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Weapons of Mass Destruction (WMD)

July 27, 1998

RUSSIA: FACING A BRACE OF SERIOUS PROBLEMS

Commentators in Europe, Asia and Latin America following events in Russia described a country beset with a brace of serious problems, including a precarious economic situation, political discord, and turmoil in some surrounding areas--most recently occurring in the break-away region of Chechnya. The IMF's approval of a bailout package for the country was the main focus of the majority of commentaries. Most observers continued to view the Fund's "injection" of aid as a necessary measure to help Russia out of its economic doldrums. They were also quick to add, however, that this bailout is not the final solution to the country's economic ills, holding that Russia must now meet its obligations on the IMF loan requirements and waste no time implementing much-needed economic reforms. Several observers noted that in the first tranche, the Fund retained $800 million of the original $5.6 billion proposed loan amount. This was a move, they said, to further pressure Russia to follow through with its stabilization plans. Russian pundits weighed in with a range of views on the loan, with most agreeing that the IMF money should help the situation. Perhaps not surprisingly, the sharpest critics of the bailout were found in neo-communist dailies. Pravda-Five contended that the Yeltsin government--intent only on saving itself--was sacrificing Russia's independence to American interests and paying too high a price in order to secure help from the U.S.-dominated IMF. Observers elsewhere continued to express fear that the possible collapse of the erstwhile superpower--still a nuclear power, many emphasized--"would have horrible consequences for the entire world." Following are major themes in the commentary:

U.S.-RUSSIA: Vice President Gore's trip to Moscow was seen by most Russian pundits as a "sort of reconnaissance" in preparation for President Clinton's upcoming summit in Moscow. Some papers noted that Mr. Gore did not meet with President Yeltsin--who was away from the capital on vacation--but instead spoke by phone to the Russian leader. Most commentators who referenced the vice president's trip or the upcoming U.S.-Russia summit placed them in the broader context of U.S.-Russia relations. Several editorialists foresaw a "readjustment" in the relationship between Moscow and Washington. Reformist papers emphasized that the two countries must seek cooperation and continue top-level political dialogue.

THE CZAR'S FUNERAL: Russian and Argentinian dailies remarked on the reburial ceremony of Czar Nicholas II, pondering its possible significance for a post-Soviet Russia. Official government Rossiyskaya Gazeta, for example, asked, "Will this day relink our broken history and reunite our divided society?" Opinion was mixed on Mr. Yeltsin's sudden change of mind in deciding to attend the ceremony, with some chiding him for his "unpredictability," and others lauding him for his "courageous act of personal repentance." A daily in Buenos Aires claimed that the Russian leader was "looking for popularity" at the funeral.

CHECHNYA: In the wake of an attack by unknown assassins against the president of Chechnya last week in Grozny, observers warned that the Kremlin will be beset with "new dangers" emanating from the Caucasus and face internal pressures from those who "continue to brood on revenge for the military defeat of two years ago."

This survey is based on 51 reports from 13 countries, July 15-27.

EDITOR: Diana McCaffrey

To Go Directly To Quotes By Region, Click Below

|  EUROPE  |    |  EAST ASIA AND THE PACIFIC  |    |  SOUTH ASIA  |   

EUROPE

RUSSIA: "Gore To Intercede For Moscow In Congress"

Centrist Nezavisimaya Gazeta (7/25) front-paged this comment by Dmitry Gornostayev: "Vice President Gore has agreed to support Moscow's demand that the Jackson-Vanik amendment be repealed. Al Gore's stay looked like a gift-giving ceremony, the IMF having completed the transfer of the last $100 million of its $4.8 billion loan for Russia--for which credit goes to the United States--by the second day of the visit. The Americans cleverly used the fact that the Gore visit coincided with Russia's stock market crisis. Boris Yeltsin chose to stay away from the confused talks with the American visitor by going on vacation to Karelia. His telephone conversation with the vice president differed but little from a routine top-level telephone exchange.... The Kiriyenko-Gore negotiations looked like the beginning of something new, rather than an extension of the old thing."

"Political Mission"

Georgy Bovt observed in reformist Segodnya (7/24): "With Bill Clinton's Russia policy increasingly criticized at home, the Gore trip looks like a political mission. It is a sort of reconnaissance in force to prepare Bill Clinton's visit due in September. The deep financial crisis in Russia and growing pressure from the Republicans in Congress, it seems, may soon result in a readjustment of Russian-American relations. There always comes a time when the pragmatic Americans, reviewing their policy toward this or that foreign country, ask themselves 'what and who comes next?' Are they asking these questions about Yeltsin's Russia today? Maybe not. But they, no doubt, are very close to doing that. Otherwise, Gore would not have been here now...and Clinton's ultimatum not to come to Moscow unless the Duma ratifies START II would still have held."

"U.S. Trusts In Kiriyenko"

Vladimir Abarinov said in reformist Russkiy Telegraf (7/24): "Judging by the latest events and circumstances, the time ahead is going to be trying for Boris Yeltsin and Bill Clinton. The White House, for all its friendliness and praise for the IMF's new Russia bailout plan, never misses a chance to remind Moscow of its obligations. The administration simply has to be stern, being under close watch from Capitol Hill. Even so, it believes in the Kiriyenko cabinet, confident that it is free of Soviet legacy."

"Russians Unabashed But Graceful"

Mariya Bogatykh commented in reformist Segodnya (7/24): "Admittedly, the Russians are acting unabashedly, but not without grace, constantly embarrassing the Americans. For instance, Gore asked for a meeting with Yeltsin, and was offered a telephone conversation instead. The vice president balked, noting that he had always met with Yeltsin while in Moscow. The Russians said okay but added that he would have to fly to Karelia. So Gore agreed to a telephone call. In another instance, he asked to see Chernomyrdin. No problem, the Russians answered and said that, according to protocol, a few minutes after the meeting started, Kiriyenko would have to join in, 'so that the three of you could discuss things together.'"

"Special Mission"

Sergei Guly said in reformist Noviye Izvestiya (7/23): "The (American and Russian) heads of state will meet before the IMF decides the fate of the second tranche of an emergency loan for Russia. Clinton's statement on the results of the talks in Moscow will precede that decision.

"His words 'I have full faith in this Russian leadership,' said on Russian soil, would be equivalent to support for the Kremlin master's new presidential ambitions, signalling a message to the world that 'Yes, we can do business with this president.' What 'friend Bill' will say will, in large measure, depend on what Gore will hear in Moscow these days. Gore is to probe the new, post-Chernomyrdin, ground (in the Kremlin) and make recommendations to the boss. They may come in handy for the vice president, too, as he has his own political career to think of."

"Gore's Objectives: Stepanovich, Kiriyenko"

Centrist Nezavisimaya Gazeta (7/23) front-paged an article by Dmitry Gornostayev: "Gore is somewhat confused, with the (GCC) Commission pushed to the background and its session postponed until the very end of the year. His two main objectives are to see his friend and presidential candidate (Viktor Stepanovich) and get to know Sergei Kiriyenko firsthand.... In the broader context, this visit is just an element in a chain of the relations fast coming out of a period of stagnation caused by a year-long delay in the U.S. president's official visit to Russia. But then, things may not turn out well for Russia in the end. Gore's (telephone) conversation with Yeltsin, now on vacation in Karelia, and his meeting with Chernomyrdin are far more important than his talks with Kiriyenko. Chernomyrdin, Number One candidate for the top office in Russia, looks like the most convenient partner for the Americans, and if it is true about Russia having to pay in political concessions for the IMF's dollars, he may be the one to handle the consequences of this deal with the Fund."

"NATO To Move East This Year?"

Vladimir Yermolin said in reformist Russkiy Telegraf (7/23): "Russian defense Minister Igor Sergeyev's invitation to the defense ministers of NATO countries to hold a meeting in Moscow later this year did not surprise anyone. In fact, it was expected. NATO-Russia relations have reached the point where they clearly need to be closer and more confidential. Our relations have obviously stalled recently, so the proposed meeting in Moscow might put them back on track. It would be a sure sign of the recognition of Russia's special status with the Partnership for Peace Program and the North Atlantic bloc as whole. Such a meeting would also be a boost for the Russian Defense Minister who has lately been criticized for Russia being too complacent about NATO and oblivious of the fact that it is a military bloc."

"Compromise Possible"

Sergei Samuilov mused in a supplement to centrist Nezavisimaya Gazeta (7/22): "The U.S. political elite is still in euphoria over 'the dizzying success' in the Cold War against the USSR, still believing in the possibility of a unipolar post-communist world order. It seems to overestimate America's possibilities--isolationist tendencies inside the country have grown stronger, a vast majority of Americans, unlike in the past, view Russia as a friendly nation, the U.S. military presence abroad has diminished considerably, and U.S. aid to foreign countries keeps decreasing. In other words, proclaiming certain foreign policy principles does not mean implementing them.... We can and must seek cooperation with the Americans on a compromise basis, even more so since today Russia is weak and the United States is way stronger in many respects. To reach a compromise, the following formula could be used: You give us support in restoring equality for Russian minorities in 'the near abroad' and cease resisting voluntary integration (inside the CIS), and we support your efforts to ensure stability and respect for the territorial integrity of post-Soviet states and your interests."

"IMF May Face Crisis"

Aleksei Makushkin commented in reformist Noviye Izvestiya (7/22): "Russia was really in dire straits when it was caught in the maelstrom of a world crisis. Its role as an independent agent is infinitesimal.

"The government cannot make the economy work, fully dependent on external factors, including the enormous foreign debt, massive imports, and a lack of an internal saving and investment system. Its program gives no answers to those problems. If it is true about international experts predicting calamities for other major economies, the IMF may face a crisis too and will have to think more of its own future. To whom would we then have to turn for new loans?"

"Top-Level Dialogue Necessary"

Reformist Rossiyskiye Vesti (7/22) published this article by Sergei Rogov, director of the U.S. and Canada Institute of the Russian Academy of Sciences: "The United States does not consider Russia an equal partner, except in the nuclear arms area where Russia has a comparable potential.... NATO enlargement, increased penetration into ex-Soviet republics, attempts to dictate to Moscow on regional issues (Bosnia, Kosovo, Iraq, Iran, Korea, etc)--all are evidence of Washington's disregard for Russia's concerns. If things go that way, Russia may end up a third-rate nation in international affairs.... The Russians are unhappy about Washington's butting into their internal affairs and attempting to impose a suicidal economic policy on them. They would also hate to lose their great-power status. To be sure, the opposition is doing much to kindle anti-American sentiment, acting on the principle of 'the worse the better.' To have these and other problems resolved, we need to continue the top-level political dialogue and maintain the stabilizing role of the Russian premier-U.S. vice presidential commission."

"IMF Loan May Have Saved Us A Lot Of Trouble"

Under above headline, centrist Nezavisimaya Gazeta (7/22) front-paged a comment by Tatyana Koshkareva and Rustam Narzikulov: "Resulting from two weeks of humiliating negotiations, the IMF loan has an external (in U.S. dollars), as well as a strictly internal price--how much will ordinary Russians have to pay for it?.... Those billions of dollars from the IMF are the last big loans from Western, that is, American creditors.... The American president, obviously acting out of his own political motives, has rescued Boris Yeltsin, Sergei Kiriyenko and [chairman of the Central Bank] Sergei Dubinin. Political considerations have again prevailed over concern for the Russian economy and ordinary voters. On the other hand, who knows what might have happened if the government and the political regime had fallen?"

"End Result Makes Up For Embarrassment"

Dmitry Kuznets remarked on page one of reformist Russkiy Telegraf (7/22): "Beating the Fund out of big money may be disgusting, but the end result makes up for the moral discomfort felt during the negotiations."

"Determination Needed"

Official Rossiyskaya Gazeta (7/21) stated in a comment by Aleksei Baliyev: "Whatever the size of the loan offered, Russia's financial and economic situation depends primarily on her leadership's determination to implement the stabilization program."

"Price Of American Aid: Some Of Russia's Independence"

Stanislav Menshikov filed from Rotterdam for neo-communist Pravda-Five (7/21): "Evidently, only the Kremlin's promise to 'give up some of its independence' in geopolitical affairs made the American president decide that he could help Russia secure the requisite $22 billion. The financial and economic price of American aid is well known--increased taxes and curtailed social programs. The IMF's money is not for ordinary Russians. It is for another 'black hole.' As for the geopolitical price, it is still a secret.

"To know it, we will have to watch for Russia's diplomatic moves."

"Time To Readjust Relations"

Aleksei Arbatov, a deputy chairman of the Duma's defense committee, stated in centrist Nezavisimaya Gazeta (7/21): "Paradoxically, a decade after the Cold War, Moscow and Washington understand each other's concerns much less than they did in the years of harsh confrontation and the arms race. Personal relations between the presidents remain quite warm and fine. But, unfortunately, political circles in Russia and the United States, specifically members of parliament, the press and public opinion find it increasingly hard to share in those friendly feelings. Our priorities and interests are different. They are not even parallel. We have to admit that at last. Trying to make the other side see how important your own priorities and concerns are makes no sense. It is hopeless too. At the same time, we cannot solve our respective security problems, unless we cooperate, much less so, if we act against each other. So the United States must meet Russia's concern over a global strategic balance and the balance of conventional and tactical nuclear forces in Europe, especially in light of NATO's enlargement eastward. Russia, for its part, will heed America's concerns regarding the non-proliferation of weapons of mass destruction and rocket technologies. The euphoria of the early 1990s is over, but we can avoid new tension and a lack of interaction in the security sphere. To do that, we need jointly to readjust our relations in keeping with a new reality."

"Bleak Prospects"

Nikolai Zimin reported from Washington for reformist Segodnya (7/18): "Recent changes in the Russian government have upset the usual course of events and caused bureaucratic uncertainties, confusing the part of the U.S. administration responsible for ties with Russia. A spokesman for the White House could not answer what it was going to be, the 11th session of what used to be the GCC commission or the first session of a new inter-governmental entity. Planning on a brief stay, Al Gore will not be able to carry out his old dream, a trip to Lake Baikal. But he may see his former partner Viktor Chernomyrdin, even though this is not on the official program. Aside from common nostalgic reminiscences, the two have something else to share. Both will run for the presidency in their respective countries. No doubt, they would be very convenient and predictable partners for each other. As for the commission on economic cooperation and trade, it will hardly ever become a 'Gore-Kiriyenko Commission.' The White House is pessimistic, having no idea what to do with this product of Russian-American cooperation."

"Mourning"

Political observer Aleksandr Sabov of official government Rossiyskaya Gazeta (7/17) said: "Today is a day of mourning. Eighty years after Tzar Nicholas II and his family members and attendants were assassinated, their remains will be committed to earth. But will this day relink our broken history and reunite our divided society? That, to a decisive degree, depends on our ability to look into our own eyes, hear out all witnesses, without interrupting them, and accept the hard truth about our 'unpredictable past.'"

"Unpredictable Yeltsin"

Natalia Timakova, commenting on Yeltsin's sudden change of mind regarding his plans to attend the czar's reburial ceremony, remarked on page one of reformist, business-oriented Kommersant Daily (7/17): "Here comes Yeltsin again, unpredictability itself, embarrassing all Russian politicians."

"Common Sense"

Yury Lepsky remarked on the President Yeltsin's attendance at the czar's funeral in centrist, trade union Trud (7/17): "Some will call the president weak and 'controlled.' I think he showed common sense, above all, and his ability to hear and accept really strong arguments in spite of his own ambition. It is also a courageous act of personal repentance."

"It Doesn't Matter Who Attends"

Vasily Ustyuzhanin pointed out in reformist, youth-oriented Komsomolskaya Pravda (7/17): "Basically, it does not matter who will attend the reburial ceremony. After all, it is not a political show but an act of historical repentance."

BRITAIN: "Taxing Russia"

The independent Financial Times opined (7/16), "The IMF agreement forged on Monday depends above all on the government's ability to finance itself. Previous agreements have been regularly suspended because of the failure to collect taxes. That is not simply a reflection of the well-nigh universal mistrust of the Moscow government. It is also a result of an inadequate tax system, as much unenforceable as unenforced.... It is understandable that Russian governments are mistrusted by potential taxpayers. They have failed to deliver most essential services provided by the public sector in other countries. Having failed to collect enough tax, they have simply stopped paying state wages and pensions. But the vicious circle has to be broken somewhere. Even if they are imperfect, it is essential that the Duma approve the tax reforms, or Russia will remain ungoverned, and ungovernable."

GERMANY: "Chechnya: A President With Many Enemies"

Thomas Urban had this to say in centrist Sueddeutsche Zeitung of Munich (7/24): "Who wanted to kill Chechen President Makhadov with a car bomb?... At first inspection, Chechnya's President Makhadov is a nuisance for Muslim fundamentalists among his compatriots, but also in neighboring Arab countries, in Iran, and in Afghanistan.... But new fighting in Chechnya is also in the interest of some politicians and company managers who want to build the new oil pipeline not along the Northern fringes of the Caucasus across Russian territory but across Azerbaijani and Georgian parts of the Caucasus to Turkey. In order to achieve this goal, the Russian government must currently be very interested in keeping Makhadov as a negotiating partner. Makhadov himself is also pinning his hopes on cooperation with the Kremlin. But there are also strong forces in Moscow who would like to see a minor war taking place in the region. It would discredit the reform government, and possibly even result in its ousting. But the people who placed the bomb under Makhadov's car could also come from Chechnya itself where several clans are fighting for influence and for a share in the drugs and arms trade. Only one thing is certain: the bombing in Chechnya will continue and the country is still far away from internal peace."

"Like Afghanistan"

Werner Adam commented in right-of-center Frankfurter Allgemeine (7/23): "In Chechnya, the things that happened and continue to happen in Afghanistan are repeating themselves. After Islam united all groups in Afghanistan in their fight against Russian forces, the winners have become involved in a civil war which makes those affected peoples wonder whether a continuation of the Russian rule would not have been the better choice. It is true that Chechen President Makhadov can continue to be sure of broad support of the people when insisting on independence from Russia...but Makhadov is in control of events only to a certain degree. Russia is not even thinking of providing the promised reconstruction aid, and the president has to deal with accusations that were made by radical Islamic forces.

"In addition, and this also reminds us of Afghanistan, there are guerilla fighters from the Arab countries who were brought to the country to fight Russian forces. Nevertheless, Moscow has little reason to feel satisfied, since new dangers for the Caucasus as a whole are emanating from Chechnya."

"Moscow Will Not Watch Idly As Independence Movements Appear At Fringes"

Adrian Zielcke said in centrist Stuttgarter Zeitung (7/23): "In Chechnya, President Makhadov is no longer in control of events. Again Russia has now sent re-enforcements to the border of Chechnya. Radical field commanders are acting like tyrants, and Alexander Lebed is warning against new bloodshed in the Caucasus. Fundamentalist tendencies are on the rise not only in Chechnya, but also in the neighboring Republic of Dagestan which still belongs to Russia. But Moscow will certainly not watching idly by when the independence movements, which are growing increasingly stronger, start showing at the fringes of the vast empire."

"Warning Shot"

Centrist Der Tagesspiegel of Berlin opined (7/22): "The IMF has fired a warning shot across Russia's bow. It is true that it approved the loans for Russia in principle. But the first tranche was cut.... The reason: Washington has doubts about Russia's capability to implement reforms. The IMF must now show that it is able to implement its conditions.... The surprising cut of the first tranche was a smart move. This moderate cut is not a fiasco for Russia and allows the Russians to speak even of a victory. The Moscow government has now one more reason to implement structural reforms. And the donor countries have no more doubts that the IMF can be blackmailed."

"IMF's Stern Warning"

Centrist Neue Osnabruecker Zeitung (7/22) had this to say: "The IMF has drawn the right conclusion from the behavior of the Duma: As a first tranche, Russia will only get $4.8 billion instead of the planned $5.6 billion. It is not acceptable that the parliament reduces the savings package thus cutting its own contribution to the financial recovery, while the flow of the billions of dollars from the IMF is supposed to continue unabated. The communist and nationalist-dominated Duma must realize that this loan must be used for self-help. This is why the IMF's stern warning that Russia needs to implement profound reforms was absolutely necessary. It is impossible to pursue a new economic policy intended to lead the country out of the misery, while cherishing an obsolete ideology."

"Russia At A Crossroads"

Elfie Siegl opined in right-of-center Frankfurter Allgemeine (7/21): "Since the IMF cannot increase its loans to Russia, there is only one possibility to improve the situation: to implement reforms. If they are not implemented soon, the bill will be even higher than it is today. The question is for whom?"

"West Wants To Keep Yeltsin In Power"

Centrist Stuttgarter Zeitung commented (7/21): "As long as millions disappear on the way from Moscow to the recipient regions, as long as corruption is thriving, and as long as the economy of the country is governed by a minisculely small elite of power-hungry company owners, even the billions from the IMF can only result in a short-term improvement of the situation. The IMF must accept to the fact that the money will never be repaid. This is a high price--but it is politically motivated: The West wants to keep Yeltsin in power."

"A Bottomless Pit?"

Wolf Bell said in an editorial (7/16) in centrist General-Anzeiger of Bonn and in centrist Darmstaedter Echo : "Moscow must now speed up the reform process and show that the borrowed billions of dollars will accomplish their goal. The reduction of the budget deficit, a new tax code, a modern land reform law, investment security, a strengthening of the banking sector, the disentanglement of monopolies--there are many things to do for the Duma. But time is running out. Next fall, there will be parliamentary elections, and a year later presidential elections. An election campaign is already in the air. It remains an open question whether Western-style democracy and market economy will in the end also triumph in Russia. But for the time being, it is more important to integrate the large country into a stable system of treaties and security. After this unprecedented aid package, we must now expect Moscow's politicians to show greater willingness for constructive cooperation in these sectors. This is also true for the disarmament treaties which the Duma has so far refused to ratify. But the West also has reason to think about the logic of its policy towards Russia. With its ambiguous and hesitant policy which aims at integrating and marginalizing Russia, it bears considerable responsibility for the current difficulties."

FRANCE: "A High Risk Summer For Yeltsin"

Laure Mandeville held in right-of-center Le Figaro (7/21): "Yeltsin has finally left on his summer holiday, a holiday postponed more than once for reasons of financial crisis. The problem is that the crisis is still very much present. After the euphoria that met the announcement of the IMF rescue dies down, Russia's economic and political realities will once again be cruelly apparent.... Rumors of anticipated elections are beginning to circulate.... Observers are all the more concerned because the legitimacy of those in power seems to be diminishing by the minute.... Boris Yeltsin has not been able, in spite of the top political changes he has made, to impose a prime minister with enough political clout and to profit from these changes. He now finds himself without a successor and surrounded by technocrats without a political base. In case his plans to rescue Russia from the crisis fail, Yeltsin will be on the front lines. "

ITALY: "Warning To Moscow"

An editorial in leading Il Sole-24 Ore by Piero Sinatti held (7/23): "The granting of the new maxi-loan to Russia by the IMF did not begin under the best auspices. The Duma has, in fact, before the summer recess, modified some important fiscal measures submitted by the government.... Income has been reduced by half and Yeltsin was bound to resort to decrees.... As a consequence, the IMF, still confirming the loan, wanted to warn Moscow with a mainly symbolic gesture, by cutting from $5.6 billion to $4.8 billion the first installment of the new loans."

BELGIUM: "Interests At Stake In Chechnya"

Freddy De Pauw commented in independent Catholic De Standaard (7/24): "'The Russian media exaggerate the problems in Chechnya,' Chechen President Aslan Maskhadov's spokesman said on Tuesday. Yesterday, however, the president was lightly wounded in an attack in the capital of Grozny. Maskhadov immediately pointed his finger to 'special units from Russia.' Officially, Chechnya still belongs to the Russian Federation. In Russia, of course, many circles continue to brood on revenge for the military defeat of two years ago.... There are also interests at stake. Moscow is afraid that historic rivals like Turkey and the United States might profit from the Russian defeat now that so much oil is at stake. Now that Azerbaijan President Geidar Alijev is clearly opting for a pipeline via Turkey to funnel Azerbaijan's oil riches to the world market, Russian oil tycoons consider their interests even more threatened.

"It was those oil tycoons who, after the signing of the historic oil agreement between Azerbaijan and a Western consortium, insisted at the end of 1994 on the military intervention against Chechnya to safeguard control over the pipelines in that area.... The Russian former general and would-be president Alexander Lebed, who concluded the truce with the rebels in 1996, has warned that the unrest in Chechnya may rapidly spread to the entire area. The fact that similar warnings in 1995 were not fulfilled may tempt Moscow to incite the unrest. That would be the umpteenth expression of an extremely shortsighted policy."

"Attack In Chechnya"

In leftist Le Matin (7/24), Laurent Monseur wrote: "While Chechnya asserts that it is an independent state, but as Moscow considers it as a republic integrated in Russia, the attack against Maskhadov demonstrates the present regime's inability to restore law and order since the end of hostilities with the Russian capital's troops in 1996."

CANADA: "Bailing Out The Russian Bear--Is IMF Rescue Worth Risk?"

The leading Globe and Mail (7/22) observed: "Russia has been snatched once again from financial collapse.... The board of the International Monetary Fund reluctantly endorsed a multibillion-dollar rescue plan. Prudently, the IMF reduced the size of the first payment to register its dissatisfaction.... Why should Russia...be shored up when other countries, such as Indonesia, are forced to implement harsh austerity measures before the cheque is signed? The answer owes more to politics than to economics.... Banks bail out customers, governments bail out banks, the IMF bails out governments and the West, especially the United States, bails out the IMF until the spiral spins out of control.... What's propelling the IMF is the fact that Russia is too big and important to be allowed to collapse.... But there are other reasons. Since the collapse of the Soviet Union, the Russian Federation has been stumbling toward liberal democratic capitalism, a state of near grace that is highly valued by the West and the largely U.S.-financed IMF.... The current crisis is an opportunity to force Russia to make overdue reforms, specifically to confront the deficiencies in fiscal policy, the structural weaknesses in the banking sector and the pervasiveness of 'crony' capitalism."

"Not Very Good Calculus"

French-language, centrist La Presse commented (7/17): "In the case of Indonesia as well as in the case of Russia, it (IMF) acts in a reckless way without contributing to the long term stability of the international monetary system.... IMF is lending its own funds because the international confidence in the future of the Russian economy is decreasing, but the conditions imposed on Moscow are those which would normally be imposed on a developing country whose government would be in control of the situation.... The conditions are therefore not met for the IMF to put at stakes so many resources, resources which are far from being inexhaustible.... It is not the role of the IMF to support regimes and to solve problems which are above all political. Once the loan will have been spent, the reserves of the Fund will no longer be high enough to inspire confidence without a doubt."

HUNGARY: "A Valuable Loan"

Washington correspondent Oszkar Fuzes wrote in top-circulation Nepszabadsag (7/22): "The recently grand loan granted to Russia is valuable to everybody, since the collapse of the globe's biggest country (and also a declining nuclear power) would have horrible consequences to the entire world.... Russian politicians, who feel sorry for losing the status of superpower, intend to blame Yeltsin of betrayal, although the Russian president has tried his best: He was offering the plan of `counterbalancing' the United States' power from China to France, from India to Germany.

"But having heard the answers Yeltsin had to get back to the only path to be walked after three years: the path of a strategic partnership with the United States. A path that the Russian president, as a matter of fact, could, never really step off.... The recently granted vast sum is hardly enough to revitalize the Russian market, the current crisis management is enough only for keeping president Yeltsin politically alive. If the Russian state carries on following the curve, then it will partly be carrying the mafia as a companion. The Russian 'nouveau-riche,' the bourgeoisie that wants to launder and legitimize its monies and power, will integrate itself with the new world order. Until then there are going to be additional IMF loans granted, and in case it is going to be so, then it's worth it."

SPAIN: "A General's Warning"

Liberal El Pais judged (7/25): "Lebed has sought a spectacular way to draw attention to the plight of the Russian military: He has threatened to fragment the nuclear arsenal of Russia and transfer the missile base at Uzhursk to the jurisdiction of the Siberian province.... Lebed has chosen the moment for his warning well with Vice President Al Gore visiting Moscow, the announcement of the September summit between Clinton and Yeltsin, and when the IMF and other institutions and countries have begin to deliver $22.6 billion in credits, in part, for the Russian state to face up to the nonpayment of government workers, the military, and others.... Is it sensible to ask for money from the world community and increase this dangerous and costly nuclear megalomania? No."

"Cash Injection For Russia"

Barcelona's centrist La Vanguardia held (7/22): "The IMF has provided some relief to the Russian economy by approving the immediate transfer of $4.8 billion, which is the first tranche of a $22.6 billion loan ($13.8 billion in IMF funding), that Moscow is to receive by the end of 1999. The amount was to have been $5.6 billion now, but the IMF has retained $800 million against Russia's long-awaited approval of austerity and stabilization plans designed to address its serious economic problems.... The jousting between the government and the [opposition-controlled] Duma have been the Achilles' heel of any attempts to bring discipline to the troubled Russian economy.... Clearly, neither the United States, the principal mover behind this assistance package, nor Europe is interested in seeing the crisis in Russia, with its unforeseeable consequences, deteriorate any further. But Russia has to do its part, especially in fiscal policy where its efforts at tax collection have thus far shown only laughable results."

EAST ASIA

CHINA: "American Aid To Russia Related To Its Own Interests"

Zhang Zhinian commented (7/16) in State Council Economic daily Jingji Ribao, "The Clinton administration is not negligent in dealing with a bailout plan for Russia. The reason is that with mid-term elections drawing near, any impropriety regarding the Russian aid issue will evoke fierce repercussions in Congress, and possibly result in a turnover of Congressional seats. Additionally, possible political turbulence in Russia will threaten U.S. interests. The Clinton administration has been urging Congress to provide IMF funding to help Russia out of the difficulties."

SOUTH ASIA

BANGLADESH: "Moscow Has To Find Ways To Meet IMF Conditions"

The centrist Independent commented (7/18): "The Russian government has to find ways of meeting the IMF conditions to overcome its lingering and painful financial crisis.

"The cash problem is so grave that the government has been forced to offer interest rates as high as 150 per cent to keep investors from fleeing the bond market. The low-interest IMF loan will bring much needed relief by way of providing cash with which the government could buy up expensive domestic debt and assure the market that it was not running out of hard currency."

LATIN AMERICA

ARGENTINA: "Burial In Saint Petersburg"

Julio Crespo wrote in daily-of-record La Nacion (7/19): "While in Saint Petersburg, the [Czar's] burial ceremony was meant to symbolize the end of a violent and unfair period, in Moscow other remains, much better preserved, wait for a decision about its final destiny. Embalmed immediately after his death in 1924 the corpse of Lenin stays in a crypt across from the Kremlin.... It might not be there for a long time.... For decades visitors had to line up to see it. But times have changed now.... The number of visitors has diminished and the honor guard was removed.... The new leaders of Russia have no reasons to wish to have Lenin's remains nearby. They are thinking of transferring his remains to Saint Petersburg. When that happens, Lenin will lie not far away from Nicholas II. Both belong to a world which disappeared. There can also be a certain symmetry in the way their memory will be preserved."

"Yeltsin Looking For Popularity At Czar's Funeral"

Armando Perez, on special assignment in Moscow for leading Clarin, wrote (7/17): "With his image totally worn out by economic difficulties, harassed by the demands for his resignation and the ghosts of military coups...Boris Yeltsin decided yesterday to improve his declined popularity. That is the reason why he unexpectedly announced that he will attend the funerals of the last czar of Russia, Nicholas II, and his family.... His announcement was astounding because the Kremlin had repeatedly said that Yeltsin would not attend any of the ceremonies to pay homage to the Czar's remains. Yeltsin was not planning to go because the Holy Synod of the Russian Orthodox Church officially announced that it was not completely sure that the remains belong to Czar Nicholas II and his family and that for this reason the Church Patriarch Alexis II would not take part in the funerals. The Kremlin did not dare contradict the Church's verdict and...released an amount of non-attendance announcements on behalf of the Senate, the Constitutional Court, the governors and even the descendants of the imperial family....

"Yeltsin took advantage of the occasion to appear as the only politician in the country with enough moral values to be able to overcome official conventionalism and accomplish the natural human duty of burying fellow men.... Yeltsin, who is bearing an overwhelming economic crisis for which he received huge international support, is now seeking to strengthen his worn out political image. Until recently, Yeltsin assured that he had dismissed any possibility of seeking a new reelection. But for many analysts that option is not completely ruled out.... The news stirred up members of parliament. The most original one was the leader of the nationalistic extreme right-wing party Vladimir Zirinovsky who, in addition to praising Yeltsin's attitude, invited him to build a common grave in Saint Petersburg 'to bury in there Czars, Lenin, Stalin, Kruschev and all Communist leaders' and seal the reconciliation of the 'two Russias,' the imperial and the Communist one."

BRAZIL: "Russia's Rescue"

An editorial in liberal Folha de S. Paulo (7/15) held, "The financial help to Russia has been a clear signal that the IMF, the World Bank and the developed nations are committed to preserving the status quo and prevent disruptions from occuring in international economic flows.... The help to Russia recalls to some extent the attitude adopted towards Mexico during the December 1994 crisis....

"More recently with the crises in Southeast Asia, Japan and Russia, has emerged the fear that a worsening in exchange and financial markets could also affect the confidence in the European and U.S. markets. This [situation] has originated what seems to be the beginning of an international safety net aimed at preventing financial disruptions. In the case of Russia, political and even military aspects have contributed to the adoption of the decision to lend. No sensible government would be interested in a crisis that could cause social and political instability of the world's second largest nuclear power."

For more information, please contact:

U.S. Information Agency

Office of Public Liaison

Telephone: (202) 619-4355

7/27/98

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