UNITED24 - Make a charitable donation in support of Ukraine!

Weapons of Mass Destruction (WMD)

July 9, 1998

RUSSIAN ECONOMIC CRISIS: 'A BAD SITUATION'

Observers in Europe, Asia and Latin America viewed with increasing alarm the "bad" economic situation in Russia. Amidst swirling rumors--among them that Russian President Yeltsin had died--and following a week that saw Russia's stocks, bonds and currency take a pounding, analysts expressed concern that the Yeltsin government's recently announced anti-financial crisis measures and its efforts over the last few days to secure an aid package with the IMF would not be enough to avert a "catastrophe." Pundits in Russia and Germany held that President Clinton's decision to accept an invitation to attend a superpower summit in Moscow in September was influenced in part by his concern about Russia's economic crisis. Following are salient themes in the commentary:

ANTI-CRISIS MEASURES: A majority of media voices criticized the Kremlin's initiatives--which include a tax system overhaul and budget-cutting--holding that they are only short-term solutions and not the long-term remedies that are necessary to put the nation back on track economically. But several gave credit to Mr. Yeltsin and his officers for boldly addressing the situation, and, as London's conservative Times said, not bowing to "any populist temptation to blame international markets." Russian media reflected a wide variety of opinion, ranging from communist Pravda-Five's criticism that the anti-crisis program is "more like an instruction on fire-fighting through the use of fuel and combustibles," to reformist Russkiy Telegraf's admission that the government had "no choice" but to implement its severe budget stabilization program.

DOMESTIC AND INTERNATIONAL IMPLICATIONS: Opinion-makers foresaw a deepening political crisis between the Kremlin and opposition forces in the Duma. Noting that the parliament must still approve a number of the more important economic reforms, as well as any agreement made with the IMF, commentators warned that the Communist Party members in the Duma would continue to stonewall on the measures and probably reap the benefits from a Yeltsin government that appears to be stumbling. In light of its dire economic straits, a number of editorialists raised questions about Russia's status in the new world order, wondering if it fit the criteria for a "superpower" anymore. "Russia obviously has difficulties bidding farewell to this role.... In the coming century, nuclear forces are supposed to remain Moscow's basis of power. But in the long run, a thriving economy and a stable ruble would be a better basis," asserted Berlin's right-of-center Die Welt.

AMERICA NOT HELPING? A few pundits focused on the role of the U.S., criticizing the superpower for not being more "helpful." Noting that the U.S. is a central force behind the IMF, Moscow's centrist Nezavisimaya Gazeta had this most jaundiced view: "The Americans, far from trying to help, are out to sink her. Aware that Russia has nothing except her oil and gas resources, the U.S. wants to deprive her of that last economic prop. Succeeding in that would be a blow to Russia's integrity." London's conservative Times also berated Washington, admonishing the U.S. Congress for refusing to pay "America's share of the IMF replenishment.... Mr. Clinton needs to tackle the opposition in Congress with...resolve."

This survey is based on 46 reports from 9 countries, June 20-July 9.

EDITOR: Diana McCaffrey

To Go Directly To Quotes By Region, Click Below

|  EUROPE  |    |  EAST ASIA AND THE PACIFIC  |    |  LATIN AMERICA AND THE CARIBBEAN  |

EUROPE

RUSSIA: "Economic Policy Crisis"

Aleksei Ulyukayev held in reformist Segodnya (7/9): "Russia's current fiscal problems stem not so much from the wretched state of its economy as from a crisis of its economic policy. Investment risks in Russia are due to the government's inability to finance budget expenditures from revenues, which increases the federal debt, the price of its servicing and interest spending, and makes further drawing necessary. To win investors' confidence, we need a consistent and tough budget policy. The government must stop using money from financial markets to finance the budget deficit."

"U.S. Loses Interest In Russia"

Reformist Izvestiya (7/8) ran a report by Konstantin Eggert: "Bill Clinton's recent visit to China lasted nine days. His trip to Russia in September will be no longer than two to three days. On the U.S. scale of political priorities, Moscow is clearly not tops. The Americans are increasingly disappointed with Russia and its political elite, convinced that building relations with Moscow on a long-term basis is an unrewarding business. An incoherent economic policy, social tension, crime and unstable government are all features of Russian reality and do not help serious contacts. Compared to central Europe and even Communist China, Russia looks like a country unsure of where it is going. The lack of a political will among those behind the throne gives no confidence in this country's future.... For all its differences with Moscow, Washington wants Russian reform to continue."

"Adding Fuel To Fire"

Viktor Pritula remarked on page one of neo-communist Pravda-Five (7/8): "The anti-crisis program is more like an instruction on fire-fighting through the use of fuel and combustibles. It does not give confidence in the government's ability to control the situation."

"Choosing Between Boris And START"

Nikolai Zimin filed from Washington for reformist Segodnya (7/8): "Russia's economic crisis is apparently why Bill Clinton has after all decided to come to Moscow. The Russo-American summit, just as a chance to get a big credit from the IMF, may be proof that the West is serious about the Russian government's frantic attempts to get out of the financial deadlock."

"Clinton Does The Right Thing"

Vladimir Abarinov remarked in reformist Russkiy Telegraf (7/8): "Clinton has done the right thing by deciding to come over. After all, he did go to China which is giving America no fewer headaches than Russia. The atmosphere at the summit is a special topic. It is extremely unfavorable, I must admit, with the president himself publicly urging his diplomats not to submit to the Americans."

"Turning Point?"

Yury Nevezhin and Denis Kirillov said in the "Finansoviye Izvestiya" supplement to reformist Izvestiya (7/7): "Sergei Kiriyenko's political demarche [vis-a-vis Gazprom] will stay in the history of this government as a turning point. Hopefully, it will bring political stability and make this cabinet more credible, rather than tough and aggressive.... Encouragement from Michel Camdessus, made in public, has so far been the only positive reaction."

"Yeltsin Is Not A Player"

Andrei Denisov held in reformist weekly Moskovskiye Novosti (# 26, 7/7): "The fight (against Gazprom), the first serious fortitude test for the government, has shown that it lacks in fortitude and that the key player on the executive power side, the president, is not a player, but still a referee. That makes one wonder about the new cabinet and its role."

"Attack On Gazprom Makes No Sense"

Otto Latsis commented in reformist Noviye Izvestiya (7/4) on the government's latest attack on Russia's leading monopoly Gazprom: "In the IMF's eyes, it must have looked helpless and senseless, although the intention was to demonstrate the government's force. Worst of all, assuming that the current financial crisis, in effect, is a credibility crisis, the government's credibility has suffered the most. The cabinet was only beginning to appear like a team of hardcore professionals when, all of a sudden, it looked like a bunch of dilettantes unsure of themselves. But that the government is wrong does not mean that Gazprom is absolutely right.... The years when we tried to cheat on ourselves and avoid reducing spending and putting our taxation policy in order have only added to our social problems in this transition period. To adopt and, more importantly, implement an anti-crisis program, we need a firm government and great consolidation of all political forces. Unfortunately, we lack both, as shown by the Gazprom row."

"Punitive Actions Fail"

Andrei Serov stated on page one of reformist Russkiy Telegraf (7/4): "Much has been said about tough measures that are being effectively applied to those who refuse to pay taxes. But those punitive actions have not brought a single ruble to the state budget. Instead, they have brought losses in the form of the British Shell company having given up its plans to take part in the Rosneft auction as Gazprom's partner."

"It's All Intrigues And Selfishness"

Vitaly Gan concluded on page one of neo-communist Pravda-Five (7/4): "The Gazprom story is a classic example of selfish time-serving considerations and intrigues in the establishment having upstaged Russia's true interests."

"This Is no Way to Treat Major Companies"

Official government Rossiyskaya Gazeta (7/4) published this comment by Aleksandr Velichenkov, Anna Kozyreva and Vladimir Kucherenko: "This is no way to treat major companies. Rows like that play into the hands of Gazprom's rivals, including the Americans who have been trying hard to get us out of Iran, cutting Russia off from lucrative markets in Pakistan, India and China."

"The IMF In A Trap Similar To Russia's"

Boris Kagarlitsky held in centrist Nezavisimaya Gazeta (7/4): "The IMF's current problems are precisely why it will give Russia the money. It simply cannot help giving it. The Fund is in a trap similar to Russia's--it is a hostage to decisions already made, a hostage to the economic model of neo-liberal capitalism. Things might have been different, had neo-liberal reform not been so sweeping and had this country not been turned into a periphery of the global system. Alas, we have an impotent state and impotent lumpen-bourgeoisie capable only of exploiting our natural resources and serving Western financial interests."

"Yeltsin's New Deal"

Svetlana Babayeva, Vera Kuznetsova and Dmitry Dokuchayev remarked on page one of reformist Izvestiya (6/24), reporting about President Yeltsin's new anti-crisis program: "The Kremlin and the government will have to rack their brains over how to secure the Duma's cooperation in implementing the new policy."

"Protracted Depression Possible"

Boris Pozdnyakov stated on page one of reformist Russkiy Telegraf (6/30): "The budget stabilization policy (obviously, important and necessary) may have indirect but nonetheless painful consequences. Stagnation may give way to protracted depression with all its nasty attributes like ruined banks and enterprises, mass-scale unemployment, a disintegrating financial system, and the loss of a competitive market. Even worse, it may entail social and political troubles. The government, of course, is aware of the risks involved in budget stabilization. But it has no choice. Ruble stability and short-term obligations are now more important than long-term economic prospects."

"Kremlin Snubs Duma"

Vasily Safronchuk said on page one of nationalist opposition Sovetskaya Rossiya (6/30): "The economic and financial stabilization program was developed in participation with oligarchs and takes a 'parallel' government, a council for economic cooperation, to implement. The Duma was not involved, the Kremlin having decided it could do without it. One can hardly imagine a worse instance of a government ignoring parliament."

"Flaying People Soviet Style"

Aleksei Borisov said in reformist, youth-oriented Moskovskiy Komsomolets (6/27): "If crushing the banking system, the standard of living and the real economy via taxes is an anti-crisis, the government is surely in a (medical) crisis. We need real and firm rules and we need to know the time during which unpopular but necessary measures are to be carried out. We also need a pro-investment taxation policy with a clear incentive for everyone to work more and take the income to a bank. We do not have all that. Instead, we are being flayed Soviet style."

"Price Of Integration"

Aleksei Makushkin concluded in reformist Noviye Izvestiya (6/26): "The problems we run into, following the road of reform, are the price we have to pay for integration into the outside world."

"Program Made To Order"

Maria Bogatykh said on page one of reformist Segodnya (6/24): "It looks as if this program was made to order, the special design taking into account the unique proportions of Mother Russia's figure. With a skilled cutter, you may be lucky to end up with a good dress. Sergei Kiriyenko is a great manipulator, and this country's politics prevail over its economics, therefore you only see what you need to see so that the program does not fall victim to political games and you find it hard to make forecasts. You only have to follow changes as they come."

"Strong Russia Unwelcome In World"

Yury Maslyukov, chairman of the Duma's economic policy committee, stated in neo-communist Pravda-Five (6/23): "The longer we delay a crash, the worse its consequences will be. We must act differently, taking into account what happened and what is going to happen.

"We need a new program. Whatever has been suggested to date is merely patching up holes and trying to keep afloat a bit longer. We must be quite clear that the measures that really need to be taken are unpopular and very hard. It is important also that we define our objectives--continuing to use Russia as a source of personal enrichment or trying to revive it. The latter is sure to be opposed by our creditors abroad and at home. A strong, competitive and independent Russia is unwelcome in this world."

"There's No Easy Choice"

Lyudmila Telen said in reformist Moskovskiye Novosti (# 24, 6/23): "Ruble devaluation would be the end of all--the robust president, the flabby government, the compliant opposition, and corrupt governors. This only means that we need new people to carry out a new policy, people with trust and will. As for the economy, our previous leaders have not left us an easy choice, and nobody is certain that new ones will be able to carry on market-economy and democratic reforms. One thing is clear--it is naive to expect anything good from those who will sacrifice democracy to a market economy. There are many people like that. But their approach has nothing to do with a market economy."

"U.S. Out To Sink Russia"

Tatyana Koshkareva and Rustam Narzikulov held on page one of centrist Nezavisimaya Gazeta (6/20): "As if an economic disaster is not enough, there is a danger to Russia's integrity as a state. The impotent government is a great risk to her sovereignty, regardless of the way the financial crisis may be solved. The IMF only agrees to offer money on its own stringent terms. They are suicidal to Russia. But, without that money, she is on the brink of default. The Americans, far from trying to help, are out to sink her. Aware that Russia has nothing except her oil and gas resources, the United States wants to deprive her of that last economic prop. Succeeding in that would be a blow to Russia's integrity."

"Crisis Dates Back to Gorbachev Days"

Anatoly Tille opined in nationalist opposition Sovetskaya Rossiya (6/20): "This crisis did not start last May or in 1994. It dates back to the Gorbachev days and the Gaidar (American) reform. The system crashed last May. It is mortally sick. There is nothing for it ahead. Only chaos. Unfortunately, there is no force in Russia today which would be able to rally the masses."

BRITAIN: "Russia And Friends"

The conservative Times said (6/25): "Capriciously as Boris Yeltsin has often seemed to change teams, he has held to the overall goal of reform. His grave analysis of Russia's plight admirably eschewed any populist temptation to blame international markets.... Mr. Yeltsin insists that the Duma must pass all the necessary legislation by July 13, when it breaks for the long summer recess. Otherwise, he hinted that he will resort to decrees. He may well have to make good that threat. If he does, Russia's friends should show understanding. While the West awaits proof of the latest Russian pudding, it should repair a gap in the world's international financial defenses. Because the American Congress refuses to pay America's share of the IMF replenishment, the $15 billion Russia wants would devour all the hard currency the IMF has left, leaving nothing for emergencies elsewhere. Mr. Yeltsin has faced up to the Duma this week; Mr. Clinton needs to tackle the opposition in Congress with equal resolve."

GERMANY: "Summits Aren't What They Used To Be"

Manfred Quiring opined in an editorial in right-of-center Die Welt of Berlin (7/8): "Bill Clinton will go to Moscow. 'Finally,' the Kremlin will certainly say since the last Russian-American summit meeting took place more than a year ago.

"In Moscow, Russian-American summits are still considered something they no longer are: meetings of the two great leaders of global politics.... But the times of confrontation are fortunately over. This is also true for Russia's role as a superpower. But Russia obviously has difficulties bidding farewell to this role.... In the coming century, nuclear forces are supposed to remain Moscow's basis of power. But in the long run, a thriving economy and a stable ruble would be a better basis."

"Put A Bottom In The Russian Pit"

Right-of-center Fraenkischer Tag of Bamberg (7/8) opined: "Kiriyenko will remain a beggar in a pin-striped suit if his government does not quickly change the economic policy framework conditions in the country. He must enable Russia to translate the enormous economic potential into social progress. It is necessary not only to set up anti-crisis programs but also to implement them. Under pressure from the leading politicians of the Western world, the IMF is still willing--as often before--to throw again billions into a bottomless pit. It is questionable whether these new grants will be well-invested and can stabilize Russia. Only one thing is sure: They will help support the power of Russia's President Yeltsin on a temporary basis. But nobody wants to speak about for how long this political pomp in the Kremlin will continue to be feasible will tick, for the vision of a Russia without the alibi democrat Yeltsin is interpreted like a horror scenario. Unlike his predecessor, Kiriyenko should not only point out that the Russian pit is empty, but he must also put in a bottom. And Yeltsin must not only encourage him to do so, but he must also put the hammer into Kiriyenko's hand."

"Kiriyenko Painting Gloomy Picture"

Centrist Stuttgarter Zeitung (7/6) noted: "Russia's Premier Kiriyenko is the focus of interest. His appearance over the past two days in the Duma made clear the seriousness of the Russian state budget situation. The young premier painted a gloomy picture of the economic situation of the country to the parliamentarians. With brutal frankness he pointed to the weak spots of earlier reform plans and confronted the Duma with a radical emergency plan. This had no resemblance with the self-righteous moves of Yeltsin in the past years. After this speech, even the die-hard opposition parties of the nationalists and communists understood that the crisis must be tackled."

"Yeltsin Responsible"

Right-of-center Maerkische Oderzeitung of Frankfurt on the Oder held (7/6): "In March, Yeltsin fired the government of Premier Chernomyrdin and, after a lengthy bickering with the Duma, made Kiriyenko the premier of the country. However, if this young politician fails, Yeltsin will be faced with some dangerous problems. The president who has so far applied a hire-and-fire principle, will then have no other choice but to concede his own bankruptcy. The Russian president is the one politically responsible for Russia's decline. He allowed every second ruble to be earned in the shadow economy, and large companies such as Gazprom invest their profits abroad instead of paying their taxes on time. Yeltsin signed several decrees, but did not improve the situation itself. In light of this, it seems grotesque that Yeltsin is disseminating rumors about a new presidential candidacy in the year 2000."

"Bad Situation In Russia"

Centrist Badische Zeitung of Freiburg noted (6/24): "The hectic activities in Moscow reveal how bad the financial situation in Russia is. The Russians will now be faced with tough and austere times. Without foreign assistance, President Yeltsin and his new premier would be sucked into a maelstrom of the state's bankruptcy. This would mean not only a lack of funds, but also the disintegration of the state's social order. It is in the best interest of Western donors and the majority of political parties in the country itself to prevent this.

"The reaction of the Duma to this savings package also demonstrated this. The only party to stonewall the package was the Communist Party. Are they still hoping to get rid of the current system?"

"No Improvement In Sight"

Right-of-center Fuldaer Zeitung held (6/24): "From whatever the Russian government's viewpoint, on a short-term basis, an improvement of the situation is not in sight. These are bad omens for the next elections, since the longing of the people for a state that can support them in bad times is getting greater. Strong men such as ex-general Alexander Lebed and the communists, who want to turn back the clock, will benefit from such a situation. For the rest of the world, however, both variations are terrible to imagine."

"Not An Easy Task"

Right-of-center Thueringer Allgemeine of Erfurt (6/24) had this to say: "We must fear that the anti-crisis program which was announced with so much pomp will end up as all previous reforms that simply drifted away."

"Government Should Stimulate Economy"

Right-of-center Badische Neueste Nachrichten of Karlsruhe and right-of-center Schwaebische Zeitung of Leutkirch (6/24) held: "Instead of punishing initiatives with horrendous taxes and alienating foreign investors, the government should stimulate the economy. And it should strictly watch the activities of fraudulent banks, since they are stymying action with their intransparent 'baksheesh' system. In its history, Russia is now experiencing real freedom. There are, for the first time, signs of democracy and implementation of the rule of law. These values must be further developed. But we do not hear anything about this in the speeches of the president. It is counter-productive to threaten the Duma with its dissolution now. Instead, Yeltsin should try to win lawmakers' support for the reform plans of the young government."

"Misery Will Continue As Long As Money Is Not Invested For Creation Of Jobs"

P. Bock commented on regional radio station Radio Kultur of Berlin (6/24): "The whole anti-crisis program only serves to impress the IMF. But the economic and social misery in Russia will not change as long as money is not invested for the creation of new jobs. The necessary confidence in the safety of these investments, however, does not exist. This is true both for Russians and foreigners. A great part of the Russian population has no longer any trust in the politicians. The people are only trying to survive."

"Right Direction"

Birgit Marschall noted in an editorial in left-of-center Berliner Zeitung (6/23), "The program which Premier Kiriyenko has now presented to address the crisis is going in the right direction. In order to increase tax revenue, the state must reduce its spending. Stricter controls on tax evaders, however, will result in on a negligible increase in tax revenues. The Russian finance authorities simply do not have the means to counter the tricks of tax evaders."

FRANCE: "The Battle Of The Ruble"

Laure Mandeville commented in right-of-center Le Figaro (6/24): "The urgency with which Anatoli Chubais has been called back to negotiate with the IMF leaves one skeptical. Is the Russian government so weak that it needs to call upon one of its former key men in order to be heard?... In spite of their 'strategic plan,' Boris Yeltsin and his government look more like firefighters dealing with an emergency than strategists with a long-term plan."

BELGIUM: "Kiriyenko Is Right: 'Fantastic Political Courage' Is Necessary"

Pol Mathil wrote in independent Le Soir (6/24): "In Russia, there is no alternative. The Yeltsin-Kiriyenko program can cause a catastrophe. But (such a catastrophe) is avoidable. However, if such a program did not exist or were to fail, the catastrophe would be certain. In the absence of reform, Russia would be confronted with a dramatic future. Either a period of 'smuta,' of national apathy, or anarchy. In both cases, the longing for a strong man would surface.... With real 'smuta' or real anarchy, the most backward forces could take over.... Kiriyenko is not mistaken. A crisis of state is threatening Russia and, in order to implement his rescue plan, 'fantastic political courage' is necessary. Not only political."

HUNGARY: "Dangerous Beautiful Lady"

Second-largest circulation Nepszava asked (7/8): "Is it only an old time routine that the recently announced meeting of Clinton and Yeltsin is called a summit? Summits are normally held for leaders of superpowers, but can Russia still be called one? It is obvious that the international influence of the current lord of the Kremlin does not compare to that of former Soviet first secretaries, one would, therefore, expect that the U.S. president is going to have an easy task. But it is clearly not the case. It is as difficult to run talks with a 'declining' superpower as to go on meditating on the passing of time with a beautiful lady. The main thing is to avoid offending them or making them remember the contrasts of the glorious past and the bitter today. Clinton and Yeltsin, nevertheless, have important issues on the agenda to discuss: Kosovo, NATO or Southeast Asian nuclear weapons. The U.S. president, however, has to be quite careful . The beautiful lady is maybe not her former self, but could be more dangerous than ever before."

NORWAY: "Clinton And The Russians"

Conservative Aftenposten commented (7/8): "When an American head of state has paid a visit to China, he must also go to the Kremlin. The balance of power in the United States' relationship with Beijing and Moscow has shifted considerably since the 1970s. The Americans cannot, however, embrace one and neglect the other. There needs to be a balance. It was no longer acceptable for Clinton to continually repeat that a summit in Moscow was out of the question until after the Russian Duma had demonstrated intent to ratify the last part of SALT II.... Clinton is forced to go. However, the Americans would be negligent if they--behind diplomacy, polite language and negotiations--didn't start looking into who, and which policies, Yeltsin will be replaced by."

SPAIN: "Explosive Situation"

Liberal El Pais opined (7/3): "Only the shared conviction that collapse is imminent will make way for the emergency plan presented to a hostile parliament by the Russian prime minister.... Moscow is trapped in an explosive situation--its most visible signs are strikes and millions of unpaid workers--and at the same time, it is faced with the demands of the IMF, which will only come up with more money if the government cuts expenses.... The magnitude of the crisis gives one the shivers. The price of oil, the major source of government revenue together with natural gas, has dropped 40 percent this year; a third of the budget is earmarked to service $200 billion in debts; the stock market has fallen 50 percent since January; and companies' tax arrearages are estimated at about $160 billion. Kiriyienko has warned the Duma that the situation is not apt for political rhetoric and that the battery of bills he has submitted needs to be passed in order to avoid a collapse."

EAST ASIA

SOUTH KOREA: "Summit In Moscow"

Conservative Segye Ilbo pointed out (7/8): "President Clinton will visit Moscow in September to hold a summit with President Yeltsin.... In its announcement of the planned presidential visit, Washington insisted that the visit and the START II agreement are not directly linked.... While the top issue of the summit will be the reduction of nuclear weapons, issues such as Kosovo, NATO expansion, the IMF's support for Russia, and the India-Pakistan nuclear race will be discussed in detail."

LATIN AMERICA

ARGENTINA: "Russia's Downfall Inevitable"

Claudio Uriarte, left-of-center Pagina 12's international analyst, commented (6/27): "Basically, Russia is Asia's downfall, but China is the pivot from which it will rise again.... But it is Russia where the Asian crisis threatens to grow and become global and deadly for the rest of the world. For weeks, Russian monetary authorities, the IMF and even the U.S. president himself--have been trying to uphold the ruble against the attack of speculators. And not only of speculators, but of legitimate investors, too.... The Russian Central Bank raised interest rates again yesterday and the IMF, with its $670 million, had the effect of trying to stop the leaking of a dam with a cork. These are temporary measures, and both players are aware of this. Not much can be expected from Prime Minister Kiriyenko's advanced tax plan. Finally, the United States has no more money to give.

"Then, is Russia's downfall inevitable? To a certain extent, yes--because Boris Yeltsin has already lost too much time and U.S. aid--and what he is negotiating now is up to where and in what terms it will fall. This is why a strong China on the southeast angle of the huge Asian continent is indispensable for the United States. A China which will resist the temptation of knocking economically at Japan's door and which will guarantee certain regional stability. In truth, this is nothing new, but the continuation of the pivot established by Nixon and Kissinger against the old USSR in 1972. That pivot--with new players and problems--is today back in operation."

"Russians, Surrounded By Crisis And Corruption"

Telma Luzzani, on special assignment in Moscow for leading Clarin, wrote (6/23): "Moscow is drastically changed. Nothing remains of that sordid Soviet capital which voluntarily remained in darkness for fear of being tracked down by an enemy satellite. Today, streets are paved; public buildings, shops and homes are lit; there is a modern underground shopping mall a few meters away from the Red Square, and cafes and restaurants are key places: something unusual only six years ago.

"But Moscow is not Russia. Only 70 kilometers away from the capital people still live without electricity or running water. And if you no longer see poor or unemployed people begging on the streets, it is because an important official operation 'did away' with most of them. According to the press, this 'mass deportation of undesirable' people is linked to the opening ceremony of the upcoming Junior Olympic Games on July 13.... The country is today in a more than worrying situation. In addition to financial unrest there is a political and social crisis. Protest rallies headed by teachers, scientists, mine operators and public servants crop up intermittently across the country, claiming the payment of nine-months delayed salaries. Capitalizing popular unrest, the Duma approved, last Friday, the first step aimed at submitting Yeltsin to impeachment....

"What is worse, the Kremlin no longer hides its impotence in controlling the crisis in its financial market or in preventing investors from fleeing. The Treasury-bond market, the only resource the government has to finance the budget deficit and the payment of the public debt, is in a very dangerous spiral, like the one that led to a civil war in Albania.... The Russian government will launch an anti-crisis plan as part of the demands by international organizations...many of which will inevitably lead to popular unrest.... If the present economic instability grows, which is quite likely, Russia will fall into an irreversible political and social crisis. The consequences will not be visible in the next months but, according to political and diplomatic sources consulted by Clarin, the deterioration will definitively lead to the downfall of Yeltsin's government and another key figure (many think in general Alexander Lebed) will be Russia's leader before the year 2000."

For more information, please contact:

U.S. Information Agency

Office of Public Liaison

Telephone: (202) 619-4355

7/9/98

# # #



NEWSLETTER
Join the GlobalSecurity.org mailing list