The greatest of faults, I should say, is to be conscious of none. - Thomas Carlyle 1975-1881
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 153, Part I, 5 November 1997



A daily report of developments in Eastern and Southeastern Europe,
Russia, the Caucasus and Central Asia prepared by the staff of Radio
Free Europe/Radio Liberty.

This is Part I, a compilation of news concerning Russia, Transcaucasia
and Central Asia. Part II covers Central, Eastern, and Southeastern
Europe and is distributed simultaneously as a second document.
Back issues of RFE/RL NewsLine and the OMRI Daily Digest are online
at RFE/RL's Web site:
http://www.rferl.org/newsline

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Headlines, Part I

* YELTSIN REMOVES BEREZOVSKII FROM SECURITY COUNCIL

* RUSSIA PUTS PRESSURE ON IRAQ

* ARMENIAN FINANCE MINISTER PRESENTS 1998 DRAFT BUDGET

End Note
RUSSIAN REGIONS PRESSURE KREMLIN INTO POLICY SHIFT

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RUSSIA

YELTSIN REMOVES BEREZOVSKII FROM SECURITY COUNCIL. President
Boris Yeltsin on 5 November signed a decree dismissing Security
Council Deputy Secretary Boris Berezovskii in connection with his
transfer to unspecified new work, RFE/RL's Moscow bureau reported.
In recent months, Berezovskii, one of Russia's wealthiest
businessmen, has frequently clashed with First Deputy Prime
Ministers Anatolii Chubais and Boris Nemtsov, with whom Yeltsin
met the previous day. No details about Berezovskii's new work have
been released, although he told Interfax that he will not be
appointed to a government post. Efforts to curtail Berezovskii's
influence at 51 percent state-owned Russian Public Television (ORT)
are also under way. The government has appointed a council of
representatives for the network, and a 13 November shareholders'
meeting is expected to transform ORT from a closed to an open joint-
stock company, "Kommersant-Daily" reported on 5 November. lb

COMMUNISTS WELCOME BEREZOVSKII DISMISSAL. Communist Party
leader Gennadii Zyuganov and State Duma Speaker Gennadii
Seleznev, also a Communist, welcomed Berezovskii's dismissal as a
generous "gift to the working people" from Yeltsin on the eve of the
80th anniversary of the October Revolution, Russian news agencies
reported on 5 November. Seleznev said Berezovskii should have been
dismissed long ago, adding that a person who continues to conduct
private business should not occupy high office. lb

FEDERATION COUNCIL RATIFIES CHEMICAL WEAPONS CONVENTION...
The Federation Council on 5 November unanimously voted to adopt a
law on ratifying the Chemical Weapons Convention (CWC), which
prohibits the use, production, and stockpiling of chemical weapons,
RFE/RL's Moscow bureau reported. The Duma recently approved the
law after receiving assurances from government officials that
sufficient funds will be allocated for destroying chemical weapons
(see "RFE/RL Newsline," 31 October 1997). However, the Duma added
a clause to the law saying Russia may withdraw from the CWC if it
faces a threat to its national security or if economic problems make
implementing the treaty impossible. Russia has an estimated 40,000
tons in chemical weapons stockpiles, which is more than any other
country. lb

...DELAYS CONSIDERATION OF LAND CODE. Also on 5 November, the
Federation Council postponed a vote on whether to override a
presidential veto of the land code, ITAR-TASS reported. In
September, the Duma overrode Yeltsin's veto of the code, which
would prohibit the purchase and sale of farmland. A "roundtable" of
presidential, government, and parliamentary representatives is to
discuss the code on 22 November. The Federation Council will return
to the issue at its next session, in December. lb

DOCTOR GIVES YELTSIN CLEAN BILL OF HEALTH. One year after he
performed a quintuple-bypass operation on Yeltsin, surgeon Renat
Akchurin told journalists on 4 November that the president has fully
recovered and is in good health. Akchurin said checkups have shown
Yeltsin's heart to be functioning normally. He noted that the
president keeps a busy schedule, making many trips and working up
to 12 hours a day. Akchurin added that Yeltsin is keeping to a low-
fat diet and hinted that he consumes small amounts of red wine to
keep his cholesterol level down, AFP reported. lb

SPOKESMAN DENIES CHERNOMYRDIN DISMISSAL RUMORS.
Government spokesman Igor Shabdurasulov on 4 November denied
rumors that Prime Minister Viktor Chernomyrdin will soon be
sacked, Russian news agencies reported. Shabdurasulov said such
rumors appear every time the prime minister takes time off. (On 3
November, Chernomyrdin began a previously unannounced one-
week vacation.) The spokesman joked that Chernomyrdin is
considering awarding a prize for the best rumor on his impending
dismissal reported by Russian media. lb

RUSSIA PUTS PRESSURE ON IRAQ. Russian Foreign Ministry
spokesman Gennadii Tarasov told journalists on 4 November that a
telephone conversation the previous day between a senior Russian
diplomat and a member of the Iraqi leadership played a key role in
persuading Baghdad to agree to receive a special UN mission, Russian
agencies reported.  Also on 4 November, Russian government
spokesman Shabdurasulov commented that Iraq's continued refusal
to cooperate with UN weapons inspectors is "unacceptable." lf

RUSSIA DENIES INVOLVEMENT IN TAJIK-UZBEK BORDER CLASHES.
Foreign Ministry spokesman Tarasov on 4 November denied
allegations that Russia is seeking to exacerbate inter-ethnic tensions
in Central Asia, Russian agencies reported. In particular, he rejected
claims of Russian involvement in the 27 October clashes between
Tajik government troops and opposition forces near the Tajik-Uzbek
frontier. Tarasov reaffirmed Moscow's "vital interest" in resolving
and preventing conflict situations in Central Asia. lf

OFFICIALS COMMENT ON RUSSIA-JAPAN SUMMIT. Russian
presidential spokesman Sergei Yastrzhembskii on 4 November
announced that the recent pledge by Yeltsin and Japanese Prime
Minister Ryutaro Hashimoto to sign a peace treaty by 2000 reflects
"the political will and firm desire on the part of the two leaders to
overcome the territorial issue," Interfax and AFP reported. However,
Yastrzhembskii noted that no binding pledges were made during the
informal talks between the two leaders. Japanese Foreign Ministry
spokesman Nobuaki Tanaka told journalists in Tokyo that the summit
achieved "excellent" results and made real progress toward solving
the territorial dispute over the Kuril Islands, ITAR-TASS reported.
Also on 4 November, the Japanese consulate in Khabarovsk
expressed "perplexity" concerning a monument unveiled in Sakhalin
to mark the 300th anniversary of the arrival of Russians on the
Kurils. lb

RYBKIN SLAMS SPECULATION OVER CHECHNYA'S FUTURE STATUS.
Russian Security Council Secretary Ivan Rybkin told journalists in
Moscow on 4 November that media speculation about Chechnya's
future political status is "inadmissible" in the light of the Khasavyurt
agreement, which postpones a decision on the issue until 2001,
Russian agencies reported. Rybkin went on to warn that Moscow's
failure to meet its financial obligations to Chechnya plays into the
hands of "extremist forces" there.  Also on 4 November, the Chechen
parliament again postponed a vote on President Aslan Maskhadov's
request for extended powers. Maskhadov, who is vacationing in
Turkey, told "Izvestiya" on 5 November that there are no internal
splits within the Chechen leadership. lf

CHECHNYA TO PROCEED WITH PLANS FOR LEASING PIPELINE.
According to "Nezavisimaya gazeta" of 5 November,  Maskhadov
signed a protocol of intent with several prominent British
businessmen in mid-October on creating an international energy
consortium to which Chechnya intends to lease its sector of the Baku-
Grozny-Novorossiisk pipeline. The newspaper published what it
claims is the entire text of the protocol. The agreement is part of an
ambitious plan to create a Pan-Caucasian common market.
Commenting in October on the Chechen intentions to lease the
pipeline, Russian government spokesman Shabdurasulov warned that
"the pipeline is the exclusive property of the Russian Federation, and
any deals concerning it will be illegal," ITAR-TASS reported on 21
October. lf

GAZPROM SIGNS $3 BILLION LOAN AGREEMENT. As expected,
Gazprom director Rem Vyakhirev signed an agreement in Paris on 4
November with a consortium of Western banks for a $3 billion credit,
ITAR-TASS reported.  The money will finance the construction of the
4,000 kilometer Yamal pipeline, which is to run from Siberia to
Western Europe. Gazprom has undertaken to repay the loan partly
through gas sales to France and Finland. According to the "Financial
Times," Vyakhirev also wants to use some of the loan  to bid at
forthcoming privatizations of Russian oil companies, possibly
including Rosneft. lf

RUSSIA DEMANDS APOLOGY FOR BEHAVIOR OF NEW YORK POLICE.
The Russian Foreign Ministry has demanded that the U.S. explain and
apologize for an "unprecedented intrusion" of New York City police
officers in connection with a car belonging to Sergei Lavrov, Russia's
ambassador to the UN, Russian news agencies reported on 4
November. Police on 31 October halted Lavrov's car and briefly took
the keys from the driver but made no arrests. The police say the car
was stopped "because the operator was blowing the horn extremely
loud and for no reason," AFP reported on 4 November. In January,
Moscow demanded an apology after an altercation between New
York City police and two diplomats from Russia and Belarus (see
"OMRI Daily Digest," 3 and 23 January 1997). lb

U.S. DROPS CLAIMS OF RUSSIAN NUCLEAR TEST. The U.S. government
and the CIA have withdrawn a claim that a "seismic event" near the
Arctic site of Novaya Zemlya in August may have been caused by a
nuclear test, the "Washington Post" reported on 4 November. The U.S.
demanded an explanation from Moscow after a CIA report argued
that the event was probably linked to a nuclear test. Russian officials
denied the charge, saying Russia continues to abide by a five-year
moratorium on nuclear testing (see "RFE/RL Newsline," 29 August
and 3 September 1997). U.S. officials dropped the claim after a panel
of experts convened by the CIA concluded that a nuclear explosion
"almost certainly" did not cause the seismic disturbances. lb

PROSECUTOR SAYS SOLDIERS MAY BE BARRED FROM ROKHLIN'S
MOVEMENT. Chief Military Prosecutor Yurii Demin announced on 4
November that serving military personnel will not be allowed to join
a new movement founded by Duma Defense Committee Chairman
Lev Rokhlin if the movement is officially recognized as "political,"
Russian news agencies reported. Demin said the Justice Ministry has
not yet decided whether to register Rokhlin's the Movement in
Support of the Army. If the movement is registered as a political
organization, soldiers who have joined will be dismissed from the
armed forces. Demin's office is investigating Rokhlin's recent public
statements on his plans to remove Yeltsin and his "hated regime."
Rokhlin claims the media distorted his words (see "RFE/RL Newsline,"
23 October 1997). lb

PROSECUTORS INVESTIGATING 21 GENERALS FOR CORRUPTION. At
the same press conference, Demin said criminal cases have been
opened against 21 generals. He noted an investigation of former
Deputy Defense Minister Konstantin Kobets will be completed by the
end of this year. He also said General Vladimir Ruzlyaev, a former
head of border guards in the North Caucasus, will be prosecuted for
allegedly beating officers. However, Demin admitted that an
investigation into illegal arms shipments to Armenia has been stalled
because Armenian and Georgian authorities have been "slow to
respond to inquiries" from Russian prosecutors, Interfax reported. lb

MOSCOW AUTHORITIES HALT UTILITY RATE HIKE. The Moscow city
government on 4 November annulled a 1 November resolution on
raising rates for heating, water and electricity in the city, Russian
news agencies reported. The increase would have forced residents to
pay 40 percent of the costs for utilities, "Nezavisimaya gazeta"
reported on 4 November. Currently, residents who do not receive
special subsidies must pay 30 percent of those costs. Moscow officials
had previously said they were obliged to implement the increases
because of federal government instructions. However, the Moscow
City Duma, which is dominated by supporters of Mayor Yurii
Luzhkov, appealed to the government to halt the rate hike. Luzhkov
has been a leading critic of federal government plans to force citizens
to pay more for rent and utilities. lb

YELTSIN LIFTS LIMITS ON FOREIGN OWNERSHIP OF OIL COMPANIES.
Yeltsin on 4 November signed a decree lifting restrictions on foreign
ownership of shares in Russian oil companies, Interfax reported.
Under a November 1992 decree, no more than 15 percent of shares
in such companies could be owned by foreign investors. The new
decree is expected to help the government attract higher bids in
upcoming sales of stakes in Rosneft, LUKoil, Norsi-Oil, the Eastern Oil
Company, and the Tyumen Oil Company. It also represents another
blow to former Security Council Secretary Berezovskii, who has
substantial interests in the oil industry (see above). "Nezavisimaya
gazeta," which is partly financed by Berezovskii's LogoVAZ group, has
warned that foreigners should not be allowed to acquire controlling
stakes in Russian oil companies (see "RFE/RL Newsline," 3 October
1997). lb

CHERNOMYRDIN ORDERS PAYMENTS TO ARCHIVE GUARDS. Prime
Minister Chernomyrdin on 4 November instructed the Finance
Ministry to pay back wages to guards of federal archives within
three days, ITAR-TASS reported. The previous day, the Interior
Ministry withdrew the guards from the archives to protest some 4.5
billion rubles ($760,000) in wage arrears. Government spokesman
Shabdurasulov said the guards' action was "absolutely
impermissible" since it put "priceless" archive materials at risk. lb

ALTAI COURT REVOKES LEGISLATORS' IMMUNITY. The Supreme
Court of the Altai Republic has decided to revoke the immunity that
up to now has been guaranteed to members of all legislative bodies
in the republic, "Izvestiya" reported on 5 November. Law
enforcement officials will no longer need to seek the approval of the
republican legislature in order to arrest or prosecute deputies.
Official corruption is believed to be widespread in Altai (see "RFE/RL
Newsline," 30 October 1997). lb

TSAR'S REMAINS TO BE MOVED TO MOSCOW. Yeltsin on 4 November
ordered that the remains of Tsar Nicholas II and his family be
transferred to Moscow for further scientific tests to confirm their
authenticity. The remains are to be returned to Yekaterinburg before
January, when Yeltsin plans to decide where they should be buried
(see "RFE/RL Newsline," 4 November 1997). Communist Party leader
Zyuganov commented that Russia's last tsar should be buried "where
he lived and ruled," alluding to St. Petersburg, Interfax reported. He
described the murder of the tsar's family as a "tragic page" in
Russian history but expressed doubt that Bolshevik leader Vladimir
Lenin was to blame, noting that "war is a very complicated thing." lb

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN FINANCE MINISTER PRESENTS 1998 DRAFT BUDGET.
Armen Darpinian told journalists in Yerevan on 4 November that the
government draft budget projects 5.2 percent GDP growth in 1998
and a 9 percent inflation rate, RFE/RL's Yerevan bureau reported.
Darpinian said that budget expenditures  are estimated at 174 billion
drams ($350 million), 15 percent higher than in 1997, while the
budget deficit is projected at 5.5 percent of GDP. He added that there
are no precise figures on estimated revenues as it is unclear how
much the Armenian government will receive in foreign loans and
from the privatization of state enterprises. Darpinian said tax
revenues are expected to increase by 28 percent owing to improved
value-added and excise tax collection. lf

ARMENIA TO BUY IRANIAN GAS? In talks  with Iranian Oil Minister
Bijan Namdar Zanganehi in Tehran on 2 November, Armenian Deputy
Foreign Minister Sergei Manasarian said Yerevan wants to purchase
an unspecified quantity of natural gas, Reuters reported, citing IRNA.
A previous agreement on Armenian purchases of Iranian gas has not
been implemented for financial reasons, according to "Hayots
ashkhar" on 18 October. In late August, Armenian and Russian
officials signed a major agreement on the export of Russian gas to
Armenia (see "RFE/RL Newsline," 2 September 1997). lf

SHOOTING ON ARMENIAN-TURKISH FRONTIER. The Arshat frontier
post, which is manned by Russian border guards, was fired on from
Turkish territory on 3 November, Russian and Armenian agencies
reported. The shots came from a sub-machine gun. No one was
injured in the incident. lf

TEN KILLED IN RENEWED ABKHAZ FIGHTING.  Ten Abkhaz police
officers, including a deputy minister of internal affairs, were killed in
a clash with Georgian White Legion guerrillas in Abkhazia's Lata
gorge on 1-2 November, CAUCASUS PRESS reported on 5 November.
The Abkhaz contingent was reportedly planning to attack Georgian-
populated villages in the gorge. lf

ALIEV DISCUSSES SECURITY ISSUES. Azerbaijani President Heidar
Aliev told a session of his Security Council on 3 November that the
Russian military presence in Armenia and Georgia negatively impacts
on relations between CIS states, Turan reported on 4 November. He
again called for the annulment of the Russian-Armenian Treaty on
Friendship, Cooperation, and Mutual Assistance, signed in August. He
went on to say the stalled investigation into Russian arms supplies to
Armenia is an obstacle to implementing the Organization on Security
and Cooperation in Europe Minsk Group's Karabakh peace proposal.
Aliev endorsed the program for Azerbaijani participation in NATO's
Partnership for Peace program drafted by Foreign Minister Hasan
Hasanov.  But Azerbaijan has nonetheless cancelled its participation
in the PFP exercises currently under way in Romania for financial
reasons, Mediafax reported on 4 November. lf

ELCHIBEY ADVOCATES SUSPENDING OIL CONTRACTS. Addressing the
Supreme Council of the opposition Azerbaijan Popular Front on 3
November, former Azerbaijani President Abulfaz Elchibey argued
that the implementation of several oil contracts signed with U.S.
firms should be suspended until Washington reviews its approach to
resolving the Karabakh conflict, Turan and Interfax reported.
Elchibey said the U.S. is pursuing double standards by "demanding
that Azerbaijan  give up its sovereign right to Karabakh." He added
that numerous violations were made in signing the oil contracts.
Elchibey reportedly declined an invitation from the U.S. Embassy to
meet with the U.S. Secretary of State's special adviser on CIS affairs
on 4 November, saying he was "too busy." lf

END NOTE

RUSSIAN REGIONS PRESSURE KREMLIN INTO POLICY SHIFT

by John Helmer

        When Orel Oblast cast a 95 percent vote to re-elect Governor
Yegor Stroev in late October, the Kremlin sought  to beat State Duma
election observers to the punch by claiming victory for President
Boris Yeltsin.
        Stroev, who is also the powerful chairman of the Federation
Council, "personifies stability and common sense," said Deputy Viktor
Sheinis, one of the State Duma observers at the Orel poll.
        According to Kremlin officials, Stroev's near-total victory--
surpassing even the margin of victory in Kemerovo by Governor
Aman Tuleev--could not have been won without Yeltsin's personal
backing or without institutional and media endorsement. Nor could it
have been achieved without cash from the central government to
meet regional budget needs.
        Although Stroev and Tuleev are still viewed as pro-communist
by the Russian Communist Party, they are also claimed as Yeltsin
supporters by the Kremlin. Sergei Shapovalov, the deputy head of
the president's territorial department, argues that party loyalties no
longer have any bearing in regional politics. "Let the opposition count
as they will," Shapovalov told RFE/RL. "We know that political colors
change radically after a person gets elected."
        Regional politicians say that, following Yeltsin's recent
concessions to the Duma and to regional treaty negotiators, it is the
president who most resembles a chameleon.
        In addition to Stroev, representatives of several multi-region
associations are to be included in the monthly "roundtable," which
Yeltsin promises will now review the most contentious government
policies before they are sent to the parliament. This was just one of
the points Yeltsin said he accepted as the price for avoiding the Duma
vote of no confidence in October. Stroev is also included in the
"council of four," an even more influential consultative body Yeltsin
is reviving with Prime Minister Victor Chernomyrdin and Duma
Speaker Gennadii Seleznev.
        Yeltsin has also put emphasis on the revenue-sharing and
policy provisions of the treaties--37 so far--that he has signed with
regional administrations. Those pacts, he asserted in a recent speech,
are a "fundamentally new constitutional instrument."
        Significantly, presidential officials say, Yeltsin has conceded
that the treaties are an alternative source of policy-making power in
which several regional leaders are developing the upper hand.
Because of his position in the Federation Council, Stroev is one of
those leaders, while Tuleev, who controls the vital Kuzbass coal
mines, is another. The governors of the big tax-paying regions, and
the mayor of Moscow, are also members of this policy-making elite.
        This group is strongly opposed to the policies of the
government's perceived market reformers, First Deputy Prime
Ministers Anatolii Chubais and Boris Nemtsov. Just how big the gap is
between them became evident six months ago, when the Federation
Council passed a resolution endorsing a report prepared by its own
analytical department.
        Entitled "On Measures to Perfect State Regulation of the
Economy and Correct Economic Reform,"  the report was drafted by
Sergei Glazev, a young economist currently working for Stroev. In
September 1993, Glazev was a cabinet minister who turned against
the government and has been a scathing critic of its policies ever
since. His report blames the government's budget-cutting approach
for the collapse of investment and the failure of economic recovery.
It recommends a totally different budget strategy from the one being
pursued by the government.
        A poll of upper house members, carried out by the Russian
Academy of Sciences and published in October, suggests that 70
percent or more of Council deputies agree with Glazev. When asked
in a similar poll two years ago to say if they favor strengthening
state regulation of the economy, 16 percent said "yes." The survey
also notes greater blame directed at federal government policy this
year, compared with 1995.
        Anton Fedorov, overseer of presidential representatives in the
regions, says the Kremlin has had to replace 60 percent of those
representatives this year because of the suspicion that their loyalty
has been co-opted by the regional power elites.
        Yeltsin recently described his treaties with the governors as
necessary to prevent "a weak rag state in which everyone is out for
himself." The view in the Federation Council is that "everyone for
himself" is exactly what those treaties mean.

The author is a Moscow-based journalist who regularly contributes to
RFE/RL.




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