid Kosovo-style civilian flight, US takes measured tone to Russia, not 
wanting to spoil larger policy efforts. 
By Jonathan S. Landay , Staff writer of The Christian Science Monitor


The Russian bombing blitz to crush Islamic rebels in Chechnya appears to be 
putting the United States in a new foreign-policy bind. 


The onslaught comes as Washington is striving to work with the Kremlin on 
issues critical to US security, such as arms control and nonproliferation. 
Anxious to advance those efforts and bolster Russia's stability, the US has 
also pledged to help it fight Muslim terrorists blamed for recent bombings of 
Moscow apartment blocks. 


But such cooperation could become more difficult to defend as reports mount 
of Russian planes killing Chechen civilians in the hundreds, smashing schools 
and hospitals, and driving some 60,000 refugees into nearby republics. 


US officials also worry the assault will sap Russia's badly strained 
finances, fuel Muslim extremism in the oil-rich Caucasus region, and trigger 
more destabilizing terrorism in Russia itself. 


Should the bloodshed escalate and Moscow send in ground troops in a repeat of 
its disastrous 1994-96 war in Chechnya, US officials say it will be hard to 
do business as usual. 


Hoping to avoid long conflict 


"There is no question that if they are back to general hostilities in 
Chechnya, that is going to be a major problem for us," says a senior US 
official. 


The crisis underscores the fine line Washington must walk in its "engagement" 
policy with Russia. 


That policy emphasizes cooperation on US security interests and helping the 
world's second-largest nuclear power through its traumatic transition from 
authoritarianism to free-market democracy. But that means abiding Russia's 
economic and political chaos, policies opposed to US interests, epidemic 
corruption, and misconduct - such as the humanitarian calamity in Chechnya. 


This difficult trade-off is reflected in the absence of any outright US 
condemnation of the week-old Russian bombing of civilian areas of Chechnya, a 
breakaway republic in the north Caucasus. Instead, Washington is cautioning 
against an escalation of fighting and urging the sides to "refrain from 
military actions" that could prevent a dialogue. The US position could be 
elaborated on by the administration's Russia point-man, Deputy Secretary of 
State Strobe Talbott, in a speech he is to make tomorrow at Harvard 
University. 


The current stance angers human-rights advocates, who say the US is ignoring 
massive Russian human-rights violations just as it did in the 1994-96 war. 


"The Clinton administration is very laissez faire about what is happening in 
Russia," says Rachel Denber of New York-based Human Rights Watch. "It will 
take a strong interest only where human-rights violations have a major 
negative impact on US national security interests." 


Some experts say the week-old Russian onslaught could give majority 
Republicans in Congress new ammunition with which to attack President 
Clinton's Russia policies. GOP leaders are now using a series of hearings 
into those policies and Russian corruption to ask the question "who lost 
Russia," with the aim of tarring Vice President Al Gore's presidential quest. 


Is 'Clinton doctrine' for real? 


The US view that the conflict in Chechnya is an internal Russian affair also 
raises new questions about the so-called "Clinton doctrine." Declared by Mr. 
Clinton during the Kosovo crisis and repeated by him at the United Nations 
last week, it advocates international intervention in major humanitarian 
crises. The administration clearly worries about all this. "There has been a 
lot of violence in the North Caucasus in the last couple of months," says an 
administration official. "The danger we see is that the escalation could lead 
to the worsening of that violence." 


The Russian offensive was triggered by incursions into neighboring Dagestan 
in August and September by Islamic rebels based in Chechnya. Moscow also 
blames the rebels for the Moscow bombings that killed 300 people. The Russian 
offensive aims to force Chechen President Alsan Maskhadov to crack down on 
the rebels, who seek an Islamic state in the predominantly Muslim region. 
Russia says its aircraft and long-range artillery are targeting rebel bases 
and supply lines, but civilian areas of the capital, Grozny, and other towns 
have been hit. Russia has deployed thousands of troops on Chechnya's borders 
in what could be invasion preparations. 


US officials and other experts are deeply skeptical of Moscow's strategy, 
which Russian officials say they adopted from the US-led NATO air campaign 
against Yugoslavia earlier this year. But US officials and experts say Russia 
lacks the precision munitions that NATO used in Yugoslavia. 


The resulting destruction and civilian casualties, they say, will fuel 
anti-Russian hatreds lingering from the 1994-96 war that erupted over 
Chechnya's declaration of independence from the Russian Federation. Up to 
80,000 people were killed, including as many as 29,000 civilians in Russian 
bombardments that leveled much of Grozny. Furthermore, they say, Mr. 
Maskhadov is too weak to take on the rebels. Finally, the underfunded Russian 
Army's equipment, troops, and morale are in far worse shape than they were 
when it failed to crush Chechen forces in the last war, forcing a settlement 
that left the republic's status undecided. Moscow can't afford the new 
conflict, they say. 

#7
Jamestown Foundation Monitor
1 October 1999


RUSSIAN MONEY LAUNDERING CONTROVERSY DELAYS DISBURSAL OF IMF CREDIT.
Finance Minister Mikhail Kasyanov said today that Russia could receive the
next US$640 million installment from a multibillion dollar International
Monetary Fund loan at the end of this month or the beginning of November.
Kasyanov's comments followed a meeting he had with President Boris Yeltsin,
whom Kasyanov described as being worried about the fate of the IMF tranche
(Russian agencies, October 1).


The IMF credit was supposed to have been disbursed this month, but was
delayed as a result of the controversy surrounding alleged Russian money
laundering through the Bank of New York. According to press reports in
August, U.S. law enforcement investigators believe that US$200 million or
more from IMF credits were laundered through the Bank of New York. U.S.
officials, including Treasury Secretary Lawrence Summers, have noted
repeatedly that no evidence has been presented showing that IMF funds were
misappropriated. But during U.S. congressional hearings into the Bank of
New York scandal, Summers emphasized that Washington will back no further
credits to Moscow until there is a proper accounting of how previous
credits were used.


The international auditing firm PriceWaterhouse Coopers has been
commissioned to carry out that audit. The company was hired earlier this
year by Russia's Central Bank (CBR), to audit the activities carried out by
FIMACO, an obscure Channel Islands' asset management company into which the
CBR had placed billions of dollars from Russia's hard-currency reserves.
PriceWaterhouse Coopers' auditors found new illegalities concerning FIMACO,
but noted that they were given insufficient information by the CBR to do a
proper audit.


Finance ministers from the G-7 leading industrial nations, meeting in
Washington, issued a statement last weekend demanding that Russia clean up
its Central Bank, audit its hard currency reserves every three months, take
measures to strengthen its control over budgetary expenditures and submit
an anti-moneylaundering law to the State Duma. The ministers said that the
quarterly audit should be a condition for further loan disbursals
(Vremya-MN, Moscow Times, September 28). These demands were poorly received
by Russian officials, including Central Bank Chairman Viktor Gerashchenko,
who called them "nonsense."


One paper this week even stated that U.S. Treasury Secretary Summers has
suddenly become a "hawk" on the issue of loans to Russia because, in the
wake of the money laundering scandal, his close ties with Russian officials
such as Anatoly Chubais has made him politically vulnerable. The paper
implied that last year Summers used his Russian contacts to help a former
employer, Goldman Sachs, avoid disaster on the GKO market, Russia's
now-defunct short-term treasury bills. "The latest scandal does not leave
any doubt that his friendship with Russian officials may cost his career
too much," the paper wrote (Kommersant, September 29).


For his part, Finance Minister Kasyanov predicted that the money laundering
scandal was being "fed by political sources" in the United States and
predicted that it would soon "die away" (Russian agencies, October 1).
Earlier this week, USA Today reported that Russia's Federal Security
Service had rejected a U.S. Justice Department request to Russia's Central
Bank and Prosecutor General's Office for bank statements and other
documents related to the money laundering investigation (USA Today,
September 28).


While putting tougher requirements on credits to Russia, Michel Camdessus
has denounced the press reports that IMF funds were laundered through the
Bank of New York. He also said that it would be the "height of
irresponsibility" for the IMF to turn its back on Russia, and that Russia
had "overperformed" in fulfilling the commitments it had made to the fund
in July (Reuters, September 28, 30).

#8
Lugar: Fix Russian Y2K
By David McGuire, Newsbytes.
September 29, 1999


The United States would be well-served to earmark a few million dollars to 
aid Russia in its ongoing Y2K remediation efforts, because Russian Y2K 
failures could endanger US national security, Sen. Richard Lugar, R-Ind., 
said today.


"In my opinion, an 'insurance policy' in this area is a good investment," 
Lugar said, speaking before the Senate Special Committee on the Year 2000 
Technology Problem. "The cost of efforts to address potential threats today 
will be miniscule in comparison to the costs of responding to a tragedy 
should an incident occur."


Today's hearing featured testimony from a slew of national security and 
foreign affairs experts - many of whom raised concerns about the Y2K risks 
facing Russia and other former Eastern Bloc countries.


"Russia is likely to experience disruptions in its electrical grid and 
telecommunications infrastructure, with subsequent effects on financial, 
industrial and government sector," US State Department representative John 
Beyrle said at the hearing.


Even more frightening, Lugar said, are the Y2K threats facing Russia's 
nuclear reactors, missile stockpiles and early warning systems.


"Russian early-warning capabilities continue to deteriorate and this 
deterioration will be compounded by the transition to the Year 2000," Lugar 
said. "Russian early warning operators may not be able to tell the difference 
between a peaceful rocket and a military rocket from their computer screens."


To address that concern, Russian and US defense authorities have established 
the Center for Y2K Strategic Stability in Colorado Springs Colo. Staffed by 
Russian and US personnel, the Center will watch for false alarms.


But the threat to Soviet-constructed Russian nuclear power plants remains 
significant, Lugar contended.


Built without many of the failsafe and safety devices that are common in 
Western and US-built plants, Russian reactors are still susceptible to 
potentially serious Y2K glitches.


"I would urge my colleagues to once again look to the future and to examine 
the benefits of cooperating with Russia on Y2K versus the potential risks of 
inaction," he said.


Lugar has long been active in US-Russian relations.

#9
USIA
29 September 1999 


Warner Cites Y2K Problems with U.S.-Russian Hotlines 
(Cites establishment of joint Y2K center) 


The United States and Russia have identified Y2K problems that would
prevent the full operation of all but one of the seven direct
communications links, or "hotlines," that guarantee immediate
communications between U.S. and Russian leaders.


Edward Warner, assistant secretary of defense for strategy and threat
reduction, told a Senate Special Committee on Y2K Sept. 28 that U.S.
and Russian communications experts are working to correct the problem.


"Assured communications between U.S. and Russian leaders is a priority
at all times, and of particular concern over the millennium date
change," Warner said.


To help remedy the problem, the United States has agreed to provide
Russia with Y2K compliant software and computer workstations "to
correct program deficiencies in outage reporting, monitoring and
channel reroute operations," Warner said.


"Procurement actions for this equipment have been initiated, and while
the schedule is tight, we are confident that the fixes will be
installed and tested by December," he added.


The U.S.-Russia hotlines provide direct links between the two
presidents; a link between the secretary of state and the foreign
minister; and links connecting the Nuclear Risk Reduction Centers on
both sides. The hotlines were installed during the early 1960s, at the
height of the Cold War, to guarantee immediate communication when
needed.


To avoid possible misunderstandings during the date change, Warner
said that the United States and Russia have agreed to set up a joint
Center for Year 2000 Strategic Stability at Peterson Air Force Base in
Colorado Springs, Colorado. U.S. and Russian military personnel will
sit side-by-side at the center during the millennium transition period
to continuously monitor missile and space launches by both countries.


"In addition...the center will provide a direct means for
consultations regarding other defense-related problems that emerge
over the Y2K transition period," Warner said.

#10
Russia: Delegation On The Defensive In U.S.
By Robert Lyle


With Italian prosectors saying they have found links between Russian 
organized crime gangs and the movement of some huge amounts of money through 
bank accounts in New York discovered recently, Russian financial officials 
felt on the defensive as they met with World Bank and International Monetary 
Fund officials in Washington. RFE/RL's Robert Lyle reports. 


Washington, 29 September 1999 (RFE/RL) - Russian First Deputy Prime Minister 
Viktor Khristenko and Central Bank governor Viktor Gerashchenko led a senior 
level delegation to three days of intensive discussions with IMF and World 
Bank leaders ahead of Tuesday's formal opening of the IMF/World Bank annual 
meetings.


After the G-7 group of major industrial nation's finance ministers on the 
weekend said Russia would need to meet some additional reform requirements 
before any further disbursement of IMF loans, Gerashchenko responded that 
Russia was being treated unfairly.


In fact, however, as U.S. Treasury Secretary Larry Summers explained, the 
demands for implementing certain reforms and safeguards on the Russian loan 
were not new. They had already been made conditions by the IMF when it 
approved the latest $4.5 Billion loan program this summer.


Still, Russian officials said their discussions with IMF officials had been 
difficult, although they remained hopeful the next drawing of the loan would 
be made available by the end of October.


All of the loan disbursements are being kept within the IMF to repay previous 
Russian loans as they become due.


Khristenko, who led the delegation, flew home to Moscow Sunday night, as did 
several other senior officials. Gerashchenko remained in Washington, but 
cancelled his scheduled address before the annual meetings.


Sources on the Russian delegation said the cancellation was for technical 
reasons only and that the text of his speech would be released at some time. 
RFE/RL obtained a copy of the draft speech -- in the Russian language -- 
which did not appear to contain any direct references to the controversies.


The speech said those who had fears about Russia after the 1998 crisis had 
been proved overly concerned and that time has proven the decision to devalue 
the ruble was the right thing to have done. 


The speech, originally written for Khristenko, went on to say that Russia 
will achieve its budgetary targets this year and that it will successfully 
fulfill the current IMF loan program.


IMF Managing Director Michel Camdessus strongly defended the fund's work with 
Russia, saying that the loan program is "on track" and that Moscow will 
advance in both structural reforms and improving its governance:


"Amidst all the recent controversy, we should not lose sight of the real 
progress that has been achieved during seven years of endless efforts to 
assist Russia in its journey toward a market economy. Nor should we ignore 
the fundamental decision, on which Russia has not wavered, to seek to develop 
a modern market economy and integrate itself into the international 
community."


Camdessus used his opening speech to the meetings to say that the fund could 
not, in good conscience, simply cut Russia off:


"It would be the height of irresponsibility to turn our backs on this great 
nation. We will not do that."


Part of that continued work with Russia, IMF officials emphasize, is the 
program of stepped up audits and more frequent monitoring of central bank 
handling of funds. So far, the IMF says, there has been no evidence that any 
of its loans were misappropriated, although investigations, in cooperation 
with U.S., Swiss and British authorities are continuing.