DOWNSIDE LEGACY AT TWO DEGREES OF PRESIDENT CLINTON
SECTION: RUSSIA
SUBSECTION: ECONOMY
Revised 8/20/99
StratFor Intelligence Briefing 7/10/98 "With its economy in a state of collapse, coup rumors flying, and the recent murder of an opposition political leader, Russia's situation is more grave than at any time since the collapse of the Soviet Union. Caught in a cash crisis stemming from its inability to collect taxes and from declining petroleum prices, Moscow is facing increasingly hostile state workers and miners to whom the government owes billions of dollars in unpaid wages."
Freeper Anochka post 7/10/98 "The last six year's of Russian "economic reform" is a story of empire. No, not the Soviet empire or even the Russian empire, but the evolving American empire of finance capitalism, whose front-line soldiers' are equipped not with helmets and rifles, but with Brooks Brothers suits and US fiat dollars. Ambitious American policymakers, who were so busy "reforming" Russia in the most appallingly cavalier and self-serving fashion, failed to grasp the lesson Russia has to teach, i.e. liberty and empire do not cohabit. The Russian philosopher Aleksandr Berdiaev remarked long ago, "The Russian people were crushed by a vast expenditure of strength, such as the scale of the Russian state required.".The current situation in Russia is unsustainable; the economy will loose $12 billion this year alone due to depressed commodities prices, taxes can not be collected in an economy that functions mostly underground on barter, and in which a whopping 45% [up from 6% in 1995] of the national budget is consumed by debt payments for foreign loans. When Russia undergoes the inevitable devaluation, another massive bailout is guaranteed on account of Russia's 20,000 nuclear weapons. This will precipitate devaluations in Eastern Europe and may possibly threaten Latin American currencies. By the time the euro comes on line as the EU's unit of account in January 1999, we'd all better have our safety belts buckled; the ride is going to get pretty choppy.I've been on the phone with Moscow most of the day. Events there are moving very rapidly and I continue to monitor them. Once I'm satisfied I've sorted out the red herrings and am reasonably confident I can give you solid information, I will post again"
Freeper Anochka Johnson Russia List 7/11/98 Dmitri Glinski "Despite the brevity of his thorny political career, Lt. Gen. Lev Rokhlin was one of that handful of the Russian military officers whose names are easily recognized by ordinary Russians. It is striking that his murder, on the night of July 3 at his dacha in Naro-Fominsk, has been barely noticed by the Western press. In Russia, even if no direct evidence of the political character of his assasination is ever found, this tragedy is still likely to have far-reaching repercussions. . Unfortunately, all opposition to Yeltsin - which covers a wide range of views and thinking not easily synopsized here - are branded as "red browns" or "ultranationalists" in our media just as freepers are known as "extremists". But whatever their political persuasion, the overwhelming majority are patriots who are trying to save their country. It is our lending and our meddling that are bringing on the conditions for a national socialist to exploit in a time of chaos, but not a one of those guys could get elected. The globalists are not merely evil - they are INCOMPETENT! Especially when aided and abetted by WH influence peddlers and crony capitalists...Clinton, no matter his fate, will leave behind a harvest of sorrow for citizens to reap on the foreign policy front.."
7/13/98 Bloomberg Website "Russia will receive a total of $22.6 billion in financing led by the International Monetary Fund in 1998 and 1999 to bolster reserves and support the ruble, IMF, World Bank and Russian government officials said. Russia will receive $14.8 billion this year, and $7.8 billion next year."
7/24/98 Stratfor Intelligence Briefing "According to its leader, State Duma Security Committee Chairman Viktor Ilyukhin, the All-Russia Movement in Support of the Army, the Defense Industry, and Military Science (MSA) has begun preparations for a nationwide protest. Ilyukhin told a news conference in Moscow that preparations were to begin on July 23 and last ten days. He asked that all regional branches of the Movement report their readiness for the nationwide action by July 30. Ilyukhin also told reporters that, since the most active members of the Movement had received "threats of physical liquidation," the MSA had "decided to set up its own security force." ."
Sunday Times of London 8/23/98 Mark Fanchetti & Robert Service "GLOOM hung over Moscow's White House last week as Russia's most powerful tycoons departed in a solemn fleet of armoured black limousines. Their meeting at the government building, convened by Sergei Kiriyenko, the embattled prime minister, to seek ways out of Russia's financial crisis, had ended without agreement. The oligarchs, who claim to control 50% of the economy, were agreed on only one thing: that the rule of Boris Yeltsin, the president they helped to elect, must end. . .The Kremlin owes $10 billion in back wages to millions of workers who are becoming increasingly militant. Strikes, especially in the depressed coal-mining sector, have become commonplace and Russia's trade unions have announced a series of protests across the country this autumn.
8/28/98 More on Russian from Freeper Anochka ".Western assistance, IMF lending and the targeted division of national assets are what provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol [Communist Youth League] leaders, who were given the freedom and the mechanisms to plunder their own nation in tandem with a resurgent and more economically competent criminal class. This new elite learned everything about the confiscation of wealth, but nothing about its creation. Functioning as Boris Yeltsin's political base, the Russian president's government has been doomed to sustain them ever since it took power. And it is that reality which explains the return of Viktor Chernomyrdin to the Prime Ministership.The Harvard teams' second mistake lay in a profound misunderstanding of Russian culture and, in accordance with the many ironies of the Clinton regime, in their astonishing disregard for the very basis for their own country's success; property rights. .Russian property rights are tricky; property has never been distributed, but only confiscated and awarded on a cyclical basis. Today property exists, as it always has, only where there is power. For the common man, the property right hasn't advanced much beyond what Blackstone identified as "usage rights" in that custom prevents the taking of any man's shelter, clothes or tools so long as continuous usage is demonstrable. An additional, purely Slavic feature of the Russians' concept of property is the shared belief that each has a claim upon some part of the whole.. The years-long sugarcoating of what the Clinton administration's policies have wrought in Russia is just one more lie bequeathed Americans. Unless Mr. Clinton can resist his lifelong predilection for influence peddling and not hand Al Gore's special pal, the re-installed Viktor Chernomyrdin, yet another bag of other peoples' money, the degradation of Russia will continue. .For the Clinton administration, the US Treasury and the IMF, all of whom sought to command the global economy, and the American electorate, which unwittingly funded their effort, now is the time to recall that the fundamentals of a successful country - private property, sound money, the rule of law, minimal government and public accountability - still apply, no matter how much time or how many taxpayers' billions go by."
8/23/98 Wall Street Journal "Russia's President Boris Yeltsin fired Prime Minister Sergei Kiriyenko and the rest of his government on Sunday and said he was reappointing former Prime Minister Viktor Chernomyrdin just five months after he dismissed him. The surprise announcement came as Mr. Kiriyenko and the government were struggling to overcome one of Russia's worst economic crises since the Soviet collapse.."
New York Times 8/29/98 "The scramble was on again Friday among President Clinton's already seriously scrambled aides. Three days before they are scheduled to depart for a summit meeting in Moscow, senior administration officials wondered which Russians they would face across the conference tables. Clinton's aides began rewriting his planned remarks on the future of U.S.-Russian relations. "You've got an economy collapsing and a president on the verge of resignation, and we're about to go there for a summit," one administration official said Friday afternoon, referring to Russia and President Boris Yeltsin. "."
Stratfor Systems Inc. 9/1/98 "Citing a "highly positioned source at the Defense Ministry," the Russian newspaper "Komsomolskaya Pravda" reported Monday that commanders of the Tamanskaya and Kantemirovskaya Divisions and the Tyoplyi Stan Brigade, all stationed near Moscow, as well as the Tula, Ryazan, and Tver Divisions, have been ordered to "prepare themselves for extraordinary situations." Officers have reportedly had their leaves canceled, and the units have been ordered to increase their guard on ammunition, food, and fuel stockpiles. Komsomolskaya Pravda also reported that acting Defense Minister Igor Sergeyev had assured Russian President Boris Yeltsin of the troops' loyalty during a recent meeting. Additionally, the newspaper reported that the Interior Ministry had been ordered to prepare to "act under extraordinary circumstances" in Moscow, should civil unrest arise. Finally, the newspaper reported that Russia's Federal Security Service, the successor to the KGB, is monitoring the situation in Moscow and the Far East for any signs of destabilization.."
8/31/98 Barry Renfrew AP "Lawmakers voted overwhelmingly today to reject the appointment of Viktor Chernomyrdin as prime minister despite warnings that Russia was on the verge of political and economic collapse. The Duma, the lower chamber of Parliament, voted 251-94 not to confirm Chernomyrdin after more than three hours of bitter debate in the chamber. Hard-line delegates called for President Boris Yeltisn's resignation..Yeltsin's parliamentary envoy, Alexander Kotenkov, warned the opposition that both sides could be swept aside if there is no swift action to end the crisis. ``If this chaos lasts for several more weeks, it may happen that there will be neither Communists nor us,'' he said. ``I mean a popular uprising, merciless and senseless.'' .
Electronic Telegraph 9/3/98 Marcus Warren "ALEXANDER Lebed, the outspoken Siberian governor, warned President Clinton yesterday that Russia's current position is even more desperate than in 1917, the year the Bolsheviks seized power. "I told him today the situation in Russia is catastrophic," Gen Lebed said after a reception in Mr Clinton's honour. "The situation is worse than in 1917. Now we have stockpiles of poorly-guarded nuclear weapons." The rhetoric was the most alarmist that Mr Clinton had heard on his two-day summit with President Yeltsin. But it reflected increasing nervousness in Moscow that the country's financial and political crisis could take a tragic turn for the worse."
AP 9/9/98 Mitchell Landsberg "In one Russian region, the local government has created a barter bank where people can swap timber or cardboard for food. In another, local officials manufacture macaroni to feed the hungry. With only a temporary government in Moscow, power in Russia quickly is devolving to the country's regions, where governors are adopting widely divergent policies to deal with the worst economic crisis since the 1991 collapse of the Soviet Union. Where it will all lead, nobody knows. But more than one observer has warned that Russia could be heading down a road toward division, separatism and collapse.."
Greg Myre AP 9/16/98 "Boris Yeltsin today appointed four deputy premiers - three moderate reformers and one Communist technocrat - but the government's plan for tackling Russia's economic crisis remained fuzzy and the ruble showed new signs of weakness.."
Reuters 9/21/98 "The leader of the Russian Communist Party warned on Monday that the military might take power if the new government headed by Prime Minister Yevgeny Primakov failed. ``It is important for us to support Primakov's government, but if it fails we cannot exclude the possibility that the next government will very probably be made up of soldiers,'' Gennady Zyuganov told reporters while on a visit to the Council of Europe."
St. Petersburg Times 10/2/98 Bradley Cook "It's been six weeks since former prime minister Sergei Kiriyenko took a deep breath, sighed, and unapologetically announced to the world that Russia had decided not to honor its debts. And although the dust from Kiriyenko's bombshell has yet to settle, some analysts are saying that Western investors alone could end up losing as much as $100 billion thanks to the Kremlin's unilateral and financially dubious decision. Oddly enough, that figure - $100 billion - is the same figure some analysts say investors will lose as a result of last week's failure of one of the world's largest private investment funds. Long-Term Capital Management of Greenwich, Connecticut - a hedge fund run by two former Nobel Laureates and a former governor of the Federal Reserve Board in Washington - had, at the end of August, $1.25 trillion (with a "t") invested in international markets, including everything from Japanese yen and Danish mortgages to U.S. treasury bills and Russian and Brazilian bonds .. The fact that the Strategic Rocket Forces has found the money to modernize its fleet of ICBMs while the Russian Space Agency is saying it doesn't have the funds to finish its share of the work suggests that NASA cash is being used to build Russia's new ICBMs. "NASA policy to date has been to allow the Russian Space Agency to write itself checks from a U.S.-funded bank account in New York, with no auditing on how the money was spent, and the U.S,. has no mechanism to make sure NASA money is not used to maintain Russia's nuclear weapons infrastructure," according to Russian Reform Monitor, a publication from Washington's American Foreign Policy Council think tank. ."
LA Times John-Thor Dahlburg 10/20/98 ".In July the wheat crop failed, roasted alive in the dust as the sun baked the hard earth of Russia's southern steppe to 160 degrees. Soviet-era collective farms around here lie in ruins, the livestock killed and butchered, barns and dwellings pillaged by scavengers. The local administration of this isolated, semidesert area has run out of cash, and in the largest town, half of the adult population is jobless. On the threshold of winter, when temperatures on the wind-scoured plains near the Kazakhstan frontier can drop to nearly 40 below, many families have no money and virtually nothing to eat.."
Washington Times 11/6/98 Bill Gertz ".The Clinton administration is considering whether to send up to 9 million military field rations to help feed the disintegrating Russian army that is struggling to cope with severe food shortages. A retired Russian general informally asked the U.S. government to help by supplying the packaged food called Meals, Ready-to-Eat, or MREs, said administration officials who spoke on condition of anonymity. "They are in dire need," said an administration official. "Officers are selling off stuff left and right" to get money for food."
Economist 11/7-13/98 Moscow ".AS THE country's tax revenues, reserves and credibility shrivel, the question facing Russia and its creditors is no longer whether there will be a default on over $160 billion of outstanding debt. It is when it will come, and how messy it will be. The answers are all too likely to be "soon" and "very..Russia is several hundred million dollars behind in interest payments. But because western governments have been eager to spare the new government's blushes, the fall-out has been limited. Not that Russia has shown much gratitude. One odd idea was that the debts should be offset against money owed to Russia by Soviet satellites such as Vietnam."
DAWN (Pakistan) 11/11/98 Jonathan Landay ".It was to have been a partnership that would make the world a safer place. But the Clinton administration's grand vision of helping transform Russia into a free-market democracy with which it could work to ease international tensions and consolidate the new global economy has vanished. With President Boris Yeltsin's authority ebbing and his people facing a winter of food shortages amid deepening economic tumult, the US is being forced to rethink relations with Russia. Its size and atomic arsenal hold profound implications for the security of the US and its allies. Mr Yeltsin and his team of youthful pro-West reformers were driven on to the political sidelines by the economic collapse in August. Now Yeltsin's new health problems have compelled him to hand many of his responsibilities to Prime MinisterPrimakov and raised the possibility that he could be forced to resign before his term ends in 2000. "There is a general fear that we are at the beginning of the crisis and we don't know who will be in the Kremlin" in a year, says Russia expert Michael McFaul. But recent speeches by senior US officials show that concerns over Russia's struggle to shed its communist legacy run deeper.."
11/20/98 Bob De Maria Freeper Reports ".Last week after Clinton used $885 million of the U.S. Taxpayer's money to send 1.5 million tons of free wheat to Russia, we found that Russia was exporting 1/3 of this for profit. We were told that the Russian people were starving. It appears that Clinton feels that he has had success with his wheat project for he is about to use more of the U.S. Taxpayer's dollars to send free wheat to other parts of the world. Meanwhile, the Taxpayer pays the wheat farmer substadies, pays for the free wheat and now every indication is that the "wheat futures" is going up.." And from Reuters 11/17/98 ".The Clinton administration is looking at making additional donations of wheat beyond the 2.5 million tonnes already allocated this year for various countries, a top U.S. Agriculture Department official said on Tuesday. In remarks to the Commodity Club of Washington, USDA undersecretary Gus Schumacher also said final work had begun on a package of at least 3.1 million tonnes of U.S. food aid for Russia. But he said no decision had been made on a separate initiative to help U.S. poultry growers make sales to Russia.."
Reuters 11/21/98 ".The murder of a leading liberal deputy in the lower house of parliament shocked Russian leaders and overshadowed efforts to resolve the country's economic crisis Saturday. Outspoken State Duma deputy Galina Starovoitova was shot dead in the stairwell of her apartment building in St Petersburg by two unknown attackers overnight, moving President Boris Yeltsin to express his "deep outrage." In a statement read out by top Kremlin aide Oleg Sysuyev on Ekho Moskvy radio, the president said he was taking personal control of the investigation and would see that the killers were brought to justice. Yeltsin described Starovoitova as a "passionate tribune of democracy" and one of his own "closest comrades in arms." "The shots that have cut short her life have wounded every Russian for whom democratic ideas are dear. This impertinent challenge is thrown to the whole of our society," he said.."
Washington Post 11/27/98 David Hoffman ".Tons of highly enriched uranium and plutonium at Russian scientific institutes and research facilities have been left more vulnerable to possible theft and diversion because of the country's economic crisis, according to experts from the United States who recently inspected some locations. The specialists have expressed alarm about the buckling of the "human factor" in protecting nuclear materials since the Russian ruble was devalued Aug. 17, effectively slashing the meager salaries of nuclear plant workers and guards and further draining funds available for security. "The Russian economy is the world's greatest proliferation threat today," said William C. Potter, director of the Center for Nonproliferation Studies at the Monterey Institute of International Studies in California, who visited five Russian nuclear materials sites last month and has seen 10 sites over the past year. "I think the situation is extremely dire," said Kenneth N. Luongo, a former Energy Department official who is now executive director of the Russian-American Nuclear Security Advisory Council, which seeks to promote U.S.-Russian cooperation on the issue. "We have taken a gigantic step back to the beginning of the 1990s, when the Soviet Union collapsed and we worried about a breakdown of their security system." ."
FoxNews AP 12/4/98 Greg Myre ".The Russian ruble tumbled today, trading at about 20 to the U.S. dollar and threatening to hit its lowest point since the country's economic crisis struck in August. The ruble's latest slide is an ominous sign for the government, which desperately wants to stabilize the economy as Russia heads into the difficult winter months. He blamed previous governments for the country's economic turmoil and said a lack of stability, as well as the loss of confidence in the country's future, had jeopardized economic reform efforts. Primakov's government is urgently seeking foreign help, but International Monetary Fund chief Michel Camdessus came and left this week without giving any signal that a frozen loan package will be released soon. With the country's financial markets essentially wiped out by the economic crisis, the value of the ruble is one of the leading indicators of economic confidence.."
Center for Security Policy 12/2/98 ".As the International Monetary Fund's Michel Camdessus wrestles with how to squander still more taxpayer-subsidized financial assistance in Russia, the Center for Security Policy's William J. Casey Institute today offered powerful reasons why further good money should not be thrown after bad.. Specifically, the Symposium pointed to the following mistakes by the Clinton Administration and, to varying degrees, by its G-7 partners: Focusing on government-to-government financial transfers rather than measures that would promote entrepreneurialism, small business, small farms, private ownership, and start-up enterprises and individual Russian republics.. Allowing U.S. policy and bilateral and multilateral financial aid decisions concerning Russia to be driven by an unconditional commitment to Yeltsin regime, predicated on the dubious proposition that the latter was dedicated to genuine political and economic reform...Ignoring the increasingly serious divergence of U.S. and Western interests from those being advanced pursuant to the "Primakov Doctrine" -- what Mr. Moore called a "national socialist" agenda for: reasserting Russian influence around the world, generally at American expense; forging (or resuscitating) ominous strategic relationships with the likes of China, Iran, North Korea, Iraq, Syria, Cuba and Libya; and reversing the decline of the Kremlin's military power...Last month, Deputy Secretary of State Strobe Talbott -- the man who might be said to bear the greatest responsibility in the U.S. government for its part in "losing Russia" -- launched the Clinton Administration's effort to distance itself, at least rhetorically, from its historic open-ended and unconditional embrace of Yeltsin's government.."
Freeper pea eye adds ".The point is the Clinton Administration's complicity with those mob connected oligarchs who plundered Russia and left the Russian people to the wolves.. The only one we know about for sure, thanks to a report in the Jerusalem Report of December 28, 1995, was Grigori Louchansky, who was invited to what appeared to be a fund raising dinner with Clinton at the Hay Adams Hotel in Washington DC on July 11, 1995. The invitation was signed by Richard Sullivan, DNC Finance Director. According to the Report, Louchansky is suspected of maintaining close connections with the Russain Mafia, laundering KGB money, and involvement in illicit trade in nuclear materials and missile technology. Loutchansky now holds an Israeli passport, but his company, Nordex, located in Vienna, reportedly had a $3 billion turnover several years ago. Louchansky never made that 1995 dinner with Clinton, according to the Jerusalem Report, because he had discreetly learned that he might be arrested or denied entry to the U.S. because of highly detrimental information in his intelligence dossier. But Louchansky did dine with Clinton at a similar dinner two years earlier, and even had his photo taken with Clinton which was printed up in a hometown paper back in Latvia. Time Magazine even did a big Special Investigation report called The Russia Connection, featuring Louchansky on July 8, 1996. The Jerusalem Report story stated that Louchansky's 1995 invitation from the Finance Chairman of the DNC, "was an invitation to a select dinner of some two dozen international Jewish businessmen." ..
USA Journal Online 12/14/98 "..Republican Sen. Richard Lugar [R-Ind.] and Democrat Sen. Carl Levin [D-Mich.] say that unless the U.S. commits to giving the Russian government more money to dismantle nuclear weapons, it risks "playing into the hands of terrorists." The senators' comments were made at press conference in Moscow November 19, during a visit to push the Russian Duma - roughly equivalent to the U.S. Congress - to ratify the START II nuclear arms reduction treaty. If the Duma were to ratify the treaty, Lugar and Levin said even more U.S. funds would be needed. "If START II is ratified by the Duma, particularly in light of the softness of the Russian economy, the increased number of weapons that would then need to be dismantled . . . would create an additional challenge," Levin told Reuters. "So we need to increase our efforts and not hobble them and cut them back." Lugar agreed. According to the American Foreign Policy Council, however, the funds being supplied to Moscow under the 1994 Nunn- Lugar agreement to destroy obsolete nuclear weapons are instead being used to upgrade and build new nuclear weapons and other weapons systems In fact in early September, the architect of Russian economic "reform" and chief negotiator of a recent $20 billion bailout package financed by U.S. taxpayers and the IMF says Moscow "conned" Western countries out of the money. Anatoly Chubais told Kommersant Daily September 8 that lying to Western lenders was the right thing to do. If Moscow told Western lenders the truth, Chubais said, Russia's economy would have collapsed last spring and Western lenders "would have stopped dealing with us forever."."
Freeper Conservative Arts AP 12/20/98 ".Foreign economic intelligence has become a focus for Russia's secret services, an intelligence service spokesman said Sunday. The Foreign Intelligence Service had predicted that the Asian financial crisis would affect Russia, said Yuri Kobaladze, the spokesman for the service, according to the ITAR-Tass news agency. Vladimir Putin, the head of the Federal Security Service, says that besides being responsible for counteracting subversion by foreign intelligence, the service is working to preserve Russia's territorial integrity, fight extremism and battle corruption at the highest levels. The Federal Security Service, the main successor to the Soviet-era KGB, has come under strong public criticism recently. Several of the service's officers have accused their bosses of ordering contract killings, extortion and other crimes.."
AP 1/9/99 ".Five of Russia's 10 largest banks are effectively insolvent, the Interfax news agency reported Saturday. The agency said the five banks were hit hard by the country's economic crisis and are no longer able to meet their debts to customers and creditors. Before the crisis hit in August, Russian banks were known for risking their money in highly speculative investments, including government treasury bills that yielded extremely high rates of interest. The devaluation of the ruble and the effective default on treasury bills left many banks deeply in debt. The collapse has been disastrous for Russians with savings in the insolvent banks. However, the vast majority of people are unaffected because they either have no savings or have kept all their savings in cash due to their distrust of banks. ."
On IMF and World Bank Lending for Russia, Venyamin Sokolov "Under the guise of establishing a market in Russia, the authorities have created an economic monstrosity that has nothing to do with a market system. First of all, in the Russian market there is no money, without which it is impossible to buy or sell. Consequently, the owners and directors of firms, instead of selling what they produce and buying what they need, are forced to exchange what they produce for something they need. Our present barter system is much the same as that which existed in primitive societies when people exchanged stone axes for mammoth skins. Only today our producers of jet planes, a product unknown to primitive societies, are forced to exchange aircraft not only for fuel, but for eggs, butter and sugar as well...All loans made to Russia go to speculative financial markets and have no effect whatsoever on the national economy . Giving more loans to the Yeltsin government is comparable to giving a drug addict a fresh supply of narcotics.
Union Leader 8/39/98 Patrick Buchanan ".Russia has now admitted it cannot pay its foreign debts and has demanded that short-term bond holders accept long-term paper at 30 percent of face value. Panicked investors are fleeing Russia and every Third World market. Worldwide, stocks are plummeting, and billions of dollars of equity are being wiped out daily. Since mid-July, the U.S. stock market has probably given up a trillion dollars in value. Who is responsible for this global disaster, which began in Asia? Last week, on CNN's "Moneyline," Nobel Prize-winning economist Milton Friedman nailed the villain. Said Dr. Friedman, the IMF "is largely responsible for the Asian crisis." Instead of letting Mexico default in 1994, and Goldman Sachs take its hit, the IMF rushed in to bail out Mexico City and its New York creditors. That bailout sent a message: The risks of investing billions in emerging markets are minimal. Huge sums poured into these markets. It is those investments that are being wiped out today. To stanch the bloodletting, the IMF, since last summer, has put taxpayers at risk for $130 billion in loans to Asia and Russia, most of which we will never see again..In 1991, Russia was pro-American and on the road to freedom. Today, this nation, with thousands of nuclear weapons, is a basket case seething with anti-Americanism and ripe for an explosion.."
New York Post 8/23/98 John Dizard "A TRADING friend commented last week: "If people didn't know these people were criminals before, they found out Monday." And feelings are certainly running high among investors in Russian paper these days. Up to now, the more restrained Wall Streeters thought I was being alarmist in my views of the Russian government. But I was if anything understated about the criminal nature of the country's "leaders." Last Monday's devaluation and debt moratorium was drawn up the previous weekend in a meeting of Russian oligarchs in Nice, on the French Riviera. (Somerset Maugham called it "a sunny place for shady people.") Then the gangster/bankers handed it over to Boris Yeltsin on Sunday, who signed it without understanding it .The Russian banks are not banks in the sense of the word we know. They are conduits for gangsters to siphon money out of companies they control in what is left of the real Russian economy. Then the oligarchs either spend it on buying more influence or ship it out of the country. If they can make a little money on the side by signing their names to worthless guarantees and derivatives, fine.."
Global Intelligence Update 2/22/99 "...A series of unconnected problems are coming together as different aspects of a single problem: Russia. The G-7 met this weekend in Bonn and made it clear that major help for Russia is not going to be forthcoming without the implementation of impossible reforms. Russia made it clear that it was going to stand against the U.S. and the West on the three critical issues of the week. Russia let the U.S. know that it would oppose any stationing of NATO troops in Kosovo without Serb permission, and it would also oppose air strikes. Leaks appeared throughout Western newspapers about Russian arms sales to Iraq. We believe that these reports were deliberate leaks from Moscow and Minsk designed to warn the West. The Russians condemned the Turkish invasion of Iraq, and a Russian General said that the S-300 missiles shipped to Armenia were designed to protect the CIS from Turkey and NATO. At the same time, high-level meetings were being held with German and Japanese leaders. Russia is putting pressure on these two countries, and particularly Germany, to get the West to provide financial help to Russia. The Russian lever on Germany: the threat of a return of a mini-Cold War...."
AP 2/22/99 "...Some U.S. money intended to help find civilian work for unemployed weapons scientists in the former Soviet Union has gone to scientists currently working on Russian weapons programs, a congressional study found. The General Accounting Office study, released Monday, also said that only a small percentage of money in the program, which is overseen by the Energy Department, seems to be getting to the intended recipients. The report said that scientists working on nine ``dual use'' projects ``could unintentionally yield useful defense-related information and therefore negatively affect U.S. national security interests.''...Sen. Jesse Helms, R-N.C., who requested the study, said the findings were ``of enormous concern to me and others in the Senate.'' ``It is absolutely unacceptable for the Clinton administration to donate the U.S. taxpayers money to Russian scientists who spend their time working on poison gas, biological agents and new nuclear weapons designs for the Russian government. That must stop,'' Helms said...."
Reason Magazine 3/99 Thomas W. Hazlett "…After seven years of economic 'reform' the majority of the Russian people find themselves worse off economically. The privatization drivehelped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy." Curiously, the media has mostly ignored the successes of places such as Estonia and the Czech Republic, where rapid and sweeping privatization programs--along with relatively secure property rights --created momentum for the legal, political, and cultural changes necessary to make the transition from a command economy to a market-based one. When the Soviet Union imploded in 1991, virtually all productive assets (not counting human beings) belonged to the state and were controlled by Communist Party hacks--the nomenklatura…. Since the reformers who brought on capitalism and democracy in Russia consciously chose not to employ Bolshevik methods to pry assets loose, they "left 'red directors' in possession of all the economic assets and privileges that they enjoyed in Soviet times," observes Russia expert Leon Aron of the American Enterprise Institute…. By 1996, just one-fifth of Russian firms featured majority shareholding by people outside the company they worked for. The result, in other words, was capitalism without capital markets. Bad things are bound to happen in such a scenario…."
Forbes Digital Tool 3/22/99 Paul Klebnikov "…Russian capitalism is at a crossroads. In the first six years after President Boris Yeltsin came to power, a mad rush to privatization put valuable assets into the hands of a small circle of well-connected businessmen. Western investors bought into this transformation, putting $8 billion into equities and $40 billion into loans. Now the economy is in a meltdown. Western capital has pretty much evaporated. The population is poor and sick; people eat dog food for protein; the cities are home to hundreds of thousands of orphaned street kids scavenging for food. Russia's businessmen, even those as well-connected as Berezovsky, are going to take some blame. "Privatization in Russia goes through three stages," Berezovsky explained to this magazine in 1996. "First, the privatization of profits; second, the privatization of property; third, the privatization of debts." …"
NewsMax 3/15/99 Christopher Ruddy "…In 1997, Russia’s Parliament allocated some $12.8 billion for new weapons development. Pravda (Russia’s leading newspaper) cited a General Staff official who says that new weapons systems include directed-energy weapons, new "smart" weapons, deep penetration munitions, and electronic warfare technologies. Funding also went for the Topol-M, new tactical nuclear weapons, miniaturized nuclear weapons and seven new ballistic missile submarines. Previous Russian spending has paid off. In February of 1996, the Times of London reported that Britain’s Royal Navy was concerned about "Russian nuclear hunter-killer submarines" stalking British Trident submarines operating off Britain’s coasts…. The Times also disclosed that Russia had deployed a new "Akula-class" submarine that carries SS-21 nuclear missiles aimed at American targets. The head of US Naval Intelligence, Admiral Mike Cramer, said the new submarine "has demonstrated a capability that has never been demonstrated before to us ..." …"
Drudge Report 3/18/99 "…Treasury Secretary Robert Rubin told a congressional panel that he suspected that much of the $4.8 billion in loans sent to Russia last summer by the International Monetary Fund "may have been siphoned off improperly." Rubin's comments marked the first public confirmation by the Clinton administration that much of the bailout money the U.S. Treasury Department organized last year went to wealthy Russian oligarchs who move billions of dollars to Switzerland and other safe havens…."
World Net Daily 3/23/99 Anne Williamson "…The man best able to strike a decisive blow against world tyranny is in Washington today, but his name isn't Bill Clinton. He's the visiting Russian prime minister, Yevgeny Primakov. Primakov hopes to loosen the strings on the IMF's moneybags so that the arrested $22 billion bailout agreed to last summer before Russia's August meltdown might proceed. Russia needs new IMF loans just to pay the $4.8 billion due the IMF this year on over $20 billion in previous IMF lending. Failure to pay risks exclusion from the world's credit markets. According to the conventions of international finance, a nation can stiff private investors, but never the IMF….. Private banks and bondholders left in the lurch are paid off routinely through a shell game known as "round-tripping" in which taxpayers' funds are channeled to the deadbeat nation through new public loans…. Though such practice cheats the rules of sound banking and of government accountability, the Clinton administration recently browbeat another $18 billion from the U.S. Congress for the fund's capitalization…
Should Yevgeny Primakov rightly declare Russia's IMF debts odious, the IMF could not survive. Were he to follow-up with an invitation for an orderly workout of Russia's private debt in the international court system, he would strike a decisive blow against the monopolistic Russian bankers who cannibalized their own country while making a stand for financial prudence, justice, and the rule of law. In so doing, the Russians could lay claim to having slain not one, not two, but all three of the monsters this century has produced, which presume to exploit entire peoples while telling them how to live; Fascism, Communism, and the IMF…."
Reuters 3/21/99 Gareth Jones Freeper LPH2 "…Prime Minister Yevgeny Primakov heads to Washington this week for talks with U.S. leaders and international creditors which are widely expected to either make or break his government's efforts to rescue Russia's economy. ---- Treasury Secretary Robert Rubin said today the International Monetary Fund made the right decision last summer in providing emergency loans to Russia even if part of the money ended up in foreign bank accounts held by rich Russians .... Rubin sought to clarify remarks he made to Congress on Thursday in which he seemed to indicate that much of the $4.8 billion in loans ``may have been siphoned off improperly.'' …"
AP 3/30/99 Freeper TexMex "…Two leading House Republicans said Tuesday they oppose more International Monetary Fund loans to Russia until the IMF provides a full accounting for previous outlays to Moscow. House Majority Leader Dick Armey, R-Tex., and Rep. Jim Saxton, R-N.J., vice chairman of the Joint Economic Committee, said the United States ``should use its influence to any deny further IMF loans to Russia'' until Congress is told what happened to $4.8 billion lent last August…."
USA Today 4/7/99 Ariel Cohen "…Drug addiction is terrible. So is an addiction to someone else's money. In both cases, the worst thing you can do is hand over more to the addict. That, however, is precisely what is about to happen in Russia, where a delegation from the International Monetary Fund is supposed to meet today with Moscow officials to hash out details of a plan that would give Russia billions of dollars in additional loans. More IMF loans to Russia means more money for a country that has become a financial junkie. IMF bailouts amounting to $27 billion since 1992 have failed. Russia has defaulted on most of its foreign loans since its August ruble crisis, and it threatens further default on its debt if the IMF does not provide the new credits….."
Baltimore Sun 4/10/99 Kathy Lally "...In a solemn ceremony that bore the air of a religious crusade,Russia sent off its first shipment of humanitarian aid to Yugoslavia this week, with officials preaching that even a poverty-stricken, aid-receiving nation could give unto others. "Isn't there some discrepancy here?" a Russian reporter asked Sergei K. Shoigu, the head of the Ministry of Emergency Situations. "We were receiving aid, and now we are rendering aid ourselves." ..."
The Washington Times 4/16/99 Freeper NotAvailableFor Abuse "...The World Bank will lend $650 million to Russia for social programs and retraining coal miners. The bank could reach an agreement for an additional $1.2 BILLION [freeper emphasis] ... in loans by the end of the month...."
US Embassy - Moscow 4/26/99 "...On January 25, 1999, Secretary of State Madeleine Albright announced in Moscow that the United States will commit USD 10 million to fund training and support for Russia's independent media. This commitment builds on more than five years of assistance programs to promote the professionalism and financial viability of the regional independent media in Russia. Assistance will be implemented primarily through non-profit Russian media assistance organizations selected by the U.S. Government for their expertise and extensive networks of contacts with regional Russian broadcasters and print media...."
AP 4/26/99 "....Chernobyl radiation victims are still praying for better treatment. The leaky concrete-and-steel shelter covering the ruined reactor still needs repairs. And Ukraine says the plant won't be closed unless the West gives it $1.2 billion for two new reactors. On the 13th anniversary of the world's worst nuclear accident, a grim legacy lingers from the explosion and fire at reactor No. 4 of Chernobyl's atomic power plant...."
AP 4/28/99 Martin Crutsinger Freeper Brian Mosely "...The International Monetary Fund announced Wednesday it had reached an agreement in principle with Russia on a new economic reform program that will allow the agency to resume lending to the country...."
WorldNetDailyn 5/3/99 J.R. Nyquist "....An American businessman with intimate ties to Russia, who wishes to remain anonymous, spoke to me recently. He said that living conditions in Russia have sunk dramatically. "The children are suffering," he explained. "There are no hospitals. The social safety net has collapsed." I asked this businessman about the tens of billions we have poured into Russia, in support of free-market reforms. "What reforms? The Russian leaders are mostly Communists!" he exclaimed. "I mean, basically, they think in terms of power, lines of organization, personal contacts -- to gain personal control." In other words, Russia's political machine has not adopted a true market system. The old system of bureaucratic back-scratching and favor-swapping continues to control economic outcomes much as before. Consequently, Russia's economy is not based on a capitalist model. State control dominates in sector after sector. Even Russia's largest private company, Gazprom, is 40 percent state-owned. More suggestive still, the Russian economy remains heavily militarized, with weapons production and heavy industry at the forefront....."
Christian Science Monitor 5/26/99 Frank Cilluffo and Todd Nelson Freeper Stand Watach Listen "...Still, a new IMF loan disbursement to Russia is imminent and for a very bad reason: to assuage Russian hurt feelings. If the IMF follows through, it will make two grave mistakes: rewarding Russia's antagonism of the West, and addressing political rather than economic considerations. The abysmal track record of Russian economic reform - inability to implement a true market economy and lack of fiscal accountability and transparency - doesn't justify further loans. .....Last summer, a $22.6 billion loan package put together by the IMF, World Bank, and Japan at the urging of the Clinton administration was intended to help stabilize the Russian economy. The justifications given at the time were some of the exact concerns listed above. Within weeks the ruble collapsed, and in the aftermath of the financial crisis, former Finance Minister Anatoly Chubais admitted publicly that the loan package had been "swindled" from the West. ..."
Washington Post 7/1/99 David Hoffman "...A secret audit of the Russian Central Bank's dealings with an obscure offshore investment company has concluded that Russia misreported its foreign currency reserves to the International Monetary Fund by $1 billion in 1996, well-informed sources said today. The audit, carried out by the international accounting firm PricewaterhouseCoopers, was made in part to satisfy IMF demands for full disclosure of Russia's connection to the offshore firm during the IMF's recent negotiations with Moscow on whether to resume lending to debt-laden Russia. The issue is important to the IMF because it put billions of dollars into the Central Bank's reserves in recent years as part of a program designed to bolster economic reform in Russia. Evidence that the IMF money was misplaced or mishandled could further complicate Russia's efforts to attract new lending. Analysts said Russia was unlikely to be cut off from IMF loans, because the fund is more interested in changing Russia's ways than in penalizing it. But the case may represent a clear breach of Russia's promises to the fund, and could fuel criticism of IMF support in Congress and elsewhere. While the results of the audit have been presented to the IMF and the Central Bank, Central Bank Chairman Viktor Gerashchenko has vigorously resisted making the document public, according to the well-informed sources. Gerashchenko classified previous audits on the same subject...."
Russia Today 7/12/99 "…President Boris Yeltsin is getting ready to sign a decree launching on to world markets a stockpile of diamonds worth up to $1.5 billion. These are being released for export because, according to government documents, they have "special qualities" that make the stones unsuitable for jewellery…..By fudging the classifications of diamonds for export, western traders claim, Russia is threatening to release on to world markets substantial volumes of small gemstones. They say this is likely to upset De Beers's intended supply-side tightening this year, necessary because demand for diamonds fell sharply in Asia two years ago… Russian Special Technologies, a source said, is already hard at work sorting and preparing diamonds for export that are classified Type XXII, according to a Soviet-era classification. That classification was originally identified nitrogen-free diamonds which are known in western classifications as Type 2a. The special properties of these diamonds, say industry experts, makes them valuable in electronics, but unfit for cutting and polishing into jewellery…."
Washington Post 7/27/99 Boris Fyodorov "..For the past six years our governments have been living from one International Monetary Fund infusion to the next. In the first stage we are short of money and hold hasty talks with the IMF. Next, we receive the money with after considerable difficulty. Then we forget our promises, get into a crisis and ask for money again. The Russian authorities have learned the craft of pulling the wool over the eyes of the West, and the West has learned to pretend not to notice it. For political reasons, the West periodically tosses money at us. The main idea is to keep us quiet and non-threatening. The West does not believe that any economic reforms are underway in Russia, and so it simply aims at producing the appearance of decency with the help of the IMF missions and negotiations..... The problem of our budget consists of collecting taxes and other debts. This requires strong fiscal bodies and a true tax reform -- that is, the establishing of order. At the same time, we cannot have a realistic budget, because no one in Russia can predict the level of inflation or the currency rate. It is impossible to expect that economic activity will grow under the current conditions of instability and lack of encouragement. The circle closes. Still, with today's level of federal revenues we have no funds for the army, law-enforcement bodies, education or health care. It becomes increasingly obvious that the state is falling apart and is not coping normally with its most elementary functions. Periodic financial injections from the West delay only slightly the need to take decisions that are a matter of principle...."
TampaBayOnline 7/31/99 AP "...dAuditors have found that Russia's Central Bank kept its transactions with an offshore company off its accounting books and hid the profits it made on the nation's treasury-bill market, a newspaper reported Saturday. The report comes just days after the International Monetary Fund approved a new, $4.5 billion loan program for Russia. The news again raises questions of whether Russian finance officials have been straight with Western lenders, whether they are truly committed to reforming the battered economy and whether they have violated not only IMF guidelines, but also Russian law...."
AP 7/30/99 "...Russia will receive the first installment of a $4.5 billion loan from the International Monetary Fund on Sunday, Russia's Finance Ministry said Friday. But the $640 million will be used to make a loan repayment to the IMF that falls due on the same day, the ministry said. ..."
Washington Post 7/29/99 Paul Blustein "...The International Monetary Fund formally approved a $4.5 billion loan to Russia yesterday, a move aimed at keeping Moscow from disintegrating economically by giving it money to help avert default on its previous IMF loans. Approval of the loan by the IMF's board reflected Russia's geopolitical importance as a nuclear power rather than the belief that it has put its economy on a sound footing...."
New York Times Magazine 8/15/99 John Lloyd "…Russians, free to get rich, are poorer. The wealth of the nation has shrunk -- at least that portion of the wealth enjoyed by the people. The top 10 percent is reckoned to possess 50 percent of the state's wealth; the bottom 40 percent, less than 20. Somewhere between 30 and 40 million people live below the poverty line -- defined as around $30 a month. The gross domestic product has shrunk every year of Russia's freedom, except perhaps one -- 1997 -- when it grew, at best, by less than 1 percent. Unemployment, officially nonexistent in Soviet times, is now officially 12 percent and may really be 25 percent. Men die, on average, in their late 50's; diseases like tuberculosis and diphtheria have reappeared; servicemen suffer malnutrition; the population shrinks rapidly. This is the Russia that many in the West now say we have lost. Lost not in the sense of having mislaid, by accident, but through our own actions and mistakes. Lost as a selfish, thoughtless man loses a woman who loves him -- through indifference or by pushing her away. Lost, the critics say, because we pursued agendas that were hopelessly wrong for Russia, and lost because we encouraged and supported precisely these men in the Government dacha, who were also hopelessly wrong for Russia….."
New York Times Magazine 8/15/99 John Lloyd "…When Bill Clinton came to the Presidency in early 1993, Summers was appointed Under Secretary of the Treasury for International Affairs. The official who covered the former Soviet Union and Eastern Europe was David Lipton, who had worked closely with Sachs on Polish and Russian reform. Sachs, on a leave of absence from Harvard, had installed himself and his team in the Finance Ministry -- where he spent a large part of one morning chiseling away a portrait of Lenin that had been embedded in the plaster of a colleague's office wall. Both men proselytized for shock therapy -- Sachs, vocally and impatiently, and Summers, behind the scenes, nagged and pushed the I.M.F. and the World Bank to lend, lend, lend. The money, tens and tens of billions of dollars, would be used for the essential first step in the reform, making the ruble convertible on world markets. Only with a hard currency, they believed, would investors commit the substantial sums needed to transform the Russian economy. That never happened. Yegor Gaidar needed much more help than the Clinton Administration -- or any other Western government -- was willing to give him. He had come to Government at a time of collapse. At the end of 1991, as Mikhail Gorbachev left office and the Soviet banner was pulled down from the Kremlin tower, most Russians were lining up around the block for the basics. As Gaidar tells it, he had no choice but to let prices rise to increase supply and to scrap trade barriers so that foreign commodities could begin to fill store shelves…."
Boston Globe 8/14/99 Brian Whitmore "…When the president of the world's second largest nuclear power wants to make an important political decision, he consults the family. Not his family, but The Family, a collection of business tycoons, cronies, and Kremlin bureaucrats who wield enormous - and many say destructive - influence on Russia's President Boris N. Yeltsin since his reelection three years ago. In Russia, The Family has taken on legendary proportions, with many of the country's ills being laid squarely at its doorstep. Some media here speculated, for example, that The Family's hand was behind last August's financial meltdown, when Russia's currency lost 70 percent of its value in a matter of weeks. The oil business of prominent Family member Boris Berezovsky's, reports say, stood to benefit from a weak ruble to increase his export earnings, and he allegedly lobbied for a devaluation that devastated the savings of ordinary Russians. Many observers also say that Yeltsin's decision Monday to sack his government was The Family's dirty work…."