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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 172 Part I, 7 September 1998


________________________________________________________
RFE/RL NEWSLINE Vol. 2, No. 172 Part I, 7 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
site: http://www.rferl.org/newsline

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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

* CENTRAL BANK CHAIRMAN OFFERS TO RESIGN

* BOMB KILLS 17 IN DAGESTAN

* GEORGIAN, AZERBAIJANI CURRENCIES LOSE VALUE

End Note: RUSSIA FROM A DIFFERENT ANGLE
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RUSSIA

CENTRAL BANK CHAIRMAN OFFERS TO RESIGN.  Sergei Dubinin
on 7 September tendered his resignation, citing as one
reason for his decision the State Duma's delay in
passing a number of "vitally important" draft laws on
banking, ITAR-TASS reported. Two days earlier, Central
Bank Deputy Chairman Andrei Kozlov resigned. Kozlov was
responsible the Central Bank's relations with other
banks, as well as for the controversial scheme in which
six top banks were forced to transfer all private
individuals' bank deposits to Sberbank (see "RFE/RL
Newsline," 4 September 1998). "Russkii telegraf"
reported on 4 September that acting Prime Minister
Viktor Chernomyrdin overruled the objections of Central
Bank officials when he agreed to the basic principles
for introducing a currency board. Under a currency board
system, the role of the Central Bank would be
diminished. JAC

YELTSIN, DUMA CONVENE ROUNDTABLE. President Yeltsin met
with Russia's legislative and executive branches on the
morning of 7 September to seek to convince them to
confirm acting Prime Minister Chernomyrdin. On 4
September, Yeltsin had submitted draft amendments to
Russia's Law on Government expanding the Duma's power to
select the cabinet. NDR leader Aleksandr Shokhin told
Russian Television  on  6 September that Chernomyrdin
still had not marshaled enough votes for a victory,
having won the support only of the Our Home is Russia
(NDR), the Liberal Democratic Party of Russia, and most
of the Russian Regions factions.  Shokhin added that
Chernomyrdin had at most 125-130 votes, assuming that
the "Communists and their allies, the Yabloko group,
fail to change their position." The same day, Yabloko
leader Grigorii Yavlinskii declared his faction's
continued strong opposition to Chernomyrdin. If rejected
by the Duma and renamed by Yeltsin, Chernomyrdin will be
considered for a third and final time. JAC

GOVERNORS TO SWITCH TO LUZHKOV? Interfax reports that a
group of regional governors will suggest to President
Yeltsin that he nominate Moscow Mayor Yurii Luzhkov for
prime minister when the roundtable between the executive
and legislative branches reconvenes on the afternoon of
7 September. In an interview published in "Kommersant-
Daily" on 4 September, Samara Governor Konstantin Titov
said that he will back either Luzhkov or Federation
Council speaker Yegor Stroev, but not Chernomyrdin. The
next day, Luzhkov told reporters that Chernomyrdin did
not present the country with an economic program during
his speech to the Federation Council. He said that
Yabloko head Yavlinskii, on the other hand, had
proposals on economic stabilization that merited
discussion. JAC

RUSSIA TO SEEK MORE FOREIGN AID...  Acting Prime
Minister Chernomyrdin said in a 6 September national
television address that Russia needs to double its gold
and hard-currency reserves "hopefully through the
assistance of the global financial system." Acting
Minister of the Economy Yakov Urinson told "Vremya MN"
in an interview published the next day that Russia might
have to borrow up to $20 billion, kept on deposit in the
central bank of another country, in order to carry out
the idea of establishing a currency board for Russia.
Under a currency board system, new units of money cannot
be issued unless they are backed 100 percent by reserves
of another, more stable currency. In his speech to the
Federation Council on 4 September, Chernomyrdin implied
that his government will adopt a currency board system,
although he never actually used the words "currency
board" (see "RFE/RL Newsline," 4 September 1998). JAC

...BUT PRESS, IMF SKEPTICAL. "Russkii telegraf" reported
on 4 September that an exchange rate of 30 rubles to the
dollar would require a currency board with $12 billion
in reserves and a money supply of 370 billion rubles.
But according to "Izvestiya" the next day, the nation's
reserves are "currently negligible," and the newspaper
called a possible agreement with the West "on urgent
currency assistance too good to be true." IMF Managing-
Director Michel Camdessus said on 4 September that a
currency board for Russia, though a good idea, is not
appropriate under current conditions. JAC

RUSSIA TO OPT FOR ARGENTINA'S QUICK FIX? The Russian
press has concluded that Chernomyrdin's government has
opted to follow the example of Argentina's 1991 currency
reform, based on the advice of its architect, Argentine
former Minister of Economy Domingo Cavallo. Cavallo
arrived in Moscow last week at the invitation of acting
Premier Chernomyrdin and acting Deputy Prime Minister
Boris Federov. Cavallo told reporters on 4 September
that Argentina's economic experience may prove useful
for Russia but that Russia may still opt for a different
program. When asked how much time the Russian government
would require to implement "its unpopular measures" to
fix the economy, Federov told  Russian Public Television
that "the Argentineans who advised us were saying
unequivocally that while President [Carlos] Menem's
popularity at the time of the reform was 10 percent, six
months later he was able to win the presidential
election. So the results can be very rapid." JAC

LOCAL LEADERS SET UP FOOD BANKS.... Stepping into the
vacuum left by continued political uncertainty in
Moscow, political and business leaders around Russia
have devised a variety of measures to ease the economic
crisis, according to ITAR-TASS on 6 September. In
Saratov, Governor Dmitrii Ayatskov issued an instruction
that fruit and vegetable merchants operating at fairs in
the city of Saratov and throughout the region be exempt
from fees for trading at the fair in the hope that
traders do not increase their prices. In St. Petersburg,
Deputy Governor Ilya Klebanov said on 5 September that
the city will  use some of its budget monies to create a
reserve of food products that it will buy only from
local enterprises. JAC

...AND PRICE CONTROLS. Smolensk Governor Alexander
Prokhorov on 6 September ordered the establishment of an
ad hoc commission on control over pricing. The city of
Novgorod has established a special working group to
strictly monitor supplies to kindergartens, schools, and
hospitals to ensure they do not pay exorbitant prices.
In Kursk, the city administration also created an
interdepartmental commission for the control of prices
on goods and services. Vendors wishing to raise prices
on goods such as bread, sugar, eggs, and milk will first
have to seek the agreement of the local department of
trade.  JAC

REGIONS ENGAGE IN PANIC-BUYING. ITAR-TASS reported on 7
September that regions are experiencing shortages of key
goods, as citizens have begun hoarding non-perishable
items. For example, in Nakhodka and Ufa, consumers are
purchasing sugar, flour, and other foods in large
quantities. In Vologda, a local gasoline station claimed
that it has only enough gasoline to last two days.
Grocery stores in Murmansk have run out of salt,
cereals, cooking oil, and other staples. JAC

KREMLIN FEARS CRIME WAVE. Both acting Interior Minister
Sergei Stepashin and acting Director of the Federal
Security Service Vladimir Putin told the Federation
Council on 4 September that they fear Russia will
experience a new wave of crime because of the current
financial crisis. Putin told the Council that already a
large layer of Russian society--which controls up to 40
percent of gross domestic product--is involved "in
criminal and pre-criminal economic conduct." According
to ITAR-TASS, Stepashin reported his ministry is ill-
prepared for the new threat because the money planned
for it will hardly be enough to pay salaries, which have
been frozen since 1995.  He also noted that local
governments owe more than 1.3 billion rubles ($63
million) for the maintenance of municipal police forces.
JAC

BOMB KILLS 17 IN DAGESTAN. Seventeen persons were killed
and up to 70 injured when a car bomb exploded in a
residential district of Makhachkala on 4 September,
Russian agencies reported. Both Dagestani Interior
Minister Adilgirei Magomedtagirov and his Russian
counterpart, Sergei Stepashin, attributed the explosion
to local criminal groups intent on overthrowing the
Dagestani government. Former Russian Deputy Prime
Minister Ramazan Abdulatipov has written to Russian
President Yeltsin and acting Prime Minister Chernomyrdin
proposing that they impose direct presidential rule in
Dagestan, Interfax reported on 5 September. Meanwhile, a
warrant has been issued for the arrest of former
Makhachkala municipal council chairman Kurban
Makhmudgadzhiev on suspicion of having masterminded both
the 4 September bombing and the assassination attempt
last month on Makhachkala Mayor Said Amirov, RFE/RL's
North Caucasus correspondent reported on 7 September. LF

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN, AZERBAIJANI CURRENCIES LOSE VALUE. The
Georgian lari on 6 September fell   from  1.38 to 1.70
to $1 in street trading,  AP reported the following day.
In his weekly radio address on 7 September, Georgian
President Eduard Shevardnadze warned against panic,
affirming that the lari is stable and there are no
objective reasons for it to fall in value. Meanwhile in
Baku, officials from the National Bank of Azerbaijan
began touring currency exchange stalls on 4 September in
the hope of preventing panic buying of dollars,
according to ANS-Press. As of 5 September, the manat was
trading at between 3,940 and 3,950 to $1, an increase of
100 manats over the previous week, Turan reported. ANS-
Press quoted unconfirmed reports that customs officials
have imposed restrictions on the import and export of
foreign currencies. LF

BAKU DEMONSTRATION POSTPONED.  Meeting on 3 September,
the opposition Movement for Democratic Elections and
Electoral Reform decided to postpone the protest
demonstration scheduled for 5 September, RFE/RL's Baku
bureau reported. Baku Mayor Rafael Allakhverdiev had
rejected the opposition's demand to be allowed to hold
the demonstration on the city's main Freedom Square,
proposing instead that it  take place at a motor-racing
stadium in the suburbs. LF

CIVILIAN KILLED IN COMBAT MANEUVERS IN GEORGIA. A man
was killed and his wife and mother injured on 5
September when Russian peacekeeping forces inadvertently
fired an anti-tank missile at their home near
Tskhinvali, ITAR-TASS reported. The Russian troops, who
are part of a peacekeeping contingent deployed in the
self-proclaimed Republic of South Ossetia, were engaged
in routine combat training. LF

GEORGIAN BORDER GUARDS PRESSURE RUSSIAN COUNTERPARTS TO
LEAVE. Georgian border guards on 6 September entered the
Russian border guard  post in the Georgian Black Sea
port of Poti and demanded that the Russians vacate the
premises, Caucasus Press reported the following day.
Under an agreement signed by Georgia and Russia earlier
this year, Georgian border guards were to assume full
responsibility for patrolling Georgia's sea borders on 1
September. The Russian contingent will be transferred
from Poti to the Adjar capital, Batumi. LF

KYRGYZ PREMIER ADDRESSES PARLIAMENT.  Addressing the
upper house of the parliament on 4 September,
Kubanychbek Jumaliev said  the country's economic
situation is stable. He noted that GDP growth during the
first eight months of 1998 was 4.5 percent, and he
predicted an annual inflation rate of 12 percent this
year. Jumaliev admitted, however, that the Asian and
Russian financial crises have adversely affected the
som. He proposed banning any financial transactions in
U.S. dollars and conducting all such transactions only
in the national currency. Jumaliev also informed
lawmakers that the government will not implement the
law, enacted earlier this year, that reduces land tax by
50 percent. He asked the parliament to amend that
legislation. LF

TAJIK PRESIDENT ASSESSES MILITARY. In an interview with
ITAR-TASS on 5 September, Imomali Rakhmonov said that
despite the 1992-1997 civil war, Tajikistan has
succeeded in building armed forces adequate to ensure
the country's security. He added that joint maneuvers in
recent months involving Russian forces and Tajik
Interior Ministry troops, presidential guards, and army
units have demonstrated that Tajikistan's armed forces
"are capable of assuming control of the situation in
conditions where either an external threat or local
conflicts [arise]."  In other news, the body of
Mukhiddin Zamonov, a bodyguard for one of the opposition
members of the National Reconciliation Committee, was
found in a reservoir near Dushanbe on 4 September, one
week after he was abducted by unidentified gunmen, AP
reported. An Interior Ministry official has been
arrested and has confessed to the killing, which is
believed not to have been politically motivated. LF

END NOTE

RUSSIA FROM A DIFFERENT ANGLE

by Julie Corwin

	While Moscow--or the press, at least-- is riveted by the
Kremlin's current political gyrations, one suspects after
reading Fen Montaigne's "Reeling in Russia" (St. Martin's
Press; New York, 1998) that the Russian countryside is paying
only scant attention. Montaigne, a former Moscow-based
correspondent for the "Philadelphia Inquirer," journeyed over
6,000 miles from Murmansk to Kamchatka with fly-fishing rod
in one hand and notepad in the other. The  book that results
is part travelogue, part reflection on Russia--a kind of
Marquis de Custine goes fishing minus the uppity French
attitude. By skipping Moscow altogether, Montaigne provides a
useful antidote to most Western media coverage of Russia,
which rarely ventures out of one time zone, let alone covers
all 11.
	The portrait of the people that emerges is one of a
populace anaethesized by alcohol, deeply mistrustful of
political institutions, and reduced by economic upheavals to
eking out little more than a subsistence-level income. The
few individuals with energy and initiative face constant
setbacks. For example, Victor Chumak, one of Russia's first
private farmers living in Rtysheva, in Saratov Oblast watched
the foundation of his small agricultural empire erode
overnight.  Interest rates on bank loans hit 200 percent, and
the bank repossessed his 12 tractors, two harvesters, and
three trucks. In the village of Umba on the Kola Peninsula,
Victor Shmelyov, a former highly paid truck driver now unable
to find work, has been reduced to taking whatever odd jobs he
can find, such as ushering foreigners around in his broken-
down van.
	And then there are the individuals who don't participate
in the economy any differently than their forebears might
have 100 years ago: Vasily Volkov and his daughter Yelena
pick berries on Kola Peninsula during the high season and
spend the rest of their time fishing on the lakes and rivers
in the forests of Karelia. The berries they sell for $14 a
bucket; the fish they trade for bread and cured pork. Their
only source of steady income is Volkov's monthly pension,
worth about $60 a month.
	The Volkov's relationship is similar to that of most of
people Montaigne encounters. They don't just live on the
land, they live off it. They see the forests, rivers, lakes
as vast basins of inexhaustible resources that exist to be
exploited. Poaching is the rule, enforcement of fishing
regulations the exception. On the Kola River, biologists
estimate that poachers kill up to 50 percent of the salmon
run. Some poachers catch enough fish merely to feed their
families, while others string large nets across the mouths of
rivers and make hundreds of thousands of dollars a season.
Inspectors are routinely bribed to look the other way; those
who won't are transferred. At one point, an American
naturalist tries to persuade his listeners in Kamchatka that
efforts must be made to preserve Russia's unique steelhead
trout before it disappears from the local Utkholok, Tigil,
Kvachina, and Snatolveyem Rivers, as it did in the American
Pacific Northwest.
	Against the background of these individual struggles and
on almost every page of the book is vodka. Consumed in vast
quantities late into the evening as well as early in the
morning, it appears to function as the
social/political/economic lubricant, numbing the population
to unnecessary indignities while at the same time making
everything run less efficiently. At Kem on the Karelian
coast, Montaigne encounters Yevgeny Nikonov, the owner of a
small lumber mill, who argues that he must keep a cap on
wages in order to preserve a minimum level of sobriety at his
business. Nikonov says, "'The average worker wants to earn
only enough for a bottle of vodka  a day, two packs of
cigarettes, and a little food. If you pay him more, he'll
drink a second bottle and not come to work the next day."
Nikonov claims that the workers he fired for drunkenness on
the job have vandalized his house and boat and robbed the
store run by his sister several times.
	When reporting his experiences directly, Montaigne is an
engaging writer. He can make a character and a place come to
life quickly. His zest for adventure, quiet sense of humor,
and a profound love for Russia make him an entertaining
guide. His attempts, however, to wrap up the Russian national
character every five pages or so become tiresome, and at
times the long fishing interludes distributed over longer
intervals feel like a device--or, even perhaps, a ploy by a
publishing company eager to find a way to market a book about
rural Russia to group of consumers who routinely pay $60 to
$100 for new graphite rods. Perhaps for his next book,
Montaigne should leave the rods at home and stay in one
place--possibly a struggling former collective farm. He
writes with feeling and obvious enthusiasm about agriculture,
and a longer stay with the people he writes about might
enable him to make them seem less stereotypical: less Vasily
the Peasant and Andrei the New Russian and more like vivid,
unique individuals.

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