Dear pen-l'rs,
Here are 7 articles on the latest situation in Russia.
In sol,
Greg.
******
#1
Date: Mon, 24 Aug 1998
From: Fred Weir in Moscow
For the Hindustan Times
MOSCOW (HT Aug 25) -- Boris Yeltsin called on Russians to
``accept and support'' his decision to sack Sergei Kiriyenko and
bring back disgraced former prime minister Viktor Chernomyrdin
Monday, but Yelena Solovyova says all she sees is a reign of
insanity in the Kremlin.
``Nothing here can be understood logically,'' says the
pert, blonde 49-year old accountant. ``There is a revolving door
at the top just because Yeltsin doesn't trust his own shadow.
``As long as this country is governed by a paronoid
person, we will have nothing but endless, senseless changes.''
Last March Mr. Yeltsin sacked Mr. Chernomyrdin, his prime
minister of five years, blaming him for a deepening financial
crisis that left millions of Russian workers without wages for
months at a time.
He brought in Mr. Kiriyenko, a 36-year old political
unknown, and pledged the youthful new prime minister would turn
around Russia's long economic slump with a fresh wave of market
reforms.
This week Mr. Yeltsin staged the exact reverse of that
act, saying the country needs ``the experience and strength of
Chernomyrdin'' to pull it out of a galloping financial crisis and
collapse of public confidence.
``This is, of course, vintage Yeltsin,'' says Igor Bunin,
an analyst at the independent Centre for Political Technologies.
``When things go wrong, find a scapegoat to blame and promise
that everything will be put right under renewed leadership.
``But this time it doesn't look like people will buy
it.''
Under Mr. Kiriyenko Russia's economy has sunk like a
stone. Last week the rouble was devalued, many banks froze
depositors' accounts, and prices on imported food and consumer
goods took off.
``Yeltsin wants to say that Kiriyenko caused all our
troubles, but I haven't received any wages since last October --
and Chernomyrdin was prime minister then,'' says Alexander
Vassiliyev, one of 300 miners from the arctic coal centre of
Vorkuta who have been picketing the Russian government house
for the past three months.
``Changing prime ministers is just a stale old trick to
fool people,'' says the burly, 44-year old. ``But we know who's
really responsible.''
The miners have been living in a ramshackle tent village,
just outside the white granite-and-glass government headquarters,
living on gifts of food and cigarettes from sympathetic
Muscovites.
They now say they will not leave until Mr. Yeltsin does.
``A fish rots from the head down,'' says Valentin
Drachenko, 49, another of the protesters.
``As long as Yeltsin is president our misery will
continue. I will not go home to my family until I can tell them
the bastard is gone.''
Even people who believe Mr. Chernomyrdin is the right man
for the job say they fear Mr. Yeltsin is too capricious to let
him do it properly.
``Chernomyrdin is a strong and experienced man and I'm
very happy to see him coming back,'' says Anna Terukhova, a
36-year old real estate agent.
``But if we want real change in this country I'm afraid
someone has to deal with the main cause of instability. And
that's Yeltsin.''
******
#2
From: Fred Weir in Moscow
Date: Wed, 26 Aug 1998
For the Hindustan Times
MOSCOW (HT Aug 26) -- As the rouble's value continues to
evaporate, Russians are besieging their banks in hopes of getting
at least some of their savings out before they become worthless.
But for most it seems an increasingly forlorn search.
"I put 8,000 roubles into this bank over the past year, but
now they say my account is temporarily frozen," says Georgi
Leonidov, a 42-year old municipal worker. He is sitting in the
modern marble foyer of a downtown Moscow branch of Inkombank,
Russia's second largest financial institution.
Mr. Leonidov has been told he must fill out several forms
and wait a few days while some "temporary difficulties" are
cleared up.
"When I deposited my money they took it immediately, in
cash. Why won't they give it back to me the same way?" he says.
Russia's banks have been hit hard by rouble devaluation and
forced restructuring of government debt, which has left even the
strongest of them technically insolvent.
In an effort to protect themselves from complete collapse,
three of Russia's largest banks -- Unexim, Menatep and MOST --
announced they were merging Tuesday.
Analysts say the basic problem is that banks borrowed
heavily from foreign lenders in order to speculate on the
domestic Russian government bond market, which was yielding
interest over 100 per cent barely a month ago.
"The banks were greedy and they believed the gravy train
would continue forever," says a financial analyst. "Now that the
rouble is collapsing in value, they find themselves holding huge
obligations in hard currency while their rouble assets are
dwindling by the day."
The rouble has been nosediving for over a week, since the
Central Bank announced it would no longer defend the currency at
the former rate of about six roubles to one U.S. dollar.
On Tuesday alone the rouble plunged by almost ten percent.
It continued crashing Wednesday, until the Central Bank closed
down the Moscow currency exchange and annulled the results of the
day's trading.
On Moscow streets anyone offering to sell hard currency
could fetch up to 9 roubles to the dollar Wednesday. But there
were very few dollars for sale and many anxious to buy.
"Roubles are garbage, and soon they're going to be worse
than garbage," says Igor Simonov, a 27-year old street vendor.
"The rule is, change them into dollars immediately at whatever
rate you can get. And whatever you do, don't put your money into
a bank."
For millions of Russians, that advice comes too late. Over
recent years a few of the largest private banks have won the
trust of the country's new middle class by offering depositors
attractive interest rates and services similar to those of
Western financial institutions -- credit cards, 24-hour bankomat
machines and the security of hard currency accounts.
But on Wednesday most hard currency accounts were frozen,
Moscow bankomat machines were "out of order" or "temporarily
unable to dispense cash", and few Russian-based credit cards were
being honoured by local businesses.
"I'm tired of being robbed by the people in charge of this
country," says Vladislava Kirilova, a 65 year old pensioner
waiting in a lineup outside a downtown bank.
"I'm waiting for a man to come to power who will put all
these thieves in prison where they belong."
******
#3
The Independent (UK)
25 August 1998
[for personal use only]
Decline and fall of Yeltsin empire
By Phil Reeves in Moscow
THE REIGN of "Tsar" Boris Yeltsin has entered its twilight. His
television appearance yesterday to explain why he had reappointed a
prime minister whom he sacked only five months ago was not quite as
humiliating as a prime-time confession to an affair with an intern. But
it was bad enough. His choice of a premier who is widely disliked, and
whose name is associated with fudge, economic decline, and cronyism, is
a personal defeat.
Mr Yeltsin knows he will be seen as having buckled under the pressure of
a narrow clique of oligarchs who exploited the privatisation of state
assets to build vast fortunes - and subsequently used them to pressure
the Kremlin to defend their interests. But the events of the last 36
hours may also mark a larger watershed in the rule of Mr Yeltsin, a
seven year helter-skelter ride in which he has veered across the
political spectrum, from autocrat to rough-hewn democrat.
The snowy-haired man who in 1991 stood on a tank outside the White
House, flourishing his democratic credentials in the face of drunken
Communist coup plotters, also launched war in Chechnya, surrounded
himself with hardliners, and used tanks to bombard a recalcitrant
parliament. Exhausted by hard-living, heart trouble and the task of
trying to pilot the country through the post-Soviet chaos, this same man
may now have concluded that it is time to ease his way out.
"It looks like the President is starting to withdraw from office step by
step, handing over power to the heir," said his arch-enemy Mikhail
Gorbachev. For once, the former Soviet leader's views did not sound
purely like sour grapes. Mr Yeltsin loves power, and is a master at
centralising it on the Kremlin. He is also incorrigibly unpredictable,
whether in his ludicrous exploits - drunkenly conducting an orchestra in
Berlin, pinching a secretary - or in politics. He proved that yet again
last Sunday, sacking his government at the height of a fiscal crisis,
adding political chaos and limbo to the economic maelstrom. What he does
today, he can - and often does - undo tomorrow.
Witness the case of Anatoly Chubais, his financial trouble-shooter whom
he has sacked three times. In addition, the zealous Sergei Kiriyenko was
almost certainly fired because he was construed as threat to the
oligarchs' empires - which are rooted in energy, banking and the media.
Several feared his government would allow their banks to collapse,
unable to pay vast foreign debts.
But, having bankrolled Mr Yeltsin's election campaign in 1996, they
appear to have called in the favour by demanding a compliant prime
minister.
Yet signs are beginning to surface which suggest Mr Yeltsin may now have
accepted his rule is winding down. The well-connected Ekho Moskvi radio
station quoted sources saying Viktor Chernomyrdin had insisted, as a
condition of his return to office, that he has the right to appoint the
head of the "power ministries" - the Interior Ministry, the Federal
Security Services and the Ministry of Defence. No one understands the
importance of retaining control over the security forces better than Mr
Yeltsin. If the story is true, then it amounts to a significant
reduction of his powers.
In his speech to the nation yesterday, the President clearly anointed Mr
Chernomyrdin as his preferred successor in the election of 2000. His
departure cannot come too soon for his growing army of critics, whose
ranks embrace the majority of Russians, almost all the lower house of
parliament, and plenty of enraged international investors, who view Mr
Chernomyrdin's appointment as the kiss of death to Russia's efforts to
make the transition to a healthy market economy.
They point to the evidence that he is no longer up to the job. Although
he appeared to recover well from the quintuple coronary bypass in late
1996, questions have repeatedly arisen over his mental state. This theme
has a bleak familiarity for Mr Yeltsin, who these days appears far older
than his 67 years. He has long been prone to bouts of depression and
withdrawal, and has openly admitted to "dark thoughts". A best-selling
account by his former bodyguard Alexander Korzhakov claimed that Mr
Yeltsin had twice tried to commit suicide by leaping in the Moscow river
and locking himself in a steam bath.
There is certainly little doubt that he had a nervous break-down when he
was banished by Mr Gorbachev to the Soviet construction ministry in
1987. Although he has retained a gift for springing political surprises,
the number of embarrassments has grown.
During a trip to Sweden late last year, he appeared unsure of where he
was, and seemed to think Germany and Japan possessed nuclear arsenals.
Last Friday, he appeared to refer to the US attacks on Sudan and
Afghanistan as an "act of terrorism". And only three days before the
government announced its decision to devalue the rouble last Monday, Mr
Yeltsin was publicly declaring that devaluation "won't happen . It is
not a question of what I think, of my own fantasies, of what I do or do
not want to see. It is all calculated."
True, this may have been a last-ditch attempt to build confidence in the
beleaguered currency; but it is as likely that he was simply out of
touch. After all, he had been on holiday for five weeks despite a
rapidly worsening political crisis.
How long he will stay in the Kremlin now depends on several factors. He
is mindful of his place in history, which will at least give him credit
for holding the first democratic transfer of power in Russia for a
thousand years. He will want to be sure that Mr Chernomyrdin stands a
strong chance of succeeding him, and will defend the interests of the
ruling elite that has evolved during the Yeltsin years. This could
conceivably mean striking a deal with the Communist-nationalist
opposition which includes rewriting the constitution to allow the
president to be appointed not by popular vote, but by parliament.
And much rests on the advice of the so-called Kremlin "Family",
dominated by his daughter and image-maker, Tatyana, and his chief of
staff, Valentin Yumashev. As Russians look on with bewilderment as the
Kremlin staggers from one disaster to another, there are plenty who hope
that the old man's aides will now gently tap him on the shoulder, and
point to the door.
******
#4
Moscow Times
August 25, 1998
EDITORIAL: Ill, Paranoid Yeltsin Looks Like Suharto
>From the point of view of a sick, old man with failing mental powers
and
a deep sense of paranoia, President Boris Yeltsin's decision to bring
back Viktor Chernomyrdin as prime minister might have looked reasonable.
Yeltsin was troubled by the economic times he barely understands. His
response was that Russia does not need some whiz kid but a solid figure
-- a "heavyweight" -- to steer the ship of state.
Yeltsin, a former Communist Party boss who earned his political spurs in
the Brezhnev era, probably thinks Chernomyrdin's backroom friendships
with the power elite will sort things out better than any financial
tricks.
The ailing president's mind is also clearly plagued by the prospect of
what happens when he steps down. He wants to ensure he will be succeeded
by a man who shares his views, who will give him a graceful exit and who
will not throw him or his friends in jail.
Of course, Yeltsin cannot just name a successor -- Russia is a democracy
-- and it will be a hard sell to have the discredited, recycled
Chernomyrdin elected. But with the support of the power elite and their
media, he may think that, too, should be manageable.
Such is the president's apparent logic. It is flawed and reckless.
For one thing, the timing is madness. Russia is in the middle of its
worst financial crisis since 1991, but it now faces the prospect of
weeks of horse-trading over a new Cabinet.
Even if that can be quickly resolved, Chernomyrdin is not the man to
lead Russia out of crisis. He is, after all, the man who more than
anyone else except Yeltsin created this mess by piling up a mountain of
state debt. As one wit in the Duma put it, Yeltsin has replaced a man
who could not do anything in five months with someone who could not do
anything in five years.
Chernomyrdin's network of pals in the power elite will not empower him
but compromise him and prevent him from making the tough decisions
needed to win back confidence.
And as for the succession, Chernomyrdin is very much an outside bet. He
will in a few months, if not a few weeks, be tarred with the blame for a
truly appalling financial and social crisis. It will take a miracle to
elect him.
Yeltsin is now a lame duck whose influence and relevance will fade.
Similarities to the last days of the Suharto regime in Indonesia are
growing. It is hard to see what can now pull Russia back from the brink.
******
#5
Toronto Sun
August 25, 1998
[for personal use only]
Time's running out for Boris - and Russia
By MATTHEW FISHER ([EMAIL PROTECTED])
Sun's Columnist at Large
MOSCOW -- As Boris Yeltsin indicated to Russians on television
yesterday, the chief attraction of Viktor Chernomyrdin, who was
dramatically reinstated as prime minister on Sunday, is that he is as
comfortable as a pair of old shoes.
That Chernomyrdin's shoes never had any sheen and had long ago begun to
smell a little, is not such a great liability in a nation where
Yeltsin's flashy and unpredictable theatrics haven't worked and the
stench from generations of incompetence, corruption and decay permeates
everything.
Russia is said to be on the brink this week. What such a dramatic word
actually means here, let alone what happens once you go over the brink,
is a mystery.
The closest thing to a consensus emerging yesterday, as weary
Muscovites once again tried with little success to change their pathetic
rubles into American dollars, is that some kind of partial palace coup
took place on Sunday when Yeltsin announced he was once again firing his
entire cabinet, including his prime minister, Sergei Kiriyenko, and
bringing back Chernomyrdin, who was accused of "lacking dynamism" when
the president sacked him as prime minister a mere five months ago.
The thinking is that Yeltsin understood or was made to understand that
this humiliating volte-face was the only way he could keep his job.
According to this reading of the Kremlin tea leaves, Yeltsin's advisers,
the top generals in the three security ministries and the handful of
billionaire oligarchs who have plundered Russia during Yeltsin's reign,
gave the president what amounted to an ultimatum.
Only Chernomyrdin, with decades of experience as a faithful, faceless
apparatchik, could calm Russia at a time when the ruble is crashing, the
stock market has virtually ceased to exist and every government bill is
going unpaid.
That some sort of deal was struck was already clear late Sunday night
when Chernomyrdin's supporters boasted that he had been given a
completely free hand to deal with the economy. Yeltsin seemed to confirm
that - and more - yesterday when he all but annointed Chernomyrdin as
his successor in 2000, stating on national television that only an
experienced "heavyweight" such as the former prime minister could give
Russia the stability and unity required leading up to the next
presidential elections.
Chernomyrdin's specialty is supposedly as a manager but while serving
as prime minister from 1992 to March, 1998, his record was every bit as
bad as Yeltsin's. And the president's record is so dreadful it has no
recent global equal.
Despite many silly bouquets from western leaders, neither man was or is
much interested in democracy or in the kind of radical economic reforms
undertaken with some success in neighboring Warsaw Pact states or the
three former Soviet statelets bordering the Baltic Sea.
Yeltsin has always had a penchant for the dramatic gesture, the bottle
and the jugular, but little patience for the bull work of government.
Chernomyrdin survived for so long beside Yeltsin by being even-tempered,
stodgy and deferential and by carefully building coalitions within the
government and across the country.
MUDDLING PAIR
But there is one stark similarity. Both men have long records of
muddling through seemingly impossible situations; survival skills that
were learned as rising stars during Leonid Brezhnev's Golden Age of
Stagnation.
Yeltsin took the preferred Soviet track to the top, becoming a ruthless
local and regional party boss before joining the Politburo. Chernomyrdin
was part of that vast army of colorless bureaucrats who kept the Soviet
Union stumbling along. He eventually became energy minister and the
biggest player in Gazprom, the national oil and gas monopoly which was
never very well run, but given the country's immense natural resources
always earned lots of money and had lots of political influence.
Yeltsin's sclerotic kleptocracy has robbed Russians of their dreams. It
has now fallen to Chernomyrdin to once again dole out cabbages and
carrots from a larder that is almost bare. Most of his compatriots will
be thankful if he can even do that.
******
#6
Date: Tue, 25 Aug 1998 01:03:55 +0400 (WSU DST)
From: Renfrey Clarke
Subject: My Experience of Cows
My Experience of Cows, or Carol Williams on Russian Agriculture
As a foreign journalist in Moscow, I'm reluctant to criticise
the work of colleagues - life here is hard enough without having your
late-night howlers sniped at. But people in the West have a tendency
to believe what we write, and if more than the odd bit of it is
rubbish, some comment ought to be made. So I can't let Carol
Williams' article "Russia copes with crisis in agriculture" (JRL
2322) pass without a broadside.
"In the slothful days of the Soviet Union...Russia could never feed
itself."
The diet was certainly monotonous, but I don't recall that
anyone has been able to point to a major incidence of malnutrition
after the 1950s. In the latter decades of the Soviet era, Russia
could in fact have fed itself, had it needed to - the imports were
mainly of animal feed grain to increase meat consumption.
Incidentally, malnutrition has made a comeback since the USSR was
dissolved. Russia copes?
"Despite stunning growth in most consumer and service industries,
food production is still in the clumsy hands of Communist
ideologues..."
Stunning growth of consumer industries? Has Carol been to
Ivanovo lately, and looked at what remains of Russian textile
production? Or checked out the Russian footwear industry, or tried to
buy a Russian-made TV set? Overall, output in the consumer goods
sector has fallen by considerably more than the general collapse. As
for Communist ideologues, it's hard to find a KPRF parliamentary
fraction member who has more than a party-primer grasp of Marxism,
and I doubt if farm directors are more cerebrally inclined.
"Weekend gardeners who tend small plots attached to their dachas in
the countryside grow 91% of the potatoes consumed in Russia, 77% of
all vegetables, 56% of meat and 47% of dairy products..."
Has Carol ever tried keeping a cow, and milking it at weekends?
My experience of cows is that they get very unhappy if not milked
morning and evening, seven days a week. The figures cited are
evidently for all private-plot production, the bulk of which is
carried out not by dachniki, but by farm workers in their off hours.
Incidentally, the figures for private meat and dairy production rest
on feed concentrates that are generally obtained from the farms.
Feedlots provide a high proportion of meat and dairy output in the
West as well.
"In the Soviet era, Western critics often pointed to the greater
output from private plots as evidence that incentive was what was
lacking on the state farms, as the individual gardens then produced
about 25% of Russia's food while occupying less than 3% of its
cultivated territory."
In the Soviet era, Western critics who were idiotic enough to
use this argument were dealt with scathingly by people who knew the
first thing about agricultural economics. Of course a hectare of
private strawberries was worth more than a hectare of collective-farm
wheat! After all, vastly more work had to be concentrated on it. It's
the labour, not the land area, that's crucial here.
"Russians have no right...to move out of the communities in which
they are registered to seek job opportunities elsewhere."
This ceased to be true even for peasants after Khrushchev let
them have passports. The current constitution guarantees Russians the
right to choose their place of residence. Granted, Luzhkov still does
his damnedest to stop them moving to Moscow. But the main factor that
keeps Russians relatively immobile is the difficulty of finding
affordable housing rather than legal or bureaucratic obstacles.
At a couple of other points in the article, complex issues are
treated in a fashion which is far too simplistic, and the conclusions
implied are quite misleading. Foodstuffs imported into Russia are
indeed made more expensive by tariff barriers, but on the other hand
they're often made much cheaper by agricultural subsidies in the
countries where they're produced. Meanwhile, Russian agriculture now
receives very little in the way of subsidies. My hunch is that even
with the tariffs, Russian producers lose quite badly out of this. At
any rate, Russian agriculture has a compelling case for protection.
"Land Ownership Root of Problem"? The notion that Russian
agriculture would prosper if only land could be used as collateral
for loans may seem appealing, but I don't think it holds up. Even
Russian farms that are relatively well capitalised still tend to have
great difficulty turning a profit, and I can think of a variety of
reasons for this that have nothing to do with the system of land
tenure.
The key problem of Russian agriculture, I suspect, is the 1990s
version of the "scissors crisis". A range of studies have shown that
the prices agriculture has to pay for its inputs - machinery, fuel,
fertilizer - have risen far more rapidly than the prices that the
farms receive for their products. This is a predictable consequence
of removing price controls in sectors of industry that are
characterised by structural monopolies; rarely facing much
competition, the industrialists can raise their prices to the very
limit of what they think the farms can pay. The farms, on the other
hand, face intense competition, not merely from one another but also
from heavily subsidised producers in the European Union.
If the price structures of Russian agriculture are such that
making a profit is barely a possibility, then agricultural land is
worth very little, and no bank would give you a meaningful loan on
the basis of it.
In my view, the collapse of Russian agriculture (and of light
consumer industry, whose price structures are similar) has been an
inescapable consequence of "reform" as practised by Gaidar and his
successors. If anyone wants to know why things are miserable down on
the farm, the first place they should look is in the Kremlin.
******
#7
CALL TO ARMS IN RYBINSK. "Izvestiya" reported on 25 August
that an unknown organization distributed leaflets urging the
population of Rybinsk, a large industrial city in the
Yaroslavl region, to take up arms. The newspaper quotes
Asfira Pushkarnaya, an adviser to the governor of Yaroslavl
Oblast, who said that although no one took the call
literally, the situation in the region remains tense.
Employees of state-run enterprises are owed back wages
totaling 52 million rubles ($7.2 million). JAC
--
Gregory Schwartz
Dept. of Political Science
York University
4700 Keele St.
Toronto, Ontario
M3J 1P3
Canada
Tel: (416) 736-5265
Fax: (416) 736-5686
Web: http://www.yorku.ca/dept/polisci
