RFE/RL NEWSLINE Vol. 2, No. 166 Part I, 28 August 1998

___________________________________________________________
RFE/RL NEWSLINE Vol. 2, No. 166 Part I, 28 August 1998

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Headlines, Part I

* KREMLIN PREPARING FOR YELTSIN'S DEPARTURE?

* ADMINISTRATION BALKS AT DUMA PROPOSALS

* TAJIK GOVERNMENT ACCUSES FORMER COLONEL OF MURDERS IN
TURSUNZADE

End Note: RUSSIA'S NEIGHBORS ON RUSSIA'S PROBLEMS
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

RUSSIA

KREMLIN PREPARING FOR YELTSIN'S DEPARTURE? "Kommersant-
Daily" on 27 August argued that the presidential staff
no longer pretends that "everything is fine." They
expect acting Prime Minister Viktor Chernomyrdin "not
only to overcome the financial crisis but also to secure
guarantees from the [State] Duma if President [Boris
Yeltsin] wants to resign." A "high-ranking" source told
the newspaper that the Kremlin is seeking a special law
that would provide for the president's financial and
physical well-being in retirement. The newspaper adds
that now "Yeltsin will share any powers with
Chernomyrdin." In March, one of the reasons Yeltsin
reportedly dismissed Chernomyrdin was because he
conducted talks with Ukrainian President Leonid Kuchma
as an equal. However, on 26 August, Chernomyrdin flew to
Crimea with Yeltsin's full approval to meet with the
Belarusian and Ukrainian heads of state. JAC

RUMORS ABOUT YELTSIN SPREAD. Presidential spokesman
Sergei Yastrzhembskii on 27 August insisted that there
is no truth to a CBS news report that President Yeltsin
has written but not yet signed his resignation.
Yastrzhembskii said "I would like to calm the Russian
public and the Russian and foreign media: There is no
talk of, nor can there be any talk of, any resignation
by the president." The same day, "Nezavisimaya gazeta"
quoted a "high-ranking staffer close to presidential
circles" who said that sometime in October or November
the Kremlin will create "a fitting excuse for Yeltsin's
departure from political life." The newspaper suggests
that Yeltsin will resign only after his chosen
successor, Chernomyrdin, has been confirmed as prime
minister. JAC

DUMA ATTEMPTS POWER GRAB... The first draft of the
political agreement crafted by the Duma commission and
to be approved by a tripartite commission composed of
members of both legislative chambers and the
administration envisions a significant transfer of power
from the executive to the legislature. According to
"Russkii telegraf" on 27 August, the Duma wins the right
to approve the appointment not only of the prime
minister but also of his deputies and key ministers. And
it would be able to hold a no-confidence vote on
individual ministers and not just on the government as a
whole. In exchange for these broader powers, the Duma
promises to freeze the impeachment process, to refrain
from holding a no confidence vote in the government for
at least three months, and to review and pass
legislation in a speedy manner. JAC

...AND CONSTITUTION-TINKERING. Enacting the Duma's
version of the political agreement would require
revising the Russian Constitution because the agreement
significantly enhances the powers of the legislature.
And at least some Duma factions apparently do not mind
having their enhanced powers enshrined in the
constitution. On 27 August, Aleksandr Shokhin, head of
the Our Home is Russia faction, told reporters that it
is "necessary to start the process of making amendments
to the Russian Constitution by convening a
constitutional conference." JAC

ADMINISTRATION BALKS AT DUMA PROPOSALS. The
administration's initial reaction to the Duma's version
of the political agreement was extremely negative.
According to ITAR-TASS on 27 August, presidential
spokesman Yastrzhembskii said that diluting the
president's powers in favor of the Duma and Federation
Council is "clearly asking too much." Communist Party
chief Gennadii Zyuganov declared that his faction does
not like the document either, but for a very different
reason. In his opinion, the agreement should not
preclude impeachment. It also should include some kind
of law on the media, requiring "councils of observers"
at all major publications that would encourage the
dissemination of honest and correct information.
Similarly, Nikolai Ryzhkov, leader of the Power to the
People faction, thinks the agreement is flawed since it
has no guarantee that the Duma would confirm eight
ministers and heads of central departments, according to
Russian Public Television. JAC

STROEV AS ALTERNATIVE CANDIDATE FOR PREMIER?
"Nezavisimaya gazeta" on 28 August reported that a group
of unidentified regional governors intend to block
Chernomyrdin's confirmation as premier. They will
propose the candidacy of Federation Council speaker
Yegor Stroev instead, the newspaper claimed. In an
interview in "Izvestiya" the previous day, Stroev had
said he takes "a negative view" of rumors that he will
be proposed as a candidate for premier if Chernomyrdin
is not confirmed in that post. Stroev said that the
Federation Council is prepared "to support any
government...but we hope that the government too will
support the measures proposed by the regions." He noted
that none of the four initiatives advanced in recent
years by the Federation Council met with support from
the executive branch. LF

FOREIGN EXCHANGE CLOSED DUE TO LACK OF FUNDS. The
Central Bank on 27 August announced that the Moscow
Inter-bank Currency Exchange will not resume trading on
28 August. The bank cited the tremendous imbalance
between the demand for foreign currency and its supply.
According to "Izvestiya" on 28 August, excess demand for
dollars totaled $290 million. Fearing that the exchange
may never reopen, some Moscow bankers told Interfax that
it "depends on who comes to power." JAC

STOCKS PLUNGE. According to Russia's benchmark index,
stocks sank 17.1 percent to their lowest level since the
benchmark was first calculated on September 1995.
Traders said that uncertainty about Yeltsin's health and
an atmosphere of reduced investor confidence following
the announcement of the government's plan for its GKO
contributed to the stocks' fall (see "RFE/RL Newsline,"
27 August 1998). JAC

DUMA PROPOSES NATIONALIZATION, PROTECTIONISM. On 27
August, the Duma commission drafting the political
agreement also completed a first version of its economic
policy slated for final approval by the tripartite
commission. According to ITAR-TASS, Vladimir Ryzhkov,
Duma deputy speaker and a member of the Our Home Is
Russia faction, described the document as a
"fundamentally new approach to regulating economic
activity." Under the plan, Russian customs policy would
become more rigorous "regarding protection of the
domestic market." In addition, banks that failed to meet
their obligations to depositors would become state
property. Interfax reported that other troubled
enterprises deemed to be of national importance would be
subject to temporary nationalization in order "to reform
them and make them more efficient." The plan also
specifies that the federal budget should be balanced and
tax revenues should account for no less than 70 percent
of budget revenues. JAC

ANOTHER SUPER-BANK CREATED. National Reserve Bank,
Inkombank, Avtobank, Mezhkombank, and Alfa-Bank
announced plans to merge on 27 August, Russian agencies
reported. According to earlier press reports, only
Inkombank and NRB were joining forces; however, the
current constellation of five banks may grow even
larger. According to Interfax, executives from Avtobank
and Mezhkombank are engaged in talks with other large
commercial banks to join the new banking group.
Aleksandr Lebedev, chairman of the board of directors of
the National Reserve Bank, will oversee the holding. JAC

ALL THAT GLITTERS. The Central Bank is considering
minting gold coins as an alternative currency to the
ruble, whose convertibility has been called into
question since trading has been halted for the last few
days (see "RFE/RL Newsline," 27 August 1998). The
Association of Russian Banks proposed the idea, which
quickly won support from the government and the Duma,
according to Dmitrii Ignatev, chief of the assocation's
precious metals department. The coins could be in
circulation within two weeks if the Central Bank decides
to give the plan the go-ahead. Also under consideration
at the Central Bank is a plan to transfer gold reserves
from the Central Bank to selected commercial banks in
order to guarantee the safety of private deposits,
according to Interfax. JAC

BULGARIAN PRESIDENT IN MOSCOW. Petar Stoyanov is making
his first official visit to Russia in his capacity as
Bulgarian president. On 28 August, he met with President
Yeltsin, who later told journalists that he wants
Russian-Bulgarian relations to return to their "past
levels." He said a joint working group has been set up
for that purpose. ITAR-TASS quoted Stoyanov as saying
there is now "political will" on both sides to improve
relations and to put aside "past misunderstandings."
Stoyanov told "Nezavisimaya gazeta" that he hopes Russia
will invest in the construction of pipelines and the
privatization of oil refineries in Bulgaria. Several
bilateral agreements between Russia and Bulgaria are
expected to be signed before Stoyanov returns to Sofia.
JAC/MS

DAGESTAN ELECTS NEW MUFTI. Akhmed hadji Abdulaev, former
rector of the Islamic University in Kizilyurt, has been
elected Dagestan's mufti, replacing Said-Mukhamed
Abubakarov, who was killed by a car bomb on 21 August,
"Nezavisimaya gazeta" reported on 28 August. The
Dagestani State Council convened on 27 August to discuss
implementation of the Russian government program adopted
a year ago to stabilize the region's economy. It is
unclear whether the 26 August protest march to demand
the resignation of State Council chairman Magomedali
Magomadov was also on the agenda. State Duma Committee
for Nationality Affairs Chairman Vladimir Zorin told the
newspaper that the rising tensions in Dagestan
underscore the need to create a state commission for the
North Caucasus. He added that Chernomyrdin's
confirmation as prime minister would have a positive
effect, given the latter's deep familiarity with the
situation in the region. LF

TRANSCAUCASUS AND CENTRAL ASIA

TAJIK GOVERNMENT ACCUSES FORMER COLONEL OF MURDERS IN
TURSUNZADE... The Tajik government claims former army
Colonel Mahmud Khudaberdiyev ordered the murder of six
people in Tursunzade on 27 August, including the mayor
(see "RFE/RL Newsline," 27 August 1998), Interfax
reported. Tajik presidential spokesman Zafar Saidov said
one of the attackers killed in the shooting has been
linked to Khudaberdiyev's group. Khudaberdiyev was
commander of the presidential guard's rapid reaction
force but, dissatisfied with the terms of the Tajik
peace accord, he came into armed conflict with the
government in the second half of 1997. Khudaberdiyev,
speaking with RFE/RL's Tajik service on 27 August,
denied having any part in the attack on the Tursunzade
mayor's office. BP

...ASKS UZBEKISTAN FOR HELP. The Tajik government claims
the group that attacked the mayor's office in Tursunzade
fled toward the Uzbek border and is now in the village
of Toshteppe in the Uzbekistan's eastern Uzun Region,
ITAR-TASS reported on 27 August. It has also asked the
Uzbek government for help in apprehending the group. The
Uzbek Interior Ministry refuted the claim that the group
is on Uzbek territory and called the events in
Tursunzade "an internal affair of Tajikistan." The
ministry also said attempts to connect Uzbekistan with
those events "plant the seeds of discontent between the
Uzbek and Tajik peoples." BP

TAJIKISTAN TO RECEIVE MORE LOANS. The World Bank will
lend Tajikistan $5 million to help repair damage caused
by recent flooding, ITAR-TASS reported on 28 August. The
Asian Development Bank has also promised Tajikistan a
$20 million loan for technical assistance. BP

U.S. SENATOR IN KAZAKHSTAN. Richard Lugar arrived in
Almaty, Kazakhstan, on 26 August to discuss financing of
special projects, RFE/RL correspondents reported. Those
projects include converting military installations to
civilian use, the disposal of weapons of mass
destruction, and the non-proliferation of nuclear arms.
RFE/RL correspondents report that 600 kilograms of
enriched uranium is due to be shipped to the U.S. for
disposal this year. Lugar held discussions with Kazakh
Prime Minister Nurlan Balgimbayev on further uranium
shipments to the U.S. BP

KAZAKHSTAN TO EXPORT MANUFACTURED GOODS RATHER THAN RAW
MATERIALS? During a tour of a steel plant in Karaganda,
President Nursultan Nazarbayev said that he favors
exporting manufactured goods instead of mostly raw
materials, Interfax reported on 27 August. Such a move
was outlined in the so-called Snow Leopard program for
economic transformation by 2030. Nazarbayev said that
while emphasizing domestic production of such goods, he
will not bar imports as "we [do not want to] encourage
the production of poor quality goods by our plants." The
Kazakh president added, "We should develop small and
medium-sized businesses, which should number tens of
thousands." Nazarbayev also took the opportunity to
comment on unemployment, saying everyone should be able
to find a job. "If there is no work here, then take
land, breed livestock, engage in private business, and
feed your family, " he said. BP

ARMENIAN ELECTION LAW COMPROMISE PROPOSED. Union of
Self-Determination chairman and presidential adviser
Paruyr Hayrikian told journalists in Yerevan on 26
August that his party will appeal to the Constitutional
Court to rule on the optimum correlation in the new
election law between the majority and proportional
systems, Noyan Tapan reported the following day. The
Yerkrapah union of war veterans, which forms the
majority within the present parliament, wants most seats
in the next legislature to be allocated in single-
mandate constituencies. Other parties advocate
allocating all but 30-40 seats on the basis of party
lists. LF

ARMENIAN PRESIDENT MEETS WITH AZERBAIJANI JOURNALISTS.
Robert Kocharian on 26 August met with Azerbaijani and
Georgian journalists visiting Armenia to participate in
a seminar organized by the Yerevan Press Club, Noyan
Tapan reported the following day. Outlining Armenia's
foreign policy priorities, Kocharian again rejected as
unacceptable the OSCE guidelines for resolving the
Karabakh conflict. He proposed the Dayton agreement on
Bosnia as a possible alternative that would preclude the
subordination of Karabakh to Azerbaijan, Turan reported.
Kocharian also warned against any attempt by Azerbaijan
to "privatize" the TRACECA transport corridor project,
adding that Armenia intends to participate in that
project. LF

FINLAND TO BACK AZERBAIJANI MEMBERSHIP IN COUNCIL OF
EUROPE. Meeting on 26 August in Baku with Azerbaijani
President Heidar Aliev, a visiting Finnish parliament
delegation pledged that when Finland assumes the
chairmanship of the Council of Europe in 1999, that
country will support Azerbaijan's acceptance into full
membership of that body. At present, the three
Transcaucasus states have special guest status with the
Council of Europe. LF

AZERBAIJANI POLICEMAN FIRED FOR BEATING JOURNALIST.
Azerbaijani Interior Minister Ramil Usubov has ordered
the dismissal of a police officer who assaulted an
opposition journalist on 22 August, Turan reported on 27
August. Hajji Zamin, a correspondent for the Azerbaijan
Popular Front newspaper "Azadlyg," was assaulted and
subjected to verbal abuse at a Baku metro station. The
independent journalists' union Yeni Nesil lodged a
protest at the incident. LF

GEORGIAN PRESIDENT CRITICIZES SECURITY MINISTRY. Eduard
Shevardnadze has condemned the failure of the Georgian
National Security Ministry to improve its anti-terrorist
activities in the wake of two attempts on his life,
according to Interfax. Shevardnadze pledged to apprehend
the perpetrators of the 25 August bombing in the west
Georgian town of Zugdidi, which killed two fugitives
from Abkhazia and wounded several dozen more. The Abkhaz
Foreign Ministry has expressed condolences to the
families of the victims, Caucasus Press reported on 26
August. Abkhaz parliament-in-exile chairman Tamaz
Nadareishvili has blamed the bombing on ethnic Georgian
fugitives recruited by Gali Raion administrator Ruslan
Kishmaria into a special military formation that is to
patrol the internal border between Abkhazia and the rest
of Georgia, according to Interfax. LF

RETURNING GEORGIAN FUGITIVES HARASSED IN GALI. A
Georgian official told Caucasus Press on 27 August that
the Abkhaz authorities are detaining ethnic Georgian
fugitives from Gali Raion who attempt to return to their
homes to harvest their hazelnut crop. The agency had
earlier reported that members of the Russian
peacekeeping force deployed in Gali are assisting the
local Abkhaz authorities in harvesting hazelnuts. The
Georgian fugitives are otherwise totally dependent on
humanitarian aid. The Georgian authorities can provide
them with only a half loaf per person per day. LF

ADJARIA TO DEFY TBILISI OVER LOCAL ELECTIONS. Valerii
Gelbakhiani, who advises Adjar Supreme Council chairman
Aslan Abashidze on legal affairs, told Caucasus Press on
27 August that the Adjar parliament has drafted a law on
local elections that provides for local mayors and other
authorized representatives to be elected, rather than
appointed, as is the case under Georgian legislation.
Gelbakhiani said that the Adjar Constitution gives that
republic the right to adopt its own legislation on
elections. He added that he hopes the Georgian
legislation will be amended to allow for the election of
local officials before the 15 November local elections.
LF

END NOTE

RUSSIA'S NEIGHBORS ON RUSSIA'S PROBLEMS

by Paul Goble

	The leaders of Russia's immediate neighbors--the 11
former Soviet republics and the three Baltic States--
appear confident that the ongoing political turmoil in
Moscow will not have a negative impact on either their
internal development or their bilateral relations with
the Russian Federation.
	Some even have suggested that the return of Viktor
Chernomyrdin might bring Russia some stability, allow it
to recover from its current crisis, and thus make it
possible for relations between Moscow and their
countries to improve.
	But a few have indicated that they are concerned
that Moscow's problems could become theirs either
directly, if Russian politicians try to exploit
nationalist themes, or indirectly, if Western
governments and investors decide that the entire post-
Soviet region is now at risk.
	Such a range of judgments would not surprise anyone
if it came from the neighbors of any other major country
going through difficulties. But it undoubtedly will
surprise many who still think of the post-Soviet region
as a single unit and who believe that the leaders of all
the countries there still focus first and foremost on
Moscow.
	Across the region once occupied by the USSR,
presidents, prime ministers, and foreign ministers
reacted calmly to Boris Yeltsin's decision to bring back
Chernomyrdin as prime minister and the latter's
willingness to cooperate with Communists in the Russian
parliament.
	The statement of the Kyrgyz presidential press
secretary earlier this week was typical. Kanybek
Imanaliyev said the change is "Russia's internal
affair," a statement echoed in Tajikistan and other
Central Asian capitals.
	Latvian President Guntis Ulmanis reflected the
views of most when he said the change in government in
Moscow will have no impact on Russia's relationship with
his country. The return of Chernomyrdin, the Latvian
leader said, is "in no way linked to relations with
Latvia." And he pointed out that at the present time,
whatever some citizens of his country may think, "Moscow
is least of all thinking about Latvia."
	Most leaders were inclined to put an even more
positive interpretation on developments in the Russian
capital. Georgian President Eduard Shevardnadze said he
hopes Chernomyrdin's return will enhance stability in
Russia, which, he said, is now "crucial for everybody"
but "especially for Georgia."
	Moldovan President Petru Lucinschi said he believes
that Chernomyrdin's "experience and influence will help
overcome the severe financial crisis" in Russia. He
expressed confidence in the future of Russian-Moldovan
relations on the basis of their development during
Chernomyrdin's earlier tenure as Russian prime minister.
	And Lithuanian President Valdas Adamkus said he is
confident Chernomyrdin has the skill to "stabilize the
situation" in Russia, which, he added, would promote the
continued expansion of bilateral ties "in the right
direction for the benefit of our peoples."
	But in the midst of this generally upbeat set of
assessments, there were some who indicated that the
problems in Russia might spread to their own countries.
In contrast to his president, Latvian Foreign Minister
Valdis Birkavs was one such person. He suggested that
the deepening of the economic crisis in Russia could
lead to problems for Latvia.
	That conclusion, Birkavs said, reflects the fact
that "Russia unfortunately uses Latvia in its domestic
political games." But even he said that Moscow now faces
so many domestic problems that it is unlikely to focus
its attention on any of its neighbors anytime soon.
	Others expressed concern that Russian political and
economic problems could have a serious impact on Western
assessments of their countries. Estonian President
Lennart Meri, for example, said he does not believe that
Chernomyrdin's appointment will have a negative impact
on Estonian-Russian relations. But he indicated that the
devaluation of the ruble and the declines in the Russian
stock markets could lead some in the West to draw more
sweeping conclusions about the region.
	In every case, at least some of the confidence
reflects the requirements of diplomacy. But equally, if
not more, important, this confidence also reflects the
extent to which these are 14 independent and very
different countries, significantly less dependent on
Russia now than they were only a few years ago.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
               Copyright (c) 1998 RFE/RL, Inc.
                     All rights reserved.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

HOW TO SUBSCRIBE
Send an email to newsline-request@list.rferl.org with the
word subscribe as the subject of the message.

HOW TO UNSUBSCRIBE
Send an email to newsline-request@list.rferl.org with the
word unsubscribe as the subject of the message.

For subscription problems or inquiries, please email
listmanager@list.rferl.org
________________________________________________
CURRENT AND BACK ISSUES ON THE WEB
Back issues of RFE/RL Newsline and the OMRI Daily Digest are
online at: http://www.rferl.org/newsline/search/
_________________________________________________
LISTEN TO NEWS FOR 23 COUNTRIES
RFE/RL programs for countries in Eastern Europe, the
Caucasus, Central Asia, Russia and the South Slavic region
are online daily at RFE/RL's 24-Hour LIVE Broadcast Studio.
http://www.rferl.org/realaudio/index.html
_________________________________________________
REPRINT POLICY
To receive reprint permission, please contact
Paul Goble, Publisher
Email: GobleP@rferl.org
Phone: 202-457-6947
Fax: 202-457-6992
Postal Address:  RFE/RL,  1201 Connecticut Ave., NW
Washington, DC  20036  USA
_________________________________________________
RFE/RL NEWSLINE STAFF
* Paul Goble, Publisher, GobleP@rferl.org
* Liz Fuller, Editor-in-Chief, CarlsonE@rferl.org
* Patrick Moore, Team Leader, MooreP@rferl.org
* Julie A. Corwin, CorwinJ@rferl.org
* Jan Maksymiuk, MaksymiukJ@rferl.org
* Bruce Pannier, PannierB@rferl.org
* Michael Shafir, ShafirM@rferl.org
* Jan Cleave, CleaveJ@rferl.org

Freelance And Occasional Contributors
* Fabian Schmidt
* Matyas Szabo
* Pete Baumgartner
* Jeremy Bransten
* Jolyon Naegele
* Anthony Wesolowsky
* Julia Guechakov
* Floriana Fossato

RFE/RL Newsline Fax: (420-2) 2112-3630
_________________________________________________
RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC