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RFE/RL NEWSLINE Vol 1, No. 72, Part I, 14 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:

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

Headlines, Part I




End Note



State Madeleine Albright met with Russian Foreign Minister Yevgenii
Primakov on 12-13 July in St. Petersburg, international media
reported. Primakov echoed statements by President Boris Yeltsin
that the admission of the Baltic States to NATO sometime in the
future would be "dangerous." Primakov said he was in favor of
Russian assurances as the means to guarantee that the Baltic States
maintain their "sovereignty." He added that the Baltic States are an
area of "special interest" for Russia. Albright noted that NATO
membership did not depend on where countries "are on the map."
She added that membership is open to all "democratic market
systems in Europe."

...AND OTHER ISSUES. Albright and Primakov announced that talks on
the Conventional Forces in Europe Treaty will be extended until the
end of July in the hope that a framework agreement on reducing
weapons ceilings can be reached by then. Progress on arms reduction
will be reviewed "on the sidelines" of the Association of Southeast
Asian Nations (ASEAN) meeting in Kuala Lumpur on 24 July.
Responding to Russian Foreign Ministry criticism that recent NATO-
led operations against war criminals in Bosnia-Herzegovina were a
"cowboy raid," Albright asked Primakov if he could suggest any
"better methods." The two also agreed that the U.S. and Russia should
make all efforts to remove obstacles to stability in the Middle East.
Primakov said the two sides would hold regular consultations on that

BASAEV'S RESIGNATION "FINAL." Speaking on local television on 12
July, Chechen First Deputy Prime Minister Shamil Basaev said his
decision to resign "is final," but he declined to offer an explanation
for that decision, according to ITAR-TASS. "Kommersant-Daily"
reported on 12 July that President Aslan Maskhadov has not yet
accepted the resignation of either Basaev or security chief Abu
Movsaev. The previous day, radical field commander Salman Raduev
had said he is ready to take a public oath of loyalty to Maskhadov
but that he reserved the right to espouse opposing political views,
Interfax reported. On 13 July, gunmen in Grozny opened fire on a car
belonging to the Russian government office, but no one was hurt.
Both Chechen and Russian officials said they are certain the shooting
was not politically motivated.

Bank Chairman Sergei Dubinin on 14 July released a statement
accusing former First Deputy Finance Minister Andrei Vavilov of
arranging two fraudulent deals in 1996-1997 that allegedly cost the
state budget $275 million and $237 million, Interfax reported.
Dubinin's statement said then Finance Minister Aleksandr Livshits
and then Presidential Chief of Staff Anatolii Chubais had been
unaware of Vavilov's misuse of budget funds. On 11 July, the
Procurator-General's Office confirmed that Vavilov and former First
Deputy Prime Minister Vladimir Potanin will be questioned in a
criminal investigation surrounding $237 million transferred in
February to the International Financial Corporation (MFK), an
Oneksimbank affiliate, Russian media reported. The funds were
ostensibly intended to finance a purchase of MiG fighter jets by
India. However, India reportedly had not signed a contract to buy
the fighters, and the budget funds were said not to have reached
MAPO, the company that manufactures MiGs.

told Interfax on 14 July that the company did receive a government
loan to construct MiGs for India. Vavilov and Potatnin have not
commented on the criminal investigation, but spokesmen for
Oneksimbank and the MFK have portrayed the allegations as false
rumors sown by unscrupulous business competitors. Potanin was re-
elected as president of Oneksimbank after his dismissal from the
government in March. Vavilov became head of MFK after leaving the
Finance Ministry in April. MFK press secretary Oleg Sapozhnikov
issued a statement saying that media reports implicating company
officials were inspired by rivals that cannot compete with MFK
honestly, "Izvestiya" reported on 12 July. Oneksimbank spokesman
Modest Kolerov said that newspaper articles on the scandal were
"placed and paid for by our competitors," according to the "Financial
Times." The official government newspaper "Rossiiskaya gazeta" is
among the papers that have accused Potanin and Vavilov of

Novgorod Mayor Ivan Sklyarov won the 13 July gubernatorial
election in Nizhnii Novgorod Oblast with about 52 percent of the vote,
compared with 42 percent for Communist State Duma deputy
Gennadii Khodyrev, Russian news agencies reported on 14 July.
Turnout was about 49 percent, higher than in the first round of the
election. Former governor and First Deputy Prime Minister Boris
Nemtsov recently spent three days in the oblast campaigning for
Sklyarov. In addition, Prime Minister Viktor Chernomyrdin visited
the nuclear research center in Sarov on 11 July and promised federal
support for the center. Although spokesmen said Chernomyrdin's
visit was "not connected to the election," RFE/RL's correspondent in
Nizhnii Novgorod noted that Khodyrev outpolled Sklyarov in the
district containing Sarov in the first round. Even though Sklyarov's
program and campaign rhetoric differed little from Khodyrev's, a
Communist victory in Nizhnii would have damaged Nemtsov's
political standing.

...BUT LOSES IN SAMARA. Georgii Limanskii, deputy chairman of the
Samara Oblast legislature, gained 54.6 percent of the vote to win a 13
July runoff mayoral election in Samara, Russian news agencies
reported on 14 July. Former Mayor Oleg Sysuev, who was appointed
deputy prime minister in March, had supported Deputy Mayor
Anatolii Afanasev, who polled about 38 percent. Turnout was just
over 40 percent. Limanskii heads the Samara Oblast branch of
former Security Council Secretary Aleksandr Lebed's Russian
People's Republican Party, and Lebed campaigned for Limanskii in
Samara in June. Yabloko leader Grigorii Yavlinskii and Forward,
Russia! leader Boris Fedorov also backed Limanskii.

DAY OF PROTEST IN KEMEROVO. Trade unions staged a "day of
protest" across Kemerovo Oblast on 11 July, but the demonstrations
drew modest crowds and no enterprises were hit by strikes, RFE/RL's
Moscow bureau reported. Protesters demanded the payment of back
wages, changes in federal economic policies, and the resignation of
the president and prime minister. Trade union leaders had long
planned an oblast-wide strike for 11 July but changed their plans
following the recent appointment of Governor Aman Tuleev (see
"RFE/RL Newsline," 2-3 July 1997). In an interview with RFE/RL,
Tuleev said he supported the protesters' economic demands and said
he had already moved to pay some wage arrears and child
allowances. On 12 July, the Railroads Ministry signed an agreement
with the Kemerovo Oblast administration to lower freight charges for
enterprises in Kemerovo, a move Tuleev said would help the region's
economy, ITAR-TASS reported.

MILITARY CORRUPTION UPDATE. Maj.-Gen. Viktor Maluzov, the head
of the armored vehicle department of the North Caucasus Military
District, has been arrested and charged with unspecified "violations
related to the decommissioning of damaged armored vehicles" during
the war in Chechnya, sources in the Military Procurator's Office told
Interfax on 11 July. In addition, procurators have sent the case
against the Navy's former Chief of Staff Igor Khmelnov to court. In
June, Khmelnov was charged with misusing the proceeds from the
sale of 64 ships to India and South Korea while he was Pacific Fleet
Commander. Meanwhile, "Kommersant-Daily" reported on 12 July
that the poor health of former First Deputy Defense Minister
Konstantin Kobets, who was arrested in May on corruption charges,
has stymied attempts by investigators to interrogate Kobets.
However, the newspaper said other high-ranking Defense Ministry
officials had been questioned in that case.

enforcement officials on 11 July arrested two people suspected of
involvement in the June 1996 explosion in the Moscow metro after a
year-long investigation involving the Procurator-General's Office, the
Federal Security Service (FSB), and the Moscow police, Russian media
reported. An FSB spokesman said investigators are still searching for
nine other suspects in the case. No details were released about those
arrested or possible motives for the bombing. Four people were
killed and 12 injured in the blast, which took place just five days
before the first round of the presidential election. Meanwhile, no one
has claimed responsibility for planting a bomb discovered outside
the Chief Military Procurator's office in Moscow at 2 a.m. on 13 July,
Russian Public Television reported. A guard carried the bomb away
from the building; no one was injured when it eventually exploded.


Russian officials, including First Deputy Prime Minister and Minister
for Fuel and Energy Boris Nemtsov and Security Council Deputy
Secretary Boris Agapov were in Baku on 11 July. Nemtsov signed a
five-point agreement with the heads of the Chechen and Azerbaijani
state oil companies, Khozh-Ahmed Yarikhanov and Natik Aliev, on
the export via Chechnya of Azerbaijan's Caspian oil, Turan and
Russian agencies reported. Under an Azerbaijani-Russian agreement
signed in January1996, Russia will receive $15.67 transit fees per
metric ton. Yarikhanov declined to divulge what percentage of this
Chechnya will receive under the 11 July agreement. Russian and
Chechen oil executives signed another agreement in Grozny on 12
July whereby Russia undertakes to finance repairs to the pipeline in
return for Chechen guarantees of the safety of Russian workers
engaged in repair work, Interfax and AFP reported.

the Armenian Pan-National Movement--the senior member within
the majority Hanrapetutyun bloc--ended in Yerevan on 13 July,
RFE/RL correspondents in Yerevan reported. Observers had predicted
a competition for the post of chairman of the movement's board
between Yerevan mayor Vano Siradeghyan and parliamentary Legal
Affairs Committee chairman Eduard Yegoryan (see End Note, "RFE/RL
Newsline," 23 June 1997). The congress elected a new board with 40
members proposed by Siradeghyan, not including Yegoryan.
Siradeghyan then proposed postponing the election of a new board
chairman for two months. Addressing the congress, President Levon
Ter-Petrossyan enumerated the movement's achievements since its
creation in 1989, including Armenia's declaration of independence,
the successful defense of Nagorno-Karabakh, and the adoption of a
new constitution. Ter-Petrossyan had earlier endorsed Siradeghyan's
candidacy as chairman.

General Dzhamlet Babilashvili on 11 July released the text of a letter
to his Russian counterpart, Yurii Skuratov, again demanding the
extradition from Moscow of former Georgian Security Service chief
Igor Giorgadze, Reuters reported. Georgian officials claim that
Giorgadze was a key figure in the unsuccessful August 1995 attempt
to assassinate Eduard Shevardnadze. The following day, Giorgadze's
father, who heads the United Communist Party of Georgia, told a
news conference that he received a telephone call from his son
denying he was in Russia, according to ITAR-TASS. Meanwhile,
Georgian parliamentary Security and Defense Committee chairman
Revaz Adamia told journalists on 11 July that Tbilisi is demanding
Russia provide financial compensation for weaponry worth $4 billion
removed from Georgia after the collapse of the USSR.

held talks in Yerevan on 11 July with his Armenian counterpart,
Alexander Arzoumanian, and with President Levon Ter-Petrossyan,
Armenian and Russian agencies reported. Udovenko called for
increased bilateral and trilateral economic cooperation, with Russia
as the third partner, and undertook to support Armenia's stated wish
to participate in the TRASECA transport project. He also expressed
support for proposals by the Organization for Security and
Cooperation in Europe's Minsk group aimed at resolving the
Karabakh conflict.

 ...AND TBILISI. Also on 11 July, Udovenko met with Georgian Foreign
Minister Irakli Menagharishvili and President Eduard Shevardnadze
in Tbilisi. He assured them that Kyiv still backs Georgia's claim to
part of the Black Sea fleet, according to ITAR-TASS. Interfax quoted
Udovenko as telling journalists that Russia should continue to play
the key role in mediating a settlement of the Abkhaz conflict, but
ITAR-TASS quoted the Georgian presidential press service as saying
Ukraine wished to participate in a proposed peace conference on
Abkhazia convened by Western states. Udovenko said Ukraine is
prepared to provide a contingent of peacekeeping forces to serve in
Abkhazia under UN auspices if the Security Council decides to deploy
such a force.

KYRGYZ PRESIDENT IN U.S. Askar Akayev is currently in the U.S. on a
seven-day visit, RFE/RL correspondents reported. He has met with
billionaire philanthropist George Soros, who has invested several
million dollars in Kyrgyzstan, and with UN Secretary-General Kofi
Annan. In Washington on 11 July, he met with the IMF Deputy
Managing Director Alassane Outtara. The surprise growth in Kyrgyz
GDP from 1.3 percent in 1995 to 5.6 percent in 1996 led the IMF to
increase credits to Kyrgyzstan. Also on 11 July, Akayev told a
conference organized by the Carnegie Endowment that his country's
transition from communism to capitalism is taking longer than



by Paul Goble

        The timetable for NATO expansion announced at the Madrid
summit on 8-9 July may break down even before the alliance takes
in its first new members two years from now. The summit invited
three countries--Poland, Hungary, and the Czech Republic--to begin
accession talks leading to membership by 1999. The alliance leaders
indicated they will consider inviting a second group of countries in
that year and that they will keep the process of including ever more
East European countries in the alliance both open and deliberate
after that time.
        This carefully worked-out timetable reflected calculations by
some NATO leaders about how both their own populations and
Moscow would react. Many NATO leaders noted that they could not
hope to win popular support for the costs of expansion if the alliance
tried to take in too many countries too quickly. Even more NATO
leaders suggested that a slow, step-by-step expansion is the only
way to avoid offending Moscow and pushing Russia back into an
adversarial role.
        But there are already at least three indications that the
Western alliance may have a number of difficulties in holding to that
        First, many of the countries that had hoped to be invited into
the alliance now or in the near future are stepping up their
campaigns for membership rather than accepting the Madrid
timetable. The countries that had hoped to make it into the first
round--Slovenia, Romania, and the three Baltic States--indicated that
they will increase their efforts to be included sooner than the Madrid
schedule. Lithuanian President Algirdas Brazauskas, for example,
pointed out on 9 July that "a long-term cataclysm could occur in
three, four, or five years." As a result, he said, Vilnius wanted
"guarantees for the future" sooner rather than later.
        Other East European countries that were not expected to be
included took courage from the alliance's decision to expand and
indicated that they, too, might press for membership far sooner than
the NATO leaders had planned. Buoyed by their charter with the
Western alliance, several Ukrainian political figures said they hoped
Ukraine will achieve NATO membership in the not too distant future-
-something no one in the alliance now appears to be contemplating.
        Second, the three countries that were invited to join at Madrid
reportedly have agreed to press for the more rapid inclusion of the
Baltic States into the Western alliance. The presidents of Poland, the
Czech Republic, and Hungary met with their counterparts from
Estonia, Latvia, and Lithuania on 9 July and told them they will press
for Baltic membership in the alliance as soon as possible. Latvian
President Guntis Ulmanis said he and his Baltic colleagues looked to
the three Madrid invitees "to become advocates" of the rapid
inclusion of Estonia, Latvia, and Lithuania.
        Such support for Baltic membership may be more difficult to
resist than the NATO planners expected. In addition to Polish,
Hungarian, and Czech support, the Balts received backing from
Thomas Siebert, the ambassador to Sweden. Siebert told the Swedish
newspaper "Dagens Nyheter" on 9 July that "we will not consider the
expansion of NATO to be accomplished or successful unless or before
the Baltic States' ambitions are fulfilled."
        Both the efforts of those who hope to join and the attitudes of
those already invited to do so will put pressure on the alliance to
move more quickly than it had planned, especially since those on the
outside are likely to view any delay as a sell-out of their security.
        But the third indication that the Madrid timetable may not be
kept suggests that NATO may not expand as quickly as the Madrid
summit planned. The pressure on NATO from both those included
and those not yet in inevitably raises the stakes of the first round of
alliance expansion and thus virtually guarantees increased opposition
to any growth in the alliance from both Moscow and many in the
        Russian leaders, including President Boris Yeltsin, have
indicated that they can accept NATO's expansion only if it is both
limited and deliberate. Consequently, at least some in Moscow are
likely to consider the statements of those countries not invited in and
especially of those invited to join at Madrid to pose a threat--one,
moreover, that Russia is likely to respond to.
        Such a response will have an impact on the ratification debates
in the current NATO member countries and provide ammunition to
those who oppose any growth in the alliance. As a result, the
euphoria about the Madrid NATO summit could quickly evaporate, as
some countries discover that their own enthusiasms threaten their
own interests.

               Copyright (c) 1997 RFE/RL, Inc.
                     All rights reserved.


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