A man seldom thinks with more earnestness of anything than he does of his dinner. - Samuel Johnson
RFE/RL NEWSLINE

Vol 1, No. 75, Part I, 17 July 1997


Vol 1, No. 75, Part I, 17 July 1997

This is Part I of Radio Free Europe/Radio Liberty's Newsline.
Part I is a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II, covering Central, Eastern, and Southeastern
Europe, is distributed simultaneously as a second document.  Back
issues of RFE/RL NewsLine are available through RFE/RL's WWW
pages: http://www.rferl.org/newsline/search/

Back  issues of the OMRI Daily Digest are available through OMRI's
WWW pages: http://www.omri.cz/

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Headlines, Part I

* FIRST MEETING OF RUSSIA-NATO JOINT COUNCIL POSTPONED

* NEMTSOV PROMISES TO PAY NUCLEAR INDUSTRY WORKERS

* GUARANTORS OF TAJIK PEACE MEET IN DUSHANBE

End Note : Patrimonialism in Post-Soviet Russia

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RUSSIA

FIRST MEETING OF RUSSIA-NATO JOINT COUNCIL POSTPONED. The
first meeting of the Russia-NATO Joint Council, scheduled to convene
at the ambassadorial level in Brussels on 17 July, has been
postponed, an RFE/RL correspondent in the Belgian capital reported.
The council was created under the Founding Act signed by Russia
and NATO in May. According to AFP, the joint council is to have three
top officials: NATO Secretary-General Javier Solana, a Russian official,
and a rotating member from one of the NATO countries. However,
NATO officials reportedly want Solana to preside over all the council
meetings, while Russian officials advocate that the chairmanship
rotate among the three top members. An unnamed NATO official told
RFE/RL that the meeting is likely to take place within the next few
days. The first ministerial-level meeting of the Joint Council is
scheduled for September in New York.

NEMTSOV PROMISES TO PAY NUCLEAR INDUSTRY WORKERS. First
Deputy Prime Minister Boris Nemtsov, who is also fuel and energy
minister, says the government will pay 123 billion rubles ($21
million) in wage arrears to workers at nuclear power plants this
month, ITAR-TASS reported on 17 July. He also said all back wages
would be paid by the end of the year. Nemtsov made the promises
while meeting with protesters who picketed government
headquarters. Hundreds of protesters arrived in Moscow on 16 July
following a two-week march begun by workers at a plant in
Desnogorsk (Smolensk Oblast), some 360 kilometers from Moscow.
Demanding adequate financing to pay wages and ensure the safety
and security of nuclear power stations, the protesters marched in
shifts and were joined along the way by workers from several other
nuclear plants. Nemtsov promised to make the safety of nuclear
facilities a "top priority goal" for the government.

YELTSIN SIGNS DECREES ON STREAMLINING ARMED FORCES.
Following discussions on 16 July with Prime Minister Chernomyrdin,
President Boris Yeltsin signed several decrees on downsizing and
streamlining the armed forces, Interfax reported. The total strength
of the armed forces is to be cut by 500,000 to 1.2 million. The ground
troops command is to be abolished; the strategic missile forces, space
defense force, and anti-aircraft missile units are to be combined; and
the air defense forces are to be merged with the air force, according
to ITAR-TASS. The budget of the Defense Ministry's central
apparatus will be cut by almost half to no more than 1 percent of the
defense budget. It is unclear how these measures relate to proposals
for restructuring the military that Defense Minister Igor Sergeev and
Defense Council Secretary Yurii Baturin are supposed to submit to
Yeltsin by 25 July.

BARRACKS COLLAPSE AT MILITARY SCHOOL IN TOMSK. At least
seven people were killed and 50 injured when a three-story
barracks collapsed at a military school in Tomsk, Russian news
agencies reported on 17 July. Some 150 people were in the building
when it collapsed, and three or four are still trapped under the
rubble. According to ITAR-TASS, the building was a two-story
seminary before 1917. A third level was built during the 1950s.

WAS SPRING MILITARY DRAFT SUCCESS OR FAILURE? Russian
military officials have expressed satisfaction with this year's spring
draft, claiming more than 214,000 people responded. "Rossiiskie
Vesti" on 16 July reported that the ranks of Russian armed forces'
non-commissioned officers and enlisted men are currently 85
percent staffed, which the newspaper said was a "record for the last
five years." But "Nezavisimaya Gazeta" the same day pointed out that
one-third of the conscripts arrived at induction centers underweight
and that a small number of draftees have criminal records or
substance-abuse problems. Draft-dodging remains a problem, with
more than 31,000 conscripts not responding to the call. Some
observers say it will be impossible to have an all-volunteer army by
2000 because contract soldiers earn more than three times the
amount conscripts are paid.

YELTSIN CALLS FOR IMPROVING TAX COLLECTION BY GETTING
TOUGH ON DIRECTORS. Yeltsin announced on 16 July that tougher
measures will be taken to improve tax collection from enterprises,
Russian media reported. Appearing on NTV, Yeltsin said the directors
of some 50 large enterprises must be summoned to cabinet meetings
and told that they must pay their back taxes. If they fail to do so, he
said, either they will be made to resign or their enterprises will be
forced into bankruptcy. In a recent radio address, Yeltsin blamed
incompetent enterprise directors for many of Russia's economic
problems (see "RFE/RL Newsline," 11 July 1997).

MORE PROBLEMS ABOARD "MIR." The "Mir" space station suffered
another problem on 17 July, Russian media reported. Early in the
morning , a power loss was caused by malfunction in the station's
orientation system. The station's solar panels were unable to position
themselves toward the sun and temperatures fell inside the space
station. All non-essential systems have been shut down, and Reuters
reports the crew is now working in darkness. There are also
conflicting reports as to whether U.S. astronaut Michael Foale has
been given permission by NASA to take the place of ailing "Mir"
commander Vasilii Tsibliev in repair work scheduled to start on 24
July. Russian media on 16 July had reported Foale would replace
Tsibliev.

RUSSIA, JAPAN CONTINUE TO DISAGREE OVER TANKER ACCIDENT.
Moscow and Tokyo continue to disagree over the cause of the 2
January accident in the Sea of Japan, in which the Russian tanker
"Nakhodka" sank spilling oil onto the Japanese coast, according to
Interfax. Russia says the sinking was caused by a collision with a
submerged object, while Japan says an aging and possibly corroded
section of the ship fell off during a heavy storm. The findings of the
joint investigating committee will determine whether the owner of
the tanker receives insurance money. Meanwhile, the Russian rescue
ship "Topaz" has been impounded in the port of Pusan, South Korea.
The ship was returning to Vladivostok from the Persian Gulf where it
took part in towing exercises. It had docked at Pusan port to
replenish food and fuel supplies when South Korean officials decided
to impound the vessel for reasons not yet known.

TWENTY LARGEST BANKS CONTROL MORE THAN HALF OF ASSETS IN
BANKING SYSTEM. The 20 largest Russian banks control 57.8 percent
of the total assets in the banking system, Central Bank Chairman
Sergei Dubinin told journalists on 15 July. The 220 largest banks
control 86.5 percent of total assets. Currently there are 1,881
registered Russian banks, down from some 2,500 at the end of 1995.
About half of Russian banks currently have assets of less than 1
million ECU, Dubinin said, noting that the combined assets of those
banks totals just 1.7 percent of all assets in the Russian banking
system. He added that after 1 January 1999, all banks with less than
1 million ECU in assets would be liquidated or reorganized--for
instance, into affiliates of larger banks.

COMMUNIST TO CHALLENGE ELECTION RESULT IN NIZHNII
NOVGOROD. Communist State Duma deputy Gennadii Khodyrev
announced on 16 July that he will contest the result of the 13 July
gubernatorial election in Nizhnii Novgorod Oblast, RFE/RL's
correspondent in Nizhnii Novgorod reported. According to the official
results, Ivan Sklyarov outpolled Khodyrev by 52 percent to 42
percent. However, Khodyrev told journalists that when he and his
staff saw documents on the voting, "our hair stood on end." Among
other things, he claimed that some 60,000 voters--a suspiciously
large number--cast ballots before election day and that almost all of
those were for Sklyarov. In addition, Khodyrev questioned official
tallies showing that 43,000 votes were cast during the final hour
polls were open on 13 July. Khodyrev also confirmed he will sue First
Deputy Prime Minister Nemtsov for remarks he made while
campaigning on Sklyarov's behalf, ITAR-TASS reported.

NEW MOVEMENT FOR RUSSIAN-BELARUSIAN UNION FORMED. The
organizing committee of the Russian-Belarusian movement Popular
Unity, which advocates the full integration of Russia and Belarus,
held its first meeting in Moscow on 15 July, "Nezavisimaya gazeta"
and "Kommersant-Daily" reported. State Duma deputy Nikolai
Gonchar was unanimously elected chairman of the movement.
Representatives of Boris Fedorov's Forward, Russia! party and
Aleksandr Lebed's Russian People's Republican Party, among other
groups, have also joined Popular Unity. Other outspoken Russian
advocates of integration with Belarus, including Moscow Mayor Yurii
Luzhkov and Communist Party leader Gennadii Zyuganov, are as yet
not involved, although Communist representatives joined the
movement's organizing committee. Popular Unity seeks to hold a
referendum in both countries that would ask voters one question: "Do
you support the unification of the Republic of Belarus and the
Russian Federation into a single union (federative) state?"

TRANSCAUCASUS AND CENTRAL ASIA

GUARANTORS OF TAJIK PEACE MEET IN DUSHANBE. Representatives
from countries and organizations that are guarantors of the Tajik
peace process met for the first time in Dushanbe on 16 July,
according to RFE/RL correspondents there. They reviewed the first
meeting of the Tajik Reconciliation Commission, which had taken
place in Moscow earlier this month. They also agreed to meet every
Tuesday or more often if necessary. The group is made up of the
Russian and Kyrgyz ambassadors to Tajikistan; representatives from
Pakistan, Afghanistan, and Iran; and the heads of the OSCE mission in
Tajikistan. Absent were representatives from the Organization of the
Islamic Conference, Kazakhstan, Turkmenistan, and Uzbekistan who
for "technical reasons" were unable to attend. Uzbekistan did not sign
the April Tehran protocol, nor did it send an official to the 27 June
signing of the Tajik National Peace Accord in Moscow.

BREAD, TRANSPORTATION PRICES RISE IN UZBEKISTAN. The prices
for bread and transportation have risen by some 40 percent,
according to Interfax on 15 July. At the beginning of July, wages,
pensions, and student grants were all raised. The official minimum
monthly wage is now 750 som ($12) and the minimum monthly
pension 1,400 som ($22).

MORE HEADS ROLL IN TURKMENISTAN OVER GRAIN HARVEST.
Failure to meet grain quotas has led to more dismissals in
Turkmenistan, according to RFE/RL corespondents in Ashgabat. A
presidential decree was issued on 16 July replacing the leaders of
Mary Province, which fulfilled only 50 percent of the 1997 grain
plan. Earlier this month, many officials from Akhal Province were
sacked for failing to meet grain demands. Akhal and Mary produce
the bulk of Turkmenistan's grain.

PAKISTANI FOREIGN MINISTER IN TURKMENISTAN... Gohar Ayub
Khan was Turkmenistan from15-16 July to meet with President
Saparmurat Niyazov, according to ITAR-TASS and Interfax. The two
leaders discussed the situation in Afghanistan and agreed that
continued U.S.-Russian dialogue was essential for securing peace in
Afghanistan. They also discussed the proposed gas pipeline from
Turkmenistan to Pakistan, saying they hope the project would be
realized soon. Niyazov said his country could supply southern and
southwestern Asia with "energy supplies for many years to come."
Khan also sought Niyazov's help in mediating Pakistani disputes with
India.

...AND IN AZERBAIJAN. Khan arrived in Baku on 16 July for a two-
day official visit, ITAR-TASS and Turan reported. In a meeting with
his Azerbaijani counterpart, Hasan Hasanov, and with President
Heidar Aliev, Khan said his country will support Azerbaijan's position
in the Karabakh conflict both at bilateral meetings and in
international forums. Possible areas for expanding cooperation were
discussed, including the training of Azerbaijani students and military
personnel in Pakistan. Khan proposed that part of Azerbaijan's
Caspian oil could be exported by the planned pipeline from
Turkmenistan via Afghanistan to Pakistan.

AZERBAIJAN RECEIVES OBSERVER STATUS IN WTO. The World Trade
Organization granted Azerbaijan observer status on 16 July and will
begin negotiations on granting it full membership, Western agencies
reported. This process is likely to last two or three years. Also on 16
July, state economic adviser Vahid Ahundov told journalists in Baku
that Azerbaijan's GDP grew by 5.2 percent during the first six months
of 1997 and foreign investment by 45 percent, compared with the
same period last year, according to Interfax. In 1996, Azerbaijan
registered GDP growth of 1.6 percent after five consecutive years of
decline.

IDA APPROVES LOAN TO GEORGIA. The International Development
Association (IDA) has approved a $20.9 million loan to Georgia to
help decentralize government functions, according to an RFE/RL
correspondent. Most of the loan will be used to improve roads,
drainage, lighting, water supplies, clinics, schools, and to build
revenue-generating facilities such as markets and transport facilities.
The remainder will be used to speed up the decentralization process
and help local governments to program, finance, and manage
facilities and deliver public services.

IAEA HEAD IN TBILISI. Director-General of the International Atomic
Energy Agency Hans Blix, during his official visit to Tbilisi from 15-
16 July, was scheduled to meet with President Eduard Shevardnadze
and parliamentary speaker Zurab Zhvania, according to ITAR-TASS.
The main topic of discussion was the Georgian nuclear reactor at
Mtskheta. Zhvania expressed concern over the danger to Georgia in
the event of an accident at Armenia's Medzamor nuclear power
plant, "Rezonansi" reported on 16 July, as cited by the Caucasian
Institute for Peace, Democracy, and Development. The Medzamor
plant shut down in 1989 and reopened in 1995. It is shortly to be
closed for routine maintenance. Blix is scheduled to arrive in Yerevan
on 17 July.

END NOTE

Patrimonialism in Post-Soviet Russia

by Donald N. Jensen

"Much of what we [in the West] took for granted in our free market
system and assumed to be human nature was not nature at all but
culture," Federal Reserve Board Chairman Alan Greenspan said at the
Woodrow Wilson Award dinner in New York in June. Dismantling a
centrally planned economy such as the one that existed in the former
Soviet Union, he added, does not automatically establish a free
market. In fact, one aspect of Russia's culture--what scholars such as
Richard Pipes and Max Weber have called patrimonialism--has
ensured that its post-Soviet political and economic transformation
would be especially difficult.

According to Pipes's definition, the sovereign of a patrimonial state
views himself as both the ruler of the country and its proprietor.
Political authority is seen as an extension of the rights of property
ownership, with both land and people at the sovereign's disposal.
Citizens are assigned duties but have no rights. By contrast, "the
existence of private property as a realm over which public authority
normally exercises no jurisdiction is the thing that distinguishes
Western political experience from all the rest," Pipes argues.

In pre-1917 Russia, the tsar "owned" the nation, its vast resources,
and its citizens. The state concentrated in its hands the most
profitable branches of commerce and industry and gave favored
parts of the nobility economic privileges in exchange for their
support. The civil service practiced a byproduct of patrimonialism
whereby responsibility for administering lands and collecting taxes
was handed over to civil servants, who, in exchange, were allowed to
keep a portion of what they collected. This practice fostered
corruption, which became part and parcel of public administration.
Although some aspects of patrimonialism weakened or disappeared
in late tsarist Russia, the consequences for the growth of democracy
in Russia were severe: a small middle class, weak state institutions,
and underdeveloped rule of law.

Soviet communism was an especially virulent form of
patrimonialism. Although Marxism denied the existence of private
property, in practice the state and party "owned" virtually
everything--publishing houses, sanatoria, public buildings, and
businesses--as well as controlling state revenues. In reality, citizens'
rights that existed on paper were for the state to give or take away.

Today Russia has to overcome not only the burden of its Soviet past
-- too often conceived of only in macroeconomic terms -- but also a
patrimonial inheritance of much longer standing, which is retarding
the development of a law-based state. Privatization, the infamous
loans-for-shares transactions, and the state's reliance on nominally
private "authorized" banks to handle large amounts of its money are
just three examples of patrimonialism's continued vitality.

In addition to its tendency to weaken democratic development,
patrimonialism fosters a close relationship between business and
politics. The government holds large chunks of stock in key
industries. State efforts to regulate entrepreneurial activities are
half-hearted. Patrimonialism means that political authority often
depends on leaders' business contacts and leads to the dominance of
clan politics, whereby politicians, businessmen, media entrepreneurs,
and security forces use the political process to vie for control over
the economy. Patrimonialism is also reflected in the increasing
identity of Russian foreign policy with the economic interests of
specific clans and lobbies. This trend was most clearly demonstrated
by the appointment of tycoon Boris Berezovskii, who has extensive
holdings in the oil and gas industries, to oversee implementation of
the Chechnya settlement as deputy secretary of the Security Council.

With the government playing such a patrimonial role in property
relations, crime is all-pervasive. There is traditional "organized
crime," including drug trafficking, racketeering, and prostitution.
White-collar crime, such as bribery, embezzlement, and the extortion
of protection money, is also widespread, reflecting the weakness of
the state. Official corruption, which President Boris Yeltsin's
government sometimes sponsors in the name of economic reform and
revenue raising, exists in the form of insider trading, preferential
treatment in the granting of licenses, and the banking of state funds
in favored financial institutions. Moreover, the government routinely
uses corruption charges in the struggle for political power.

On a more positive note, there is unprecedented popular acceptance
of civil liberties and elections as a way to legitimize political
authority. Society is steadily being demilitarized and economy
integrated into the international community. However, Russia's
patrimonial heritage has ensured that corruption and lawlessness are
not a just a passing phase but a systemic problem that is unlikely to
go away anytime soon. "Corruption is an old problem of ours," Yeltsin
said in a recent radio address. "Corruption is like weeds. No matter
how hard you try to get rid of them, they keep reappearing." The
fight against corruption is likely to be a long struggle.

The author is associate director of RFE/RL's Broadcasting Division.




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