December 4, 1997  
This Date's Issues: 1408  •  • 

Johnson's Russia List
#1408
4 December 1997
davidjohnson@erols.com

[Note from David Johnson:
1. Moscow Tribune: John Helmer, The Chubais Confidence Trick.
2. N.M. Switucha: Re Estonian Language Law.
3. Stefan Lindgren: Yeltsin on troop reductions.
4. Rune Edberg: New vikings.
5. David McDuff: Whitehouse/McCormick. (Estonia).
6. Sarah: RE: Boris Yeltsin: personal responsibility.
7. New book on Russian banking.
8. Voice of America: Frank Ronalds, YEARENDER-97: RUSSIA SINCE 
USSR DISSOLUTION. (Including views of Leon Aron).
9. Paul Goble (RFE/RL): Russia: Analysis from Washington -- 
Economic Problems Pose Serious Challenges.
10. Reuters: CIA "Very Concerned" by Russian Nuclear 
Safeguards.
11. AP: Russia Offer Doesn't Impress NATO.
12. Washington Post editorial: Is Russia Next? 
(DJ: Reproduced here definitely for purposes of comment and
criticism. A good example of ideological immobility. Idee fixe?)
13. Ann Vogel: Philanthropy.
14. A. Chamot: Re Resignation.]

********

#1
Date: Thu, 4 Dec 1997 14:44:14 +0300 (WSU)
From: helmer@glas.apc.org (John Helmer)

>From The Moscow Tribune, December 5, 1997
THE CHUBAIS CONFIDENCE TRICK
John Helmer

When Anatoly Chubais summoned a group of western bankers to his office
Monday night, he didn't give them any hint of what he wanted to talk
about.
The summons was an acknowledgement, nonetheless, that something Chubais
had thought of doing the week before was very wrong. Of course, 
Chubais didn't say that to his friends from Salomon Brothers, Credit Suisse
First Boston, Chase Manhattan, and Deutsche Morgan Grenfell. But what he did
say -- to be more exact, what he asked them for -- was just as wrong.
Wrong here doesn't just mean unwise. For wrong, read unlawful and unwise.
The borrowing of money by the Russian government is desperate right now
for an obvious reason. The treasury is so bare, Russian banks are so
skint, and foreign investors so reluctant, there isn't enough cash to 
refinance maturing government bonds. That also means there isn't enough 
money to pay the wage arrears promised by President Boris Yeltsin by the end
of this month. 
Since Yeltsin made the promise, he ought to understand what is happening.
But he doesn't. The President had trouble this week understanding where he 
was and what he was saying. Prime Minister Victor Chernomyrdin shares 
political responsibility with Yeltsin, and though he knows exactly where he 
is, he carefully avoids saying what the government should do about its
financial difficulty.
In normal governments, there are mechanisms for deciding what's to be
done in
such cases. In Russia, as elsewhere, these require consultations with experts,
individual ministers, committees of ministers, advisors to the
head of government, advisors to the head of state, prime minister and
president. 
To be reasonable, and also to be lawful, pledging sovereign credit for
borrowing by the state requires, even in Russia, the understanding, 
agreement and authorization of many officials.
But Chubais is a one-man show. When he decided the way out of the
government's
December crisis was a loan of between $1 billion and $2 billion, secured by 
shares in the state oil company Rosneft, he didn't get government approval, 
because he couldn't. That was a week ago. Neither the privatization ministry, 
the federal property fund, nor the finance ministry believed the deal was 
legal. Not even the likely lenders were willing to risk their chances of
capturing Rosneft, when the real privatization auction takes place,
by taking part in Chubais's scheme.
That was a week ago. So Chubais came up with another idea this week.
How about lending the money directly to the treasury, without special
security, he asked the bankers, promising the money to repay them would come
in when the Rosneft auction is held. This type of private treasury loan was
apparently provided more than once in the past by George Soros, according to
admissions by Vladimir Potanin, Soros's investment partner in Russia, 
last year's deputy prime minister and Uneximbank chief.
This looks more legal than the loan-for-shares scheme -- except that
Chubais 
didn't have government authorization to make his proposal. Finance Minister
Mikhail Zadornov, who reports to Prime Minister Chernomyrdin, is silent
on whether he knew of Chubais's proposal, before reading about
it in the newspapers. When asked, he won't say whether he and the Prime 
Minister approve it. The prime ministry will not respond to the same question.
The bankers have long taken Chubais at his word, and though there was
nervousness about a loan for Rosneft shares, a straightforward
$2 billion credit to the Russian government doesn't present much of a 
problem for them. Unless Chubais doesn't stay in office to ensure the Rosneft 
auction is held soon. Unless the government faces the same lack of means to
repay the loan when it falls due, as it lacks on its bond obligations
today. Unless the lack of the required signatures and legal process
makes it possible for another Russian government to repudiate the loan,
or at least defer its terms. 
These uncertainties are bound to be factored into the price of Chubais's 
loan, the bankers admit. They will force the interest rate to market level, 
and that will oblige the government to ask awkward questions about the
decision to borrow from them in the first place.
Today's debts are being covered by Central Bank advances to the government,
and the conversion of Russian savings deposits in Sberbank into bonds.
In two to three months, the mountain of debt is likely to be higher,
and the costs of today's rising interest rates will start to bite.
Collect more taxes, says the International Monetary Fund mission to Moscow 
this week, so that you can repay your debts, and we will lend you the money 
we promised. Chubais, the one-man show, has always been able to deliver on 
that promise before.
He's arranged the most efficient, and also the heaviest income tax 
collection system in the world. It takes 100% of the wages of roughly
one-third of all Russian wage-earners. If companies pay more in taxes,
their employees get less in wages, or wait longer to be paid.
Replacing that tax with another might be a fair idea. It would certainly
be a popular one. The trouble is that the one-man show Chubais created
allows untaxed income and savings to accumulate in hard currency,
and to exit Russia at a rate of $1 billion to $2 billion per month.
The policies Chubais has pursued have sought to replace that exiting money
with foreign inputs; to put the confidence of foreign investors in a place 
where no Russians have any confidence whatsoever -- the banking system, and
the equities and securities markets.
This is a hugely expensive confidence trick for which Yeltsin,
Chernomyrdin 
and their new finance minister are responsible. It's up to them, not 
Chubais, to decide how to finance the confidence gap. They must explain
whether confiscating wages to meet the bills of foreign investors is a 
price they can justify.

********

#2
From: "N.M. Switucha" <mykola@travel-net.com>
Subject: Re: Estonian Language Law
Date: Wed, 3 Dec 1997 21:38:46 -0500

Reading Nicolai N. Petro's contribution ( Wed. 03 Dec 1997) I cannot help
but feel that it is his focus that is badly misplaced. He states, in part,
that: 
" It is the Russian-speaking minority that deserves (sic) expect
special protection against the (quite natural) tendency of the majority to
abuse state power, and the most convincing argument that the Baltic
governments could make that they are indeed mature democracies, is to enact
legislation providing special protection for the linguistic minority that
lives among them and put an end to all discriminatory practices against
them."

Now, given the presence of a broad range of linguistic, cultural and racial
minorities in Russia and the absence of any "special protection" against
the "abuse of state power", it would be more appropriate to slightly
revise his statement in order to put it into a proper context. Here is a
revised version:

"It is the non-Russian minorities (in the Russian Federation) that deserve
to expect special protection against the (historical) tendency of the
Russian majority to abuse state power, and the most convincing argument
that the Russian government could make that they are indeed a mature
democracy is to enact legislation providing special
protection for all linguistic minorities that live among them and put an
end to all discriminatory practices against them."

This sounds a lot better, doesn't it ?

*********

#3
Date: Thu, 4 Dec 1997 06:48:35 +0100 (MET)
From: stefan lindgren <stefan.lindgren@mailbox.swipnet.se>
Subject: Yeltsin on troop reductions

On Wednesday Boris Yeltsin in a speech before the Swedish 
parliament promised that Russia's armed forces in the 
Northwest of the country will be cut by 40 % to 1st of January 
1999. 
He also proposed a number of security measures like mutual 
right for all countries around the Baltic to inspect each others 
military installation; a hotline between Baltic country 
commanders, common control of the Baltic airspace e g.
The president said nothing about Nato but stressed all-
European co-operation within the framework of the 
Organisation for security and co-operation in Europe, where all 
european countries are members. There must be no delays in 
writing the new charter of european secirity there, he said.
The fact that Yeltsin didn’t mention Russia's proposal last 
month of a security guarantee for the Baltic republics, the 
Swedes noted as a good sign. Sweden, Finland and the Baltic 
countries themselves have all rejected this approach.
Also Yeltsin said that the question of a gas-pipeline to Sweden 
was already settled. It will be built, he said. But this was in fact 
a joke, directed against his hesitating hosts.
The agreement signed on gas deliveries actually says nothing 
more than that question has to be studied.
Yeltsin praised Swedish businessmen for being active on the 
Russian market. Swedish investments in Russia are now bigger 
than those of France, Spain and Japan (Nemtsov however 
earlier called Volvo a “sleeping whale” in this respect). Only 
eight countries are investing more.
None of the historical incidents that have been a burden to 
swedish-russian relations were discussed during the meetings. 
Except the fate of Raoul Wallenberg. Foreign Minister Primakov 
said that no documents have been found that gives ground to 
believe that Wallenberg was alive later than 1947. In a meeting 
with Raouls half-brother Guy von Dardel minister of justice 
Sergey Stepashin promised that Russia will continue its efforts 
to find out more about Raoul Wallenbergs fate.

Stefan Lindgren
editor of “Ryska Posten”

*******

#4
Subject: Fw: New vikings
From: <sim-re@nordm.se> (Rune Edberg)
Date: Thu, 4 Dec 1997 10:38:09 +0100 (MET)


Boris Yeltsin in his speech Dec 3d mentioned the viking traditions of going
east.
Not only businessmen will follow ths path: 
In 1994 and 1996, the reconstructed Swedish Viking Age ship "Aifur" made a
voyage from Sigtuna at the lake Mälar in Sweden to Kherson at the Black Sea
in the Ukraine. The venture, called "Expedition Holmgård" was the first
modern Scandinavian effort to sail the road from the Varangians to the
Greeks, mentioned in the Russian Primary Chronicle.
The "Aifur" is 9 metres long, 2,2 m wide and its hull weighs approx. 600
kgs. Its construction combines features from different Baltic area Viking
Age archaeological boats. It carried a 19 sq. m sail and was manned by
crews of nine.
In 1994, the "Aifur" crossed the Baltic Sea and went upstream the rivers
Neva and Volkhov to Novgorod. Distance covered was 1382 km. Effective time
was 307 hours, whereof sailing 192 1/2 hours, rowing (incl. manual towing)
114 1/2 hours.
In 1996, the ship continued from Novgorod. The river Lovat from Kholm
upstream was due to a very low water level not navigable, and the portage
over the first watershed therefore became far too long to be practicable
(horses were not available). However, the crew continued on the rivers
Usvyatya, Dvina and Kasplaya, crossing the second watershed by putting the
vessel on simple wheels, made on the spot. Counting from Novgorod to
Svetlylahirske on the Dnepr, distance covered was 1568 km. Effective time
was 415 1/2 hours, whereof sailing 113 1/2 hours, rowing (incl. manual
towing) 264 hours and manual towing over land 38 hours. (The stages from
Sopki to Usvyaty and from Svetlylahirske to Kherson was covered partly by
non-authentic means and is excluded).
The combined distance covered, during the 113 days of effective Expedition
voyage, was 2950 km. Average distance per day was 26,1 km. Average speed
was 4,1 km/h. 42 per cent of the time was spent sailing, 53 per cent rowing
and 5 per cent pulling the ship over land.
During the Baltic Sea crossing, on the lakes Ladoga and Ilmen and on the
Dnepr dams, the "Aifur" proved to be a good sailing vessel before the wind
and to a certain degree also capable of beating. Rowing (and sometimes also
sailing) downstream on the Dnepr also worked quite nicely. However,
although the "Aifur" is fairly small, the rivers Lovat and Kasplya were
navigable only with big effort and difficulty. The adverse stream on the
shallow Lovat with its many rapids was especially demanding.
From the Expedition's experience, only very light vessels would be suitable
for the northern part of the historic Road. Even so, it is probable that
the upper Lovat and the upper Kasplya may be navigable only after snowy
winters and only for a short period each spring. And even then, the
traveller on the Lovat would have to master the river's strong current and
many dozens of rapids.
Where exactly the northern part of the road from the Varangians to the
Greeks was situated is, in fact, unclear. Miklyayev and other Russian
scholars have also observed that many settlements and cemeteries from the
period AD 500-1000 are situated several metres below the level of the
present river Lovat, Usvyatya etc. Miklyayev has therefore suggested that
the waterways in North-West Russia were, therefore, not readily navigable
during the Viking Age. According to him, the reson was the hot climate in
that historical era. Miklyayev suggests that this part of the Road was
instead used in winter. Also, even in much damper times - e.g. during the
18th century - the Lovat was, according to written testimony, not very
useful for travellers because of its many rapids.
Scandinavians scholars discussing the Viking voyages to the East have shown
an obsession with ships. However, by travelling by horse and slege on the
frozen plain and on the ice of rivers and marshes, long distances have in
North-West Russia historically been covered in relatively short time.
Several accounts of Viking Age winter travelling, e. g. in Snorre
Sturlasson's work, support the "Winter version" of the road from the
Varangians to the Greeks.
The southern part of the Road is not questioned. The Dnepr between Smolensk
and the Black Sea was a huge, wide river. Two problems have been much
discussed by scholars: the ever-present military threat to travellers
presented by the nomadic tribes and the hazardous rapids (of which the
so-called Aefor/Aifur was one) which were situated between to-day's cities
Dnepropetrovsk and Zaporozhe. However, the rapids are now covered by
hydropower dams and all opportunity for travelling experiments there is
unfortunately lost.

contact sim-re@nordm.se for more information.

*******

#5
From: David McDuff <david@halldor.demon.co.uk>
Subject: Whitehouse/McCormick
Date: Thu, 4 Dec 1997 10:59:51 -0000

There appears to be some confusion in Tom Whitehouse's latest
contribution to the debate on the situation of Estonia's Russian-speakers.
Whitehouse writes, with justification, in my opinion:

>Russian-speakers came from all over the former Soviet Union to
>work or were strongly "encouraged" by the central authorities. They and
>their children now have good reason to call Estonia home

However, earlier in the same paragraph, Whitehouse refers to the
Russian-speakers as 'Estonia's Russians':

>While accepting that until 1991 Russian was the language of the oppressor, I
>think it is wrong to equate Estonia's Russians with the Soviet regime and
>thereby declare their collective guilt for 50 years of brutal and stupid
>government. 

Then, in his comments on Slovakia and its Hungarian minority, Whitehouse
suggests that Brussels is applying double standards in selecting new
members of the EU, and asks: 'Could it be that Russians are still
acceptable international "baddies"?'. It seems to me that he cannot have it
both ways: if Estonia's Russian-speakers 'came from all over the Soviet
Union' - including non-Russian republics - they cannot be referred to
collectively as 'Russians'. It's an important distinction, and needs to be
borne in mind when discussing the so-called 'ethnic' issues in Estonia.
Also, I have a question for Mr Whitehouse concerning his earlier
presentation of the recent events in Sillama"e (JRL 1402). I wonder if he
might present a few more aspects of the story. From what I gather, the case
is not as simple as it appears, and the truth of the matter is that the
demise of Sillama"e's mayor to a large extent reflects political tensions
and rivalries within different sections of Sillama"e's almost entirely
Russian-speaking population. Perhaps Mr Whitehouse would like to comment on
this, and give more details. I doubt if it's possible to have a sensible
discussion of this issue without them.

*******

#6
Date: Wed, 03 Dec 97 20:41:20 -0800
From: Sarah <sarak@iname.com>
Subject: RE: Boris Yeltsin: personal responsibility

DJ: "For me, as for most readers of JRL, Russia is an entertaining
spectator sport. Watched from afar or experienced as a temporary visitor,
Russia today is interesting."

This is true for me. The more I read what you send me as well as books
in my husband's libary such as "Lost opportunity: what has made economic
reform in Russia so difficult?" (by Marshall Goldman), the more pessimistic
I feel on the future prospect in Russia.
But my husband remains optimistic. On articles regarding hardship in
Russia, he goes, "That's nothing new. That's how peasants have lived for
centuries. They were always hungry and poor. They can handle that. The
changes are slow there, but things will change." But I don't know how long
people can wait in such misery...

DJ: "For me, what is most striking about the period 1992-97 is the
personal responsibility of Boris Yeltsin for innumerable failures and yet
the absence of accountability. The example that Yeltsin has set has had
enormous impact on Russian life, mostly, I would suggest, for the worse."

I really agree with you. I prefer to read on Russia than on US.
Reading on US politics annoys and frustrates me so much. But I can enjoy
Russian ones in peace.
One of the strangest things in Russian politics to me is that President
who is the chief executive of the goverment acts like a none-player. The
government is going to give him the report on progress since March? What
does that mean? He doesn't know the picture until they have the meeting?
He is supporsed to be the main figure on the reform, isn't it? Only thing
he does is behind the curtain politiking and blaming on someone.

DJ: "President Yeltsin should resign. It's time to start the
post-Yeltsin era. Russians need a fresh start, a new sense of possibility
and change. They need a new political constellation at the top. This can
only happen if Yeltsin steps aside, acknowledging his personal
responsibility for failure, and lets others try their hand at shaping
Russia's future." 

I agree that he doesn't improve the Russia's situation. But his
resignation would scare me. An election is almost always "which one is
less evil" choice in every country. How do we know that Russia will elect
a better leader or will carry out a fair election?
Sad thing is that he doesn't have a clue on economics and capitalist
system, even basics. He can't make any judgement on his staff's decisions
or actions, such as Gerashchenko and Pavlov's currency reform screwups. Or
earlier, unlimited use of the rouble credits by other FUSSRs and
overprinting of the currency by the Russian central bank. But it is not
much different with Lebed, Zyuganov, Luzhkov, or even Chernomyrdin. And
from what I have read, I don't think that Yavlinsky would make it. I don't
know about Nemtsov. 
I know that Russia's case is very special and difficult and it is not
easy to figure out what to implement and how among numerous "advices" and
reform plans. But now Russia can't afford more mistake. Yeltin's
resignation may end up simply more chaos...

DJ: "Political inclusiveness--a genuine spirit of reconciliation and
coalition-building."

I hope the reformist party changes their policy and works with the
government so that they would actualize what they believe Russia needs in
even compromised forms.

DJ: "Self-reliance--an end to looking to the West as Russia's saviour."

I agree with Goldman that Russia needs what he calls "green fieldization".

DJ: " Recasting of political structures to make them more legitimate and
consistent with Russian experiences. This may very well involve significant
modifications of Yeltsin's constitution."

In my opinion, the constitution should states that everybody including
elected officals is responsive in following the law and nobody is immune or
above the law like now. Also it should state that the constituency should
deserve the right to recall their every elected official by collecting
signitures of a certain percentage of the constituency and the majority of
affirming vote on recall. These should be included among the basic
principle of the new constitution over the whole RF as a democratic country.

*******

#7
Date: Wed, 3 Dec 1997 19:05:56 -0300 (CDT)
From: "Dr. Pyotr Johannevich van de Waal-Palms, American_Bank, USA"
<palbank@eskimo.com>
Subject: New Book 

May I advise the readers of JRL of a new book treating
an understanding of the Russian Banking 


"Understanding Russian Banking" (300 pages) written by Mossbusinessbank,
Promstroibank, Bank Saint Petersburg, Petrovsky bank, and Dr. Pyotr
Joannevich van de Waal-Palms. (1997)
http://www.aa.net/~russia/banking/book.html

The book can be ordered from Anke van de Waal;
Mail address: Palms Harbor Lights Building #103
515 Lake Street South
Krikland, Washington State, USA 98033

E-mail: kirch@iiss.ee
Phone: 1 425 828-6774

*******

#8
Voice of America
DATE=12/3/97
TYPE=BACKGROUND REPORT
TITLE=YEARENDER-97: RUSSIA SINCE USSR DISSOLUTION
BYLINE=FRANK RONALDS
DATELINE=WASHINGTON

///// ED'S: THE USSR WAS DISSOLVED SIX YEARS AGO THIS MONTH. 
THIS BACKGROUNDER REVIEWS THE MAJOR POLITICAL EVENTS IN RUSSIA 
SINCE THEN; OTHER SCRIPTS WILL COVER ECONOMIC AND SOCIAL 
DEVELOPMENTS. MAY BE USED ANYTIME THIS MONTH. ///// 

INTRO: SIX-YEARS AGO THE SOVIET UNION WAS EFFECTIVELY DISSOLVED.
THE GIANT RED SOVIET FLAG ATOP THE KREMLIN WAS REPLACED BY THE 
WHITE, RED AND BLUE FLAG OF PRE-REVOLUTIONARY RUSSIA. WITH A 
REVIEW OF POLITICAL EVENTS IN RUSSIA SINCE THEN, HERE IS FRANK 
RONALDS.

TEXT. WITH THE COLLAPSE OF THE SOVIET UNION, MIKHAIL GORBACHEV, 
WHO HAD STARTED THE REFORM MOVEMENT, LOST HIS POSITION AND HIS 
POWER. BUT THE KEY PROBLEM FACING MR. GORBACHEV STILL FACED 
RUSSIAN PRESIDENT BORIS YELTSIN: RESISTANCE TO REFORM BY THE 
NOMENKLATURA -- THE ENTRENCHED BUREAUCRACY THAT CONTROLLED 
AGRICULTURE AND THE IMMENSE MILITARY-INDUSTRIAL COMPLEX. IT 
RETAINED A MAJORITY IN THE LEGISLATURE. 

IN DECEMBER, 1992, PARLIAMENT FORCED OUT ACTING PRIME MINISTER 
YEGOR GAIDAR, WHO HAD LAUNCHED A RADICAL MARKET REFORM. IN HIS 
PLACE, PRESIDENT YELTSIN PROPOSED, AND PARLIAMENT APPROVED, 
VIKTOR CHERNOMYRDIN, FORMER DIRECTOR OF THE NATURAL GAS MONOPOLY 
-- GAZPROM. CONTRARY TO EXPECTATIONS, PRIME MINISTER 
CHERNOMYRDIN CARRIED FORTH THE PRIVATIZATION OF STATE-OWNED 
COMPANIES AND ENCOURAGED THE CREATION OF ENTREPRENEURIAL 
ENTERPRISES. BUT PRODUCTION, AND LIVING STANDARDS FOR MOST 
PEOPLE, CONTINUED TO PLUMMET. 

AS YELTSIN CHARGED IN MARCH 1993, THE LEGISLATURE, A HOLDOVER 
FROM THE COMMUNIST PAST, CONTINUED TO RESIST REFORMS PROPOSED BY 
THE GOVERNMENT.
// 1ST YELTSIN ACT -- IN RUSSIAN AND FADE //
IT IS QUITE CLEAR TODAY: THE ROOT OF ALL PROBLEMS LIES 
NOT IN A CONFLICT BETWEEN THE LEGISLATIVE AND EXECUTIVE 
BRANCHES OF GOVERNMENT; NOT IN THE CONFLICT BETWEEN THE 
PARLIAMENT AND THE PRESIDENT. ITS ESSENCE LIES DEEPER: 
IN THE PROFOUND CONTRADICTION BETWEEN THE PEOPLE AND THE
FORMER BOLSHEVIST ANTI-DEMOCRATIC SYSTEM, WHICH HAD NOT 
YET FULLY DISINTEGRATED AND WHICH IS SEEKING TODAY TO 
RECAPTURE ITS LOST CONTROL OF RUSSIA.
// END ACT //
THAT FALL, A GROUP CALLING FOR OPEN REBELLION AND THE RESTORATION
OF THE SOVIET UNION SEIZED THE PARLIAMENT BUILDING. A TWO-WEEK 
STRUGGLE ENDED WHEN TROOPS FIRED ON PARLIAMENT AND LEFT IT A 
BURNT-OUT SHELL. THE ACTION BROUGHT MUCH CRITICISM, BUT ALSO 
SUPPORT FROM LEADERS AROUND THE WORLD. 

KAZAKHSTAN'S PRESIDENT NURSULTAN NAZARBAYEV READ OUT A MESSAGE ON
BEHALF OF SIX NATIONS OF THE COMMONWEALTH OF INDEPENDENT STATES, 
PLEDGING THEIR FULL SUPPORT.
// IST NAZARBAYEV ACT -- IN RUSSIAN AND FADE //
ANTI-DEMOCRATIC FORCES HAVE ATTEMPTED TO CARRY OUT A 
PUTSCH, AS THEY REPEATEDLY WARNED THEY WOULD...
// END ACT // 
ELECTIONS FOR A NEW RUSSIAN PARLIAMENT AND A NEW CONSTITUTION 
WERE HELD DECEMBER 12TH 1993. THE RESULTS OF THE PARLIAMENTARY 
ELECTIONS WERE A SHOCK TO THE YELTSIN ADMINISTRATION AND TO 
FOREIGN OBSERVERS. 

COMMUNISTS AND EXTREME NATIONALISTS WON A MAJORITY. BUT THE NEW 
CONSTITUTION, OVERWHELMINGLY APPROVED, GAVE THE PRESIDENT GREATER
POWERS. HE VOWED TO CONTINUE HIS REFORM PROGRAM. MOST LARGE 
INDUSTRIES WERE PRIVATIZED AND A NEW MIDDLE CLASS DEVELOPED AS 
MILLIONS OF SMALL ENTERPRISES WERE FORMED. 

ALTHOUGH OFFICIAL FIGURES CONTINUED TO SHOW DECLINING PRODUCTION,
MANY EXPERTS BELIEVE AVERAGE REAL INCOMES ARE 40 TO 50-PERCENT 
HIGHER THAN REPORTED BY OFFICIAL STATISTICS, BECAUSE THE NEW 
ENTREPRENEURS AVOID TAXES BY FAILING TO DECLARE PROFITS. 
ALTHOUGH REVENUES WERE, AND REMAIN, INADEQUATE, THE RATE OF 
INFLATION WAS GRADUALLY BROUGHT UNDER CONTROL.

BUT THE YELSTIN ADMINISTRATION MADE A SERIOUS MISTAKE. SECURITY 
AND MILITARY FORCES MOVED INTO CHECHNYA, A PROVINCE ONE-THOUSAND 
MILES SOUTH OF MOSCOW WHICH HAD IGNORED CENTRAL AUTHORITIES SINCE
THE COLLAPSE OF THE SOVIET UNION. VAST OIL RESERVES WERE BEING 
DEVELOPED IN THE CASPIAN SEA AREA, AND A KEY PIPELINE FROM THE 
CAUCASUS RAN DIRECTLY THROUGH CHECHNYA. WHETHER OR NOT THIS WAS 
MOSCOW'S PRIME MOTIVE FOR INVADING CHECHNYA IN DECEMBER OF 1994, 
THE RESULT WAS A DISASTER.

WORLD LEADERS GENERALLY AGREED CHECHNYA WAS AN INTEGRAL PART OF 
RUSSIA, BUT DENOUNCED THE WHOLESALE SLAUGHTER OF MEN WOMEN AND 
CHILDREN. BORIS YELSTIN ADMITTED TO THE DISASTROUS RESULTS.
// 2ND YELTSIN ACT -- IN RUSSIAN AND FADE //
WE HOPED THAT OUR ARMED FORCES AND INTERIOR TROOPS WERE 
STRONGER AND MORE EXPERIENCED, THAT THEIR COMBAT 
READINESS WAS HIGHER. THEIR FAILURES, SETBACKS, AND 
MISTAKES OF THE COMMAND ARE A PAINFUL BLOW TO OUR 
PATRIOTIC AND CIVIC FEELINGS, TO THE DIGNITY OF 
RUSSIANS. OUR STATE TURNED OUT TO BE UNPREPARED FOR THE
EFFICIENT USE OF POWER. THIS IS THE REASON FOR THE 
LOSSES. THIS IS THE ROOT OF HUMAN RIGHTS VIOLATIONS IN 
THE COURSE OF COMBAT ACTIVITIES.
// END ACT //
THE WAR DRAGGED ON THROUGHOUT THE YEAR AND WAS A FACTOR IN THE 
DEFEAT OF POLITICAL FACTIONS SUPPORTING THE PRESIDENT IN THE 
PARLIAMENTARY ELECTIONS OF DECEMBER, 1995. NEW PRESIDENTIAL 
ELECTIONS HAD BEEN CALLED FOR JUNE OF 1996, AND BORIS YETLSIN'S 
CHANCES LOOKED VERY DIM. TO ADD TO HIS WOES, HE HAD SUFFERED TWO
HEART ATTACKS DURING 1995. 

WHEN HE ANNOUNCED IN FEBRUARY HE WOULD RUN FOR RE-ELECTION, 
RUSSIAN POLLS PUT HIM IN FOURTH OR FIFTH PLACE. BUT THE 
65-YEAR-OLD PRESIDENT, WHO HAD SEVERAL TIMES BEFORE SHOWN HIS 
ABILITY TO RECOVER FROM SEEMINGLY HOPELESS SITUATIONS, TURNED 
INTO A DYNAMO AS HIS CAMPAIGN DEVELOPED. IN THE FIRST ROUND OF 
VOTING, HE CAME IN FIRST, AHEAD OF THE COMMUNIST CANDIDATE, AND 
THEN OFFERED A CABINET POST TO GENERAL ALEXANDER LEBED, WHO CAME 
IN THIRD.

YELTSIN'S AMERICAN BIOGRAPHER, LEON ARON, SAYS THE FINAL RESULT 
OF THE ELECTION ON JULY 3RD OF LAST YEAR VINDICATED HIM ONCE 
AGAIN, AND VIRTUALLY ENDED THE POWER OF THE COMMUNIST PARTY AS A 
MASS MOVEMENT.
// IST ARON ACT //
THE RESULTS OF THE ELECTIONS WERE BOTH A PERSONAL 
TRIUMPH FOR BORIS YELTSIN AND A VERY BIG HISTORIC STEP 
FOR THE RUSSIAN PEOPLE. HE WAS BARELY IN SINGLE DIGITS,
OR MAYBE LOW TEENS, IN JANUARY. HE SHOT UP ALL THE WAY 
TO 54-PERCENT. THAT WAS DUE TO A VERY SKILLFUL MESSAGE:
'CHOOSE ME, OR RETURN TO THE PAST; PROTECT LIBERTY AND 
DEMOCRACY. AS FAR AS THE RUSSIAN PEOPLE ARE CONCERNED, 
THIS WAS A BELATED REFERENDUM ON THE COUNTRY'S POLITICAL
AND ECONOMIC SYSTEM.
// END ACT //
GENERAL LEBED BROUGHT ABOUT A TRUCE IN THE CHECHEN WAR ON AUGUST 
31ST. BUT THE GENERAL'S POPULARITY DID NOT SUIT MR. YELTSIN, WHO
FIRED HIM IN SEPTEMBER. 

LATE LAST YEAR, THE PRESIDENT UNDERWENT QUADRUPLE BYPASS HEART 
SURGERY, FROM WHICH HE EMERGED SUCCESSFULLY. HE NOW APPEARS TO 
BE VERY MUCH IN CHARGE. TO STRENGTHEN THE FORCES FOR REFORM, HE 
HAS NAMED TWO FIRST DEPUTY PRIME MINISTERS. ANATOLY CHUBAIS, WHO
CARRIED OUT THE RAPID PRIVATIZATION OF INDUSTRY AND LATER 
MASTERMINDED YELTSIN'S CAMPAIGN FOR THE PRESIDENCY -- AND BORIS 
NEMTSOV, FORMER GOVERNOR OF THE PROVINCE OF NYZHNY NOVGOROD, 
WHICH UNDER HIS LEADERSHIP MADE REMARKABLE ECONOMIC PROGRESS. 
ALTHOUGH THE RECENT FINANCIAL TURMOIL IN EAST ASIA HAS INDIRECTLY
LED TO CAPITAL FLIGHT FROM RUSSIA, THE FUNDAMENTALS OF THE 
ECONOMY APPEAR TO BE REASONABLY STRONG. 

LEON ARON BELIEVES BORIS YELTSIN, ALONG WITH MIKHAIL GORBACHEV, 
HAS PLAYED A MOMENTOUS ROLE ON THE WORLD STAGE.
// 2ND ARON ACT //
WITH MIKHAIL GORBACHEV, HE UNDOUBTEDLY WILL BE COUNTED 
AS A FOUNDING FATHER OF RUSSIAN DEMOCRACY. GORBACHEV 
PLAYED AN EXTREMELY IMPORTANT AND BENIGN ROLE IN 
UNDERMINING COMMUNISM. YELTSIN CONTINUED BY BUILDING 
THE RUDIMENTS OF DEMOCRACY AND TAKING RUSSIA THROUGH A 
NUMBER OF EXERCISES IN DEMOCRACY: INSTITUTIONALIZING A 
FREE PRESS, FREE POLITICAL ACTIVITY, POLITICAL PARTIES, 
THE PARLIAMENT AND CONSTITUTION AND THE PRESIDENTIAL 
ELECTIONS. SO BOTH YELTSIN AND GORBACHEV ARE ASSURED 
THEIR PLACES IN HISTORY.
// END ACT //
DESPITE ITS CONTINUING DIFFICULTIES, RUSSIA HAS COME A LONG WAY 
SINCE THE COLLAPSE OF THE SOVIET UNION SIX-YEARS AGO. 

********

#9
Russia: Analysis from Washington -- Economic Problems Pose Serious Challenges
By Paul Goble

Washington, 3 December 1997 (RFE/RL) -- Sharp declines in the Russian
currency and stock markets following the economic turmoil sparked by the
Hong Kong market meltdown represent both good news and bad.
The good news is that these declines demonstrate that Russia is now
sufficiently integrated into worldwide commercial markets that it now
affected by developments around the world. And this degree of integration
means that its economy and financial institutions and a growing skepticism
about the ability of the Russian government to cope with the challenges that
turbulence in world markets pose.
If the good news is likely to be the more important in the long run, the
bad
news is certain to have more immediate consequences on the Russian economy,
the Russian political system, and on the international financial and
political communities.
Both declines in the Asian markets and growing skepticism about the
state of
the Russian economy are likely to prompt ever more foreign investors to pull
their funds out of emerging markets like Russia's, sometimes to cover their
losses elsewhere and sometimes to avoid losses in Russia itself.
Such withdrawals -- and they stand at more than $5 billion in the last few
months -- are likely to accelerate as their impact on the Russian economy
becomes more significant. That is because these withdrawals are likely to
undermine the ruble, force the Russian government to raise interest rates,
and cause Russian firms to seek safe havens for their funds outside of Russia.
These economic consequences will have a variety of political effects. They
are likely to lead to demands for a new and more nationalist economic
policy, one that will isolate rather than integrate Russia further into the
international economy. They may force President Boris Yeltsin to drop some
officials, such as the embattled Anatoliy Chubais, from his team. 
And if these economic trends continue for very long, they seem likely to
spark more political challenges to both Yeltsin himself and the government
of Prime Minister Viktor Chernomyrdin. Although driven by these economic
difficulties, such challenges could quickly spill over into broader attacks
on the entire reform agenda.
Because of that possibility, not to say likelihood, Russia's problems pose
some serious challenges to the international financial and political
communities both immediately and long term. Immediately, they are likely to
force the hand of the International Monetary Fund to give Russia some
assistance even if Moscow has not met the standards these institutions have
insisted on. 
And they are likely to force some Western countries, particularly the
United
States and Germany, to come up with specific aid packages. Although these
are unlikely to be large enough to be called bailouts, they are certain to
spark political discussions about Russian policy in both Washington and Bonn.
But precisely because of the risks involved of a Russian market meltdown,
these latest developments are likely to have a political impact as well.
They could for example force the West to adopt a more accommodating policy
toward Iraq, allowing it to sell more oil and thus be in a position to pay
back more of the thousands of millions it owes to Russia.
Thus the integration of the world economy is likely to lead to some
unexpected political consequences. And these suggest that the "day of
reckoning" on the Russian economy that Yeltsin postponed on Monday will soon
be rescheduled regardless of what he intends -- and that it will, like the
collapse of the Hong Kong market, be one not only for Russia. 

********

#10
CIA "Very Concerned" by Russian Nuclear Safeguards 
Reuters
3 December 1997

WASHINGTON -- U.S. spy agencies remain "very concerned" about the security
of the former Soviet nuclear arsenal, the Central Intelligence Agency
director told Congress in a statement to be published this week. 
CIA Director George Tenet, in reply to questions from the Senate
Intelligence Committee, said Russia retained a large stockpile of nuclear
materials and warheads amid challenging conditions. 
"The (U.S.) intelligence community remains very concerned about their
security because of continuing social and economic difficulties, corruption
in the military and potential activities of organized crime groups," he said. 
Tenet's comments were sent to the intelligence panel on June 12 to flesh
out the record of its February hearings on threats to U.S. national
security. Excerpts were obtained by Reuters on Wednesday, a day before they
were to be published in full by the committee. 
In his answer to the committee, Tenet said Moscow was committed to
improving nuclear security and was taking actions to minimize the
vulnerability of weapons to theft. 
The CIA's stated concern over Russian nuclear security coincided roughly
with a scare last summer over reports from Aleksander Lebed, a former
secretary of the Russian security council, that Russia might be missing
dozens of suitcase-sized nuclear weapons. 
U.S. officials later said that they were satisfied with Russian
assurances that Lebed had been wrong and that Russia retained control over
its nuclear arsenal. 
At issue was the security of as many as 40,000 nuclear-tipped warheads
plus as much as 1,200 tons of highly enriched uranium and 200 tons of
plutonium stored in as many as 50 sites nationwide. 
CIA spokesman Mark Mansfield declined on Wednesday to say whether
Tenet's comments from June represented the Central Intelligence Agency's
current analysis of the state of Russian control of its nuclear arsenal. 
The comments "speak for themselves," Mansfield said. 
On a related issue, Tenet said Moscow had made progress on "educating
exporters" on treaty-related curbs on the transfer of missile components
and missile-related technologies. 
"However, Russia's ability to enforce export controls remains
problematic because of resource shortages, weak customs enforcement and
corruption," he said. 
"We do not believe that Russian ICBMs (intercontinental ballistic
missiles) are as vulnerable to theft or sales as missile components," he
added. "A conspiracy of many government officials would be necessary to
purloin an entire ICBM." 

*******

#11
Russia Offer Doesn't Impress NATO 
By Jeffrey Ulbrich 
December 4, 1997 

BRUSSELS, Belgium (AP) - Russian President Boris Yeltsin's dramatic offers
to make deep cuts in nuclear warheads and conventional troops failed to
impress NATO defense ministers gathered here. 
They've seen bold statements by Yeltsin before, not always backed up by
action. 
The Russian president has a penchant for the theatric, particularly when
on trips abroad. His impromptu announcements sometimes have astonished not
only his audiences but his own aides as well. 
Just last May, when he was in Paris for a summit to sign a charter
creating a NATO-Russia Joint Permanent Council, a flush-faced Yeltsin
surprised President Clinton and other leaders by pushing to the podium to
announce Russia would no longer target NATO countries with its missiles. 
What at first seemed dramatic was less so when experts pointed out that
computers can untarget and retarget these missiles in a matter of minutes. 
Then in October, while attending a Council of Europe summit in
Strasbourg, France, an exuberant Yeltsin emerged from a meeting with
President Jacques Chirac and unexpectedly blurted out that Russia would
sign a convention banning land mines. 
``Even though major Western powers say `no,' I say we support and will
strive for the goal of resolving once and for all this problem and sign the
convention,'' he said. 
That was the very day anti-land mine campaigners won the Nobel Peace
Prize, which obviously inspired the Russian president. 
Yet today, as delegates from more than 120 countries began signing that
convention in Ottawa, the Russians were not present. 
On Tuesday, Yeltsin told a news conference that Russia was ready to make
a unilateral one-third cut in its nuclear weapons. And Wednesday, he
pledged to cut forces in the Russian northwest by 40 percent by Jan. 1, 1999. 
``I think President Yeltsin or his foreign minister should explain
exactly what he has in mind,'' said U.S. Defense Minister William Cohen
following a meeting of the NATO-Russia Permanent Joint Council, set up to
alleviate Russia's concerns about NATO expansion into eastern Europe. 
Other NATO officials said the Russian announcements amounted to old
stuff with a new hat, had been made earlier or were part of already known
plans. 
Marshal Igor Sergeyev, the Russian defense minister, confirmed to
reporters at NATO headquarters in Brussels that the cuts would be made to
ground troops in the Kaliningrad enclave between Poland and Lithuania, in
the region around St. Petersburg and to the Baltic and Northern fleets. 
``These are regions that are the most stable in Europe and we feel able
to make drastic cuts of 40 percent,'' he said. 
He said the reductions were part of an ongoing overhaul of Russia's
military, which should see overall numbers reduced to 1.2 million by Jan.
1, 1999, down from the current level of 1.5 million. 
``Good surprises are always welcome in this area,'' said British Defense
Secretary George Robertson, putting an optimistic face on it. ``If there
are further reductions being proposed, NATO will welcome it wholeheartedly.'' 
Neither the nuclear nor the conventional cuts were brought up in the
Permanent Joint Council meeting, however, and Sergeyev made his remarks
only when asked during a news conference. 
He said the cuts in the nuclear force would come in the context of talks
planned with the United States to negotiate a third Strategic Arms
Reduction Treaty. 
U.S. Undersecretary of Defense Walter B. Slocombe said these cuts are in
line with what the Russians already have discussed with Washington. 
``It is not in fact a unilateral declaration to make a cut, but a
Russian indication that a level of about 2,000 (nuclear warheads) is the
right level for START III,'' Slocombe said. 
On Tuesday, the NATO defense ministers urged the Russian parliament to
promptly ratify the 1993 START II treaty, which calls for the United States
and Russia each to reduce their nuclear warhead stocks to 3,500, from an
estimated 8,000. The United States already has ratified it. 

*******

#12
Washington Post
4 December 1997
[for personal use only]
Editorial
Is Russia Next?

WHILE THE attention of the world's financiers has been turned to the
unraveling economies of Asia -- South Korea most recently -- trouble is
brewing in another "emerging market" of more than passing interest to the
United States. Most of Russia is in Asia, too, of course, but the epicenter
of nervousness is west of the Urals, in the financial markets of Moscow.
There, foreign investors have withdrawn billions of dollars in recent
weeks, sending the stock market tumbling and raising fears of a collapse of
the ruble. Russian officials have appealed -- again -- to the International
Monetary Fund, and also to private bankers, for help in averting a crisis.
This threat to Russia's fragile reforms couldn't come at a worse time --
though, in the perils-of-Pauline history of post-Soviet Russia, there
couldn't have been a good time. For most of this year, optimism has
legitimately held the upper hand. President Boris Yeltsin emerged from
heart surgery more energetic than he had been in years. He appointed a new
team of young reformers into an unusually coherent government. Their
intention was to whip an essentially bankrupt government into shape,
collecting taxes at a normal level and selling off state-owned industries
in order to stabilize the ruble, allow the economy finally to begin growing
and pay the salaries and wages that many Russians hadn't received for
months. That, in turn, would have a political benefit, showing the majority
of Russians that they could benefit from reform.
Through the summer and into the fall, the government seemed on track.
But now the dominant picture is of backsliding. With foreigners pulling
out, major privatizations will have to be postponed. The Central Bank has
had to jack up interest rates, which will discourage investment in
factories and so postpone an upturn in the economy. Once again, enterprises
are amassing huge debts among each other, and the government's debt is
growing, too -- a sanitized way of saying that teachers, soldiers and
nuclear power plant workers once again aren't being paid.
If all this stemmed only from a temporary loss of foreigner confidence,
the IMF could step in without difficulty. But as in other emerging markets
since Thailand began to collapse in July, the contagion may land anywhere,
but it takes hold only in economies with fundamental problems of their own.
And Russia has plenty of those. Its reform team has recently been weakened
by scandal, and political opposition continues to block needed changes in
the tax code, the land law, pensions, the armed forces and much more.
Moreover, the IMF isn't coming fresh to Russia, as it came to South
Korea this week. The multinational lending facility of last resort already
has approved a $10 billion loan to Russia, with certain conditions. This
fall, it postponed a scheduled $700 million disbursement because Russia
wasn't meeting those conditions -- wasn't collecting enough taxes, among
other fairly significant shortfalls. Now Russia's benefactors can't ignore
a failure to meet the terms of the original loan simply because the
nation's problems have worsened. But nor can the IMF and its biggest
backer, the United States, afford to let Russia and its fragile economic
reforms fail altogether, with potentially dire consequences. It's a
terrible dilemma, but the first step has to be for Russia to get its own
economic program back on track. 

********

#13
Date: Wed, 3 Dec 1997 18:08:45 -0800 (PST)
From: "Ann Vogel" <avogel@u.washington.edu>
Subject: Philanthropy

I just recently got to subscribe to your email list and
it's been great to get news on Russia daily. 
I am writing my dissertation on philanthropy (not that
broadly, but enough to send out a keyword as a first step)
in a comparative historical sociological perspective.
I want to investigate corporations's and businesses' 
philanthropical activity (if it happens, that I don't even
know) in a couple of Eastern European countries. Anything
on philanthropy or non-state redistributive economy would
be helpful. 
I am wondering if you got any information about that or if you
know sources that you could refer me to.

Ann Vogel, ABD
Department of Sociology
University of Washington
Seattle, WA 98195-3340

********

#14
From: punoczka@inforamp.net (A. Chamot)
Subject: re:- Resignation
Date: Wed, 3 Dec 1997 23:02:19 -0500

Wow!
You gave me such a fright.
For a moment there I thought that you were resigning and abandoning
JRL.
Then I found out that Boris Yeltsin will be resigning,
although he apparently does not know it yet.
In order to encourage this event to happen sooner than later 
I wish to make the following minor literary contribution to JRL.
Furthermore, I am donating this to the public domain so that it will be
free of all copyright.
Everyone and anyone anywhere at any and all times may sing, play,
broadcast,
perform, republish, and otherwise use this little ditty as much as they want.
The more the better.
Who knows, if it catches on in Russia it might even persuade 
Boris Yeltsin to resign, die, or at least mend his ways
(if such a miracle is possible, (keep dreaming, fools)).

The Russian Constitution

The Russian Constitution is a long and complex document with many details.
Most, if not all, people find it very difficult to understand and to remember
all the details.
Furthermore it is always changing due to constant amendments.
As a public service we would like to offer the following simplified 
version of the Russian Constitution.
Everyone will find it very easy to understand.
Furthermore you can sing it too.

The Russian Constitution / simplified version

subtitled:- My Name is Boris!!! .

My name is Boris!!!
I am a fearless fellow!!!
I am the Boss!!! 
I am the Boss!!!

My name is Boris!!!
Hear me and obey!!!
I am your Boss!!!
I am your Boss!!!

(Russian translation follows) 

xxxx(subtitle):- Menya zavut Boris!!! .

Menya zavut Boris!!!
Ya bestrashniy chelovyek!!!
Ya Boss!!!
Ya Boss!!!

Menya zavut Boris!!!
Slyshayetye menya i slushayetyes'!!!
Ya vashiy Boss!!!
Ya vashiy Boss!!!

********