RFE/RL NEWSLINE Vol. 2, No. 170 Part I, 3 September 1998

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RFE/RL NEWSLINE Vol. 2, No. 170 Part I, 3 September 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
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SPECIAL REPORT: HOW RUSSIA IS RULED--1998
As the string of crises continue in Russia, the question
remains: Who is in charge? This in-depth report analyzes
the country's power structure.
http://www.rferl.org/nca/special/ruwhorules/index.html

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Headlines, Part I

* GOVERNORS BACK CHERNOMYRDIN

* CHERNOMYRDIN FORMS CABINET

* KYRGYZ PRESIDENT CALLS FOR CHANGES TO CONSTITUTION

End Note: THE SORCERER'S APPRENTICE'S APPRENTICE
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RUSSIA

GOVERNORS BACK CHERNOMYRDIN. The leaders of 20 regions
and republics on 2 September met with acting Prime
Minister Viktor Chernomyrdin. According to Interfax,
Murtaza Rakhimov, president of Bashkortostan, said that
only one or two regional leaders still oppose
Chernomyrdin. Among those declaring their support for
his candidacy were Aman Tuleev, governor of Kemerovo;
Ruslan Aushev, president of Ingushetia, and Boris
Govorin, Irkutsk governor. "Kommersant-Daily" concludes
that the "economic and financial situation in the
regions is close to collapse and the governors need
someone who would be able to assume total
responsibility." The Federation Council will meet on 4
September to consider Chernomyrdin's candidacy. In an
abrupt reversal of his earlier sharp criticism, Vladimir
Zhirinovsky, leader of the Liberal Democratic Party,
also declared his support, saying "Russia is in need of
a government chairman with a sound knowledge of the
current situation." Zhirinovsky said his 50-member
faction abstained in the vote on Chernomyrdin earlier
this week. JAC

DUMA PREPARED FOR DISSOLUTION. "Segodnya" on 2 September
reported that Vladimir Ryzhkov, State Duma deputy
speaker, said the lower house will be dissolved no later
than 14 September if Chernomyrdin is not confirmed. He
added that the Communist Party is already preparing an
appeal to the people in such an event. The newspaper
writes that a new parliamentary election could be put
off indefinitely, in part because the Federation Council
and "other authorities are perfectly prepared to do
without the Duma. And by some legal--or illegal--act
they will certainly find an original solution to carry
this out." Communist Party chief Gennadii Zyuganov
remained defiant, telling reporters that "it is not a
matter of the dissolution of the Duma but of the Russian
Federation itself and the destruction of our statehood."
JAC

NO DUMA ELECTIONS BEFORE MAY 1999? The Justice Ministry
on 2 September announced that no political party has the
right to participate in parliamentary elections before
May 1999, Interfax reported. The ministry explained that
a September 1997 law requires that organizations
planning to run in elections must first amend their
charters and register them with the Justice Ministry and
then wait a year to participate in elections. The
Federation Council voted down an amendment passed by the
Duma to reduce the waiting period to six months. JAC

CLINTON MET GOVERNORS, OPPOSITION. U.S. President Bill
Clinton met at the US embassy in Moscow on 2 September
with regional leaders such as Samara governor Konstantin
Titov, Arkhangelsk governor Anatolii Yefremov, Novgorod
governor Mikhail Prusak, Saratov governor Dmitrii
Ayatskov, and Tatarstan President Mintimer Shaimeyev. He
also met with leading Moscow-based political figures,
including Communist Party leader Gennadii Zyuganov and
Yabloko leader Grigorii Yavlinskii. Zyuganov told
reporters afterward that Clinton "seemed to be very
surprised when I told him that Mr. Yeltsin did not work
with parliament at all." Yavlinskii praised Clinton's
timing, saying that "Clinton's visit here in the context
of the very fierce economic and political crisis in
Russia is a good sign, suggesting that maintaining
friendly relations between our countries does not depend
on temporary variations." JAC

U.S., RUSSIA SIGN AGREEMENTS. Presidents Clinton and
Yeltsin concluded several agreements and joint
communiques at the close of the summit on 2 September.
Two security agreements were signed, one pledging to
exchange information on ballistic missile launches and
the other reducing stocks of plutonium (see "RFE/RL
Newsline," 2 September 1998). The two countries also
agreed to form working groups to tighten export controls
on dual-use technology, combat terrorism, and persuade
India and Pakistan to abandon their arms race. The joint
communiques addressed the need for a cease-fire in
Kosova, the banning of biological weapons, and
cooperation in trade, investment, and technology. With
regard to NATO, the two presidents agreed to disagree.
Yeltsin told a press conference that "we have not
deviated from our previous position-- we are against
NATO expansion to the East." Russian presidential
spokesman Sergei Yastrzhembskii declared that with
President Clinton's visit, U.S.-Russian relations had
"overcome an apparent recent slump." JAC

CHINA TO THE RESCUE? While President Clinton linked
additional economic assistance to concrete reform
measures, China is willing to provide $540 million in
aid to Russia, according to Britain's "The Guardian." On
3 September, the newspaper quoted Chinese Foreign
Minister Tang Jiaxuan as saying China will provide aid
through the IMF. According to the Dutch newspaper
"Groot-Bijgaarden De Standaard," the EU will take up the
issue of the Russian economic crisis on 3 September. The
possibility of adjusting credits that Russia receives
under TACIS will be discussed, but a EU spokesman said
that the crisis in Moscow cannot be resolved by
increasing credits. JAC

CHERNOMYRDIN FORMS CABINET... Russian President Boris
Yeltsin on 2 September signed a decree reinstating the
following ministers from Sergei Kirienko's government:
acting Justice Minister Pavel Krasheninnikov, acting
Foreign Minister Yevgenii Primakov, acting Defense
Minister Igor Sergeev, acting Interior Minister Sergei
Stepashin, acting Deputy Prime Minister Boris Fedorov,
and acting Minister for Emergencies Sergei Shoigu.
Acting Deputy Prime Minister Oleg Sysuev, acting Deputy
Prime Minister Viktor Khristenko, and acting Minister of
the Economy Yakov Urinson were not named in the decree
and are widely expected to leave the government. Most
newspapers expect acting Finance Minister Mikhail
Zadornov to retain his position. Acting Minister of
Industry and Trade Yurii Maslyukov, the only member of
the Communist Party in the former government, said on 3
September that he is resigning because he opposes
Chernomyrdin. JAC

...TAPS REGIONAL LEADERS. "Nezavisimaya Gazeta" reported
on 1 September that the Chernomyrdin might tap Vladimir
Torlopov, chairman of the Federation Council Committee
for Social Policy, for the post of deputy prime minister
with responsibility for social questions. According to
"Rossiiskaya gazeta" on 2 September, Torlopov, a former
trade union leader in Komi Republic, was instrumental in
forging a compromise during miners' strikes in Vorkuta
in the late 1980s and 1990s. The government has also
been wooing Samara governor Titov, according to "Noviye
izvestiya" on 2 September. Titov told reporters that he
will meet for a second round of talks on joining the
government on 3 September. Titov believes that printing
money would provide at least a partial solution to the
current economic crisis. He said that "it is necessary
to print not simply a mass of money but specific sums
for specific tasks. For example, in order to pay the
army and provide officers with housing." JAC

DUMA CENSURES DUBININ. The Duma on 2 September passed a
resolution by 267 votes with one abstention calling on
President Yeltsin to remove Central Bank Chairman Sergei
Dubinin, characterizing his actions during the latest
financial crisis as unsatisfactory and belated.
According to Interfax, the Duma wants the Central Bank
to tighten control over lending institutions'
activities, protect savings, restore commercial banks'
liquidity, and ensure that the banking system runs
properly. Dubinin told the Duma's Budget Committee that
he will not resign. JAC

RUBLE, STOCKS SLUMP. On the morning of 3 September, the
ruble quickly fell 4.8 percent to 13.5 rubles per $1 on
the electronic exchange. The Moscow Interbank Currency
Exchange resumed trading after a four-day hiatus. Stocks
also declined, dipping 2.6 percent below the previous
day's level, according to Bloomberg. Trading volume
continues to be quite low, analysts suggest, in part
because foreign-investor interest in Russian equities is
almost non-existent. JAC

TAX REVENUES SHORT OF TARGET. ITAR-TASS reported on 2
September that tax revenues in August reached 11.2
billion rubles ($83 million)--2 billion rubles less than
was planned and almost 1 billion less than in July.
According to Interfax, acting head of the State Tax
Service Boris Fedorov said Gazprom paid 500 million
rubles less in taxes in August than it should have. He
attributed the rest of the shortfall to banks delaying
transfers of tax payments owed by companies and to
taxpayers using the financial crisis to postpone
payments. JAC

NEW CHECHEN DEPUTY PREMIER. Chechen President Aslan
Maskhadov on 2 September appointed Yusup Soslambekov as
deputy prime minister and presidential representative
for foreign policy issues, "Nezavisimaya gazeta"
reported. Soslambekov was chairman of the Chechen
parliament that was dissolved by President Djokhar
Dudaev in 1993. Replacing Musa Shanibov as president of
the Confederation of Peoples of the Caucasus,
Soslambekov pursued a far more conciliatory policy
toward Moscow than did Shanibov. In March 1998,
Soslambekov proposed that Moscow recognize the
independence of both Chechnya and Abkhazia, after which
they could sign a new Union Treaty with Russia and
Belarus (see "RFE/RL Caucasus Report," Vol. 1, No. 5, 31
March 1998). Also on 2 September, Deputy Premiers Musa
Shakhbazov and Shirvani Basaev and Construction Minister
Aslanbek Ismailov resigned from the Chechen government,
Interfax reported. LF

DAGESTANI AUTHORITIES, ISLAMISTS REACH COMPROMISE. Talks
took place on 2 September between members of the
Dagestani government and inhabitants of two of the three
Dagestani villages that last month declared an
independent Islamic territory, RFE/RL's North Caucasus
correspondent reported. The villagers, who are
systematically denounced in the Russian press as
Wahhabis, agreed to withdraw their declaration of
independence in exchange for immunity from prosecution.
The authorities rejected the villagers' offer to
surrender their arms on condition that all other
informal armed groups in Dagestan do likewise. Acting
Russian Interior Minister Sergei Stepashin is scheduled
to meet with the Islamists on 3 September. LF

TRANSCAUCASUS AND CENTRAL ASIA

KYRGYZ PRESIDENT CALLS FOR CHANGES TO CONSTITUTION...
Askar Akayev appeared on national television on 1
September to announce a referendum on changes to the
constitution, Interfax and "Nezavisimaya gazeta"
reported. The text of that decree was published in the 2
September "Slovo Kyrgyzstana." Under those amendments,
the number of deputies in the Legislative Assembly would
be increased from 35 to 67 and the number of
representatives in the People's Assembly reduced from 70
to 38. Fifteen of the seats in the legislature would be
given to representatives of parties that receive more
than 5 percent of the vote in elections. Private land
ownership would be introduced, as would the requirements
that parliamentary candidates be resident both in the
country and their constituency, immunity for deputies
limited, and greater freedom for the media guaranteed.
BP

...DRAWS CRITICISM FROM DEPUTIES. Akayev's call for a
referendum on amending the constitution took deputies by
surprise, RFE/RL correspondents in Bishkek reported. On
1 September, at the Legislative Assembly's first session
following summer vacation, there was no mention of
amending the constitution. Many members of the assembly
comnsplained the next day that they had not been
consulted and were unaware of Akayev's intentions.
Deputy Abyt Ibraimov called Akayev's move "a slap in the
face" to the parliament. Deputy Daniyar Usenov noted
that Akayev himself had said there would be no more
referenda until the year 2000. This will be the third
time in four years that a referendum has been held to
change the constitution. BP

JOINT MILITARY EXERCISE IN TAJIKISTAN. A Russian-Tajik
military exercise began in southern Tajikistan on 3
September, ITAR-TASS reported. The exercise, described
as "large-scale," involves troops of the Tajik Defense
Ministry and Russia's 201st Motorized Rifle Division,
which is stationed in Tajikistan. The stated purpose of
the maneuvers is to practice "rebuffing enemy attacks."
There is no information on the exact site of the
exercises or its distance from the Tajik-Afghan border.
BP

ARMENIAN CENTRAL BANK UNFAZED AS DRAM LOSES VALUE.
Armenian Central Bank Board member Nerses Yeritsian told
journalists on 2 September that the bank does not plan
any intervention to prop up the dram, which lost 4
percent of its value against the U.S. dollar the same
day, RFE/RL's Yerevan bureau reported. Yeritsian
attributed the drop from 502 to 520 drams to $1 to
small-scale speculation, adding that Armenia has
sufficient foreign-currency reserves to protect attacks
on the dram. But he admitted that the national currency
has been weakened by sales of short-term Armenian
government bonds by Russian investors who are short of
foreign exchange. Until recently, Russian investors were
estimated to account for up to 60 percent of government
bond sales in Armenia. LF

OBSTACLES TO ARMENIAN-IRANIAN TRADE. In an interview
with National Television, Armenian Foreign Minister
Vartan Oskanian called for the liberalization of trade
with Iran, Noyan Tapan reported on 2 September. Oskanian
said that Tehran has imposed heavy import duties on
imported goods in order to protect local producers.
Armenia's trade turnover with Iran, which is its most
important trading partner, fell by 9.6 percent in 1997
to $131.3 million, according to "Nezavisimaya gazeta" of
3 September. Oskanian also admitted that the financing
of the planned gas pipeline from Iran to Armenia has not
yet been resolved. In June, Greece indicated that it
might contribute to the costs of that project. The
foreign ministers of Iran, Armenia, and Greece are
scheduled to meet in Tehran next week. LF

KARABAKH CELEBRATES ANNIVERSARY OF INDEPENDENCE
DECLARATION. Armenian President Robert Kocharian, Prime
Minister Armen Darpinian, and other government ministers
attended celebrations in Stepanakert on 2 September to
mark the seventh anniversary of the declaration of the
Nagorno-Karabakh Republic, RFE/RL's Stepanakert
correspondent reported. Addressing a joint session of
the Karabakh government and parliament, the president of
the unrecognized republic, Arkadii Ghukasian, said
Karabakh's existence has been a success, and he vowed to
prevent its return to Azerbaijani rule in the future.
Ghukasian called for direct talks between Karabakh and
Azerbaijan, which he said is the "shortest way" to
settle the decade-long dispute. The ceremonies included
the formal opening of a further section of the
reconstructed road linking Karabakh to Armenia via the
strategic Lachin corridor across Azerbaijani territory.
Reconstruction of the entire highway is being financed
by the All-Armenian Hayastan Fund. LF

ANOTHER AZERBAIJANI JOURNALIST BEATEN BY POLICE. Baku
police on 1 September halted the car of Tali Hamid,
editor of the independent newspaper "Mustagil," to
prevent him entering a stretch of highway along which
President Heidar Aliev was to drive 90 minutes later,
Turan reported. The police verbally insulted Hamid and
then dragged him from the car and beat him. Hamid
subsequently lodged a complaint with the Prosecutor-
General's Office, which has opened an investigation into
the incident. LF

COORDINATING COUNCIL DISCUSSES ABKHAZIA. The Coordinating
Council for the Abkhaz conflict convened on 2 September for
the first time since the fighting in Abkhazia's Gali Raion in
May. Georgian and Abkhaz government delegations headed by
Minister of State Vazha Lortkipanidze and Prime Minister
Sergei Bagapsh attended together with the UN Secretary-
General's special representative, Liviu Bota, and the U.S.,
British, French and German ambassadors to Tbilisi. Bagapsh
told Caucasus Press that no concrete decisions were adopted
at the meeting. Russian envoy for Abkhazia Lev Mironov said
at the meeting that the continuing low level terrorism in
Gali and the construction of fortifications on either side of
the River Inguri (which forms the internal border between
Abkhazia and the rest of Georgia) show that both sides are
preparing for a new war. He said the UN and Russia should set
a deadline for Tbilisi and Sukhumi to reach a mutually
acceptable political settlement of the conflict. LF

END NOTE

THE SORCERER'S APPRENTICE'S APPRENTICE

by Liz Fuller

	In mid-August, the majority Union of Citizens of
Georgia (SMK) parliamentary faction elected 28-year-old
lawyer Mikhail Saakashvili as its chairman. That move is
not simply the latest in Saakashvili's meteoric career;
it could also prove crucial in determining the role of
the SMK in Georgian politics over the next decade.
	Saakashvili, who spent several years studying in
the U.S. after graduating from Kyiv State University in
1992, returned to Georgia in 1995 at the invitation of
parliamentary speaker Zurab Zhvania. Since then, he has
played a leading role in reforming Georgia's legal
system and relentlessly criticized corruption within the
upper echelons of power. (He is simultaneously chairman
of the parliamentary anti-corruption committee and
recently proposed the lustration of government
ministers.)
	Saakashvili is one of very few leading Georgian
politicians who embarked on their political careers only
after the collapse of the Soviet system. As "Kavkasioni"
correspondent Ia Antadze points out, this puts him at a
certain disadvantage vis-a-vis older politicians who are
skilled in the art of behind-the-scenes intrigue. In
addition, Antadze argues, Saakashvili is a
"revolutionary" to whom compromise does not come
naturally. At present, however, both those relative
"weaknesses" are compensated for by Saakashvili's
widespread popularity (he was named Georgia's "Man of
the Year" in 1997) and the fact that he has the
unqualified support of both Zhvania and Georgian
President Eduard Shevardnadze.
	Zhvania and Saakashvili are the most prominent
representatives of the progressive wing of the SMK,
which Shevardnadze created in late1993 as a personal
power base. The SMK is a marriage of convenience between
disparate elements--the Greens, whom Zhvania originally
headed; former Communist Party regional apparatchiks and
bureaucrats-turned-businessmen, and youthful and
ambitious scions of the former Communist intelligentsia-
-all of whom chose to hitch their wagons to
Shevardnadze's. Not surprisingly, this heterogeneity
spawned major policy differences within the SMK's ranks
following its victory in the November 1995 parliamentary
elections. Those disagreements were exacerbated by
personal animosities, for example between Zhvania and
Minister of State Niko Lekishvili.
	It is, however, the young, reformist wing of the
SMK that has dominated and directed parliamentary
debate. In the process, it has frequently demonstrated
its independence, for example by rejecting presidential
nominees for various official posts. Its members have
also criticized Shevardnadze's failure to act more
decisively in replacing representatives of the corrupt
"old guard" who still occupy senior posts. Moreover,
Zhvania has consistently been more outspokenly critical
of Moscow than has Shevardnadze. (Whether his role is
that of stalking-horse for the president or sorcerer's
apprentice is unclear. Alternatively, Zhvania could
simply be capitalizing on most opposition parties'
shared antipathy and profound mistrust of Russia in
order to secure a power base extending beyond his own
party.)
	Speaking on behalf of his fellow reformers within
the SMK in July, Zhvania warned that failure to reform
the local administrative system and the concomitant
erosion of the leadership's authority had brought
Georgia to the brink of catastrophe. He threatened to
resign and assume the role of "constructive opposition"
within the parliament unless radical measures were
adopted to kickstart the stalled reform process. That
warning effectively precipitated the resignation three
weeks of both Lekishvili and the government. But some
observers argued that Zhvania's statements were
hypocritical and that neither he personally nor the SMK
as a whole could disclaim a share of responsibility for
the situation in the country.
	Assuming that the new cabinet succeeds in
implementing measures to cure the present malaise,
Zhvania and Saakashvili will be vindicated and their
positions strengthened. But their respective futures
will hinge on two factors: first, whether the SMK
retains its majority in the November1999 parliamentary
elections and second, how the political situation
evolves in the post- Shevardnadze era. Under the
Georgian Constitution, the parliamentary speaker assumes
the presidency in the event of the president's sudden
death. But a pre-term presidential poll would inevitably
be a hard-fought and ugly battle, and its outcome at
this juncture is impossible to predict.
	By the same token, there is no guarantee that the SMK
would survive the departure of its founder from the political
scene. On the contrary, it might split into rival factions--
especially if Zhvania failed in his bid for the presidency.
In such a case, Saakashvili would be better placed than
Zhvania to head the reformist wing of the SMK in its next
incarnation. Finally, Zhvania and Saakashvili may at some
point cease to be allies. Saakashvili could conceivably
regard Zhvania's less than spotless business reputation as
reflecting badly on the SMK as a whole. Zhvania, for his
part, may consider that Saakashvili's uncompromising approach
makes him ill-suited to the political horse-trading that will
be necessary if the SMK fails to secure a clear majority in
the next parliament.

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