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The officer corps now is to the point where Pavel Grachov, the 

 Minister of Defense, is condemned by the All-Russian Officers As- 

 sembly, which is an organization that managed to turn out 20,000 

 representatives 2 weeks ago, as a traitor to his country. The De- 

 fense Minister said, "You cannot have this meeting," and they met 

 an3rway, and they declared him a traitor. This is his own officer 

 corps. So there is a certain incentive for the United States and for 

 Mr. Yeltsin in doing something to keep these officers happy. 



It is, if I might add, our best guess at one of the real reasons 

 Mr. Khrushchev was overthrown long ago, that he attempted to cut 

 his military substantially, and the demobilized officers at that time 

 became a large part of the political base for the movement to re- 

 move him. Yeltsin knows that history. 



Mr. Allard. Do you believe that we have a chance of getting 

 some of these military people to think in terms of free enterprise 

 and going into business for themselves, which is the main focus of 

 what we're talking about in this committee about getting some help 

 to some individuals who want to advance the idea of a free market- 

 place, who begin to train and to work in a free marketplace? Would 

 the soldiers be individuals that we would have some hope in get- 

 ting to move into a free marketplace and maintain some apprecia- 

 tion for what that can do for them? 



Mr. Van Atta, You could read this either way, sir. On the one 

 hand, military officers tend to know how to get things done. Many 

 of them are very bright and will, in principle, make good entre- 

 preneurs. Some of the military officers that I know who have be- 

 come farmers are very good at it. On the other hand, because they 

 are military officers and because, like all Soviets, they have no no- 

 tion of what a market is or how it works, you can expect that the 

 mindset they have is likely to be very unmarketlike. After all, it's 

 hard to imagine a less market entrepreneurial organization than a 

 military structure in any country. So you can read it either way. 



The real problem is not perhaps the officers, it's the military in- 

 dustrial complex that stands behind them. Rutskoi and the Federal 

 center are closely connected to the Russian military industrial com- 

 plex. They are in a sense attempting to convert defense resources 

 to agricultural use. Whether that will be more than simply ulti- 

 mately a way of laundering money back to certain defense industry 

 interests is not at all clear. 



Mr. Allard. Thank you for your frank comments. You know, 

 we've had a lot of discussion from previous panels on this concept 

 of private ownership and clear title to land and something to do 

 with the commercial code. Do you have any suggestions on how we, 

 as outsiders, may be able to further that concept along in Russia? 



Mr. Van Atta. It is not the commercial code. It is the constitu- 

 tion of the Russian Federation which forbids the resale of agricul- 

 tural land used for agricultural production. It simply is unconstitu- 

 tional. There's an "ukaz" of Yeltsin's that allows land sales, but 

 whether ukazy— Presidential decrees— are higher than the con- 

 stitution is not at all clear to anybody. They have to decide whether 

 or not they want to amend their constitution to allow land sales. 



The referendum issue began in November when Democratic Rus- 

 sia, basically the left wing, if you will, the Yeltsin supporter types, 

 collected a million signatures to put a referendum on the issue be- 



