DATE=10/10/98 TYPE=ON THE LINE NUMBER=1-00677 TITLE= THE CONTINUING CRISIS IN RUSSIA EDITOR=OFFICE OF POLICY - 619-0037 CONTENT= THEME: UP, HOLD UNDER AND FADE ANNCR: ON THE LINE -- A DISCUSSION OF UNITED STATES POLICIES AND CONTEMPORARY ISSUES. THIS WEEK, "THE CONTINUING CRISIS IN RUSSIA" HERE IS YOUR HOST, ROBERT REILLY. HOST: HELLO AND WELCOME TO ON THE LINE. THE CRISIS IN RUSSIA IS INTENSIFYING. RUSSIA HAS DEFAULTED ON ITS FOREIGN DEBTS. THE RUSSIAN STOCK MARKET HAS VIRTUALLY COLLAPSED. THE RUBLE CONTINUES ITS DECLINE IN VALUE, AS INFLATION ACCELERATES. THE NEW GOVERNMENT OF PRIME MINISTER YEVGENY PRIMAKOV HAS YET TO OFFER A PLAN TO ADDRESS THESE PROBLEMS. SOME OBSERVERS THINK RUSSIA IS ON THE VERGE OF ECONOMIC AND POLITICAL BREAKDOWN. OTHERS THINK THE COUNTRY WILL SOMEHOW MUDDLE THROUGH. JOINING ME TODAY TO DISCUSS THE CONTINUING CRISIS IN RUSSIA ARE THREE EXPERTS. ANDERS ASLUND IS A SENIOR ASSOCIATE AT THE CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE. PAUL GOBLE IS ASSISTANT DIRECTOR OF RADIO FREE EUROPE/RADIO LIBERTY AND A SPECIALIST ON THE FORMER SOVIET REPUBLICS. AND HERMAN PIRCHNER IS PRESIDENT OF THE AMERICAN FOREIGN POLICY COUNCIL. WELCOME TO THE PROGRAM. ANDERS ASLUND, HOW DO YOU ASSESS THE DEPTH OF THE CURRENT CRISIS IN RUSSIA? ASLUND: I THINK IT'S VERY BAD, INDEED. AND NOW, THE FINANCIAL SYSTEM HAS MELTED DOWN. YOU CAN'T PROCESS PAYMENTS THROUGH THE BANKS. THAT MEANS IT MAKES NO SENSE TO SEND ANYTHING, TO TRY TO GET PAYMENT. PEOPLE ARE NOT IMPORTING ANY LONGER. THEY ARE NOT DELIVERING WITHIN THE COUNTRY. SO NOW WE ARE SEEING THE COLLAPSE OF A REAL ECONOMY. AND PARTICULARLY IN THE MODERN URBAN MONETIZED ECONOMY, WE ARE SEEING A TOTAL COLLAPSE. HOST: BUT HOW MUCH OF THE ECONOMY WAS MONETIZED? ASLUND: ADMITTEDLY, ONLY A QUARTER OF THE INTER-ENTERPRISE TRANSACTIONS WERE IN MONEY. BUT YOU CAN SAY THAT THIS IS THE BEST PART OF THE ECONOMY. AND, OF COURSE, THIS HAS REPERCUSSIONS. SO, G-D-P [GROSS DOMESTIC PRODUCT] IS FALLING BY AT LEAST TEN PERCENT AT AN ANNUAL RATE RIGHT NOW. HOST: PAUL GOBLE, WHAT IS YOUR ASSESSMENT? AND I WILL QUOTE YOU A REMARK MADE TO ME BY ONE RUSSIAN ECONOMIST, VITALY NAISHUL, SEVERAL MONTHS AGO, SAYING RUSSIA IS MORE STABLE THAN HER GOVERNMENT. AND IN FACT HE POINTED TO THE FACT THAT AT LEAST HALF THE ECONOMY IS IN THE SHADOW ECONOMY SECTOR AND, THEREFORE, THERE'S MORE GOING ON THAN MEETS THE EYE. GOBLE: I WOULDN'T DISAGREE WITH THAT ASSESSMENT. BUT I THINK THAT THE PROBLEMS THAT ANDERS ASLUND HAS POINTED TO SUGGEST THAT THIS CRISIS IS VERY FUNDAMENTAL, INDEED. WHILE RUSSIA MAY BE MORE STABLE THAN MEETS THE EYE, SHE IS STILL REMARKABLY UNSTABLE. WE HAVE A GOVERNMENT THAT IS NOT IN EFFECTIVE CONTROL OF THE COUNTRY, INDEED THAT HAS NOT YET BEEN FULLY FORMED. IT IS UNCERTAIN THAT, IF IT GIVES AN ORDER, WHETHER ANYONE WILL OBEY. IT'S NOT ONLY THAT THERE'S BEEN A MELTDOWN OF THE RUSSIAN ECONOMY, BUT THERE IS NO LONGER AN EFFECTIVELY FUNCTIONING GOVERNMENT OR STATE ON THE TERRITORY OF WHAT WE CALL THE RUSSIAN FEDERATION. HOST: HERMAN PIRCHNER, IF WHAT PAUL GOBLE JUST SAID IS TRUE, WHY ISN'T THERE MORE OF AN UPHEAVAL? WE KNOW THAT LAST WEDNESDAY THE LABOR UNIONS AND THE COMMUNIST PARTY DECLARED FORTY MILLION PEOPLE WOULD BE MARCHING ACROSS RUSSIA AND IN MOSCOW. AND WE KNOW ONLY A VERY SMALL PERCENTAGE OF PEOPLE SHOWED UP FOR THOSE PROTESTS. WHY ISN'T THERE MORE OF AN UPROAR IF THE PLACE IS IN COLLAPSE? PIRCHNER: BECAUSE IN DAILY LIFE, PEOPLE ARE FINDING THEIR WAY AROUND THE CHAOS. THOUGH THERE WERE PROBLEMS INITIALLY WITH FOREIGN GOODS COMING INTO MOSCOW, THE MAJOR FOREIGN IMPORTERS ARE AGAIN PUTTING FOOD AND OTHER PRODUCTS ON THE WATER THAT ARE BEGINNING TO ARRIVE THROUGH SLIGHTLY DIFFERENT WAYS AND [WITH] SLIGHTLY DIFFERENT FINANCING THAN OCCURRED BEFORE THE COLLAPSE. IF PEOPLE WERE HURTING, OR IF THEY BEGIN TO HURT SERIOUSLY, YOU WOULD HAVE A LOT MORE THAN A FEW TENS OF THOUSANDS OF PEOPLE IN MOSCOW. HOST: ANDERS ASLUND, WHEN WE SPOKE LAST SUMMER, YOU TOLD ME THAT YOU THOUGHT THAT THE GOVERNMENT OF THEN-PRIME MINISTER SERGEI KIRIYENKO WAS PROBABLY THE BEST REFORM GOVERNMENT THAT RUSSIA HAD HAD. HOW DO YOU ASSESS NOW THE GOVERNMENT THAT YEVGENY PRIMAKOV HAS ASSEMBLED? ASLUND: CORRESPONDINGLY, THE WORST RUSSIA HAS HAD SINCE 1991. THIS IS VERY MUCH THE LEADERSHIP FROM [MIKHAIL] GORBACHEV'S LAST GOVERNMENT. HOST: SO THIS IS PERESTROIKA ALL OVER AGAIN. ASLUND: YES, AND IF YOU LOOK UP FIRST DEPUTY PRIME MINISTER YURI MASLYUKOV'S PROGRAM, IT IS VERY MUCH THE SAME THING HE PUSHED IN 1990. THE MAN HASN'T LEARNED ANYTHING. HE HASN'T FORGOTTEN ANYTHING. HE'S TRYING THE SAME THING ONCE AGAIN IN SPITE OF EVERYBODY KNOWING THAT THIS DOESN'T WORK. HOST: AND HE RAN GOSPLAN, WHICH WAS THE ORGANIZATION THAT CENTRALLY CONTROLLED THE ECONOMY BACK IN THE SOVIET ERA. ASLUND: YES, INDEED. AND NOW FOR THE LAST QUARTER OF THIS YEAR, HE PROPOSES A BUDGET WHERE THE BUDGET DEFICIT IS BIGGER THAN THE FEDERAL REVENUES. AND HE WANTS TO CONTROL PRICES, EMIT MONEY, RATHER THAN COLLECT TAXES, NATIONALIZE A LOT OF THE BANKS, CONTROL EXPORTS AND IMPORTS. DOING ALL THE MISTAKES THAT WERE DONE IN 1991 ONCE AGAIN. HOST: PAUL GOBLE, EXPLAIN TO ME THE POLITICS OF THIS. WHY WOULD RUSSIA NOW TURN TO A GROUP OF MEN WITH A PROVEN RECORD OF FAILURE? THE LAST TIME MR. [VIKTOR] GERASHCHENKO RAN THE CENTRAL BANK INFLATION WAS HYPER-INFLATION. GOBLE: ONE RUSSIAN PROVERB HAS IT THAT TO A DROWNING MAN, A SNAKE LOOKS LIKE A STICK. WHEN THINGS ARE AS BAD AS THEY ARE NOW, PEOPLE IN THE POLITICAL CLASS ARE REACHING OUT IN DESPERATION FOR SOMETHING. THE LAST TIME THERE WAS SOME STABILITY. MOST OF THE RUSSIAN PEOPLE ARE IGNORING THE POLITICAL SYSTEM. THE REASON THEY DIDN'T GO IN THE STREETS LAST WEEK IS BECAUSE THEY NO LONGER SEE POLITICS AS THE BEST WAY TO PROSECUTE THEIR OWN INTERESTS. THE STATE ENTITIES ARE SIMPLY CASTING AROUND FOR YET ANOTHER CAST OF CHARACTERS. THIS IS A MINISTERIAL CHECKERBOARD, WITH PEOPLE BEING MOVED AROUND. WE HAVE A GROUP IN OFFICE TODAY THAT I HAVE NO CONFIDENCE WILL BE THERE IN TWO MONTHS OR SIX MONTHS. THIS POLICY, AS ANDERS ASLUND HAS MADE VERY CLEAR AND I COMPLETELY AGREE, IS GOING TO FAIL. IT'S GOING TO FAIL RATHER QUICKLY. AND IT'S GOING TO BE OBVIOUS THAT IT FAILS. AND THEN WE WILL SEE YET ANOTHER CAST OF CHARACTERS. MEANWHILE, AS YOU POINT OUT, THE RUSSIAN PEOPLE ARE GOING TO BE OPERATING BELOW THIS POLITICAL DISASTER AND TRYING TO FIND SOME WAY OUT. WHEN THOSE TWO THINGS WILL COME TOGETHER AND IF THAT WILL LEAD TO AN EXPLOSION OR RESOLUTION IS VERY DIFFICULT TO SAY BECAUSE IT DEPENDS NOT ON THIS PARTICULAR GROUP OF PEOPLE, WHO ARE NOT GOING TO SUCCEED, BUT ON SOME SUBSEQUENT ARRANGEMENT OF POLITICAL FORCES IN THE REGIME, IN THE ECONOMY AND IN THE POLITICAL SYSTEM THAT MAY COME TOGETHER OR, ALTERNATIVELY, MAY SPLIT APART, LEADING TO AN EVEN DEEPER CRISIS. HOST: HERMAN PIRCHNER, WHAT'S YOUR POLITICAL READ ON THAT? PIRCHNER: I AGREE. I THINK THE CURRENT GOVERNMENT WON'T STAND THERE VERY LONG BECAUSE THEY CAN'T SOLVE THE PROBLEMS. AND THE QUESTION IS, WHAT COMES AFTER THEM? IS IT ANOTHER GOVERNMENT UNDER PRIMAKOV? OR DO WE END UP WITH A SITUATION WHERE [PRESIDENT BORIS] YELTSIN, AFTER ALL, RESIGNS BECAUSE OF ILL HEALTH. YOU KNOW, THE RUMORS IN MOSCOW OF HIS HEALTH THE LAST WEEK WERE SO SERIOUS IN THE RULING CIRCLES THAT HIS WIFE WENT ON TV JUST BEFORE THE DEMONSTRATIONS TO REASSURE THE NATION THAT HIS HEALTH WAS OKAY. SO I DON'T THINK WE CAN EVEN COUNT ON YELTSIN STAYING AROUND. SOMEBODY ELSE WILL COME EITHER UNDER PRIMAKOV OR MAYBE NEW PRESIDENTIAL ELECTIONS. HOST: MEANWHILE, A NUMBER OF THE REGIONS OF RUSSIA ARE TAKING MATTERS INTO THEIR OWN HANDS AND TRYING TO ADDRESS THIS PROBLEM. AS WE KNOW, GENERAL [ALEXANDER] LEBED, NOW THE GOVERNOR OF THE KRASNOYARSK REGION, HAS DECLARED WAGE AND PRICE CONTROLS ON SOME COMMODITIES IN HIS REGION. AND OTHER REGIONS OF RUSSIA HAVE DONE THAT AS WELL. WHEN WE TALK ABOUT 1990-1991 AS THE GRAVE CRISIS THAT CONFRONTED THE SOVIET UNION AT THAT POINT, IT ENDED UP WITH THE DISSOLUTION OF THE SOVIET UNION. WHAT DANGERS EXIST, BECAUSE OF THE GRAVITY OF THIS CRISIS, FOR THE SURVIVAL OF RUSSIA? ASLUND: ECONOMICALLY, WE ARE ALREADY SEEING THE SAME PROCESS. THE FEDERAL TAX REVENUES IN SEPTEMBER WERE ABOUT HALF OF THE FEDERAL TAX REVENUES IN JUNE. AND THIS IS A MASSIVE DECLINE. SO WE CAN SAY FROM NOW ON, THE FEDERAL CENTER WILL HAVE TO LIVE ON EMISSION. HOST: WILL HAVE TO LIVE ON? ASLUND: PRINTING MONEY. THEY CAN'T COLLECT TAXES. AND INCREASINGLY THEN, REGIONAL GOVERNORS ARE TAKING OVER THE TAX COLLECTION AND LEAVING NOTHING FOR THE FEDERATION. HOST: AND KEEPING THE REVENUES. ASLUND: YES, AND THEY ARE ALSO PAYING THE MILITARY. THEY'RE PAYING LAW ENFORCEMENT TROOPS AND THEY ARE CONTROLLING PRICES AS YOU MENTIONED. AND THEY'RE ALSO BLOCKING EXPORTS OF FOOD FROM THEIR REGION. SO POOR NORTHERN RUSSIA CAN'T GET FOOD FROM ANYWHERE. IMPORTERS ARE NOT IMPORTING FOOD BECAUSE THEY DON'T KNOW AT WHAT PRICES THEY WILL BE ALLOWED TO SELL. SO WHY IMPORT IF YOU THINK THAT YOU WILL FORCED TO SELL FOR HALF THE PRICE YOU'VE PAID FOR YOUR PRODUCT. AND OTHER PARTS OF RUSSIA ARE NOT ALLOWED TO EXPORT FOOD TO NORTHERN RUSSIA EITHER. SO WE ARE LIKELY TO GET PARTS OF RUSSIA WHERE FOOD IS NOT FORTHCOMING. HOST: PAUL GOBLE, THIS IS A SUBJECT IN WHICH YOU ARE EXPERT. WHAT ARE THE DANGERS OF DEVOLUTION? GOBLE: I THINK THE MOST IMPORTANT THING TO UNDERSTAND IS THIS IS A REGIONAL PROBLEM RATHER THAN AN ETHNIC PROBLEM. IT IS NOT SO MUCH ETHNIC CHALLENGES FROM THE NORTH CAUCASUS AS RUSSIAN REGIONAL CONCERNS. AND WHAT IS MAKING THIS MUCH MORE SERIOUS, AND WHICH THREATENS THE INTEGRITY OF THE RUSSIAN STATE AT SOME POINT, IS THAT INSIDE THE RUSSIAN GOVERNMENT THERE ARE DISCUSSIONS NOW GOING ON ABOUT REDRAWING REGIONAL LINES. THIS IS BEING PUSHED BY MAYOR [YURI] LUZHKOV OF MOSCOW AND SOME OTHERS WHO WOULD REDUCE THE NUMBER OF REGIONS FROM THE CURRENT EIGHTY-NINE TO TWELVE OR FIFTEEN. ONE OF THE CONSEQUENCES OF THAT WOULD MAKE THE GOVERNORS EVEN STRONGER RELATIVE TO MOSCOW. IT WOULD ALSO MEAN THAT THE POLITICAL ENTITIES WITHIN THE RUSSIAN FEDERATION WOULD BE COTERMINOUS WITH THE ECONOMIC ZONES AND WITH THE MILITARY DISTRICTS. THAT WOULD REINFORCE THE PROCESS THAT ANDERS HAS REFERRED TO ABOUT THE PAYING OF MILITARY SALARIES BY REGIONAL OFFICIALS. I BELIEVE WE'RE HEADED TOWARD A SITUATION WHICH MIGHT BE CALLED WAR-LORDISM WITHOUT FIGHTING. IN OTHER WORDS, VERY STRONG REGIONAL OFFICIALS WHO ARE NOT RECOGNIZED AS INDEPENDENT COUNTRIES BUT HAVE DE FACTO POLITICAL, MILITARY AND ECONOMIC CONTROL ON THEIR TERRITORIES. AND IT WILL HAVE TO BE DEALT WITH BY FOREIGN POWERS EVEN IF THE FOREIGN POWERS, AS I SUSPECT IS LIKELY, WILL RETAIN THEIR EMBASSIES IN MOSCOW AND THINK OF THE TERRITORY CALLED THE RUSSIAN FEDERATION AS A COUNTRY. IT WILL NOT BE AN EFFECTIVE COUNTRY EVEN IF FOREIGN POWERS RECOGNIZE IT, JUST AS, AT THE END, THE SOVIET UNION WAS NOT AN EFFECTIVE COUNTRY, EVEN THOUGH FOREIGN COUNTRIES, UNTIL VERY LATE IN THE DAY, CONTINUED TO HAVE THEIR EMBASSIES IN MOSCOW AND NOWHERE ELSE. HOST: CAN THAT HAPPEN, HERMAN PIRCHNER? CAN THE RUSSIAN MILITARY BE, IN EFFECT, PRIVATIZED BY THE REGIONAL GOVERNORS? PIRCHNER: IT CAN, BUT THERE ARE ALSO COUNTERVAILING TRENDS. IF YOU HAVE A PRESIDENT LEBED, I THINK THE MILITARY COMMAND WILL STAY CENTRALIZED AND HE'LL ESTABLISH DISCIPLINE WITHIN THAT ORGANIZATION. IF YOU HAVE THE WRONG TYPE OF LEADERSHIP IN MOSCOW, THE COUNTRY COULD FRAGMENT, AND I THINK THAT'S WIDELY UNDERSTOOD. THE FACT THAT IT'S UNDERSTOOD BEGINS TO BE AN ARGUMENT AGAINST IT BECAUSE DEEP IN THEIR SOULS, MOST RUSSIANS DON'T WANT THAT TO HAPPEN. HOST: AND TO WHAT EXTENT IS THE MILITARY A SOURCE OF INSTABILITY IN THAT, OF COURSE, THE MILITARY HAS NOT BEEN PAID. OFFICERS, FAMILIES ARE PRACTICALLY ON THE BRINK OF -- STARVATION MAY BE AN EXAGGERATION. PIRCHNER: SOME ARE. HOST: IS THERE A PALPABLE FEAR WITHIN RUSSIA THAT THE MILITARY MAY TAKE THINGS INTO ITS OWN HANDS? PIRCHNER: THERE WAS THE HEAD OF THE DUMA DEFENSE COMMITTEE BY THE NAME OF LEV ROKHLIN. AND HE BROKE WITH YELTSIN TO TRY TO ORGANIZE MILITARY DISCONTENT AND TO ESTABLISH SOME SORT OF DICTATORSHIP WITH MILITARY BLESSING. HE DIED UNDER HIGHLY SUSPECT CIRCUMSTANCES FROM PEOPLE THAT DID NOT APPROVE OF HIS ACTIVITY. GOBLE: I THINK THE REFERENCE TO GENERAL LEBED IS AN IMPORTANT ONE. WHILE I THINK IT WOULD BE TRUE THAT, WERE GENERAL LEBED NOW PRESIDENT OF RUSSIA, YOU MIGHT FIND A GREAT DEAL OF LOYALTY WITHIN THE MILITARY TO HIM AS A PERSON. THE FACT IS THAT AS GOVERNOR OF KRASNOYARSK, IT HAS BEEN PRECISELY GOVERNOR LEBED WHO'S RAISED THE SPECTER OF REGIONS TAKING CONTROL AND RESPONSIBILITY FOR THINGS, INCLUDING THE STRATEGIC ROCKET FORCES, WHICH UP TO NOW HAD BEEN THE MOST UNIFIED OF THE PORTIONS OF THE RUSSIAN MILITARY. I THINK THAT WAS A THREAT RATHER THAN AN ACTUAL FACT. BUT IN FACT, HE RAISED IT, AND BY RAISING IT, AS YOU SAY, ONCE SOMETHING IS VISIBLE, IT CHANGES THE NATURE OF THE GAME. BUT I THINK THE RUSSIAN ARMY -- AND LET US REMEMBER THAT IN THE LAST TEN YEARS IT HAS DECLINED FROM FIVE MILLION MEN TO ONE POINT TWO MILLION, OF WHOM ONLY ABOUT SEVEN HUNDRED AND FIFTY THOUSAND ARE CONSIDERED TO BE EFFECTIVE, THAT IS, PEOPLE WHO ARE PAID, TRAINED AND READY TO GO IN THE FIELD -- IS A VERY DIFFERENT INSTRUMENT FOR ANYBODY'S USE TODAY THAN IT WAS ONLY A FEW YEARS AGO. I THINK WE SHOULD NOT BE FOCUSING SO MUCH ON THE MILITARY BUT ON THE ABILITY OF THE COUNTRY TO HOLD TOGETHER ECONOMICALLY AND HAVING A POLITICAL SYSTEM WHICH WILL ENFORCE SOME KIND OF LEGISLATION ACROSS THE TERRITORY OF THE RUSSIAN FEDERATION. HOST: PERTAINING TO THAT POINT, LET ME ASK ANDERS ASLUND ABOUT THE CONTINUING RELATIONSHIP, IF THERE IS ONE, BETWEEN THE I-M-F [INTERNATIONAL MONETARY FUND] AND RUSSIA, AND THE G-7 [GROUP OF SEVEN INDUSTRIALIZED NATIONS] AND RUSSIA. UNDER WHAT CIRCUMSTANCES CAN THE NEXT TRANCHE OF THIS TWENTY-TWO BILLION DOLLARS OF LOANS TO RUSSIA BE MADE, OR DO YOU THINK THAT'S SIMPLY OVER? ALSO, INTERESTINGLY ENOUGH, A SENIOR RUSSIAN OFFICIAL SAID THE OTHER WEEK THAT THE I-M-F MUST CONTINUE TO GIVE US MONEY BECAUSE IT'S THE WAY IN WHICH THEY GAVE US MONEY IN THE PAST THAT CAUSED THESE PROBLEMS. SO THEY HAVEN'T LOST THEIR -- IT THAT AN ATTEMPT AT RUSSIAN HUMOR ON HIS PART? ASLUND: IT'S CLEAR THAT THE PROGRAM IS OVER. AND IF THERE WILL BE ANY NEW MONEY FROM THE I-M-F, FIRST, THERE WILL HAVE TO BE A TOTALLY NEW ECONOMIC PROGRAM IN RUSSIA. THE I-M-F DOESN'T GIVE MONEY IF IT DOESN'T THINK THAT IT CAN COVER THE FINANCIAL GAP. AND THERE'S NO WAY THAT THE I-M-F WITH ITS RESOURCES CAN COVER RUSSIA'S FINANCING GAP TODAY. THAT'S EVEN IF THE I-M-F WOULD BE VERY BENEVOLENT. AND NOW RUSSIA IS, ON THE CONTRARY, PUSHING FOR A BIG BUDGET DEFICIT, MAKING NO EXCUSES. THE I-M-F CAN'T DO ANYTHING AT ALL. THE WORLD BANK CAN ISSUE SOME LOANS WHICH ARE INVESTMENT PROJECTS, BUT NOT FOR THE RUSSIAN BUDGET. SO WE CAN SEE ALREADY NOW, ALMOST FOR CERTAIN, THAT RUSSIA WON'T GET ANY INTERNATIONAL FINANCING FOR ITS BUDGET BEFORE THE END OF THIS YEAR. HOST: THEN LET ME ASK: MR. PRIMAKOV WENT ON TELEVISION TO SPEAK TO THE RUSSIAN NATION RECENTLY IN WHICH HE SAID WE'RE GOING TO STABILIZE THIS SITUATION AND MOST OF ALL, DO NOT WORRY. THERE WILL BE PLENTY OF POTATOES AND VEGETABLES AND NO ONE IS GOING TO SUFFER THIS WINTER. GOBLE: THOSE ARE NICE PROMISES, AND I EXPECT THE RUSSIAN PEOPLE BELIEVE THEM. WE'VE HEARD THEM ALL BEFORE. THEY WEREN'T TRUE IN THE PAST. MR. PRIMAKOV IS NOT GOING TO DELIVER NOW. I THINK HE HAD NO CHOICE, BUT TO SAY THAT. TO IMAGINE HIM TO SAYING THE REVERSE IS UNTHINKABLE. WE WON'T SOLVE THE CRISIS. IT WILL GET WORSE. YOU WON'T BE EATING THIS WINTER. IT'S NOT SOMETHING THE PRIME MINISTER OF A COUNTRY IS GOING TO SAY. HOST: AT THE SAME, THOUGH, HE MUST HAVE SOME IDEA ON HOW HE'S GOING TO ACHIEVE THAT OBJECTIVE. AND SINCE THEY HAVE TO IMPORT SO MUCH OF THAT FOOD, HOW ARE THEY GOING TO HAVE THE RESOURCES TO DO IT WHEN THEY DON'T HAVE ANY FINANCES? GOBLE: THAT'S A PROBLEM. THEY AREN'T GOING TO BE IMPORTING BECAUSE PEOPLE AREN'T GOING TO BE SENDING FOOD WHEN IT'S NOT BEING PAID FOR. ASLUND: HE HASN'T GOT A CLUE. MASLYUKOV HASN'T GOT A CLUE. GERASHCHENKO HASN'T GOT A CLUE. AND THESE ARE THE THREE MOST IMPORTANT PEOPLE. PIRCHNER: I HAVE TO DISAGREE A LITTLE WITH THAT. THERE ARE SOME THINGS THEY ARE DOING. THEY ARE GOING TO CUT THE IMPORT TAX DRASTICALLY ON FOOD ITEMS AND I'VE BEEN TALKING IN THE LAST WEEK TO PEOPLE THAT SHIP INTO RUSSIA THAT HAVE NOT SHIPPED OVER THE LAST FOUR WEEKS AND ARE BEGINNING TO DO IT. HOST: WHY ARE THEY STARTING NOW? PIRCHNER: BECAUSE THEY FIGURED OUT A WAY TO GET FINANCED AND GET PAID. GOBLE: I WAS JUST IN ESTONIA, WHICH IS A COUNTRY THAT HAS PROVIDED A GREAT DEAL OF DAIRY PRODUCTS AND CANNED FISH TO THE NORTHWESTERN RUSSIAN FEDERATION AROUND ST. PETERSBURG. OVER THE LAST SIX WEEKS, THERE HAS BEEN ABSOLUTELY NO EXPORTING OF FOOD TO THE EAST FROM ESTONIA SIMPLY BECAUSE NO ONE IS PAYING. AND THE FOOD HAD BEEN BUILDING UP IN WAREHOUSES. IT'S NOW BEING SHIPPED WESTWARD INTO THE EUROPEAN UNION. HOST: ANDERS ASLUND, YOU'RE SAYING, WITH THE PRESENT GOVERNMENT IN RUSSIA, AN IMPROVEMENT IN THE SITUATION IS SIMPLY NOT GOING TO TAKE PLACE. ASLUND: YES. HAVING SAID THAT, CLEARLY THEY WILL START REALIZING NOW THAT THEY DON'T KNOW WHAT SHOULD BE DONE. WE HAVE SEEN IN THE LAST WEEK A CERTAIN DISTANCING FROM THE MOST EXTREME STATEMENTS, FOR EXAMPLE, ON PROHIBITION OF USAGE OF DOLLARS. BUT, MOVING AWAY SLIGHTLY IN THAT DIRECTION IS NOT ENOUGH TO GIVE HOPE. YOU HEAR NOW THE GOVERNMENT IS SAYING DON'T WORRY, WE HAVEN'T GOT A PLAN AND WE WON'T HAVE ONE FOR AT LEAST TWO WEEKS. THAT'S NOT WHAT YOU WANT TO HEAR IN THE MIDST OF A SERIOUS CRISIS. SO I FIND IT VIRTUALLY EXCLUDED THAT THIS GOVERNMENT WILL FIND AN ECONOMIC WAY OUT. [BUT] IT IS NOT NECESSARY THAT WE ARE DOING AS BADLY AS WE ARE NOW, ALL THE TIME. HOST: I'M AFRAID THAT'S ALL THE TIME WE HAVE THIS WEEK. I'D LIKE TO THANK OUR GUESTS -- ANDERS ASLUND FROM THE CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE; PAUL GOBLE FROM RADIO FREE EUROPE/RADIO LIBERTY; AND HERMAN PIRCHNER FROM THE AMERICAN FOREIGN POLICY COUNCIL -- FOR JOINING ME TO DISCUSS THE CONTINUING CRISIS IN RUSSIA. THIS IS ROBERT REILLY FOR ON THE LINE. 09-Oct-98 11:02 AM EDT (1502 UTC) NNNN Source: Voice of America .