Silence is the real crime against humanity. - Nadezhda Mandelstam
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 182, Part I, 21 September 1998


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RFE/RL NEWSLINE Vol 2, No. 182, Part I, 21 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

* CENTRAL BANK BAILS OUT RUSSIAN BANKS

* MEDIA FACING COST CRUNCH

* OPPOSITIONISTS MARCH IN BAKU

End Note: RUSSIA'S INTERNAL CRISIS IMPERILS COOPERATION WITH
WEST
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RUSSIA

CENTRAL BANK BAILS OUT RUSSIAN BANKS. The Central Bank on 21
September announced that Russian banks still owe 30 billion
rubles ($1.83 billion) in interbank debt, Bloomberg reported.
Three days earlier, the Central Bank pledged to cover
outstanding interbank debts with new loans. It also agreed to
buy back most banks' defaulted treasury bonds. In theory,
those measures will preserve the country's banking system and
shake out the weakest banks, which will promptly go bankrupt.
However, by printing such a large amount of new money, the
bank risks plunging the country into hyperinflation.
According to Interfax, Inkombank President Vladimir
Vinogradov said in a speech on 20 September that Russian
banks should surrender key stakes to the state. He added that
he is prepared to give up 50-75 percent of his bank to
preserve Russia's banking system. JAC

...LEAVES FOREIGN BANKS DANGLING. Meanwhile, "Kommersant-
Daily" on 19 September predicted that large Western investors
might wage an "economic war against Russia" because of the
Central Bank's most recent action to buy back defaulted bonds
from Russian banks. Some Western banks plan to take the
matter to court and to seize the accounts of some Russian
banks. They also plan to present their grievances to the IMF
and the governments of the Group of Seven. Recently, some
Western banks banded together in order to conduct
negotiations with the Russian government on debt
restructuring. JAC

STATE TO IMPOSE NEW CURRENCY CONTROLS. In a move some
analysts are predicting may trigger the rebirth of the black
market, Prime Minister Yevgenii Primakov pledged on 18
September to introduce a requirement that exporters sell an
additional 25 percent of their hard-currency revenues to the
Central Bank. At the very least, analysts reckon that
exporters will try to hide their proceeds from government
scrutiny. JAC

MORE CABINET APPOINTMENTS ANNOUNCED. On 21 September, after
promising to complete cabinet appointments by the end of the
week, President Boris Yeltsin appointed Gennadii Kulik deputy
prime minister in charge of agriculture. Kulik, a State Duma
deputy, is a member of the Agrarian faction and was deputy
chairman of the Duma's Budget Committee. Kulik told Interfax
that acting Minister of Agriculture Viktor Semyonov will
remain in his position. From 1990 to 1991, Kulik was himself
minister of agriculture. On 18 September, Interfax reported
that Ramazan Abdulatipov, former deputy prime minister in
charge of ethnic policy, would likely be appointed to the
cabinet and that a new ministry overseeing the defense
industry might be created. Deputy Prime Minister Aleksandr
Shokhin told NTV on 20 September that acting Finance Minister
Mikhail Zadornov may retain his position (see "RFE/RL
Newsline," 18 September 1998). JAC

RUSSIA, UKRAINE TO TAKE JOINT ANTI-CRISIS MEASURES. Informal
meetings between Russian President Boris Yeltsin and
Ukrainian President Leonid Kuchma concluded on 19 September
with the signing of a communique. The presidents agreed to
form an anti-crisis task force that would work out joint
economic measures to ease the economic crisis squeezing both
countries. They also discussed ways of reforming the CIS to
transform it into a more effective vehicle for regional and
international cooperation. According to ITAR-TASS, Kuchma
pledged that part of Ukraine's debt for Russian natural gas
will be settled with goods. Ukrainian Prime Minister Valeriy
Pustovoytenko also met with his Russian counterpart,
Primakov. They agreed that priority sectors for Russian-
Ukrainian cooperation are the aero-space industry, ship-
building, machine-building, and military-technical
cooperation. JAC

MEDIA FACING COST CRUNCH... Russian media appear to be facing
a challenge on two fronts, one fiscal, the other political.
On 19 September, the "Moscow Times" reported that newspaper
production costs have risen 70 percent from last month's
level. The advertising market has collapsed, and the money
received from subscriptions has now lost much of its value,
according to "Segodnya" on 17 September. "Komsomolskaya
pravda" is responding by doubling the price of its
subscriptions. A spokesman for Russian Public Television and
NTV denied that a massive lay-off of workers is imminent,
despite the 60 percent reduction in the market for
commercials, according to ITAR-TASS. Some kind of help may be
on the way: in October, the State Duma is scheduled to
consider the law "On State Support for the Mass Media" in the
second reading. JAC

...AND REDUCED ACCESS? Reports that Primakov has ordered all
members of his cabinet to vet their statements to the press
through the new head of the presidential apparatus, Yurii
Zabakov, have triggered an outcry from Moscow-based media.
"Kommersant-Daily" on 17 September quoted the chief editor of
Ekho Moskvy as saying that when Primakov took charge of the
Foreign Ministry, "one of his first actions was to ban
interviews without his authorization." Andrei Korotkov, head
of the Government Information Department, told journalists
that the Primakov government "will not curb contacts with the
press or impose any kind of censorship." Primakov himself
said "I have been and remain a firm supporter of freedom of
speech and independence of the media." JAC

GOVERNMENT TO CONTROL TOBACCO SECTOR? A spokesman for First
Deputy Prime Minister Yurii Maslyukov on 19 September
rejected Russian news agency reports that the government will
impose a state monopoly on the production and sale of
tobacco. He said the government is only considering measures
to simplify the licensing procedure for tobacco imports, set
up a wholesale tobacco network, and eliminate breaks on
custom duties for tobacco imports, according to Interfax.
U.S. tobacco giant RJR Reynolds had temporarily suspended
production in Russia because of economic uncertainty.
According to the news agency reports, Prime Minister Primakov
had ordered that a state monopoly be imposed on the sale and
production of both tobacco and alcohol. Proceeds from the
sale of the two products would reportedly be used to
replenish state and local budgets. JAC

RUSSIA TO IMPORT GRAIN. Because of the poor harvest, Russia
will be forced to import some 2 million tons of grain--mostly
wheat--this year, ITAR-TASS reported on 21 September, quoting
a spokesman for the Ministry of Agriculture. The spokesman
said that an estimated 56 million tons of grain will be
harvested before winter, some 37 percent down from last
year's level of 88.5 million tons. According to Interfax on
20 September, this year's harvest is only a little better
than the worst harvest recorded over the last three decades,
when Russia produced 55 million tons of grain. JAC

U.S. TO FUND 'MIR' RETIREMENT? The "Washington Post" reported
on 21 September that NASA will inject new funds into the
Russian Space Agency in order to avoid any further delays
with the international space station that is scheduled to be
launched in November 1998. Earlier, a Russian Space Agency
official said that the space station is unlikely to be
completed on time, thus ensuring a delay in the retirement of
the space station "Mir." According to the newspaper, NASA
will spend up to $600 million on goods and services from the
Russian Space Agency over the next four years. JAC

LUZHKOV, PRIMAKOV, LEBED ON RUSSIAN FEDERALISM. Meeting on 16
September with Prime Minister Primakov, Moscow Mayor Yurii
Luzhkov proposed reducing the number of federation subjects
from the present 89 to 10-12 "economic conglomerates," each
of which would comprise 8-10 territories, "Nezavisimaya
gazeta" reported on 19 September. Primakov told journalists
on 18 September that the idea of reducing the number of
federation subjects is "reasonable" and that "89 territories
are too many," according to Interfax. Krasnoyarsk Governor
Aleksandr Lebed told the news agency on 20 September that the
Russian Constitution should be changed to give individual
regions greater freedom. Lebed argued that "strong regions
are the backbone of a strong Russia." LF

DAGESTAN DUMA DEPUTY STRIPPED OF IMMUNITY. The Russian State
Duma on 18 September voted in closed session to strip Union
of Muslims of Russia chairman Nadirshakh Khachilaev of his
immunity from prosecution, Russian agencies reported. The
Russian Prosecutor-General's Office had asked the Duma to
take that action to enable criminal proceedings to be opened
against Khachilaev in connection with the 21 May storming of
the central government building in the Dagestani capital.
Khachilaev and his brother Magomed played a leading role in
that incident. Nadirshakh Khachilaev told Interfax on 19
September that he is ready to face "an independent and
impartial trial." He blamed the Dagestani government for the
May unrest in Makhachkala and claimed that the Duma "has
become an accomplice in the plot devised by the Dagestani
government in order to eliminate the opposition." LF

AUSHEV SUGGESTS NEW SOLUTION TO OSSETIAN-INGUSH CONFLICT.
Meeting in Moscow on 19 September with Russian Premier
Primakov, Interior Minister Sergei Stepashin, and North
Ossetian President Aleksandr Dzasokhov, Ingush President
Ruslan Aushev proposed that North Ossetia's disputed
Prigorodnyi Raion should receive the status of a condominium
whose administration should be appointed by the government of
Ingushetia, Interfax reported. Most of the raion's ethnic
Ingush population fled ethnic cleansing by Ossetians in
November 1992. Aushev termed the present situation in
Prigorodnyi Raion "dangerous," accusing the North Ossetian
leadership of deliberately exacerbating inter-ethnic
tensions. Ossetians destroyed up to 70 Ingush dwellings on 13
September after five Ossetian policemen were shot dead on the
Ingush-North Ossetian border (see "RFE/RL Newsline," 14
September 1998). Meanwhile, an Ingush-populated village in
North Ossetia was subject to artillery fire on the night of
20-21 September, according to Caucasus Press.
LF

BRITISH HOSTAGES FREED IN CHECHNYA. Two British aid workers
abducted in Chechnya in July 1997 were released on 20
September and returned to the U.K. via Moscow. Interviewed by
ITAR-TASS, British Ambassador to Moscow Andrew Wood declined
to give details of the negotiations that led to their
release. He denied that either the British government or
Russian oligarch Boris Berezovskii had paid a ransom.
Meanwhile, Chechen President Aslan Maskhadov returned to
Grozny via Baku from a visit to Malaysia. Maskhadov said that
"for the first time, Chechnya had the opportunity to conduct
equal talks at the state level" with the Malaysian king and
prime minister, ITAR-TASS reported on 20 September. On 18
September, Maskhadov discussed the situation in Dagestan and
the North Caucasus with Azerbaijani President Heidar Aliev,
Turan reported. LF

TRANSCAUCASUS AND CENTRAL ASIA

OPPOSITIONISTS MARCH IN BAKU. Opposition supporters staged a
march in Baku on 20 September to demand the postponement of
the presidential elections scheduled for 11 October and the
resignation of President Heidar Aliev. Opposition supporters
put the number of participants at between 25,000 and 50,000,
whereas Reuters estimated that some 10,000 people took part.
After negotiations with opposition representatives, the Baku
municipal authorities on 18 September agreed an a compromise
route for the march. Police did not intervene. At an
opposition march on 12 September, police had clashed with
would-be demonstrators (see "RFE/RL Newsline," 14 September
1998). LF

ALIEV DOES NOT EXCLUDE NEW WAR OVER KARABAKH. Addressing some
20,000 supporters at a rally on the outskirts of Baku on 19
September, President Aliev pledged his continued commitment
to democracy and to ensuring that the presidential poll is
free and democratic, AP reported. He claimed the credit for
numerous construction projects in Azerbaijan in the 1970s and
1980s, including roads, schools, and hospitals, but conceded
unspecified mistakes and failings during the past five years.
He pledged to rectify those faults. Aliev also warned that if
it proves impossible to resolve the Karabakh conflict by
peaceful means, then "we will use our own powers to restore
our territorial integrity," according to Reuters. LF

AZERBAIJAN APPEALS TO DESERTERS TO RETURN. Azerbaijani
Military Prosecutor Major-General Ramiz Rzaev has called on
all Azerbaijanis who fled the country after deserting from
the armed forces during the Karabakh war in 1992-1993 to
return home, according to "Izvestiya" on 19 September. Rzaev
stressed that all deserters have been amnestied under a
recent presidential decree. LF

FORMER KAZAKH PREMIER'S AIDE DETAINED. Akezhan Kazhegeldin on
20 September demanded the release of his aide Mikhail
Vasilichenko, who was arrested two days earlier in the Kazakh
capital, Astana, AP reported. Vasilichenko was to have handed
over to President Nursultan Nazarbayev and government
officials proposals for amending the country's constitution
and election laws. "Nezavisimaya gazeta" reported on 11
September that printing of the Kazakh edition of a book by
Kazhegeldin analyzing the current situation in Kazakhstan has
been halted and all copies of the Russian-language edition
confiscated. LF

TAJIK FOREIGN MINISTRY REJECTS OPPOSITION CRITICISM. The
Tajik Foreign Ministry has issued a statement condemning as
"a deliberate attempt to disinform the world community"
claims by Tajik opposition spokesmen that the Tajik
government is deliberately delaying implementation of the
peace agreement that ended the civil war, "Nezavisimaya
gazeta" reported on 19 September. Four days earlier, United
Tajik Opposition leader Said Abdullo Nuri accused the Tajik
leadership of failing to deliver on its commitment to reform
the government and amend the constitution (see "RFE/RL
Newsline," 17 September 1998). LF

TAJIK INSURGENTS' TRIAL BEGINS. The closed trial of four men
accused of attempting to overthrow the Tajik government in
August 1997 (see "RFE/RL Newsline," 11-12 August 1997) began
in Dushanbe on 20 September, ITAR-TASS reported. The four
men, who include former parliamentary deputy Sherali Mirzoev,
are said to be associates of rebel Colonel Makhmud
Khudoiberdiev, who had launched two previous unsuccessful
coup attempts. LF

UZBEK AIRLINE SIGNS COOPERATION AGREEMENTS WITH AEROFLOT. The
national airlines of Uzbekistan and Russia signed an
agreement on 18 September establishing joint flights between
Moscow and the Uzbek cities of Tashkent, Samarkand, Urgench,
and Bukhara. They also signed accords on cargo airlifting on
the Moscow-Tashkent-New Delhi route and on introducing
special tariffs for flights from Uzbekistan to European and
Baltic cities via Moscow, ITAR-TASS reported. Uzbek Airlines
director Aslan Ruznetov told journalists at the signing
ceremony that the current Russian economic crisis will not
impact on cooperation between the two airlines. LF

REGIONAL AFFAIRS

IRAN FAVORS CLOSER TIES WITH CIS. A spokesman for the Iranian
Embassy in Moscow told Interfax on 18 September that Tehran
has "sought ways to expand former areas of cooperation" with
CIS states ever since that body was set up. Speaking in Minsk
on 15 September at the second session of the inter-state
commission to discuss CIS reform, CIS Executive Secretary
Boris Berezovskii argued that there is huge unexplored
potential for expanding relations with Iran. Berezovskii
reasoned that Iran falls within the orbit of interests of
almost all CIS states and that it would therefore be logical
to develop cooperation with Iran within the framework of the
CIS, according to "Vremya-MN" on 17 September. LF

END NOTE

RUSSIA'S INTERNAL CRISIS IMPERILS COOPERATION WITH WEST

By Christopher Walker

	Russia's domestic chaos has entered a new and more
precarious stage, one that may distinctly alter the country's
direction for the foreseeable future. In the years since the
collapse of the Soviet Union, Russia has gone through
periodic spasms of economic and political crisis and is
currently suffering what is widely described as an "economic
meltdown. " It seems that the outside world is learning a
great deal more about Russia's desperate state of affairs
than it would prefer. But while Russia's internal crisis is
making headlines now, another issue of vital importance will
preoccupy the Western community when the dust settles:
namely, the impact of Russia's volatile domestic affairs on
its foreign policy.
	One likely result of the latest protracted crisis is the
hardening of a Russian foreign policy that has already been
drifting away from Western interests for some time. In fact,
with the collapse of the Russian economy and the consequent
growth in influence of communist and nationalist political
forces, there is a grave danger that Russia's foreign policy
will become more rigidly anti-Western--anti-American, in
particular--than at any time since the end of the Cold War.
	Anti-Americanism is already on the rise in Russia. This
is in no small measure due to the Russians' linkage of failed
Western-inspired economic reform with current social and
economic pain. Much of Russia has concluded that the Western
prescription for domestic reform is ill-suited to their
country. They may similarly conclude that cooperation on a
range of international matters is not in Russia's interests
either.
	The recent installment of Yevgenii Primakov as prime
minister may be providing a sense of relief to the immediate
political crisis in Russia, but there is real doubt whether
his experience is suited to bringing about an improvement in
Russia's economy. Primakov's strength is in the foreign
arena. A tough professional diplomat and former head of
Russia's External Intelligence Service, he has extensive
foreign policy experience and has been a strong proponent of
an assertive posture for Russia in world affairs. Primakov's
compromise candidacy resulted from President Boris Yeltsin's
inability to gain adequate support for his own first choice,
Viktor Chernomyrdin. That inability revealed Yeltsin's acute
political weakness. While dogged and at times valiant,
Yeltsin's leadership has finally succumbed to the
overwhelming forces massed against it: a chronically ailing
economy, widespread corruption, rampant crime, and a
disaffected population.
	The Communists and nationalists in the Duma--whose
influence has steadily increased since gains in the 1993 and
1995 parliamentary elections--are now suggesting Cold War-era
solutions for today's pressing domestic emergencies. Those
proposals include economic isolation and renationalization of
major industries and banks. Although Yeltsin's reform team
became mired in the corruption that has colored Russia's
recent past, their program was fundamentally
integrationalist, predicated on modernizing the country's
economy and bringing Russia into the global economic system.
	With regard to international matters, the Russian
foreign policy elite, much of which has not accepted its Cold
War defeat, still harbors ambitions of more actively using
Russian power abroad. As Yeltsin has weakened politically,
this same elite--which includes Primakov--has come out
against Western interests in a number of critical areas:
supporting the sale of sophisticated arms to Iran;
maintaining close relations with a number of outlaw states,
including Syria; undermining the weapons' inspection process
in Iraq; assuming an often obstructionist role in former
Yugoslavia during the Bosnian and Croatian wars; and at times
playing a similarly uncooperative role in Kosova.
	A more nationalist and aggressively anti-Western Russian
foreign policy could mean greater antagonism toward the
Baltic states and increased meddling in former Soviet
republics in the south Caucasus and Central Asia. Russia's
own weak economic condition may limit the degree to which it
can exert such influence, but it is nonetheless likely to
pursue anti-Western policies with increased vigor.
	Some observers now speculate that Primakov will use his
credibility with the Communists and his ties to the Russian
foreign policy elite to curb the impulse of these hard-liners
toward an even more aggressive foreign posture. But even if
he were inclined to do so, he will find it difficult to
withstand pressure from the very forces instrumental in his
becoming prime minister. Enjoying an increased share of
power, the hard-liners doubtless have their sights on more
fully orienting Russia's foreign policy in a direction not
consistent with Western interests.
	Playing on the anxieties of an impoverished and
demoralized population, the anti-Western elements on Russia's
political scene may well consolidate their gains and thereby
delay the establishment of a global security order. This will
present the U.S. and the Western community as a whole with a
new set of foreign policy challenges, not to mention a dose
of nostalgia that few are eager to relive.

The author is manager of programs at the European Journalism
Network.
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