Letters from
Peter Vassiliev in Russia
>From Russia, with Love and Squalor - part 2
The place is called REVDA, it is 180 kilometers away from Murmansk, a
city in Russia's North where the convoys of the anti-Hitler coalition
were coming during the second World War.
It is a miners' town with approximately 12 thousand people living there. In the
old, Soviet days, this town saw prosperity, full employment,
growing construction, and its future seemed rather bright. People went there
for better payment, apartments and various benefits, guarante
ed to them by the law as to all those who lived in the Northern territories.
The Revda rare metals processing plant was famous not only in the former USSR
but also abroad. Its production was demanded by the aviation,
space and defense industries. After the collapse of the Soviet Union and further
economic disintegration, Revda lost many of its buyers. It
is at halt now, the plant has not paid its workers for two years now. Its produc
tion is no longer needed, nor used by other Russian industries which are
struggling to survive themselves. A funny thing here is, Revda is not
allowed to sell its product abroad as rare metals are considered a
matter of strategic importance.
The factory and its people have been discarded and abandoned by the
federal authorities. They stopped receiving money from the federal budget
that is guaranteed to then by the law as a Northern territory. The
town continues to live and survives for a third year simply by inertia.
People go to work but they do not work there, nor they are paid for it
The town relies more on the humanitarian aid from Norway rather
than on food supplies from Central Russia.
The town has stock of fuel worth three -- five days. And this is when
winter has already tested Revda's people with its early frosts -30 deg. C.
A woman who has been living in Revda for the past 40 years, said she
fears more
cold weather rather than shortages of food. "We, who still
remember W.W.II, are used to shortages of food but we are terrified by
a possible absence of heating during the coming winter."
All people whom I talked to, said that they "feel abandoned and
betrayed by the
Moscow authorities." The town found itself unneeded by Russia,
and its people ripped of any future for them and their children.
At a local children's hospitals, more than half of their patients are
kids with
pneumonia. The hospital lacks antibiotics and other drugs. When
a new sick kids arrives, we start calling all neighboring clinics trying to
find necessary medicine elsewhere, said the nurse.
The children get two meals a day, mashed potatoes, porridge, bread,
milk and tea. The hospital does not have money to buy meat or diary
products for the sick kids. Only few parents can afford them as well.
As the daily ration of a child either at home or in hospital does not
make any difference.
The tea is served in glass jars as there are not enough cups or
mugs at the hospital. But that does not worry doctors, most of all
they fear the coming winter, and mainly if the hot water and heating
is cut off. Local authorities keep saying it would not happen. But
at the same time they themselves keep their fingers crossed as they
get nothing but promises
from Moscow. So far, Revda has enough fuel to last for five
days. And its mayor did not know when the next supply was
coming.
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Peter Vassiliev worries about the military in this installment...
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IS THE MILITARY READY TO KICK BACK? [part 3]
An officer's wife wrote a letter to a Defense Ministry newspaper,
"The Red Star," accusing the Russian top brass and power elite of destroying her
life and killing her husband. Her family of three lived in a distant
military base in the Siberia. Her husband, like all other officers in his
unit, had not been paid for almost two years. They managed to
survive for a while, borrowing money from their friends and getting money
transfers from their parents until they exhausted all means of help. The
family could no longer buy food for themselves and their 3-year old son.
When the situation became desperate -- no more hopes to get money from
anywhere -- the officer's wife went to a local food story owner and offered
herself in exchange for six jars of canned meat and a loaf of bread. She made
love to the store owner in the back room on the dirty sacks with potatoes,
got her payment, and went home. She continued to sell herself and fed
her family for nearly four months. When her husband learned about it a
few months later, he shot himself, leaving a letter blaming his command and
Russia's politicians for his situation and his death.
Another officer from a tank unit near Nizhni Novgorod, a city 500
kilometers to the East of Moscow, drew his tank out of the hangar
to the city's main square in an open protest against unpaid back wages.
He and his fellow officers did not get paid for more than 18 months. The
unit commander tried desperately to persuade the officer to get back
to his barracks before a number of top military arrived from Moscow to
deal with this situation in Nizhni Novgorod. The officer's action drew a huge
crowd of people, mainly officers' wives and children, who offered him
support and openly accused the top military brass and Russia's power
elite of corruption and stealing their money. The officer threatened to
stay until he and his comrades-at-arms were paid in full for all the months.
His action got an immediate response from the Defense Ministry
which found the money to compensate the back wages for this unit. However,
many of the military and their wives expressed doubt that the situation
would change in other places where officers had not been paid for a period of
18 to 24 months.
The living conditions in such places are awful to say the least.
Most of the officers' families consider themselves lucky if they get one or
two-bed room apartments. But the apartments they get by no
means are appropriate by the sanitary norms to live in. The wallpaper
peels off the walls because of the constant leaks and absence of heating
during fall and in winter time. The temperature indoors goes lower than the
freezing level, and people are forced to use as many heating devices
as possible.
But the electric wiring in such houses, built some 20 or even
30 years ago, could not withstand high voltage currents, and often
short-circuits. Sometimes there is no electricity at all. Russia's
elite helicopter squadron based in Malino, two hours by car from Moscow,
where Yeltsin's helicopters are based, met last New Year by candle light for
a simple reason. There was no electricity on the base for several days.
The pilot's wives told me that they are scared when their husbands
have to fly because many of them work the night shifts at a local meat
farm, loading and unloading trucks with frozen meat. They get paid
some 200 rubles (approximately $10.00) a night, and it is the only money
they get to feed their families. Like in many other places, these officers
have not been paid for several months. Lt. Colonel Alexander Lebedev,
an air traffic controller who just retired after 30 years of the military
service, invited me to his home to show that because of the
constant leaks from the holes in the roof, he had to moves his furniture away
from the walls to free some space for the buckets necessary to collect
the running water torrents. Another officers told me over drinks, "Sometimes
when I lift a combat helicopter, a terrible idea occurs to me, that Moscow is
only twenty minutes away ... "
The situation in the Russian armed forces is scary. General Igor Rodionov,
a former defense minister, who openly accused president Yeltsin
of destroying Russia's defense potential and armed forces, said
that it is "a clock mine which is ticking." And nobody knows how much
time is left till the humiliated and hungry military in Russia remain under
command and control from Moscow.
Sleep in peace.
Respect,
Peter
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Subj: Russia, part 4: Boris the Illogical
One of the people I'm sending these missives to wondered about
how Yeltsin fits into the situation in Russia right now. Peter replies:
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Is it necessary to try to understand what Yeltsin's next step is
likely to e?
No. Especially because no one motivated by human logic can
predict or uess what his next move may be.
Previously Russia's president Boris Yeltsin fought against his opponents,
as well as those he considered his political enemies, like the Communist
opposition, or anti-reformers, or against those who dared to
disagree with him.
Ten years earlier, in 1989, he unleashed a struggle against
the ruling minority of the Communist party, accusing it of the
indecisiveness and lack of action in reforming the USSR. A few years later
it became clear that Yeltsin had made a purely propagandistic move to
win easy popularity.
In 1991, he had the courage to stand up against the
Communist-dominated plot attempting to reverse initial democratic changes
in his country. But many years later it is still unclear what really happened
and what Yeltsin's role in it was. Was it a real plot? If it were why
was Yeltsin not arrested, nor removed as a major political opponent to
the plotters?
In 1993, took an unprecedentedly bold step and dispersed
the Supreme Soviet, dominated by the Communists, which he believed
had blocked his reforms. But one does not need to be a shrewd politician
to understand that the use of military force against your political opponents
means that the crisis had gotten out of your control, and he, Yeltsin,
allowed that to happen. He repeated the same mistake two years later in
Chechnya, which led to a bloody war there.
In 1996, he openly defied the Communist challenge at
the presidential elections and won second term in office. A few months later
independent journalists and observers discovered that it was Russia's
banking capital and big business (seven or ten top financial and industrial
groups) that made Yeltsin's re-election possible.
But at least during those years Yeltsin demonstrated some
sort of political will and made various public appearances. Nothing
of the kind happens now. Yeltsin stays in the hospital and communicates
with his country and other politicians though his press secretary. When
he appears on TV, you cannot even hear what he is saying as all the
pictures are voiced over by a narrator. He no longer sends radio addresses
to the nation. The president is sick, and even worse, he is disabled.
This is political nonsense. A country can not exist when its
president and supreme commander of the armed forces is totally incapable,
and even worse than that, some political analysts are suggesting, Yeltsin
can not adequately react to the events and occurrences. Logically
enough, the president had to disprove that. To be more precise, his
inner circle wanted him to disprove that. What can be done in this
situation when the president no longer has the real power in his hands? The
only logical thing is to fuck up his personal team, his administration.
He can hardly take the risk of antagonizing the State Duma further, nor
could he fire his new cabinet. This could have easily antagonized all of
the power elite in Russia. It would be impossible to explain. But who cares
about a few bureaucrats from his personal administration? They could
be easily sacrificed.
And the desired reaction has been achieved - his action received
a broad public resonance, and once again the media talk about Yeltsin
as the major political figure and decision-maker in this country; whereas,
in reality, he is a very sick and old man who needs to take illogical
steps, dictated to him by his inner circle, in order to imitate political
decision-making. Otherwise, nobody would even remember he is in the
hospital.
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Subj: Russia, part 5: The Emergence of the Barter Economy
DO WE REALLY NEED MONEY?
We all get paid for the work we do, don't we? As a rule, it is
a check, a bank deposit or cash in some instances. Some people win
prize money, expensive cars, etc. People at the bottom of the social
hierarchy often agree to work for food or a place to spend a night.
But can a person get paid for two years of his work
with an airplane? Sure, he can. According to a small air carrier in Ryazan,
there is nothing wrong with it. Especially when the airplanes are old and
the owner does not know what to do with them.
The pilots and technicians from this unit, which seceded
from Aeroflot to become a shareholding company several years ago, have
not been paid for more than 18 months. The company flew rather old, small
planes, mainly to fight forest fires and spray pesticides. Eventually it became
redundant and made no profit as the local farms could no longer not pay for its
services. The pilots and technicians could not quit as there
was no hope for them to find employment elsewhere. With their skills
and training to fly small planes they can hardly expect to enter a large air carrier
company.
In addition to non-payment, the squadron had no fuel and
no spare parts to fix the aircraft. Eventually, only two out of eight planes
were still flying. Six others sat on the edge of the airfield without
engines, wheels, and other parts that had to be removed to keep
the remaining two operational. The Ministry of Aviation, Aeroflot and
local municipal authorities all refused to shoulder responsibility for
the situation. All of them had too many of their own problems to be
interested in getting still another one. Finally, the aviators were told that
they would be compensated for all the months of non-payment and
even for the next year.
The payment was - surprise, surprise - in the form of
the six old broken aircraft. They had to be divided between more than 30 pilots,
technicians and air-traffic controllers. Not that they had to be cut into
pieces. They had to be sold, and the money received would go to the
aviators as their salary.
Ads, small posters, telephone calls, radio messages and
other forms of marketing were used to offer this unusual product,
which by all expectations should not find any demand. However,
two of the planes were sold. But to make these deals possible, the technicians
had to cut off the wings. The fuselages serve now as improvised barns and
tool houses to a couple of local farmers. Their aluminum bodies will last
for centuries, plus they can not be easily penetrated by beggars and
small thieves. What a lovely beautiful solution to a terrible problem of
non-payment amidst a lasting economic crisis.
Russia has become a huge barter state. The producers
prefer to pay with what they produce rather than with the money, especially
now, when most of them experience constant shortages of it. Employees get
parts of the final product as a kind of their payment. There are situations
when people are paid with two micro-ovens every month. Or with three
dozen bras. They themselves have to find buyers for these products.
Or with crystal jars, glasses and china tea cups. You can see lots of them
on the side of the road to Guss-Khrustalni, 80 km from Moscow, offering
the crystal at much lower prices than in the stores. All of them hope to get
some money to buy food or clothes, or medicine for their kids. Such examples
are numerous.
Long live the money-free economy! The former socialist
state economy of the Soviet state has made Marx and his political
economy concepts irrelevant. No need to read Marx any more!!!
Peter Vassiliev
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Corruption and Gratitude: part 6
A lot has been written about corruption in Russia.
And still this phenomenon has not been understood, nor any tangible
mechanism proposed for saving the society from it in the future. At the moment
it looks like the corruption will remain one of the major elements of
Russia's life, no matter whether in business or in personal affairs. Though
here it is perhaps more accurate to talk about gratitude.
Once you talk to any foreigner doing business or coming on
a personal trip to Russia, you'll immediately discover that acts of 'gratitude'
make his or her life much easier. All foreign companies based in Russia
have special gratitude funds. In some cases they can be worth tens
of thousands of dollars a year, and even more. Gratitude can be in a form
of bottles of nice whiskeys or cognacs, boxes of expensive chocolates,
and more precious gifts. They are given to Russian authorities at different
levels to resolve various problems 'nicely' or prevent them from
appearing in the foreseeable future.
A typical situation in a foreign bureau is a visit of a
bureaucrat from the local fire brigade or sanitary controller. Unless you
structure your relationship with them properly, i.e., express your
gratitude to them, problems are guaranteed.
Later you will pay much more to resolve them.
Almost any situation in Russia can be resolved once
your arguments are supported by some kind of gratitude. All drivers are
familiar with the situation when you are stopped by the road police
looking for your money.
It can be a minor traffic violation or some other pretext,
like to check your papers. The experienced drivers know perfectly well
that you can get away with almost everything, even driving while under the
influence of alcohol, but you have to pay them. In each particular case
it is the matter of how much you are ready to offer. For a minor
violation, as a rule, you pay half of the fine in cash to the road police
officer at the spot. And both sides are happy.
Or take the tax problem. For a number of years Russia
has not been able to collect enough taxes to finance its budget. It's little
wonder most businesses prefer to conduct a double accounting,
an official and unofficial one. Say your official salary is 1,000
rubles a month. You are obligated to pay 12% in taxes. At the same time every
month you get an envelope with some $2,000 or 3,000 tax free. In reality
you are supposed to pay 35% in taxes on this money. Some of my colleagues
working for various Russian media told me proudly that they consider
it a personal matter not to pay taxes. "We are not fools. The state has
been robbing us for decades - why should I be honest with it now?"
Or take deals with buying and selling property and lands
in Russia. Both the buyer and seller are required to pay a certain tax after
the deal. But who wants to do this? So they agree on a price, but put
quite a different one than is indicated in the official papers. A lawyer,
for a moderate gratitude, is ready to legalize almost any deal. This means
that a real price for a two-bed room apartment can be $40,000 but on
paper it would be much lower to save you from paying taxes.
Last fall I wanted to buy a small patch of land outside
Moscow to start a construction of a summer house for my family. We were
dealing though my friend's friends and until the very last minute I had no idea
about what kind of scam I might find myself in. We struck the deal and
I was ready to pay a little more than an average at the market. But we
loved the district and had already chosen a construction company to start
our would-be house. However, the deal was never finalized. To my astonishment
I was told that the official property papers would quote a price 100 times
lower than the one I had to pay. But it was not over yet. I learned that the
lower price was the 'official,' while the higher was purely the
black-market price, called by the other part "the market price."
An official estimate of the illegal capital flow in Russia is
approximately between $60 and $80 billion a year. At the same
time Russia has been desperately trying to get stabilization loans from the
IMF and World Bank worth $4-8B for 1999. What kind of sense are
we talking here?! The best help the West can offer Russia at the moment is
to stop financing its growing corruption and stop helping to launder the
illegal capital secretly shipped abroad, mainly to a number of European
and off-shore banks. When the famous Russian historian Solovyev was
asked more than 100 hundred years ago about his very brief definition of
Russia, he said "Thieves around you." It looks like nothing has changed.
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Subj: Russia, part 7: Fiddling While Rome Burns
IS THERE AN ANSWER?
To say that Russia is a society that can be analyzed or explained as a
system means making a claim which can easily destroy the researcher or
make a poor mockery out of him. All schemes or analyses are valid for a
limited time only or as a small part of still a larger whole
which isBEYOND human understanding.
Everybody knows that Russia is going through a sharp economic crisis: many
industries do not work, people are not paid, the national
currency (the ruble) is collapsing, and prices are rising. If you open
any newspaper,you'll see terrible stories about people not being able
to buy food or pay the rent. I have seen such people and heard their sad
stories myself while traveling some time ago. You came back to Moscow and it
looks like you have gone abroad. The city lives its lavish and cheerful life,
ignoring the crisis and the hungry and ill people in other places.
When you see the city's glamour, expensive cars, newly
built houses in the city and outside it, numerous presentations and
celebrations, endless fashion shows and expensive boutiques, the nightlife
and TV gambling with a handful of people winning or losing yearly earnings
of an average person living outside Moscow, and so on, your immediate
reaction would be, 'Wait a minute, am I hallucinating?'
Try to buy a holiday tour to any nice hotel or resort
outside Moscow. All of them are gone long before the holiday season. It is much
cheaper to go for six weeks to Prague than to spend three days at a
near-Moscow resort. Go shopping, and you'll be amazed how much people
are spending and what kind of things they buy as New Year gifts. Of course,
this happens only in Moscow, and perhaps in St.Pete. But not elsewhere
in Russia. Here is my question: 'What is supposed to happen to this city,
its people and especially to its leaders when hungry and mad people
from the periphery start pouring in, or worse, decide to storm it?' No comment.
Moscow's Mayor Yuri Luzhkov has restored the Christ
the Savior Cathedral destroyed by the Bolsheviks. Even by the most moderate
estimates its price is $80M, and it the works are not over yet. Yeltsin has
attended its opening ceremony, turned into a huge event with the
consequent banquet.
This cathedral becomes a monument to Russia's
power elite stupidity, shortsightedness and greediness. They spend tons of
money on their political campaigns and other attributes of power
and prestige, leaving thousands and thousands of people to freeze and
starve in the Northern territories. Officers do not get paid what little they
are supposed to receive in time but Yeltsin's top generals live in country
houses worth a million dollars each. Ex-defense minister Pavel Grachev,
who was removed for incompetence and the inability to exercise proper
management of the armed forces, occupies a house he would have not been
able to pay for even if he put together his life's earnings.
Where does the money come from? Where does the next credit from the West,
if granted, go to? If it is not clear yet, it goes to finance
Russia's crony capitalists who continue to represent this
country's political elite.
Peter Vassiliev
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Peter Vassiliev wonders if Russia's leadership might see the
need for a familiar and common enemy in order to squelch domestic
unrest....
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COMMON ENEMY AS UNITING ELEMENT [part 8]
The Russian Communists and hard liners could not be more
grateful to the U.S. president right now, nor could they expect a better time
for the return to Cold War politics. One may disagree with my logic
or say I amtoo pessimistic but let's face the facts.
Russia's Northern Navy has been put on high alert. President Boris Yeltsin
held extraordinary consultations with his defense minister,
chief of the General Staff and his national security advisor. Russia's
Foreign Ministry, under instructions from the Prime Minister,
demanded an extraordinary session of the UN Security Council. The
State Duma started its morning session with a minute of silence and
condemned the U.S. and British 'brute aggression' against Iraq. One of the major
Russian MPs immediately stated that now the START-II ratification
by Russia's parliament was ruled out. Yeltsin is expected to come
out later today with a strong statement, condemning the U.S. strikes on Iraq.
Russia is just one step away from entering another period of 'Cold War'
against the West.
For centuries the Russian people lived under the readiness
to oppose aggression from the East or the West. As soon as this idea
disappeared with the collapse of the Berlin Wall, the society lost its
strongest unifying element and began disintegrating. The society
lost the idea of unification - it started to be torn apart by numerous
internal contradictions, including ethnic and regional ones, which
previously had been easily controlled by a common defense factor, as well
as the need to counter aggression. Russia can not be governed by free
market mechanisms,nor by liberal or democratic ideas, because its public
consciousness sees such ideas as foreign. But it can easily be governed by the
idea of war time mobilization.
The former USSR was a huge military and defense machine.
Its economy, politics and social life all were built and manipulated for
the sole purpose of withstanding competition from the West and
countering aggression. The whole country lived according to the
mobilization plans: from their school years until their last days people lived
with the readiness for permanent sacrifices. Whether personal or
financial, as a community or society, they were ready to live deprived of
human and social needs in order to survive the arms race and be able to
strike back.
Any sacrifice can be easily motivated by national or
high political interests, especially if such are deeply rooted to the
mass consciousness.
The Soviet, and currently Russian society is psychologically
ready to live under economic difficulties for the sake of some 'high
political values or goals,' which in reality may be purely false or cynical.
It becomes so easy to govern and control the society that becomes
homogeneous whet it faces a 'common enemy.'
The United States makes a perfect common enemy
because it is rich and decadent by Russian mass consciousness stereotypes,
and secondly, it was Russia's enemy not long ago. Once it becomes clear
that the political, economic and social reforms are not working in this
country, it will be just a matter of time before we see a shift in Russia's
foreign policy, and especially in its approach to the West. In the face
of a common enemy all economic and social problems can easily be written
off as political imperatives. Yesterday's U.S. strikes on Iraq may give
Russia a legitimate excuse to return to Cold War in its politics, economy
and social sphere.
Peter Vassiliev
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MEET THE NEW BOSS, SAME AS THE OLD
BOSS [part 9]
The problem of corruption among high governmental
bureaucrats in Russia, as well as the broader issue of corruption generally,
has become a terrifying and devastating factor in Russia's life.
They are called the Fathers of the organized criminal groups, the Red
Mafia, the Oligarchs, etc. Who are they? What makes it possible for them to appear?
The existing system of power invites corruption, financial
crimes and abuses in Russia, a point I'll explore in a series of pieces
examining the problem of corruption in my country.
A month ago Gregory Yavlinsky, a Liberal member of
parliament and potential candidate for the presidency, sent an open
letter to the prime minister stating that the country's power elite is corrupt
and guilty of numerous financial abuses. The letter posed several
questions to prime minister Evgeni Primakov, inviting him to think about
the commercial activities of his four deputies:
In part, Yavlinsky raised the following issues:
-- Whether vice-premier Maslyukov has been involved in
commercial activities while serving as the vice-premier in the cabinet,
and whether he let anyone know about his side activity?
-- Whether the cabinet has already made any decisions
regarding the companies whose interests Maslyukov or his relatives
represented or lobbied?
-- Why did Maslyukov grant a special status to the
VympelCom company on 9/16/98 without announcing a tender or competition, as
required by law?
-- Whether Primakov or other governmental officials were
aware of the commercial activities of another vice-premier, Kulik, when
offering him his present job?
-- What is known about Kulik's involvement with a Swiss
company NONA, and an agreement with this company he signed on 4/12/91?
-- Whether Kulik was involved in any illegal transfers of
federal funds abroad while he headed the RossInterBank during 1993-96?
-- Whether Kulik was involved in transferring funds granted
to the Ministry of Agriculture from the federal budget to a private
company, Expa, in 1998?
Questions were also raised about Vadim Gustov, formerly
the governor of the Leningrad region, currently serving as a vice-premier in
the Russian cabinet. Namely,
-- Whether he granted special status to a number of
commercial companies in his region, and benefitted from that?
-- What was his role in building the Ust-Lug sea port
in his region? The money was allotted but construction on the site has
not been finished yet. The excuse? Absence of financing.
Yavlinsky waited for a month but did not get a reply
from the cabinet, though the Procurator General acknowledged that
corruption in the high echelons of power "has become a huge problem in
Russia." Only after Yavlinsky said in a radio interview a week ago that,
"No answer to his letter is an answer in itself," did the cabinet reply,
promising to study the problem. Would it be really studied? All the
bureaucrats named by Yavlinsky serve as high governmental officials, and they
supervise the activities of the state security bodies, the Interior
Ministry and Procurator's Office.
Nice deal - an accused man is instructed to catch himself.
There is no doubt that the documents which could have proved the
involvement of these men have already been destroyed. And Yavlinsky's letter
will remain, but no action will be taken.
The political power in Russia creates opportunities for
enrichment and wealth, and it allows corrupt officials to effectively
eliminate public and social accountability in decision-making. For centuries
Russia existed as a state built according to a principle of power which gave
the ruler or a group of rulers ultimate decision-making authority in all
spheres of political life. It remained the same under the Bolsheviks,
and survives now during the Yeltsin presidency - the Russian power
elite still comprise a closed sect, exercising the unrestricted authority and
decision-making.
Peter Vassiliev
(
geocities.com/capitolhill)