I go to encounter for the millionth time the reality of my existence, and to forge in the smithy of my soul the uncreated conscience of my race. - James Joyce
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 97, Part I, 18 August 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

*RUSSIAN, CHECHEN PRESIDENTS MEET


*YELTSIN APPROVES PARAMETERS OF DRAFT 1998 BUDGET


*MUTINOUS TROOPS REPOSITION IN SOUTHERN TAJIKISTAN

End Note
ABKHAZIA AND GEORGIA RULE OUT VIOLENCE AND FURTHER
CONCESSIONS

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RUSSIA

RUSSIAN, CHECHEN PRESIDENTS MEET. Aslan Maskhadov was in
Moscow on 18 August for "frank talks" with Russian President Boris
Yeltsin. Chechen leaders had repeatedly said they hoped Yeltsin
would agree to sign an interstate treaty recognizing Chechnya's
independence, but Yeltsin told journalists after his meeting with
Maskhadov that "we will solve the problems as we did with [Tatar
President Mintimer] Shaimiev," which implies he will not grant
Chechnya greater autonomy than Tatarstan or other federation
subjects, according to Reuters. On 17 August, Russian Security Council
Secretary Ivan Rybkin and Chechen First Deputy Prime Minister
Movladi Udugov signed a protocol on appointing representatives of
families of those killed, abducted, or missing in Chechnya to a joint
commission to search for those persons. Also on 17 August, Rybkin
told Interfax that the Russian government has allocated 847 billion
rubles ($148 million) to Chechnya since the beginning of this year.

TWO RUSSIAN JOURNALISTS RELEASED IN CHECHNYA. Two
employees of the Russian TV production company VID have returned
to Moscow following their release in Chechnya on 17 August, Russian
media reported. The two men were abducted in Grozny in mid-June.
On 15 August, the Chechen authorities announced they had identified
the kidnappers and had ordered them to release the hostages within
48 hours. First Deputy Prime Minister Udugov subsequently told
Interfax that no ransom was paid. Three Russian journalists from
NTV who were abducted in Chechenya in mid-May remain in
captivity. The total number of persons currently held hostage in
Chechnya exceeds 1,000, Russian Security Council Secretary Rybkin
told ITAR-TASS on 16 August. They include five French, two British,
and two German nationals.

YELTSIN APPROVES PARAMETERS OF DRAFT 1998 BUDGET. Yeltsin on
15 August approved the parameters of the draft 1998 budget but
called for planned spending on the space program, basic scientific
research, education, and credits for CIS countries to be increased,
RFE/RL's Moscow bureau reported. Prime Minister Viktor
Chernomyrdin said the cabinet will consider Yeltsin's suggestions
when it reviews the draft budget on 21 August. The government is
required by law to submit the draft to the State Duma by 26 August.
Deputy Presidential Chief of Staff Aleksandr Livshits told journalists
that the draft budget will facilitate economic growth, but only if the
parliament approves a new tax code by the end of the year. Various
government officials have characterized the 1998 spending plans as
"tough, but realistic." The government has cut 1997 budget spending
by about 20.5 percent, citing severe revenue shortfalls (see "RFE/RL
Newsline," 6 May and 24 June 1997).

GOVERNMENT APPROVES DEFICIT REDUCTION PROGRAM. The
government has approved a program that calls for the budget deficit
to be cut to 3.5 percent of GDP by 2000, Interfax reported on 15
August. In line with Yeltsin's 1998 budget message (see "RFE/RL
Newsline," 5 June 1997), the program calls for a balanced budget in
1999, excluding interest payments on Russia's internal and external
debt, and a 0.5 percent budget surplus in 2000, also excluding debt
servicing costs. The 1998 budget deficit is projected at 4.8 percent of
GDP including debt servicing costs and 0.5 percent of GDP excluding
those costs. The deficit reduction program also projects that a new
tax code and improved tax collection will raise budget revenues to 13
percent of GDP in 2000 from 12.7 percent in 1998, ITAR-TASS
reported on 18 August.

ZYUGANOV SAYS BUDGET PROVIDES TOO LITTLE FOR DEFENSE.
Communist Party leader Gennadii Zyuganov says the planned 1998
budget expenditures on defense of 3-3.5 percent of GDP are far too
low, Interfax reported on 15 August. Zyuganov argued that defense
spending should amount to 5-7 percent of GDP. (Deputy Presidential
Chief of Staff Livshits claimed the same day that the draft 1998
budget will increase spending on defense and military reform by 38
percent compared with 1997 levels.) Zyuganov repeated his strong
opposition to planned military reforms, which, he said, threaten to
destroy Russia's defense capabilities. He also predicted that 90
percent of officers will support Duma Defense Committee Chairman
Lev Rokhlin's moves to support the military and defense industry
and will back protests to be organized this fall by the Communist-led
opposition movement Popular-Patriotic Union of Russia.

AIR FORCE COMMANDER UPBEAT ON MILITARY REFORM. Speaking at
a press conference in Moscow on 15 August, Army Gen. Petr Deneikin
said the downsizing of the air and air defense forces from 340,000 to
180,000 troops will mostly involve the demobilization of desk rather
than combat personnel. He warned that failure to compensate
demobilized officers could lead to social unrest, Russian media
reported. Deneikin argued that the merger of the two branches will
improve operational capability. He complained of a "catastrophic"
shortage of aviation fuel for training flights but expressed confidence
that the situation will improve within a couple of years. Deneikin
praised the capacity of the Russian aviation industry to produce
sophisticated air craft for the 21st century as fast as "making
pancakes." He also denied Chechen allegations that Russian fighter air
craft buzzed the central market and airport in Grozny on 13 August.

SOME PRIVATIZATION PROCEDURES TO BE REGULATED BY DECREE.
Deputy Presidential Chief of Staff Livshits says a presidential decree
is being drafted on procedures for auctioning large state-owned
stakes in enterprises, Russian news agencies reported on 15 August.
Livshits indicated that the decree will prohibit firms affiliated with
the organizers of such auctions from bidding for shares. (The 5
August auction for a 38 percent stake in Norilsk Nickel was organized
by MFK--Moscow Partners and won by Svift; both companies are
linked to Oneksimbank.) Special presidential decrees on auction
terms will be issued in connection with each future sale of a stake in
a major enterprise. At the same time, Livshits argued that issuing
convertible bonds backed by state-owned shares would probably
earn as much revenue as direct sales of state-owned stakes without
causing the scandals commonly associated with direct sales.

STATE PROPERTY COMMITTEE TO BECOME MINISTRY? Rumors in
Moscow that the State Property Committee will be given the status of
ministry were fueled on 15 August when Prime Minister
Chernomyrdin introduced the committee's new chairman Maksim
Boiko to the committee's staff as "privatization minister," ITAR-TASS
reported. In an interview with "Kommersant-Daily" published on 16
August, Boiko neither confirmed nor denied rumors that the
committee will be transformed into a ministry.

ST. PETERSBURG PRIVATIZATION CHIEF MURDERED. Mikhail
Manevich, deputy governor of St. Petersburg and head of the city's
Property Committee, was shot on his way to work on 18 August and
died shortly thereafter in a hospital, RFE/RL's correspondent in St.
Petersburg reported. Manevich's car was fired on eight times from a
window of a nearby building. Anatolii Ponidelko, head of the Interior
Ministry's branch in St. Petersburg and Leningrad Oblast, has said
the murder was the work of a professional killer, but he has not yet
speculated on a motive. Manevich, who had headed the property
committee since 1994, refused several offers to take up high posts in
Moscow from Anatolii Chubais, among others. Local observers have
speculated that Manevich's murder may be linked to an upcoming
review of the privatization of St. Petersburg hotels or may have been
ordered by organized criminal groups that feared Manevich would
reveal their ties to city officials.

CENTRAL BANK READY FOR CUSTOMS ACCOUNTS. Central Bank First
Deputy Chairman Aleksandr Khandruev says the bank is ready to
handle accounts containing customs duties currently held in
commercial banks, "Kommersant-Daily" reported on 16 August. First
Deputy Prime Minister Anatolii Chubais recently ordered that those
accounts be transferred to the Central Bank (see "RFE/RL Newsline,"
7-8 August 1997). The paper noted that some commercial banks --
above all, Oneksimbank but also Most Bank, Alfa Bank, and Rossiiskii
Kredit-- stand to lose substantial earnings. Both "Kommersant-Daily"
and the latest edition of the weekly "Itogi" argue that losing the
customs accounts is the price the government will make
Oneksimbank pay for winning two major privatization auctions
recently. "Kommersant-Daily" is believed to receive some financing
from SBS-Agro Bank. "Itogi" is owned by Vladimir Gusinskii's Media-
Most group.

NEMTSOV DOWNPLAYS SPLIT IN GOVERNMENT. First Deputy Prime
Minister Boris Nemtsov has denied rumors of a government split,
saying the cabinet is a "coalition of center-right forces" whose
members are "united by the same goal." In an interview conducted
recently in Sochi and broadcast by RFE/RL's Russian Service on 17
August, Nemtsov said that Prime Minister Chernomyrdin represents
the Our Home Is Russia movement, First Deputy Prime Minister
Anatolii Chubais represents Yegor Gaidar's party Russia's Democratic
Choice, and Nemtsov is closer to Grigorii Yavlinskii's Yabloko,
although he is not formally a Yabloko member. Nemtsov noted that
no policy can be implemented "if it is not approved by the prime
minister -- that's for sure." Many Russian commentators have
speculated that on various policy questions, "young reformers" in the
government, led by Chubais and Nemtsov, are at odds with
"moderate conservatives" led by Chernomyrdin.

CIS SUMMIT POSTPONED YET AGAIN. The next meeting of CIS heads
of state will take place on 20 November in Chisinau, Interfax
reported on 15 August. At the last CIS summit in late March,
participants agreed tentatively to convene again in June but no
definite date was set (see "RFE/RL Newsline," 1 April 1997). In late
July, the press service of the CIS Executive Secretariat told Interfax
that the next CIS summit would take place in the Moldovan capital in
late September or early October. "Nezavisimaya gazeta" on 16 August
quoted Yeltsin's press secretary Sergei Yastrzhembskii as saying that
one of the topics of discussion at the November summit will be space
research in the CIS states.

PROBLEMS CONTINUE ABOARD "MIR." The planned docking of a cargo
ship with the "Mir" space station was canceled on 17 August owing to
a computer error, Russian media reported. Russian Mission Control
flight director Vasilii Solovev said that "necessary baseline data" for
the docking procedure were "loaded incorrectly." Warning systems
aboard "Mir" detected the problem and alerted ground control, which
has rescheduled the docking for 18 August. The cargo ship, which
contains only garbage, is needed to help balance "Mir" during repairs
to modules that gather solar power. The repairs are scheduled to
begin on 20 August. Meanwhile, Vasilii Tsibliev who returned on 14
August from the space station, blamed the problems "Mir" had
suffered over the past few months on inadequate financing. He
commented that "factories do not operate and parts have not been
delivered."

TRANSCAUCASUS AND CENTRAL ASIA

MUTINOUS TROOPS REPOSITION IN SOUTHERN TAJIKISTAN... Under
the command of Col. Mahmud Khudaberdiyev, the Tajik Army's First
Brigade left its barracks south of Kurgan-Teppe late on 15 August
and repositioned near the towns of Kabodien and Shaartuz.
Khudaberdiyev, who is ignoring a 13 August presidential order that
he be stripped of his duties as commander, held negotiations with
government representatives in the afternoon of 15 August, but that
meeting was cut short when it was learned that government troops
had been reinforced and were approaching the Kurgan-Teppe area.
"Volunteers" from the Dangara and Kulyab areas are aiding
government forces near Kurgan-Teppe. They appear, however, to
have been largely responsible for looting in the area and are being
disarmed by government forces.

...COME UNDER ATTACK BY GOVERNMENT FORCES. ITAR-TASS
reported on 18 August that government forces are attacking
positions of the mutinous First Brigade. Fighting is reported at a
bridge near the village of Garavuti, but no reporters have been
allowed into the area. According to some reports, Khudaberdiyev's
remaining forces have been joined by those of former Customs
Committee Chairman Yakub Salimov, which were forced out of
Dushanbe on 9 August by Interior Ministry troops. Salimov was
dismissed by President Imomali Rakhmonov on 15 August. The
fighting is moving toward the Uzbek border, and the Uzbek
government has announced it has taken extra security measures in
the border region.

KAZAKHSTAN, KYRGYZSTAN FAIL TO AGREE OVER NATURAL
RESOURCES. Representatives of the Kazakh government met with a
Kyrgyz delegation led by Prime Minister Apas Jumagulov in Bishkek
on 15 August, according to RFE/RL corespondents. The meeting
focused on the mutual use of natural resources and payment for such
use. Kyrgyzstan claims Kazakhstan owes $23 million for supplies of
Kyrgyz electricity, while Almaty says it does not owe anything. The
two sides agreed to complete construction of the Kambar-Ata
hydroelectric plant on the Naryn River but failed to agree on Kazakh
payment for water from Kyrgyz reservoirs. There was also no Kazakh
response to a Kyrgyz complaint that Kyrgyz cargo trucks are charged
as much as $900 to transit Kazakhstan. Meanwhile, ITAR-TASS
reported on 15 August that Kyrgyzstan reduced water supplies to
southern Kazakhstan the previous day.

AZERBAIJAN, RUSSIA CONDEMN KARABAKH ELECTIONS. Azerbaijan's
Central Electoral Commission issued a statement on 16 August
condemning the presidential elections to be held on 1 September in
the self-proclaimed Nagorno-Karabakh Republic as "illegal and
legally void," ITAR-TASS and Interfax reported. The statement
argued that legal elections in Nagorno-Karabakh can be held only
after the return to their homes of the estimated 50,000 Azerbaijanis
who fled during hostilities. It also called on the Organization for
Security and Cooperation in Europe to prevent the elections from
taking place. Russian Foreign Ministry spokesman Valerii
Nesterushkin on 15 August said his ministry opposes the planned
vote because Nagorno-Karabakh has not been recognized as an
independent state. Both Azerbaijan and Russia condemned the
November 1996 elections in Nagorno-Karabakh on similar grounds.

GEORGIA RESPONDS TO ARDZINBA-SHEVARDNADZE DECLARATION.
Tamaz Nadareishvili, the chairman of the Abkhaz parliament in exile,
condemned the 15 August declaration by the Georgian and Abkhaz
leaders as a "betrayal of Georgia's interests," Interfax reported. The
declaration is a commitment to refrain from the use or threat of
violence; as such, it duplicates a declaration signed by Georgian and
Abkhaz representatives in late July (see RFE/RL "Newsline," 28 July
1997). Shevardnadze claimed that progress toward reconciliation "is
obvious," but Ardzinba warned that the Abkhaz side will make no
further concessions. Ardzinba told journalists in Sukhumi on 16
August that the Georgian leadership had made him an "interesting
proposal connected with the transportation of oil." A Georgian
government delegation headed by Minister of State Niko Lekishvili is
scheduled to discuss economic issues with the Abkhaz leadership in
Sukhumi on 20 August (see also "End Note" below).

NEW PAN-CAUCASIAN LIBERATION MOVEMENT. Unnamed
representatives from Russia's North Caucasian republics and from
Georgia and Azerbaijan attended the founding congress in Grozny on
17 August of the Caucasus Confederation, Russian media reported.
One of the movement's leaders is Chechen former acting president
Zelimkhan Yandarbiev. The movement's aims are to unite all political
forces of the Caucasus and Transcaucasus in the liberation struggle
against Russian colonialism and to create a confederation of
independent Caucasus states, according to ITAR-TASS.

ARMENIAN TELECOM TENDER CLOSES EARLY. The international
tender for the 51 percent government-owned stake in the
telecommunications company Armentel closed on 15 August, two
weeks earlier than originally planned, Interfax reported, quoting an
Armenian trade and industry ministry official. A government
spokesman told RFE/RL's Yerevan bureau on 15 August that the
privatization of Armentel will be completed "within one month." The
names of the companies that submitted bids have not been disclosed.
A journalist for the Turkish daily "Cumhuriyet" recently claimed that
the Armenian authorities had rejected a bid for Armentel made by
the Turkish Telecom company. The remaining 49 percent stake in
Armentel is owned by the U.S. Trans World Telecom corporation.

CORRECTION: "RFE/RL Newsline" incorrectly reported on 12 August
1997 that Turkey is a member of only one of the five international
consortiums extracting Azerbaijan's Caspian oil. In fact, the Turkish
state oil company has a 6.75 percent stake in the consortium
developing the Azeri, Chirag, and Gyuneshli fields and a 9 percent
stake in the consortium set up in June 1996 to exploit the Shah Deniz
field.

END NOTE

ABKHAZIA AND GEORGIA RULE OUT VIOLENCE AND FURTHER
CONCESSIONS

by Liz Fuller

        On 14 August 1992, Georgian troops under the command of
then Defense Minister Tengiz Kitovani marched into the Abkhaz
capital, Sukhumi, and opened fire on the parliament building. That
action triggered a 13-month war between the central Georgian
government and the secessionist Abkhaz leadership, which
culminated in Tbilisi's loss of jurisdiction over Abkhazia and the
exodus of some 250,000 ethnic Georgians who lived there. Five years
later, on 15 August 1997, Eduard Shevardnadze and Vladislav
Ardzinba, the Georgian and Abkhaz presidents, signed an agreement
in Tbilisi abjuring the use or threat of violence and pledging to seek a
solution to the conflict exclusively by peaceful means. The two
leaders failed, however, to make progress toward resolving such
controversial issues as Abkhazia's future political status vis-a-vis the
central government in Tbilisi and the repatriation of the ethnic
Georgians forced to flee during the fighting.
        Nor did Shevardnadze and Ardzinba set a date for the signing
in Moscow of a more comprehensive peace agreement drafted by
Russian President Boris Yeltsin. Although the complete text of
Yeltsin's proposals has not been made public, Shevardnadze has said
it provides for "broad autonomy" for Abkhazia within a unified
Georgian state and is therefore acceptable to the Georgian leadership,
which has consistently rejected the Abkhaz demand for equal status
with the rest of Georgia within a confederation.
        Ardzinba, however, has said that the sole acceptable basis for
further talks with Tbilisi is a protocol drafted by the Russian Foreign
Ministry. That document has been the subject of sporadic
negotiations over several years. The most recent round of talks in
Moscow in June was suspended after Georgia demanded substantive
amendments to a version that the Abkhaz delegation had endorsed.
Under the terms of that document, Georgia and Abkhazia affirm their
"consent to live within the confines of a shared state within the
boundaries of the Georgian SSR as of 21 December 1991. Each of the
two sides preserves its constitution, and relations between them will
be regulated by a special treaty, which both sides agree to invest
with the force of a constitutional law."
        In addition, the Russian Foreign Ministry draft contains several
points that address specific Abkhaz concerns. It stipulates, for
example, that the repatriation of Georgian displaced persons to
Abkhazia is to be implemented in accordance with a UN-mediated
agreement of April 1994, which empowers the Abkhaz authorities to
screen applications from would-be repatriates in order to preclude
the return of war crime suspects. Abkhazia pledges to guarantee the
safety of the repatriates, and provision is made for the creation of
militias to perform that function.
        Georgia, for its part, undertakes to prevent the intrusion onto
Abkhaz territory of "terrorist and saboteur groups, armed
formations, and individuals". (Two such Georgian groups are known
to exist. The so-called White Legion, composed of ethnic Georgian
former members of the Abkhaz Interior Ministry, is suspected of
perpetrating terrorist attacks against the CIS peacekeeping force
currently deployed along the internal border between Abkhazia and
the rest of Georgia. Informal paramilitary formations subordinate to
the so-called Abkhaz parliament in exile -- the ethnic Georgian
deputies to the Abkhaz parliament -- constitute the second group.
Both advocate a new Georgian offensive to restore Tbilisi's hegemony
over Abkhazia by force.)
        Paradoxically, although the Shevardnadze-Ardzinba declaration
was intended as a step toward rapprochement, it may serve to
exacerbate tensions. Spokesmen for the Georgian fugitives from
Abkhazia have denounced the document as a "betrayal of Georgia's
interests." The proponents of a "military solution" to the conflict may
decide to launch a new offensive immediately in order to forestall
any further concessions by Shevardnadze. Alternatively, the
Georgian fugitives may align with disaffected elements in Moscow,
including former Georgian intelligence chief Igor Giorgadze, who are
rumored to be planning to eliminate Shevardnadze. (Any Georgian
faction that undertakes to precipitate new hostilities in Abkhazia will
likely be able to count on backing from those Moscow circles that
have a vested interest in destabilizing Georgia to prevent the export
of Azerbaijan's Caspian oil via the western pipeline to Supsa on
Georgia's Black Sea coast.)
        Yeltsin, too, will be less than satisfied with the outcome of the
Shevardnadze-Arzdinba meeting, given that he is engaged in an
undeclared competition with the Western countries aligned in the
"Friends of Georgia" group to coerce the Georgian and Abkhaz leaders
to sign a peace agreement and take the credit for doing so. (The
"Friends of Georgia," together with representatives of the UN and the
Organization for Security and Cooperation in Europe, undertook a
fruitless attempt to mediate between Tbilisi and Sukhumi in late
July.)
        In addition to upstaging the West, there are three reasons why
Yeltsin wants a peace agreement signed quickly. First, it would
substantiate Russian claims to a monopoly on mediating CIS conflicts.
Second, it would enable the CIS peacekeeping force currently
deployed along the internal border between Abkhazia and the rest of
Georgia to be withdrawn and would dispense with the need for its
replacement by a UN or NATO equivalent. And third, it would serve
to counter the growing perception that Russia's political influence in
the Transcaucasus is rapidly declining.

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