#1
Moscow Times 
October 9, 1998 
Nationwide Protest Day Called Success by Unions 
By Chloe Arnold
Staff Writer

Wednesday's national day of protest, which saw protesters in hundreds of towns
and cities across Russia call for the resignation of President Boris Yeltsin,
was a resounding success, union leaders claimed Thursday. 

But Kremlin officials said turnout was much lower than expected, and that most
Russians had shown their support for Yeltsin by staying home. 

Predictions by opposition leaders that picketing would linger after the day of
protest were borne out Thursday as isolated demonstrations continued. About
300 workers in the Yaroslavl region, east of Moscow, blocked the main
northbound railway for three hours Thursday, Itar-Tass reported. 

Meanwhile thousands of picketers took to the streets once again Thursday
morning in the far eastern Kamchatka peninsula. Labor leaders in Kamchatka
estimated the number of protesters came to 22,000, adding that the
demonstrations could continue until Monday. 

Mikhail Shmakov, leader of the Russian Federation of Independent Trade Unions,
said Wednesday's day of protest "reached its goal, and the voices of millions
have been heard across the world." 

Shmakov estimated "from tentative data" that 25 million people joined strikes
and demonstrations all over Russia demanding wage arrears, economic reform and
the president's resignation. 

"Yesterday saw the most massive all-Russian action in the last few years
organized by the labor unions," he said. 

But there have been vast discrepancies in the figures given for the number of
participants involved. Police said Thursday that about 1.3 million people

attended rallies, while the Kremlin gave an official count of a mere
700,000. 

Deputy Head of the Kremlin Administration Oleg Sysuyev was quoted by Russian
media as saying that meant the rest of the 150 million population were opposed
to Yeltsin's resignation. 

The protests were mostly peaceful, although police detained 62 "drunken
loafers" on Moscow's Red Square Wednesday evening after they provoked police,
Interfax quoted Interior Minister Sergei Stepashin as saying. 

Prime Minister Yevgeny Primakov praised law-enforcement agencies for their
work patrolling the demonstrations, saying strikes had proceeded peacefully
all over the country. But he added there were lessons to be learned from the
action. 

"Most of the protesters were driven by dissatisfaction with their financial
position and by the need to take economic measures that might lead the country
out of this complicated situation," Interfax quoted him as saying. "Although
time is needed to implement all anti-crisis measures, it is our duty to act
promptly."

#2
Christian Science Monitor
OCTOBER 9, 1998 
Russian Bark Fades as Debts Bite
Moscow tries to halt possible NATO hits on Serbia while it's also begging for
billions.
Judith Matloff, Staff writer of The Christian Science Monitor

 MOSCOW 

The rhetoric is defiant, with chilling threats of a new cold war. But Moscow's
tough talk over Kosovo may be just that -talk - because the country
desperately needs foreign financial help.

After yesterday's meeting of the six-nation Contact Group, Secretary of State
Madeleine Albright said, "We will not be deterred," by Russian objections to
NATO airstrikes against Belgrade. Moscow may huff and puff about freezing
cooperation with NATO if the attacks go forward, but behind the scenes,
President Boris Yeltsin's ministers have been frenetically lobbying the
International Monetary Fund for more money - and trying to stave off an armed
confrontation.

Over the past week, as Russian ministers were threatening dire consequences of
a use of force against Belgrade, finance officials were in Washington begging
for another $4.3 billion to cope with the economic crisis.

"The country needs to push itself forward in international affairs to
compensate for being so fragile economically," says Artyom Rudnitsky, head of
the foreign policy department at the Foreign Ministry's diplomatic academy.
"I'm not sure that Russia can take any steps now."

Serbia is Russia's ally in the Balkans. Before becoming prime minister last
month, Yevgeny Primakov headed the Foreign Ministry with the main plank of
reviving Russia's position and independence from the West. He played a crucial
role in defusing tensions with Iraq last year.

Moscow warns it will veto use of force against Belgrade if the issue is put to
the United Nations Security Council. And Russia threatened to freeze a May
1997 cooperation pact with the North Atlantic Treaty Organization if it went
ahead with airstrikes.

"Russia does not want a local conflict or a lack of patience or political will
to provoke an adventure which will throw all of us back to the cold war,"
Foreign Minister Igor Ivanov said recently in an interview with the Spanish

newspaper La Vanguardia. "Before doing something one must meticulously
calculate the consequences."

Various Russian analysts believe that his doomsday rhetoric would not be
backed by harsh actions, however. "Russia can't pursue a strong policy while
it needs financial support from the IMF and other lenders," says Boris
Shmelyov, an analyst with the Institute of International Economic and
Political Studies, a state-run research center in Moscow. "Russia is not ready
to participate in a new cold war."

There are reports, however, that Russia may have recently upgraded surface-to-
air missiles used by the Yugoslav Army - equipment that would theoretically be
used against NATO during a confrontation.

Still, Moscow seems intent upon avoiding a standoff with NATO if possible.
Over the past week, Mr. Yeltsin has spoken on the telephone with various world
leaders and on Sunday sent a message to Yugoslav President Slobodan Milosevic
urging him to listen to reason. A Russian Foreign Ministry spokesman said
Yeltsin advised Mr. Milosevic to comply with UN resolutions to withdraw
special Serb security units and take urgent steps to resolve the humanitarian
crisis arising from the seven-month conflict in Kosovo, where the majority
ethnic-Albanian population is seeking independence. Moscow fears that
establishing an ethnic-Albanian state in Kosovo would set a dangerous
precedent for Chechen separatists at home.

Russia's trump card is its large nuclear arsenal, which Washington frets over
when Moscow hints darkly of new tensions.

"Nuclear weapons maintain Russia as a serious international player," says
Yevgeny Kozhokin, head of the Russian Institute of Strategic Research in
Moscow.

Air raids on Belgrade behind Russia's back could undo Mr. Ivanov's resolve
until now to push the Communist-dominated Duma, the lower house of parliament,
to finally ratify the 1993 START II treaty reducing US and Russian nuclear
arsenals. However, most analysts believe that Moscow will not want to be drawn
into a new arms race. Nearly bankrupt and in the process of reducing its huge
Army, Russia would find getting heavily involved militarily in Yugoslavia a
disaster.

If NATO proceeds with airstrikes, there is a risk Russia may become more
isolationist and draw closer to China and nearby Islamic states.

Mr. Primakov is an old Middle East hand who came to diplomacy as a scholar and
journalist specializing in the region. He boasts good contacts with so-called
pariah states such as Syria, Libya, Iran, and Iraq. Desperate for cash and
irked by the West, Russia could easily provide technology or arms to such
states, analysts say.

"Russia could reorient its relations away from the West," says Mr. Shmelyov.

#3
Toronto Sun
October 8, 1998 
Why Russian protest fizzled
By MATTHEW FISHER (74511.357@CompuServe.com)
Sun's Columnist at Large

MOSCOW -- Communist and trade union leaders promised that as many as 48
million protesters would turn out to denounce President Boris Yeltsin at
rallies across Russia's 11 time zones yesterday. 

  But no more than a million angry citizens came out to demand Yeltsin's
resignation. 

  It was the same story everywhere, including Moscow where a much smaller
than expected crowd of, at best, 50,000 people gathered near the Kremlin
walls under the stern gaze of 11,000 police. 

  Part of the reason for the unexpectedly meagre turnout is that protest
organizers in Russia always come up with outlandishly fanciful predictions
about crowd size before their rallies. Another factor is that Russians have
once again defied Western expectations and become more apathetic, rather
than angrier, as the country's economic and political crisis bites deeper
and deeper. A nationally televised speech by Yevgeny Primakov on Tuesday
night in which the new prime minister tried to quell rising public anxiety
-- by promising that adequate supplies of food and fuel were being set
aside for winter -- may have also convinced some would-be protesters to
stay at home. 

  Most of those who marched to the edge of Red Square yesterday were solemn
and bitter. But there was no hint of the violence that authorities said
they had feared and which they had promised to suppress by force. 

  Other than usual signs calling for Yeltsin to resign or linking him to the
country's top criminals, the closest thing to a public appeal for
revolution was a placard carried by a gold-toothed babushka that read: "To
get rid of fascists by any means is good. Army: It's your turn." 

  One entrepreneur did a brisk trade in calendars with an irreverent
painting of a Kremlin bathhouse where Yeltsin was doing something obscene
to himself, while cronies like former prime minister Viktor Chernomyrdin
lolled about like beached whales. 

  Conspicuously absent from the Moscow rally yesterday were many of the
hundreds of thousands of young, Western-oriented Muscovites who have lost
their relatively well-paying jobs in the past six weeks. There were a few
hard-hatted miners, a small contingent of university students complaining
about greatly increased tuition fees, hundreds of middle-aged nationalists
from a group called Spiritual Heritage and some youngish malcontents in
battle fatigues from southern Russia who styled themselves Cossacks. 

  However, as at almost every other anti-government gathering in Moscow
since 1991, most of those marching were pensioners or older factory workers
who haven't received their pay or pensions for many months. 

  "More younger people might come if there weren't so many old communists
here," complained 28-year-old Olga Ushakova, who lost her job with a
publishing company last month. 

  Ushakova declared that she was apolitical, but she decided to check out
the demonstration by joining the rally as it approached the Kremlin by
crossing a Moscow River bridge. 

  Although no fan of Yeltsin or those she said controlled him, she was
distressed to discover a sea of Soviet flags and scores of placards bearing
images of Lenin and Stalin. 

  "It's depressing but this form of protest is like a ritual," she said. "It
will achieve nothing because everything here is always decided at the upper
levels." 

#4
Russia: World Bank Officials Doubt Assurances Of Reform
By Robert Lyle 

 Washington, 8 October 1998 (RFE/RL) -- The World Bank's vice president for
Eastern Europe and Central Asia, Johannes Linn, says he has found Russia's
delegation at the annual meetings of the bank and the International
Monetary Fund (IMF) to be very serious in its focus on pushing ahead with
market reforms. 

They have not "fallen off the wagon" of reform, he commented in one
conversation with journalists. 

But other bank and fund officials have come away from meetings with the
group wondering if they really understand how much has changed in Russia's
situation in the past few months. One official said, "They don't seem to
have an inkling how dramatically different their circumstances are now."
Another commented that there seems to be little understanding of how
serious the situation is. 

Linn acknowledges that he tends to be optimistic, especially based on his
conversations with the Russian delegation in Washington. Led by Finance
Minister Mikhail Zadornov and Central Bank Chairman Viktor Gerashchenko,
the delegation is heavyweight, filled with the heads of major departments
of the finance, foreign affairs and other key ministries and the central
bank, as well as a senior Duma leader. 

The World Bank's country director for Russia, Michael Carter, acknowledges
that in detailed discussions on current World Bank loans, the delegation
seems unduly optimistic about what Moscow can achieve in the immediate
future. 

Drawings on three loans totaling $1.2 billion that were part of the
international rescue package in July were originally tentatively scheduled
to be ready by the end of this year. But Carter says he is "rather
doubtful" of Russian delegation assurances that the original goal is still
feasible. 

The drawings, or tranches, of the loans are tied to the achievement of
specific goals. Both Linn and Carter say that overall, the progress on
these reforms has slowed markedly since the Russian crisis began. 

In addition, all World Bank loans require that the country be in compliance
with its IMF program -- or, in unusual circumstances, have IMF assurances
that the country's macroeconomic (overall) picture is sound enough. 

Of course, Linn says, it is still not clear where the Russian government is
going because it has not yet spelled out a plan for economic recovery. If
it were to implement some of the measures heard in public comments in
Moscow, such as direct budget support for inefficient industries, price
controls, or forced inflation, then the bank would have to reexamine
everything, he says. 

But, he says, so far there is no indication that these policies are going
to be pursued. 

There is a similar uncertainty among IMF officials dealing with the Russian
delegation. Only Managing Director Michel Camdessus has commented publicly,
saying Moscow knows what it has to do to resume the fund's emergency loan,
and the sooner it begins, the better. 

Other officials say they're not sure the new government fully understands
what it would take to get the reform program back on track. One says there
is some doubt at the IMF that President Boris Yeltsin has the necessary
political support to carry through with such a program. And everyone

acknowledges that a lack of broad political support -- around the country
and in the Duma -- is a key factor. 

No matter the political situation, however, IMF and World Bank people have
reiterated that both institutions stand ready to talk about reopening loan
programs if and when the new Russian government decides on a prudent and
sound economic recovery plan. 

In the meantime, the fund and bank are working jointly with the government
on a program to revive the country's banks -- very few can be saved, say
bank officials -- and to restart the national payments system. Linn says
they are awaiting word from Moscow on whether the government wants to
follow that plan. 

Additionally, the bank is sending a special mission to Moscow next week to
help the government focus the next round of budget cuts so that they cause
the least social pain. 

World Bank President James Wolfensohn opened this week's annual meetings
with a call to include dealing with the pain of the people alongside the
fiscal needs of the economy when helping countries in distress. 

But until Moscow spells out what it plans to do, acknowledge IMF and World
Bank officials, there is little more the institutions can do. 

#5
IntellectualCapital.com

http://www.intellectualcapital.com
Don't Forget about the Real Russians
by Anne Applebaum
October 8, 1998 
Anne Applebaum is a writer for London's Evening Standard. She is a regular
commentator for IntellectualCapital.com. 

"Try to imagine: It's as if you went to sleep at night and woke up the next
morning in a different country," Olga Nagradova says. 

She is attempting to explain that while in America a change in the exchange
rate might mean that a few people lose money on the money markets, in
Russia everything -- "absolutely everything" -- changed when the currency
devalued in August. And everything continues to change at dizzying speed. 

In some ways, the situation is better than generally reported. It is not
true, for example, that people are starving. In some ways, however, the
situation is worse. 

Russia in another transition 

Because the ruble kept changing its value so rapidly, people like Olga, a
part-time teacher who spends most of her time working for Yegor Gaidar's
political party, stopped being paid. Because bank accounts were frozen,
people who run small businesses suddenly faced bankruptcy. 

In short, the people most powerfully affected are those who have tried to
create something in the last 10 years: anyone with a bank account, anyone
who runs any kind of institution or has any employees. 

Curiously, however, few people are afraid. That is, they are not worried,
as Olga puts it, about "revolution, civil war or global crisis," or even
the Communist Party returning to power. They are worried about the past
returning in a different sense. 

"I have been spoiled by civilization," Olga explains. "I cannot bear to
think of spending the rest of my life the way my parents spent theirs --
constantly worrying about petty things, where to buy soap and how long I
will have to wait in line to buy bread." 


In many ways, Olga is an average Russian. She lives in a standard two-room
box in a standard Soviet block in the far north of Moscow, has two children
and earns $300 per month. But it is that latter sentiment that makes her
truly average. Like most Russians, she appreciates some of the changes that
have occurred since 1991, particularly the improvements in the consumer
markets that mean no more long lines. 

More to the point, she is not anti-reform. And although one would not know
it from most Western commentary, most Russians agree with that, too. 

A time to choose allies wisely 

To be more precise, most Russians are not anti-reform, but they are against
"reforms" as the kleptocracy that rules Russia practices them. Most
Russians know perfectly well that the economic system that has evolved in
their country since 1991 is not capitalism as practiced in the United
States, that the election of representatives who are then "bought" by
oligarchs does not make for democracy as practiced in Western Europe. 

Yes, Russians are anti-Yeltsin and anti-Chernomyrdin. And they are opposed
to the current Russian leadership because they recognize that the current
Russian leadership has brought them laws that do not work, a government
that falls apart, and a capitalism that is based largely on theft and graft. 

That is where we in the West have made a mistake. By insisting on aligning
ourselves closely with the "reformers" who, under President Boris Yeltsin,
have been running Russia for the past 10 years, we have alienated the Olgas
and the other Russians who would be the pro-democracy, pro-capitalist
electorate if there had been genuine democracy and capitalism. 

Every time Vice President Al Gore spoke of "my friend Victor Chernomyrdin,"
every time President Clinton put his arm around Yeltsin, Russians
understood the lesson quite clearly. The West was prepared to give billions
of International Monetary Fund (IMF) dollars to the people who had
"privatized" their natural resources by giving them away to a few now-rich
friends. 

Western policy toward Russia now should be much more cautious and
intelligent. We can no longer back every leader who comes to power. On the
contrary, the West should avoid giving any financial or moral support to
any Russian government and concentrate instead on thinking about people
like Olga. They are the people who support reform in principle but dislike
it in practice, people who are trying to create or build something in the
wasteland that is post-Communist Russia. 

A new approach to change 

The West should back the new institutions that represent genuine change:
the human rights organizations, the free-trade unions, the business
schools, the one or two authentic political parties. We should beam as much
Russian-language radio as we can afford over the border to counteract the
effects of the half-free Russian press. 

The West has little or no influence over the plutocrats who make the
macro-economics decisions in Russia, which is why the IMF's money was
stolen or wasted. We can, however, influence things on the margins, helping
to rebuild the civil society that was destroyed in Russia more than 70

years ago and whose fragile efforts to rebuild itself have been crushed by
the ongoing economic crisis. 

Ever since the days when Peter the Great forced his people to build St.
Petersburg on a swamp, change in Russia has occurred from the center and by
force. This time, if it is going to work, it must come from the grass roots
-- and voluntarily. 

#6
Moscow Times
October 9, 1998 
Overtaxed in '17, '98 
By Anatoly Utkin

Anatoly Utkin is the head of the foreign policy department at the Russian
Academy of Science's Institute of U.S.A. and Canada Studies. He contributed
this comment to The Moscow Times.

For the second time this century the West is making the same fateful mistake
in its relations with a friendly Russia. 

The first time was at a crucial juncture of World War I, when Russia's
economic, social and military structure was verging on the point of collapse.
Although the Western Allies had an intelligence network in Russia, as well as
many knowledgeable diplomats and observers who had started to doubt the
strength of the Russian military, they still pushed Russia into major battles
even though the country had already lost 2 million soldiers. 

By putting loyalty to the West above an instinct of self-preservation, Russia
reached its breaking point during the offensives of 1916 and 1917. Britain's
Prime Minister David Lloyd George later conceded: "Russia was given an
assignment which could not be fulfilled þ Russia was crushed at the end of
1916. Prolongation of the war meant a senseless slaughter." 

This prolongation also stimulated the process of revolutionizing Russian
society, and helped transform Russia into an anti-Western country. Those who
managed to discern the country's dying pulse were allowed to come to power.
Consequently, the West's most trusted allies in Russia f members of the ruling
nobility and elite who were tied to the West by relatives, education,
sympathies and interests f vanished from the Russian political scene and
receded into historical nonexistence. 

Now we are facing the second drama. Seven years ago, Russia rejected communism
and started to drift in an unknown direction. The main beacons on the horizon
were the market and democracy. But after the lightning privatization of state
property, the process of change then lost all visible guidelines. Predictable
problems appeared in the new Russian state: how to restore a stable mechanism
of government and a vertical ladder of subordination; how to determine the
character of land property and regulation of state capitalism; matters of
taxation. 

But the most important questions fell outside the focus of attention: how to
preserve the existing industrial base; how to stimulate a technological
upsurge; how to preserve and develop fundamental science; and how to determine
the strategy of the Commonwealth of Independent States. 

Instead, everyday banalities blocked the view f the budget, inflation and
ruble convertibility. Crisis management substituted for the introduction of
real reforms, the prospects of which soon faded into the background. As a
result, the very notion of "reform" was devalued. Today, people call the

casual and trivial changes of economic tactics "reforms" when, in fact, they
are little more than the intrigues of clerks. In recent years, "reform" has
had little to do with the reality of industrial decline, the decay of science
and the generally chaotic state of Russian society. 

And in this context the West is pushing Russia forward again. This time it is
not a military advance on the Carpathian mountains but one in a no less
dangerous direction. 

As in distant 1917, the West has turned a blind eye to Russia's real problems
by promising help and loyalty only in exchange for a continuation of the
movement started in 1992 that has all but buried Russia's industrial
inheritance. It would be interesting to know the West's reaction if Russia
were to propose drastic changes that reduced a Western country's gross
national product by half, cut the standard of living by two-thirds and the
average life expectancy by 10 years f or that produced millions of unemployed,
and sent a huge number of specialists to the bottom of the social ladder. 

There's little point in a road that leads to an abyss. This road starts to
instigate a real hatred even in the hearts of people reared in love for
Western humanitarian values and culture, and hatred for the cold-blooded snobs
who consider the rules of their beloved economic game to be more important
than a catastrophe that is consuming an entire country. 

And as in 1917, our people are losing their orientation and feel for what is
going on f while the silence of Russia's leaders compounds their
consternation. 

The calls of Lloyd George and others for renewed Russian offensives during
World War I were perhaps understandable because the German high command was
transferring troops from the Eastern front to the Parisian suburbs. Each day
the "Big Bertha" supergun dropped shells on the city. But it is less easy to
understand today's Western leaders, since the present day NATO region is
secure. And if metaphoric notion of "reforms" is so important to the West,
then it should know that for Russia "reforms" in their present form signify
the degradation of society, death of the economy and the danger of a deadlock
involving much more than Big Bertha. 

Like 80 years ago, the West is again delivering an unintended blow to its best
friend in Russia, this time the Russian intelligentsia, who for many years
have tried to instill in the Russian people a respect for the rationality and
humanitarian values of the West. 

In 300 years of rapprochement with the West, Russia has tried to swap
"Potemkin villages" for realistic assessment. Genuine reform is generally
welcomed as a way for our society to develop. But the blind acceptance of
"reforms" without decoding what they mean, simply to keep the International
Monetary Fund and Western leaders happy, is as dangerous a formula as the one
that precipitated the communist outburst 80 years ago. Lloyd George should
have come to his conclusion much earlier. We can say the same of his
successors today. 

#7
Moscow Tribune
October 8, 1998
Luzhkov: Privatization to Blame for Crime Rate
By Dmitry Polikarpov 

Mayor Yury Luzhkov recently blamed the privatization process masterminded
by liberal economists in the former government for causing a serious
increase in crimes committed in Moscow. 

"Unjust property division has caused a major upsurge in crime," Luzhkov
said at a meeting with Moscow's criminal police, according to Itar-Tass. 

"If property is acquired illegally, criminal forces may try to make the new
owner share the benefits. If the owner refuses to do so, gunshots follow,"
Luzhkov said in a reference to several controversial privatization deals. 

Luzhkov's comments came as further confirmation of a possible revision of
the privatization process ensues. Luzhkov has always been hostile to the
privatization model advocated by former privatization architect Anatoly
Chubais, saying that former state property was sold to new owners for
artificially low prices. But despite the mayor's resistance, the Moscow
government had to follow Chubais' privatization instructions. 

Luzhkov, who failed to reveal which measures may be taken by the government
to recover the state's losses resulting from privatization, said that the
years of economic changes undermined people's trust in the police, which
has failed to lower the crime rate. 

Moscow's criminal police, which celebrated its 80th anniversary on Monday,
is considered an elite investigative force. Despite the fact that its
agents form only five per cent of the police forces deployed in Moscow, it
solves a considerable part of the most serious crimes committed in the
capital, including numerous contract murders. 

The Moscow government allocated $50 million in the last two years to
provide the criminal police with the latest foreign equipment. 

#8
Transitions
October 1998
Surviving the Russian Apocalypse
by Illarion Sergeev 

Illarion Sergeev is a newspaper journalist in Moscow. 
(published by the Institute for Journalism in Transition (IJT),
an independent, nonprofit, media-development organization based in 
Prague. http://www.ijt.cz/transitions)

People in Russia are rapidly losing touch with what is usually called a
civilized way of life. A very few days after the initial collapse, Russians
returned to their communist ways. The basic pattern is: the farther from a
city, the less money and the more of a subsistence economy. 

For many, one key to survival has been a legacy of the Brezhnev era: the
sotka (strip), amounting to one-hundredth of a hectare allotted for the
private use of each family. Several sacks of potatoes grown there would
help a family through a long winter. 

Of course, the sotkas never disappeared and many again have turned to their
potatoes for basic sustenance. Only recently this was seen as the poor
man's bread by many urban residents. But for millions in Russia, fishing,
mushrooming, and growing vegetables on their sotkas are once again the only
way to feed themselves. 

At a sanitarium near Moscow, doctors admit that there's no use wasting time
on the job. The salary, from 400 to 500 rubles a month (at press time,
around $47-$58), has depreciated several times in a few weeks. Nor is it
any use to work part time as a doctor: an ambulance medic earns 600 rubles

for 210 hours of this devastating work. So it's better to dig potatoes on
your land parcel, grow cucumbers at the dacha, or just go mushrooming. 

The poorer strata of the urban population survive using increasingly
extraordinary means. In Samara, some 700 kilometers east of Moscow, local
newspapers report that enterprising pensioners wait on street corners for
luxury cars to stop at traffic lights. When a car starts up again, they
rush in front of it, pretending they've been hit. The "victim" then extorts
significant amounts of money from the drivers to keep the "accident" secret. 

A group of veterans regularly files lawsuits against local newspapers for
so-called calumny against the Russian army and just as regularly wins the
cases -- the city is well-known for its political conservatism. Winning a 1
million ruble suit can certainly support the veterans and their lofty
principles for some time. 

Others with less "patriotic" principles -- such as the unemployed and the
homeless -- are engaged in the far more prosaic business of collecting and
selling back empty beer and mineral-water bottles. The recyclers team up
and divide the city into sectors, each controlled by a particular team. A
freelance bottle-hunter can earn from eight to 10 rubles a day. 

Money deficits paralyze commerce. A man from Volgograd who sells household
appliances complains that his business is at a standstill. Because of
inflation, he can sell only at a loss, and he cannot quit or invest his
money into dollars because not a single dollar can be found in this city,
with a population of over 1 million. If the crisis aggravates, he says,
he'll sell something like candles or canned beef. "Who would care to buy a
vacuum cleaner when the best dream would be to save money and buy a
kerosene lamp?" 

Moscow on the Brink 

In Moscow, the collapse has been more dramatic because of how high the city
had climbed -- and how much further it has to fall. The city spent a few
boom reform years psychologically abroad, but now it has come back home to
Russia. 

A couple of years ago it was almost a banality to say that Moscow was no
worse than London or Paris. Moscow's downtown, with its glistening display
windows, offices, boutiques, and thousands of Western-made luxury cars,
could impress many as an island of Western civilization on Russian soil. 

Within a few weeks of the financial debacle, the capital was regaining all
the half-forgotten features of the socialist standard of everyday living.
People stand in long lines, waiting to purchase as much as they can. Over
the last several years, they had almost forgotten the custom of storing
large amounts of cereals, flour, soap, detergents, matches, ketchup, and
inexpensive medicine. But these and many other goods had disappeared from
Moscow stores by the end of the third week of the financial crisis. The
assortment of expensive goods in the windows of downtown supermarkets
shrank by more than half. 


Customers at a specialized tea and coffee store, where until recently
making a choice was a certain pleasure, don't ask now for special teas or
their favorite coffee, as if such things had never existed. They ask for

whatever is available and are happy to build up their reserves. In ordinary
food stores, the shelves are already filled with uniform rows of tubes with
"synthetic" pate and concentrated drinks -- classics of Soviet times.
Domestically produced sausages have lost all their taste and quality -- one
benefit of the reform years --and downgraded to the Soviet level of pure
ersatz. The Moscow vegetable markets are half-empty as all imported goods
have "deserted," leaving only cheap Russian-origin commodities behind. 

The average customer has no money for anything other than essential goods.
The prices of buckwheat and washing powder have risen as much as five times
above what their inflation-adjusted level would be, thus proving the
economic law of scarcity: the more vital the goods, the higher the price.
But there are also signs of market self-regulation: skyrocketing prices of
imported alcoholic beverages are leading to a resurrection of cheap -- and
better forgotten -- Soviet brands, which will probably perform the
important function of preventing social upheaval. 

People are too busy for that anyway, engaged in search-and-store
activities. Poor citizens carry home plastic bags with cheap flour from the
nearby stalls, and "new Russians" drive to their elite apartments with
their car trunks filled with canned fish, pickles, and jams from
prestigious supermarkets. 

The patterns of trade are changing. In the Soviet years, people used to
travel to Moscow to buy all the goods they could not obtain in the
provinces: everything from tape recorders to butter. "What's long, green,
and smells of sausage?" was a joke told in almost every city of European
Russia. "The train connecting the provinces with Moscow." Now, those trains
are going in a reverse direction, as Muscovites call their friends and
relatives outside the city to send in boxes of soap and washing powder. 

In Ufa, Bashkortostan, which has its own chemical plant, a piece of soap
costs one and a half rubles -- 10 times less than the price in Moscow. The
changes are taking place so swiftly and irreversibly that Muscovites find
themselves in a state of both disbelief and amazement. 

A day of particular incredulity was in the middle of September, when Mayor
Yury Luzhkov formally opened a newly built section of the Moscow circuit
highway, constructed according to the best European standards -- another
reminder that Moscow really had spent several years "abroad." But in his
speech he had to deal with the problems of the depreciating value of
old-age pensions and the "melting" bank accounts of the city's citizens. 

Rebellion on Hold 

For the most part, the people in Russia will not revolt. Polls show that 27
percent of the population is ready for social protest. The older
population, which survived the hungry war years and many other difficult
times, is deeply discontented but will hardly stage any active protest even
if the crisis deteriorates. They face the situation with humility and even
readiness, maybe because the shortages and the long lines -- be they to buy
bread or to buy dollars -- bring with them a certain element of social
equality, not to mention familiarity. 

For the older generation, self-organizing might mean just bringing some
order to an hours-long line to buy food. The main danger is that their
passive social protest can be easily transformed by any regressive
political force into a landslide anti-reform vote. 

Besides, active social protests rarely bring desirable results. Even if
authorities were willing to meet the demands, they don't have the money.
The protest tradition had been practically eradicated during the Soviet
times, and the widespread mood of depression and loss of self-confidence
also contributes to the social passivity. 


A popular television program has another explanation, which it declared on
a recent broadcast: "Life in Russia is so interesting that it suppresses
the feeling of hunger." And newspaper writers vie to quote famous Russian
philosophers, who used to insist that "the Russian soul was always
distanced from material benefits." 

But hardly anyone remembers that those philosophers lived when there were
no bread lines. Recently, some of the most sober predictions on Russia's
fate seem to have come true. In response to the crisis, several regions
blocked their financial obligations to the federal government and declared
a state of emergency on their own, applying independently to Norway and
Sweden for emergency assistance. The local populations overwhelmingly blame
Moscow for the current disaster. Although Moscow may have come back to
Russia, Russia may not be coming back to Moscow. 

#9
Jamestown Foundation Monitor
8 October 1998

OLIGARCHS MAY HAVE FALLEN INTO A TRAP. It is by now clear that Russia's
"oligarchs"--a term generally referring to a small group of
politically-connected bankers who became industrial magnates thanks to the
country's controversial privatization program--have been hit hard by the
economic crisis. According to a study made by analysts of the Russian
agencies, the amount of foreign money leaving Russian banks may total
US$10-12 billion, which, according the news agency, is 18-21 percent of
their total resources. As of August 1, 1998, nonresidents had US$16.1
billion in Russian commercial banks (Russian agencies, October 7).

The big bankers who became oil barons--including Mikhail Khodorkovsky, who
founded Bank Menatep and now heads the Yukos-Rosprom financial-industrial
group, financier Boris Berezovsky and Uneximbank chief Vladimir
Potanin--have reportedly found common cause with First Deputy Prime Minister
Yuri Maslyukov against Finance Minister Mikhail Zadornov, who is pushing for
new taxes on oil exports as a way to help balance the budget (see the
Monitor, October 6). The energy barons--who include, along with the
banker-magnates, the heads of giant oil companies like LUKoil chief Rem
Vyakhirev--are pushing for a loose monetary policy of the kind likely to be
pursued by Maslyukov and Central Bank chairman Viktor Gerashchenko. This is
no surprise: Many of these bankers made their first big money through
currency speculation and arbitrage during the hyperinflation of the early
1990s (when Gerashchenko was also Russia's central banker). In addition, a
depreciating ruble is profitable for raw materials exporters. Their profits

are in hard currency, while their expenses are in devaluating rubles.

According to some observers, however, the oligarchs' strategy of allying
with Maslyukov in a bid to oust Zadornov may boomerang. Removing Zadornov,
the most market-oriented official in Prime Minister Yevgeny Primakov's
government, may give Maslyukov, Gerashchenko and other officials a freer
hand to impose strict state controls over foreign trade. One of the items in
a recently leaked anticrisis plan attributed to Maslyukov had a variety of
Soviet-style measures, including the mandatory sale to the state of hard
currency earned through exports. If instituted, it would in all probability
be done in a way favorable to the state and highly unfavorable to the
exporters. As Moscow-based analyst Andrei Piontkovsky put it: "Maslyukov
joined the government to take revenge upon the raw material producers who
grew fat during the years of pseudo-reforms, and in this new conflict where
the oil and gas oligarchs no longer enjoy the political 'krysha' or
protection, of [ex-Prime Minister Viktor] Chernomyrdin, they don't stand a
chance" (The Moscow Times, October 8).

...AND FEEL LUZHKOV BREATHING DOWN THEIR NECK. Yuri Luzhkov, who is gaining
a reputation as Yeltsin's most likely successor, has never been a favorite
with the oligarchs, and has given them further reason to have sleepless
nights. On October 8, the Moscow mayor gave what he tactfully called his
"recommendations" to the Primakov government on how it might overcome the
economic crisis. Among other things, Luzhkov, always a sharp critic of the
privatization program developed and carried out by Anatoly Chubais,
suggested that the legality of past privatizations should be "verified," and
that the holdings of those banks which "acquired their property in a
far-from-indisputable way" should be renationalized. Shares in these
holdings should then be used to reimburse foreign investors who suffered
losses last August when the government of then-Prime Minister Sergei
Kirienko defaulted on the state's short-term treasury bills.

Luzhkov softened the blow however, adding that Russian banks who suffered
losses in the T-bill market should be compensated by the Central
Bank--meaning, presumably, with newly minted rubles (Vremya, October 8).

#10
Voice of America
OCTOBER 9, 1998
EDITORIAL:  RELIGION ON TRIAL IN RUSSIA 

 
ANNCR:
THE VOICE OF AMERICA PRESENTS DIFFERING POINTS OF VIEW ON A WIDE 
VARIETY OF ISSUES.  NEXT, AN EDITORIAL EXPRESSING THE POLICIES OF
THE UNITED STATES GOVERNMENT.

VOICE:

    FOR DECADES UNDER SOVIET COMMUNISM, RELIGIOUS BELIEVERS IN 
RUSSIA WERE SUBJECT TO SEVERE PERSECUTION.  IN TODAY'S RUSSIA, 
THAT IS NO LONGER THE CASE.  NEVERTHELESS, THERE ARE STILL 
SERIOUS THREATS TO RELIGIOUS FREEDOM.

    A YEAR AGO, RUSSIA ENACTED A LAW ON RELIGION THAT 
DISCRIMINATES AGAINST MINORITY FAITHS OR THOSE CONSIDERED 
"NON-TRADITIONAL."  UNDER THE NEW LAW, SOME RELIGIOUS COMMUNITIES
MAY BE FORCED TO WAIT UP TO FIFTEEN YEARS BEFORE ATTAINING FULL 
LEGAL STATUS.  SUCH STATUS IS A REQUIREMENT FOR OWNING PROPERTY, 
PUBLISHING LITERATURE, INVITING FOREIGN GUESTS, OPERATING 

SCHOOLS, AND CONDUCTING CHARITABLE ACTIVITIES.  THE LAW ALSO 
ERECTS BARRIERS AGAINST FOREIGN MISSIONARIES.  RELIGIOUS GROUPS 
AFFECTED BY THE LAW INCLUDE PROTESTANTS, ROMAN CATHOLICS, AND 
EVEN RUSSIAN OTHODOX BELIEVERS NOT ASSOCIATED WITH THE MOSCOW 
PATRIARCHATE.

    RECENTLY, A MOSCOW CITY COURT BEGAN PROCEEDINGS IN A CASE 
THAT COULD BE AN IMPORTANT TEST OF THE NEW LAW.  THE LAWSUIT 
SEEKS TO BAN THE JEHOVAH'S WITNESSES FROM RUSSIA.  JEHOVAH'S 
WITNESSES HAVE  LONG BEEN ACTIVE IN MANY COUNTRIES AROUND THE 
WORLD.  THIS INCLUDES THE UNITED STATES, WHERE THEY ARE ACCORDED 
THE SAME FREEDOM AS ANY OTHER FAITH.  IN RECENT YEARS, THE 
JEHOVAH'S WITNESSES HAVE GAINED MANY FOLLOWERS IN RUSSIA.  BUT 
THE PLAINTIFFS IN THE SUIT CLAIM THAT THE RELIGIOUS GROUP IS 
VIOLATING THE NEW LAW BY INFRINGING "ON THE PERSONALITY, RIGHTS, 
AND FREEDOMS OF THE CITIZENRY."  THE PROSECUTION IS SUPPORTED BY 
PRIESTS OF THE RUSSIAN ORTHODOX CHURCH ATTACHED TO THE MOSCOW 
PATRIARCHATE.  

    FREEDOM OF RELIGION IS AN ESSENTIAL HUMAN RIGHT.  IT IS 
GUARANTEED TO RUSSIAN CITIZENS BY THEIR CONSTITUTION AND BY THE 
MANY INTERNATIONAL AGREEMENTS TO WHICH THE RUSSIAN FEDERATION IS 
A PARTY.  THE RELIGIOUS FREEDOM OF ALL RUSSIAN BELIEVERS -- 
INCLUDING JEHOVAH'S WITNESSES -- SHOULD BE RESPECTED.

ANNCR:

    THAT WAS AN EDITORIAL EXPRESSING THE POLICIES OF THE U.S. 
GOVERNMENT.  IF YOU HAVE A COMMENT, PLEASE WRITE TO EDITORIALS, 
V-O-A, WASHINGTON, D-C, 20547, U-S-A.  YOU MAY ALSO COMMENT AT 
WWW-DOT-VOA-DOT-GOV-SLASH-EDITORIALS (http://www.voa.gov/editorials),
OR  FAX US AT (202) 619-1043.