RFE/RL NEWSLINE Vol 2, No. 180, Part I, 17 September 1998

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RFE/RL NEWSLINE Vol 2, No. 180, Part I, 17 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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Headlines, Part I

* INFLATION PICKS UP SPEED

* PRIMAKOV FORMS 'MIXED' CABINET

* AZERBAIJANI OPPOSITION, POLICE PREPARE FOR NEXT
DEMONSTRATION

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RUSSIA

INFLATION PICKS UP SPEED. Consumer prices grew more than 43
percent in the first 14 days of September, Russian agencies
reported. In August, inflation reached 15 percent. According
to Otto Latsis writing in "Noviye izvestiya" on 16 September,
consumer prices rose only 5.6 percent last year, and an
increase like that witnessed so far this month was last seen
in February 1992.  "The 15 percent decline in the
population's real income after Black Tuesday of 1994 will
seem a trivial scratch compared with the social trauma that
is shaping up today," Latsis predicted. "The main achievement
of economic policy of the last six-and-a-half years--taming
inflation--has been lost." On 16 September Bloomberg reported
that Standard & Poor's lowered Russia's credit rating from
CCC to CCC-, a level lower than that of Pakistan. JAC

PRIMAKOV FORMS 'MIXED' CABINET. Prime Minister Yevgenii
Primakov on 16 September rounded out his cabinet by selecting
two moderate reformers, Our Home is Russia deputy Vladimir
Ryzhkov and acting Minister for Science and Technology
Vladimir Bulgak, as deputy prime ministers. Although the
division of labor between the deputy prime ministers has not
yet been finalized, Bulgak will likely oversee communications
and some industry ministries, while Ryzhkov will take over
the post of deputy prime minister in charge of social issues
from Oleg Sysuev, who will become first deputy director of
the presidential administration, according to Interfax.
ITAR-TASS reported that Ryzhkov's appointment won support
from both  Communist Party leader Gennadii Zyuganov and
People's Power leader Nikolai Ryzhkov. Ryzhkov himself took
more than a little persuading. According to "Moskovskii
komsomolets" on 17 September, he had to be asked seven times
to join the government. JAC

GOVERNORS TO JOIN GOVERNMENT. "Nezavisimaya gazeta" on 16
September concluded that the country's most recent economic
crisis has given regional ruling elites new influence on the
formation of national policy. The newspaper added that
Primakov has already promised to include regional
representatives in his cabinet's Presidium. According to
Interfax, Primore Governor Yevgenii Nazdratenko is likely to
be named deputy prime minister in charge of regional policy,
while another regional governor is likely to become deputy
prime minister in charge of agriculture. According to the
newspaper, "if the presence of the regional leaders is not
just for show..., then the real winner of the current crisis
is not the State Duma or the Communist Party but the party of
the governors." JAC

KREMLIN DIVIDED AGAINST ITSELF? The Russian press has voiced
some concern about the diverse composition of the Primakov
cabinet. "Izvestiya," for example, on 17 September concluded
that once the Duma begins debate on the 1999 budget, Russia
will learn whether cabinet members with such opposing views--
First Deputy Prime Minister Yurii Maslyukov and Deputy Prime
Ministers Aleksandr Shokhin and Ryzhkov--will be able to
quickly create effective policies and garner reliable
political support. JAC

OTHER SPOTS FILLED.  President Boris Yeltsin has named
General Konstantin Totskii, until now head of the Federal
Border Service Academy, as chief of the Federal Border
Service. On 17 September, Interfax reported that Tatyana
Paramanova, a former acting chair of the Central Bank and
head of the Russian National Commercial Bank, has been named
first deputy chair of the Central Bank, replacing Sergei
Aleksashenko. Meanwhile, Deputy Secretary of the National
Security Council Viktor Melnikov has been relieved of his
duties, according to ITAR-TASS. JAC

TAX SERVICE TO FORCE BANKRUPTCY ON DEADBEATS. Interfax on 16
September reported that the Federal Tax Service will begin
bankruptcy proceedings against 28 organizations that owe the
government back taxes. Frustrated tax inspectors have
reportedly exhausted all other methods to collect overdue
taxes from these companies. JAC

INVESTORS GET EXTENSION. The Russian government on 17
December extended the deadline by one week (to 25 September)
for investors to decide whether to accept ruble bonds or a
combination of ruble and dollar bonds in exchange for the
short-term treasury bonds on which Russia earlier defaulted.
Bloomberg reported that some investors  are reluctant to make
a choice because they believe that Russia will offer local
banks preferential treatment. According to ITAR-TASS on 16
September, 25 major Western banks, including Goldman Sachs,
Deutsche Bank, Nomura, and Credit Suisse First Boston,  set
up a group to demand equal treatment and conduct joint
negotiations with Russia over rescheduling its debts. The
same day the president of the Association of Russian Banks,
Sergei Yegorov, told reporters that Russia's money supply
should be increased to at least 20 percent of GDP if the
country's monetary system is to function properly. JAC

BEREZOVSKII SAYS YELTSIN'S TIME IS UP. In an interview with
BBC excerpted by "Komsomolskaya pravda" on 16 September,
financial magnate and CIS Executive Secretary Boris
Berezovskii said that the era of President Yeltsin is over
and that he should go. He added "Of course, that is
conditional on what the alternative is, but I think that
today we have alternatives better than him." Berezovskii also
said that Yeltsin's daughter Tatyana Dyachenko "agrees that
many of the problems we have stem from the president's
weakness." JAC

LEBED'S RECORD EXAMINED.  Russian Television on 16 September
evaluated the first three months of Krasnoyarsk Governor
Aleksandr Lebed's administration. It reported that while
Lebed  promised to cut by 30 percent the number of staff
employed in the territory's administration, the number of
deputy governors and official cars has almost "doubled." The
local elite has reportedly been offended by Lebed's
preference for personnel from Moscow and other parts of
Russia. JAC

RUSSIAN ICBM'S HITTING TARGETS. Russia completed its summer
missile testing program with the successful launch of an
intercontinental ballistic missile on 16 September. A RS-12M
Topol missile, also known as a SS-25, took off from Plesetsk
in northern Russia, hitting a target on the Kamchatka
peninsula. ITAR-TASS quoted Strategic Missile Force Commander
General Vladimir Yakovlev, who said that "all 57 launches of
the Topol missiles have been successful." On 17 September,
the "Moscow Times" reported that Russia has scored another
success in its campaign to convert its ballistic missile
fleet into commercial launch vehicles. According to the
newspaper, the Moscow-based Kosmotras International Space Co.
signed a contract with a British consortium for the launch of
its commercial satellite on a converted RS-20 ballistic
missile, also known as the SS-18 Satan rocket. The new name
for the converted rocket is Dnepr. JAC

COSSACKS PERSECUTE PROTESTANTS. The UK-based Keston News
Service on 16 September reported that two uniformed Cossacks
in  Anapa Krai broke up a group of Adventists who had been
giving away bibles in a public park. They confiscated 60
bibles and detained the leader, reportedly giving him 20
lashes with an iron-tipped whip. Sergei Serebrov, a local
Cossack commander, told Keston that if the Protestants
continue to engage in public proselytism, then the Cossacks
will whip them. JAC

SVR REFUSES TO DENY LEWINSKY IS ON STAFF. ITAR-TASS on 16
September reported that the Chinese magazine "Guandong
Writer" has published an article alleging that former White
House intern Monica Lewinsky is a Russian spy. When asked
about the report, Russian Foreign Intelligence Services
spokesman Yurii Kobaladze responded with some amusement,
saying "we do not comment on allegations of whether
individuals belong to Russia's intelligence services." JAC

NEW CHECHEN PROSECUTOR-GENERAL APPOINTED. Following a one-
month debate, the Chechen parliament has named its speaker's
aide for legal affairs, Mansur Tagirov, as acting prosecutor-
general, ITAR-TASS reported on 16 September. That appointment
must be endorsed by President Aslan Maskhadov, who is
currently abroad. Tagirov replaces Khazavh Serbiev, whom
Maskhadov dismissed for incompetence (see "RFE/RL Newsline,"
18 August 1998). ITAR-TASS predicted that Tagirov will face
difficulties in his new post as the staff of the Prosecutor-
General's office are on strike to demand unpaid wages for the
past two years. LF

CORRECTION: "RFE/RL Newsline" on16 September quoted an
incorrect Western agency report saying that "in the first
eight months of 1998, Russian gold production dropped from
66.4 million tons during the same period last year to 59.4
million tons." The correct figures are 66.4 tons  and 59.4
tons.

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJANI OPPOSITION, POLICE PREPARE FOR NEXT
DEMONSTRATION.  Azerbaijan's opposition Movement for
Democratic Elections and Electoral Reform has presented  to
the Baku Mayor's Office the planned route for its protest
march on 20 September, Turan reported on 16 September. The
route avoids the city's main Azadlyg Square, where
demonstrators were forcibly prevented by police from
convening on 12 September. Interior Minister Ramil Usubov
said on 16 September that the would-be participants in that
demonstration had been armed with bottles and stones. He
warned that police would prevent the planned 20 September
march. Also on 16 September, an anonymous spokesperson for
the OSCE's Office for Democratic Institutions and Human
Rights (ODIHR) told Turan that  official Azerbaijani media
had misquoted several statements by ODIHR director Gerard
Stoudman on the opposition's activities. He denied that
Stoudman had said  the 11 October presidential elections will
be democratic. LF

OSCE MINSK GROUP IN BAKU...   The U.S., Russian, and French
co-chairmen of the OSCE Minsk Group held talks with
Azerbaijani President Heidar Aliev in Baku on 15 September,
ITAR-TASS reported. Azerbaijani President Heidar Aliev said
that he regrets the hiatus in the settlement talks, which he
said is in the interest of neither Azerbaijan nor Armenia. No
further details of the talks were disclosed. LF

...AND YEREVAN. Following what he termed "fruitful and
constructive" talks with President Robert Kocharian and
Foreign Minister Vartan Oskanian on 16 September, French co-
chairman Georges Vaugier told journalists in Yerevan that he
and his two colleagues have brought new proposals for
resolving the conflict, RFE/RL's Yerevan bureau reported.
While he gave no details about those proposals, Vaugier
suggested that the Azerbaijani leadership may be prepared to
retreat from its previous insistence that the best it can
offer Nagorno-Karabakh is the highest possible degree of
autonomy within Azerbaijan. Oskanian had told journalists on
15 September that Yerevan will insist neither on independence
for the disputed enclave nor on its unification with Armenia,
but he excluded any subordination of Karabakh to the central
Azerbaijani authorities, according to ITAR-TASS.  Armenian
Foreign Ministry spokesman Arsen Gasparian told RFE/RL that
the Armenian side stressed Yerevan is prepared to restart
negotiations without any preconditions.  LF

ARMENIAN PARLIAMENT APPROVES PROPOSED AMNESTY. The Armenian
parliament on 15 September approved an amnesty proposed by
President Robert Kocharian to mark the seventh anniversary of
Armenia's independence from the USSR, RFE/RL's Yerevan bureau
reported. Under the amnesty, some 920 prisoners, or 15
percent of the prison population, will be released. Another
240 will have their sentences shortened, according to Justice
Minister David Harutiunian. The amnesty does not extend to
persons jailed for murder, rape, or other violent crimes or
to repeat offenders who have been amnestied in the past. LF

FORMER ARMENIAN MINISTER SENTENCED FOR EMBEZZLEMENT. Former
Light Industry Minister Rudolf Teymurazian was sentenced to
eight years in prison on 15 September. A Yerevan court found
him guilty of embezzling a $4.1 million Chinese government
loan in the early 1990s, "Azg" reported The court also ruled
that Teymurazian must pay $500,000 in fines. LF

GEORGIA, AZERBAIJAN, UKRAINE SIGN BORDER PROTECTION
AGREEMENT.  The commanders of the Georgian, Azerbaijani, and
Ukrainian border guard troops signed a cooperation agreement
in Tbilisi on 16 September, Interfax and Caucasus Press
reported. That agreement falls within the parameters of the
Economic Consultation Agreement concluded by Georgia,
Ukraine, Azerbaijan, and Moldova. Georgian Border Guard
Commander Valeri Chkheidze told journalists  that the Tbilisi
meeting was not directed against other states, nor does the
signed agreement run counter to CIS agreements on border
cooperation. He added that Moldova will sign the agreement at
a later date. LF

MESKHETIANS STAGE PROTEST IN TBILISI. Some 40 Meskhetians on
16 September demonstrated outside the state chancellery in
Tbilisi to demand a meeting with President Eduard
Shevardnadze, Caucasus Press reported. The Meskhetians have
been lobbying for decades for the right to return to the
villages in southwestern Georgia from where they were
deported en masse to Central Asia in November 1944. At
Shevardnadze's initiative, a few hundred families were
repatriated in the mid-1980s. Konstantin Kokoev, chairman of
the Georgian parliamentary commission for human rights, said
that the implementation of a program to repatriate 5,000
Meskhetian families by 2000 has been halted because of
problems in resettling and housing ethnic Georgians forced to
flee conflicts elsewhere in Georgia. LF

TAJIK OPPOSITION ASSESSES WORK OF NATIONAL RECONCILIATION
COMMITTEE. United Tajik Opposition leader Said Abdullo Nuri
has reviewed the work of the National Reconciliation
Commission since its foundation exactly one year earlier,
ITAR-TASS reported on 15 September. Both the Tajik government
and the opposition are represented on the commission, which
was formed to monitor implementation of last year's agreement
ending the civil war. Nuri noted progress in registering the
opposition's armed units and integrating them into the Tajik
armed forces as well as in expediting the repatriation of
refugees from Afghanistan. But he blamed the Tajik leadership
for failing to deliver on its commitment to reform the
government and amend the constitution. On 16 September, Habib
Sanginov, chairman of the National Reconciliation
Commission's military sub-committee, told ITAR-TASS that the
repatriation from Afghanistan of the last remaining 250 UTO
fighters has been delayed for unknown reasons. LF

KAZAKHSTAN'S FOREIGN DEBT RATING LOWERED. Standard and Poor's
has lowered Kazakhstan's long-term foreign currency debt
rating from B+ from BB- and its long-term local currency debt
from BB+ to BB-, Bloomberg reported on 16 September. The
rating agency said that the decision reflects Kazakhstan's
"heightened vulnerability to an extremely negative
environment," noting the slow pace of privatization, a high
budget deficit,  and the fact that Russia is Kazakhstan's
largest trading partner. Kazakh Prime Minister Nurlan
Balghymbayev has said several times over the past month that
the financial crisis in Russia has had no affect whatsoever
on Kazakhstan. LF

SVERDLOVSK GOVERNOR IN BISHKEK. Eduard Rossel met with Kyrgyz
President Askar Akayev and Prime Minister Kubanychbek
Jumaliev in Bishkek on 16 September, RFE/RL's bureau in the
Kyrgyz capital reported. Akayev expressed support for
Rossel's proposal that the 8-9 October CIS summit  be held in
Yekaterinburg as a gesture of moral support for embattled
Russian President Boris Yeltsin.  In meetings with Kyrgyz
government officials on 17 September, Rossel is expected to
sign several economic cooperation agreements, including one
that provides for Sverdlovsk to supply Kyrgyzstan with
railroad carriages, spare parts for trolley-buses, and
equipment for the mining industry. Rossel has also promised
to supply turbo-generators for the Bishkek heating and power
plant. LF

U.S. TO MEDIATE CASPIAN DISPUTE? U.S. Energy Secretary Bill
Richardson said at an oil and gas industry congress in
Houston earlier this week that Washington may offer to
mediate in the dispute between Azerbaijan and Turkmenistan
over ownership of at least one Caspian oil field, the
"Financial Times" reported on 16 September. Richardson said
that he had discussed the issue of settling the dispute
between Ashgabat and Baku with his Turkmen counterpart and is
planning to continue that discussion during his upcoming trip
to the Caspian, according to ITAR-TASS. The dispute between
Baku and Ashgabat over ownership of the Kyapaz/Serdar field
is a major obstacle to an agreement between all five Caspian
littoral states on how to divide the sea's resources. LF

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