idbits, April 4.

Deputy U.S. Treasury Secretary to World bank says 80% of all Russian businesses make payments to criminal organizations.

242.5 MILLION IN U.S. AID STOLEN IN LONDON. Police are investigating yesterday's theft of $2.5 million in U.S. government aid bound for Moscow from New York. World bank disbursements to Russia are now running at the rate of $70 million per month as compared with $25 million per month in 1996. Last previous Tidbit posting March 8th. Kirkland, WA USA - Last previous Tidbit posting March 8th. Deputy U.S. Treasury Secretary to World bank says 80% of all Russian businesses make payments to criminal organizations. Total capital inflows into Russia, CIS, Eastern Europe from 1991-1995 were less than one day inflow into U.S. mutual funds. Russian "Registrars" owned by the issuers have been known to erase shareholders and decertify ownership. Virtually all Russian stock trading is executed over-the-counter and settled off-shore

Louise Shelly Professor at American University, department of Justice, law and Society, Washington D.D.

The world's drug traffickers repatriate most of their profits, In contrast Russian organized crime deposits proceeds in foreign bank accounts. 40% of flight capital is attributed to organized crime, an estimated $1 billion monthly. Duty is paid on only 35% of imports. Hundreds of Russian banks are owned by organized crime and are laundering money. Organized crime acquired 40% of the economy during privatization using close ties to the Communist party elite (nomenklatura). New owners of businesses drain the resources and transfer them abroad.

Central banks in the Balkans will be dumped..................

Central banks in the Balkans will be dumped and replaced by currency board systems regulated from outside their borders by trustees. Look for Russia to also end up making this necessary decision. A currency board system cannot earn extra revenue from printing money or-by creating credit or inflation. Fiscal authorities and state owned enterprises cannot obtain credit from monetary authorities in countries which has currency boards. the currency boards are being mandated by IMF and represents a historic deviation from IMF orthodoxy, thank God. Expect this realism to increase bankruptcies and further reduce GDP.

Some say that declines in GDP and population.................

Some say that declines in GDP and population incomes in Russia have been overstated. The cost of living increased 670 times in Russia between 1992-1996. The nominal dollar-ruble exchange rate increased only twenty-six times. The real exchange rate thus rose more than 20 times. As a result the real wage that was $7 in 1992 is now worth $160.00. But the purchasing power of the worker's salary in terms of domestic goods has decreased. The increased consumption of durables is not necessarily indicative of an increase in real incomes.

World bank disbursements to Russia are now running at the rate of $70 million per month as compared with $25 million per month in 1996.

The IMF wants Russia to add $17 billion in federal wage and pension arrears to its calculations of budget deficits. The budget passed Jan 24th calls for $94.3 billion is expenditures and revenue estimates of $77 billion, and a budget deficit of 3.5% of GDP ($490 billion). That would bring the deficit to 7% of GDP Tax revenues are projected at $66 billion an estimate that is unrealistic. Everyone will pretend IMF requirements are being met.

Compulsory registration of Russian citizens made stricter.

One of the conditions for Russia's admission to the Council of Europe was the abolition by the Russian authorities of restrictions on freedom of movement within the country. The main document, that is the basis of the operation of "registration," is a resolution of the Russian government of 17 July 1995 #713, with the long title "On the confirmation of the rules of registration and the recording citizens of the Russian Federation on the registration record for place of stay and for place of residence within the boundaries of the Russian Federation and the list of officials responsible for registration."

The essence of this voluminous document is that any citizen in Russia traveling to a new place for a period of more than 10 days, must within 3-7 days register with the organs of the Interior Ministry or with institutions accountable to it.Above all the preservation of the propiska system (though under a different name) justifies the preservation of the enormous police-bureaucratic apparatus engaged solely in the registration of citizens and the collection of the duties and taxes required by law. What does the Council of Europe want and what does it hope for? For the gradual abolition of norms that flout human rights? This is the response of the chairman of the Russian Federation government, V.Chernomyrdin - resolution #172 of 14 February 1997 "On the introduction of amendments to rules of registration..." One must admit that nothing sensational happened. There is fine-tuning of the text, and formulations are made more specific. Instead of "might be refused," it now runs "is refused." The words "as a rule" are now omitted from the text. The rules have become a little more rigid, but not so much as to produce anxiety from these amendments alone. The point is, however, that the rules of registration are not being abolished, but perfected! The government is blatantly scorning the recommendations of the Council of Europe. It is not embarrassed about sharpening a mechanism for violating human rights. This petty, unnoticed resolution demonstrates to all the world how the Russian government regards its own obligations, how it intends to continue violating human rights, and whose interests are given priority by this government.

U.S. ADMINISTRATION WANTS TO INCREASE AID TO FORMER SOVIET UNION.

In testimony to Congress on 11 March, Ambassador Richard Morningstar called for a 44% increase in U.S. aid to the Newly Independent States next year. Aid spending would rise from $625 million in 1997 to $900 million in 1998, while spending on Russia alone would go from $95 million to $225 million. Total U.S. aid to the NIS peaked at $2.5 billion in 1994, falling to $850 million in 1995 and $641 million in 1996. Rep. Benjamin Gilman, chairman of the House International Relations Committee, said he was doubtful Congress would support the requested increase, Reuters reported. Gilman said "We do not have any kind of 'partnership' at this point with the current government in Moscow," and objected to the idea of increasing aid in return for Russian acquiescence in NATO expansion. Morningstar said the aid program "has nothing to do with NATO expansion," VOA reported. -- Peter Rutland

People are asking ..

Why did this story die and why didn't the U.S. press cover it. It is indeed It's fascinating. Those who did cover the story London Times March 3,, AFP Penny Morvant, LONDON (AP), 242.5 MILLION IN U.S. AID STOLEN IN LONDON. Police are investigating yesterday's theft of $2.5 million in U.S. government aid bound for Moscow from New York. The money disappeared from a loading bay at London's Heathrow airport. The money, believed to be in $100 bills, was part of a $10 million consignment and came from New York's Republic National Bank, one of the banks the U.S. government uses to deliver aid payments. Cash delivery is said to be Moscow's preferred way to receive such consignments. (AP, The [London] Times, March 3) other reports said the shipment was bound for Moscow-based Tokobank. On 3 March, however, the U.S. embassy in Moscow denied that USAID money had been stolen, AFP reported. "This story, as reported, is not credible," Richard Hoagland press spokesman for the U.S. Embassy in Moscow said. A Scotland Yard spokesman, speaking on condition of anonymity, said the Mail report was ``broadly true,'' except for the fact that the cash's final stop might not have been in Moscow.

Subject: Gazeta Wyborcza Chied Editor Adam Michnikon NATO 22Frank Kramer, deputy secretary of state for defense, who received me in the Pentagon, told me one thing very clearly: "The decision to enlarge NATO has already been made."

Yeltsin's son-in-law to head Aeroflot MOSCOW, March 12 (Reuter) - President Boris Yeltsin's son-in-law was named acting head of Aeroflot, Russia's state airline, on Wednesday. Okulov's appointment needs the approval of shareholders. The state owns 51 percent. Its 14,000 employees hold the rest. Okulov, 45, flew as a navigator on Aeroflot airliners for 20 years before entering the top management in June 1996. He and Yelena have a teenage daughter and a son, also known as Boris Yeltsin, who entered to a private school in England last year.

Selskaya Zhizn Newspaper March 4, 1997 "We have already heard voices calling on the head of state to simply dissolve the Duma and dismiss the government. In other words, the president is being advised not to stand on ceremony too much with the democratic formalities. At the same time, the country would only stand to gain if the president put an end to the completely unnecessary duplication in the activity of the top organs of state power, whereby you might say that two governments are functioning in parallel -- one in the Kremlin and one in the White House. Think what you like about the activity of I. Stalin, but the high effectiveness of his rule ensued in many respects from the fact that the party apparatus only helped carry out the decisions already reached by the government."

Obshchaya Gazeta, No. 9 March 6-12, 1997 The cadres are selected based on the rules of political struggle -- to counterpoise, to pressurize, to outsmart, and to cut off the oxygen supply -- rather than on the caliber of the job. What matters is who you support, rather than what your abilities are. The country has found itself in a situation whereby it is experiencing the lack of the idea to serve as the basis for the formation of the government. Only one thing remains sensible: a state of panic. Politization of the capital and the redistribution of property that took place have shifted political accents in the corridors of power. It is not the capital that goes to the political forces, but the political forces that are attracted to the capital as if to a magnet. No matter how dirty it is. The president's silence is astonishing. Even as his recent entourage is being accused of corruption and links to the criminal world, committing attempted murders and even assassinations. The premier's silence is no less telling, since the matter concerns his first deputy of the recent past and one of the ministers of the cabinet. The public expects either denial or admission.

Nezavisimaya Gazeta March 11, 1997 says Chernomyrdin's humbleness is explained be the fact that he has been promised he will be Boris Yeltsin's successor as President.

Don't count on it.

They go on to say the organization of Yeltsin's re-election campaign cost between 35 billion and 40 billion dollars, in accordance with the most modest estimates.

That's half of total international combined air to Russia in the past five years."

They indicate Chernomyrdin's position is far from secure. Yeltsin's health and the economy can be expected to deteriorate, with no constructive change in course and that Yeltsin would like to abandon democratic appearances altogether. Meanwhile they say 89 provinces are getting socially unstable.

The predict tax collections will continue to get worse. I think by By April the budget will run dry.

They report the Russian government has ordered military forces to identify the most reliable units that could be sent to suppress social unrest in the provinces and that communication and notification systems, to be used if local authorities refuse to obey, have also been specified. According to Nezavisimaya Gazeta, Chubais' special unit has allegedly worked out a special military map and a mobilization plan and politcal measures are being developed to deal with the media in that eventuality. They say the Presidential Staff is being especially worried by the growing probability that oil and gas main pipelines, as well as transportation routes, will be blocked by hungry regions.

Further they report that sources from Washington report that the main aim of U.S. Secretary of State Allbright's proposals is to attain Russia's consent in principle to the extension of NATO's jurisdiction (bilateral charter) to the Newly Independent States regions and would in that eventuality be able to take Russian nuclear, chemical, and bacteriological facilities under their control. They report it is also planned to use Ukrainian forces in this operation, which is the subject of intensive negotiations with Kiev....

They further report that according to information from analytical units of special services, Chubais' group has worked out a number of priority tactical operations aimed at playing off power agencies (the Interior Ministry [MVD], the Federal Security Service [FSB], and the Defense Ministry) against one another. These actions should separate them and so win them over when social confusion reaches its peak. In this connection, arrests of FSB officers by the MVD's special structures were initiated. At the same time, documents concerning senior MVD officers were transferred to the FSB, and information on the Federal Government Communications and Information Agency [FAPSI] and other agencies was submitted to the military prosecutor's office. Moreover, within the next few weeks it is expected that Rodionov's agency will be subjected to massive financial audit and several generals, who are close to Rodionov, will be arrested....

Nezavisimaya reports further that according to reports from foreign financial and banking circles, it should be expected that in the next few weeks there will be massive sales of shares of Russian enterprises due to the growing uncertainty of the situation regarding the government and Yeltsin himself. Against this backdrop, the liquidity crisis in the seven pro-Chubais banks is becoming ever more prominent. This results in the intensification of efforts to find large foreign buyers of Russian property and natural resources, with the interest of the West to Russia waning away....

<- To Tidbits March 4
To Tidbits May ->