I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed. - Booker T. Washington
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 77, Part I, 21 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:
http://www.rferl.org/newsline/search/

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

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Headlines, Part I

* NATO-RUSSIA JOINT COUNCIL HOLDS FIRST MEETING

* CHECHEN FIGHTERS RALLY TO DEMAND HOSTAGES' RELEASE

* GEORGIAN PRESIDENT IN U.S.

End Note
MORE THAN A VOICE BUT LESS THAN A VETO

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RUSSIA

NATO-RUSSIA JOINT COUNCIL HOLDS FIRST MEETING. The NATO-
Russia Joint Council held its inaugural meeting on 18 July in Brussels.
The session took place at the ambassadorial level. According to an
unnamed participant quoted by AFP, no contentious issues were
discussed. The Joint Council is scheduled to meet again at
ambassadorial level on 11 September and at ministerial level in New
York later that month (see "RFE/RL Newsline," 17 July 1997 and "End
Note" below).

CHECHEN FIGHTERS RALLY TO DEMAND HOSTAGES' RELEASE. Several
thousand Chechen fighters gathered at a sports stadium in Grozny on
20 July to demand military intervention to secure the release of two
Chechens taken hostage in North Ossetia on 8 July (see "RFE/RL
Newsline," 9 July 1997). Deputy President Vakha Arsanov expressed
support for such a move, but President Aslan Maskhadov warned
against using force lest Chechnya be drawn into a new conflict
between North Ossetia and Ingushetia, according to Reuters.
Maskhadov again denied the existence of any rifts within the
Chechen leadership.

CHECHEN SECURITY MINISTER RESIGNS, ANTI-DUDAEV LEADER
RESURFACES. Abu Movsaev has resigned "at his own request" as head
of the Chechen security service, ITAR-TASS reported on 19 July.
Movsaev told his staff he remains a "loyal supporter" of Maskhadov,
who named Movsaev's deputy, Apti Batalov, to succeed him.
"Nezavisimaya gazeta" on 19 July reported that Movsaev and field
commander Shamil Basaev, who recently resigned as first deputy
premier, have founded the new private organization Patriot, which
aims to expedite reconstruction in Chechnya and to combat crime.
Interfax reported on 18 July that Umar Avturkhanov, who in late
1994 headed the Russian-backed Provisional Council that tried
unsuccessfully to topple then President Dzhokhar Dudaev, is trying to
set up a center of resistance to Maskhadov. But in an article in
"Nezavisimaya gazeta" on 19 July, Avturkhanov pledges his support
for Maskhadov as Chechnya's legally elected president.

CHERNOMYRDIN IN BRUSSELS. Speaking to reporters after meeting
with European Commission President Jacques Santer in Brussels on
18 June, Prime Minister Viktor Chernomyrdin announced that Russia
seeks eventually to become a member of the EU and expressed hope
that Russia will be admitted to the World Trade Organization in 1998,
which, he said, would "confirm the status of the Russian economy as
a market economy." Chernomyrdin and Santer discussed the 14 anti-
dumping measures the EU has imposed against Russian goods. Those
measures have drawn protests from Russian government officials
(see "RFE/RL Newsline," 18 June 1997). Chernomyrdin's visit was the
first to the European Commission by a Russian prime minister.

FOREIGN MINISTRY CRITICIZES U.S. SENATE RESPONSE TO RELIGION
LAW. The Russian Foreign Ministry on 18 July criticized the U.S.
Senate's reaction to a controversial religion law passed by the
Russian parliament, Russian news agencies reported. The Senate
recently passed an amendment that would cut aid to Russia in 1998
if Yeltsin signs the religion law (see "RFE/RL Newsline," 18 July
1997). But a Foreign Ministry statement said both Russia and the U.S.
have an interest in "mutually beneficial" and "cooperative relations,
without attempts at imposing one's own vision of the world as a kind
of standard." Meanwhile, U.S. State Department spokesman Nicholas
Burns said on 18 July that the administration of President Bill Clinton
believes that "it is not in the U.S. national interest to totally cut off,
curtail American assistance to Russia because of one bill," Reuters
reported.

FINANCE MINISTRY OFFICIAL SAYS BANKING ALLEGATIONS WERE
"PREMATURE." First Deputy Finance Minister Aleksei Kudrin on 18
July described as "premature" the recent allegations of fraudulent
use of budget funds by commercial banks, RFE/RL's Moscow bureau
reported. On 14 July Central Bank Chairman Sergei Dubinin charged
that former First Deputy Finance Minister Andrei Vavilov, the
International Financial Corporation bank, and Unikombank were
involved in the misuse of more than $500 million in budget funds
(see "RFE/RL Newsline," 14-16 and 18 July 1997). Kudrin said a
Finance Ministry examination of the banking deals cited by Dubinin
had produced evidence of "administrative violations" but not of any
crimes. Although the Procurator-General's Office recently announced
that it will investigate the banking deals, Kudrin's remarks indicate
that what threatened to become Russia's largest-ever banking
scandal has been swept under the rug. "Nezavisimaya gazeta" argued
on 19 July that Dubinin is now in an "unenviable" position.

GOVERNMENT TO HELP SOME REGIONS PAY WAGE ARREARS. First
Deputy Finance Minister Kudrin announced on 18 July that while 15
Russian regions have the means to pay their wage arrears to state
employees by the end of the year, the federal government will
provide 12.5 trillion rubles ($2.2 billion) to help other regions pay
their wage debts, "Kommersant-Daily" and "Nezavisimaya gazeta"
reported on 19 July. Kudrin noted that the federal government owes
some 7.7 trillion rubles to state employees, while regional
governments owe 25.6 trillion rubles in back wages. Kudrin said
privatization sales will raise some 5 trillion rubles toward paying the
wage arrears. He added that the electricity giant Unified Energy
System will soon settle 5 trillion rubles in tax debts, and changes in
oil exporting rules will bring in an additional 3 trillion rubles (see
"RFE/RL Newsline," 9 and 10 July 1997).

OFFICIAL OUTLINES TAX COLLECTION TARGETS. Also on 18 July, First
Deputy Finance Minister Kudrin predicted that the federal
government will collect 30 to 34 trillion rubles ($5.2 to $5.9 billion) a
month in taxes by the end of 1997, "Kommersant-Daily" reported on
19 July. Taxes collected in January totaled just 14.5 trillion rubles.
Some 30 trillion rubles were collected in June, but that figure was
boosted by payments from a few large tax debtors, such as the gas
monopoly Gazprom (see "RFE/RL Newsline," 26 June 1997).
Meanwhile, in accordance with a 14 July government directive,
licenses for retail trade in alcoholic beverages are to be granted only
to enterprises that owe no taxes or contributions to the government's
non-budgetary funds, ITAR-TASS reported on 18 July. Those include
the Pension Fund, the Obligatory Medical Insurance Fund, the Social
Security Fund, and the Employment Fund.

PROTEST MARCH BLOCKED FROM PROCEEDING TO MOSCOW CITY
CENTER. Interior Ministry troops on 18 July halted some 500
protesters near Moscow's Prazhskaya metro station and prevented
them from marching to the city center, Russian media reported. The
demonstrators belonged to Viktor Anpilov's radical communist
movement Workers' Russia and Stanislav Terekhov's extremist
Officers' Union. They had begun protest marches on 12 July in the
cities of Tula and Ryazan and had planned to demonstrate near Red
Square on 18 July. However, the Moscow city government refused to
grant permission to demonstrate in the city center. On 16 and 17
July, several hundred unpaid workers from nuclear power stations
were allowed to march through Moscow and to demonstrate outside
government headquarters. However, the nuclear workers were
advancing purely economic demands, while Anpilov's supporters
called for the resignation of the government and far-reaching
changes in government policies.

NEW "IZVESTIYA" EDITOR SELECTED. The "Izvestiya" board of
directors on 18 July appointed Vasilii Zakharko as the paper's new
editor in chief, Russian news agencies reported. Zakharko had served
as deputy editor of "Izvestiya" since February 1996 and had been
acting editor in chief since Igor Golembiovskii was forced out (see
"RFE/RL Newsline," 1, 7 and 10 July 1997). The board's decision
followed an election among "Izvestiya" staff, who voted on 10
candidates for editor and sent the names of the top three vote-
getters to the board for consideration. Although the board was not
obliged to appoint the journalists' first choice, Zakharko received the
most votes from "Izvestiya" staff. Shortly before Zakharko's
appointment was announced, RFE/RL's Moscow bureau reported that
most "Izvestiya" journalists were discouraged by the selection
process and have little hope that the new editor will be independent
of the paper's major shareholders, LUKoil and Oneksimbank.

PLANS CHANGE FOR RUSSIAN SPACE STATION REPAIRS. The heads of
the Russian space program have decided to allow the next crew
scheduled to arrive at the Russian space station "Mir" to do necessary
repair work, Russian media reported on 21 July. Cosmonauts Pavel
Vinogradov and Anatolii Solovev will lift off on 5 August. They have
received training at Russia's underwater simulation chamber in Star
City in order to carry out the repairs. French astronaut Leopold
Eyharts will not be on board as Russian space command says extra
room for repair equipment will be needed. The two Russian
cosmonauts currently on "Mir" will return after the new crew
arrives. But NASA astronaut Michael Foale will stay until September,
when a U.S. space shuttle will bring him back to Earth.

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN PRESIDENT IN U.S. Eduard Shevardnadze met with U.S.
President Bill Clinton in Washington on 18 July and discussed
Georgia's role in the transportation of Caspian oil. Clinton expressed
support for routing a major export pipeline from Baku to the Turkish
port of Ceyhan via Georgia, according to the "Financial Times" on 21
July. U.S. officials told Shevardnadze they want part of the oil
transported to the Georgian port of Supsa to be shipped to Ukraine
for pumping to Western Europe. Clinton praised Shevardnadze's role
in furthering democratization and market reform in Georgia and the
country's commitment to the defense of human rights. The two
presidents issued a written statement pledging "to work together
actively to expand cooperation throughout the foreign policy,
security, economic and commercial spheres."

NEW PROPOSAL TO RESOLVE ABKHAZ CONFLICT. Also at their 18 July
meeting, Shevardnadze and Clinton called for the resumption of talks
on Abkhazia under the aegis of the UN and with the participation of
Russia and the Western states that constitute the "Friends of Georgia"
group, Reuters reported. Shevardnadze told journalists the next day
that he believes Russia has "exhausted its potential" for mediating a
solution to the conflict but should continue to participate in
negotiations. He added that Russian troops could also participate in a
new peacekeeping force under UN auspices, according to ITAR-TASS.
At a press conference on 19 July, Russian Defense Minister Igor
Sergeev argued that the Russian peacekeepers should remain in
Abkhazia after their mandate expires on 31 July. Abkhaz Prime
Minister Sergei Bagapsh rejected the proposed replacement of
Russian peacekeepers by a UN force, which, he said, Tbilisi would try
to use to enforce a Bosnian-type settlement of the conflict, Interfax
reported.

AZERBAIJAN PROPOSES AMENDMENTS TO KARABAKH PEACE PLAN.
Azerbaijan has proposed additions to the latest peace plan submitted
by the co-chairmen of the Organization for Cooperation and Security
in Europe's Minsk Group to the leaderships of Armenia, Azerbaijan,
and Nagorno-Karabakh in May, Russian agencies reported. The co-
chairmen met in Baku on 18 July with Azerbaijani President Heidar
Aliev. Azerbaijani presidential adviser Vafa Gulu-zade said
Azerbaijan will never give up the towns of Lachin (located outside
Karabakh but currently under Armenian control) and Shusha but
that it will agree to the continued use of the Lachin transit corridor,
which is the sole overland link between Nagorno-Karabakh and
Armenia. Aliev expressed optimism that a solution to the conflict will
be reached this year, while the U.S. co-chairman said the impetus for
resolving the conflict must come from the involved parties and that
the mediators can only contribute to the process.

SPLIT IN ARMENIAN RULING PARTY IMMINENT? Eduard Yegoryan,
chairman of the parliamentary commission on state and legal affairs,
told journalists in Yerevan on 18 July that he intends to form a new
parliamentary faction, RFE/RL's Yerevan bureau reported. Yegoryan
said he has resigned from the ruling board of the Armenian Pan-
National Movement, to which he was elected on 13 July, and that he
no longer considers himself a member of the movement. He said he is
ready to cooperate with any opposition party, and will do everything
in his power to prevent the movement from winning the next
parliamentary and presidential elections. Yegoryan said that more
than one-third of the APNM's members support him, Noyan Tapan
reported.

TAJIKS EXCHANGE PRISONERS... The Tajik government and United
Tajik Opposition (UTO) began exchanging war prisoners on 18 July,
according to RFE/RL correspondents in Tajikistan. But while each side
was supposed to exchange 50 men, the government handed over
only 48 prisoners and the UTO 49. Unspecified "technical reasons"
were cited for the deficit. The two sides plan more exchanges soon,
but a group called the Parents Committee of War Prisoners from the
Leninabad Region is also negotiating for the release of government
soldiers held by opposition field commanders. A spokesperson for
the committee told RFE/RL's Tajik Service that they have already
negotiated the release of more than 100 POWs and reunited them
with their parents in northern Tajikistan.

...BUT SOME PROBLEMS REMAIN. According to RFE/RL corespondents
in Tajikistan, a bomb went off in Dushanbe near the State Opera
House on 17 July. Slight damage was reported to the theater, but no
one was injured. The following day, Russian border guards wounded
and then detained two men who tried to smuggle more than 36 kg of
opium across the Afghan border into Tajikistan. The two smugglers
were given covering fire from the Afghan side of the border. Border
guards have seized more than 800 kg of drugs along the Tajik-
Afghan border so far this year.

UZBEK PRESIDENT CRITICIZES KARAKALPAK OFFICIALS. Islam
Karimov visited the Karakalpak Autonomous Republic in Uzbekistan
on 17 July, Interfax reported. Karimov told an extraordinary session
of the local parliament that the region's leadership is responsible for
a "gigantic cash deficit." Karimov pointed out that gross income in
Karakalpak fell by 16 percent and agricultural output by 22 percent
during the past three years. He added that targets for cotton and rice
production have not been met. Karakalpak parliamentary speaker
Ubaniez Ashirbekov was sacked and replaced by an official
recommended by Karimov. Karakalpakia is likely the poorest region
in Uzbekistan and suffers considerably from the ecological effects of
the shrinking Aral Sea.

KYRGYZ PARTIES ADVOCATE JOINING RUSSIA-BELARUS UNION.
Eleven political parties and movements issued a statement on 18 July
calling for Kyrgyzstan to join the union between Russia and Belarus,
Interfax reported. "The Union of Russia and Belarus has become a
reality, despite the titanic resistance mounted by those who worked
for the destruction of the USSR," the statement said. It also noted that
such a union is the only way to avoid "further economic and political
disintegration in the sovereign republics." Among the statement's
signatories are the Communist Party of Kyrgyzstan, the Agrarian
Labor Party, the Popular Movement for Union and Brotherhood of
Peoples, and the Slavic Fund. Usen Sydykov, the leader of the
Agrarian Labor Party, said the head of the new union should be
Belarusian President Alyaksandr Lukashenka, whom he described as
a "man of strong will and firm hand."

TURKISH PRESIDENT IN KYRGYZSTAN. Suleyman Demirel on 18 July
wrapped up his two-day official visit to Kyrgyzstan, Turkish media
and RFE/RL correspondents reported. Demirel told the Issyk-Kul 97
Forum that the revival of the silk route will link "spiritual values"
between Europe and Asia. He also stressed the important geopolitical
role Central Asia has played but said only "constitutional democracy"
can ensure that all ethnic groups in the region have equal rights or
the "guarantee of the right to be different." Demirel also met with
Kyrgyz President Askar Akayev and discussed bilateral relations.

END NOTE

MORE THAN A VOICE BUT LESS THAN A VETO

by Paul Goble.

        The first organizational meeting of the NATO-Russia Joint
Council suggests that Moscow is likely to have more than a voice but
less than a veto in future decisions by the Western alliance. The 18
July session seems certain to exacerbate rather than end the debate
between those like U.S. President Bill Clinton who argue that the
council gives Russia a say but not a veto in NATO affairs and others,
like former U.S. Secretary of State Henry Kissinger, who believe
Moscow has gained an effective, if not explicit, veto.
        The body's inaugural session had to be delayed by one day
because the Western alliance refused to give into a Russian demand
for a modification of the 27 May Founding Act that established the
council. That accord calls for body to have three co-chairmen--the
NATO secretary-general, a representative of Russia, and a
representative of NATO member countries selected on a rotating
basis.
        Russian ambassador Vitalii Churkin argued that there should
be only two co-chairmen, one representing the alliance and another
representing Russia. NATO members refused to comply, lending
support to the claim that Russia will not have a veto in the council.
But at the same time, the alliance did concede that the chairmanship
would rotate among the three chairmen from one session to the next.
As a result of that concession to Moscow, NATO Secretary-General
Javier Solana chaired the first part of the meeting, the NATO member
representative (in this case, the Belgian ambassador) the second, and
the Russian ambassador the third.
        Critics who argue that the NATO-Russia Founding Act gives
Moscow a veto over the alliance's actions are likely to see this
diplomatic arrangement as a confirmation of their position. But the
outcome of the 18 July meeting fails to fully vindicate the position of
either side. Rather, it suggests the new council will give Russia more
than simply a voice but not a genuine veto if NATO leaders are
prepared to stand their ground.
        There are three reasons for drawing this intermediate
conclusion. First, the NATO countries are very publicly committed to
making the council work. Confident that NATO members will not
want to be blamed for any breakdown in the talks, Russia will seek
to expand its influence by making demands.
        Second, the likelihood that NATO will seek to adapt its position
so as to avoid antagonizing Russia will extend not only to those issues
that NATO agrees to include on the agenda of the council but also to
those that NATO leaders may feel should not be discussed there.
        At the next meeting of the council on 11 September, NATO and
Russia are scheduled to discuss Bosnia. When talking about that issue
with Moscow, NATO countries will find it hard to exclude military
issues that they have said will not be discussed by the joint council.
As a result, Russia will gain influence over matters in which,
according to the Founding Act, it has no say.
        Moreover, Moscow will be able to extend its voice on issues
NATO might refuse to discuss in the joint council by linking
agreement on something discussed there to a NATO concession on
matters that the council had never had before it. And the expectation
that the Russian government will do that is likely to become an
implicit part of the calculations of NATO planners. That too will mean
that Russia's voice will only grow with time.
        Third, as the procedural debate makes clear, NATO can block or
simply ignore Russian demands if the alliance is united and if its
most important members indicate they are prepared to stand up to
Moscow on any issue--large or small.
         This last point illustrates that Russia does not have the simple
veto that President Boris Yeltsin and Foreign Minister Yevgenii
Primakov have claimed. But the certainty that Russia will exploit
divisions within the alliance and the desire of many of NATO
members to reach agreement almost certainly means that the council
will give Russia a much larger and more influential voice than the
text of the Founding Act suggested.





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