Life is what happens to us while we're making other plans. - John Lennon
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 186, Part I, 25 September 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 186, Part I, 25 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

* YELTSIN REAPPOINTS ZADORNOV AS  FINANCE MINISTER

* GOVERNMENT ADOPTS TOUGH STANCE WITH WESTERN  BANKS

* KYRGYZ AUTHORITIES TRY TO BAN DEMONSTRATION

End Note: LUZHKOV AND ZYUGANOV: FRIENDLIER THAN EVER
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RUSSIA

YELTSIN REAPPOINTS ZADORNOV AS FINANCE MINISTER. Russian
President Boris Yeltsin on 25 September reappointed Mikhail
Zadornov as finance minister. He also ended the suspense for
some other cabinet members, reappointing acting Fuel and
Energy Minister Sergei Generalov, acting Justice Minister
Pavel Krasheninnikov, acting Transport Minister Sergei Frank,
and acting Railroads Minister Nikolai Aksenenko. Acting
Minister for Trade and Industry Georgii Gabuniya was named
head of the new Ministry of Trade. Among the new cabinet
members, former Deputy Prime Minister in charge of
nationality policy Ramazan Abdulatipov has been named
minister of nationalities affairs, former First Deputy
Minister of Economics Andrei Shapovalyants minister of
economy, former Deputy Foreign Minister Boris Pastukhov
minister for CIS affairs, and Mikhail Kirpichnikov minister
of science and technology. JAC

PRIMAKOV SKETCHES ECONOMIC MEASURES. Russian Prime Minister
Yevgenii Primakov on 24 September finally revealed at least a
skeletal outline of his government's economic priorities. He
told a cabinet meeting that his government intends to lower
taxes for producers, force exporters to sell more dollars,
improve tax collection measures, reduce capital flight, and
revive the banking system. Primakov also pledged that in
September the government will pay back wages to the military
and as of October begin paying all wages on time. JAC

GOVERNMENT ADOPTS TOUGH STANCE WITH WESTERN BANKS. Russian
officials' comments on foreign financial institutions turned
bellicose on 24 September. Deputy Prime Minister Aleksandr
Shokhin told reporters that the attitude of Western banks and
international financial institutions is "driving Russia into
a corner." He added that "I do not wish to scare people with
a prospect of a default on foreign debts, but our partners,
including the G-7 countries, should realize the situation"
that Russia faces. The same day, Central Bank Chairman Viktor
Gerashchenko warned that those foreign banks that are being
"greedy" and are unwilling to search for a solution during
debt negotiations "may get nothing at all." But he noted that
some Western banks are acting reasonably. The next day
Shokhin told reporters that it would be shameful for the IMF
mission to leave Moscow "without cheering the world by
announcing results." JAC

INCOMES TO FALL, ECONOMY TO SHRINK. The Russian Central Bank
on 24 September predicted that inflation will soar to at
least 240-290 percent this year and that the population's
real incomes could plunge by 13-24 percent. The bank based
its predictions on a exchange rate of 20 rubles per dollar.
If the ruble's value falls below that level, then inflation
will be even higher and real incomes even smaller. According
to Interfax, inflation in July measured only 0.3 percent,
compared with 45.5 percent for the first 21 days of
September. The Central Bank also forecast that GDP in 1998
will fall by 5-6 percent. In 1997, GDP rose 0.8 percent. JAC

GOVERNMENT TO SCUTTLE ROSNEFT SALE? Interfax reported on 24
September that the government's plan to sell a 75 percent
stake in the oil company Rosneft is likely to be scrapped.
The sale of the company has been postponed twice owing to a
lack of bidders. Deputy Prime Minister Vladimir Bulgak has
ordered his staff to concentrate its efforts on speeding up
the sale of a stake in the oil firm Slavneft. JAC

NEMTSOV TO RUN FOR DUMA. Just two days after President
Yeltsin announced Boris Nemtsov's appointment to the new post
of deputy chairman of the Local Self-Government Council,
Nemtsov announced on 24 September that he will run for a
State Duma seat in 1999 (see "RFE/RL Newsline," 23 September
1998). Nemtsov refused to say whether he will run as a
representative of an existing party or form his own. Former
Central Bank chairman Sergei Dubinin will become deputy
chairman of Gazprombank, according to "Kommersant-Daily" on
25 September. JAC

SUPPORT GROWS FOR FEWER, LARGER REGIONS. Sakhalin Governor
Igor Farkhutdinov has become the latest leading Russian
official to endorse Moscow Mayor Yurii Luzhkov's proposal for
rationalizing the existing structure of the Russian
Federation. Meeting on 16 September with Prime Minister
Primakov, Luzhkov had advocated reducing the number of
federation subjects from the present 89 to 10-12 (see "RFE/RL
Newsline," 21 and 22 September 1998). Farkhutdinov
acknowledged that merging several small federation subjects
to form one larger territorial unit is "difficult and
intricate," but he argued that it is necessary to prevent
Russia from disintegrating. On 21 September, Kemerovo
Governor Aman Tuleev had suggested that the optimum number of
federation subjects would be between 25 and 35, according to
ITAR-TASS. Tuleev said the federal authorities should bestow
on those unified regions economic autonomy equal to that
currently enjoyed by Tatarstan and Yakutia. He added that
steps should be taken to prevent "regional separatism." LF

YELTSIN APPROVES FIRST SUCH MERGER. First Deputy Prime
Minister and former Leningrad Oblast Governor Vadim Gustov
told journalists on 24 September that President Yeltsin has
approved the administrative merger of the city of St.
Petersburg and Leningrad Oblast, Interfax reported. Gustov,
who originally suggested the merger, said that Yeltsin has
given him responsibility to prepare for the merger (see
"RFE/RL Newsline," 22 September 1998). Referenda on the
merger are required by the Russian Constitution. They will be
held in St. Petersburg in December 1998, at the same time as
elections for the city legislature, and in Leningrad Oblast
at a later unspecified date. LF

MOSCOW TO CRACK DOWN ON REGIONAL TAX DEADBEATS? "Nezavisimaya
gazeta" on 24 September, reported that regional leaders are
again trying to withhold tax money from the central
government. On 22 September, Khabarovsk Governor Viktor
Ishayev announced that he is suspending payments to Moscow in
part because the central government owes the region more than
3 billion rubles ($189 million). The newspaper reported that
Khakassia and Omsk are prepared to take a similar step,
although they have not yet made a public announcement.
"Nezavisimaya gazeta" receives financial backing from Boris
Berezovskii's LogoVAZ group. On 23 September, Russian
Prosecutor-General Yurii Skuratov sent orders to all
prosecutors in Russia's republics and regions to check on the
suspension of tax-payments and to launch criminal proceedings
and/or lawsuits if necessary, according to "Segodnya". The
newspaper also included Khabarovsk in its list of regions
refusing to transfer tax funds to the center. JAC

SCANDALS PLAGUE MAYORAL RACES. A court in Vladivostok has
ruled that Mayor Viktor Cherepkov cannot stand for reelection
because he used public money to pay for his campaign. The
flamboyant Cherepkov hosted outdoor discos to promote his
candidacy and decorated a road construction project with an
enormous flower bed that said, "To the city from the mayor,"
according to the "Moscow Times" on 25 September. Since
Cherepkov intends to appeal the court's decision, he may
still be able to run in the election scheduled to take place
on 27 September. Meanwhile, as the mayoral election nears in
Nizhnii Novgorod, the candidates there are accusing one
another of violating local election laws. In August, the
local election committee refused to register two new
candidates, accusing them of falsifying voters' signatures,
"Novosti" reported. Duma deputy Vladimir Semago, who recently
quit the Communist Party, has called for Interior Minister
Sergei Stepashin to ensure the legality of the elections (see
"RFE/RL Newsline," 18 September 1998). JAC

MOTHERS SUGGEST HOW TO SAVE MONEY. The Soldiers' Mothers
Committee has sent an open letter to President Yeltsin asking
him to cancel the fall draft, "Kommersant-Daily" reported on
24 September. The committee proposed that the money saved by
canceling the draft could be used to pay back wages to
Russia's armed forces officers. The newspaper argued that the
president will be sorely tempted to accept the mothers'
suggestion as an "anti-crisis measure," since it would not
require the Duma's approval. JAC

RUSSIA TO GRANT IRAN MFN STATUS? Speaking at a joint press
conference with his Iranian counterpart, Ali Akbar Nateq
Nouri, at the close of his four-day visit to Tehran, Russian
State Duma speaker Gennadii Seleznev said that there would be
no opposition in the Duma to the ratification of documents
granting Iran most-favored-nation status, "Parlamentskaya
gazeta" reported on 25 September. On Afghanistan, Seleznev
said that the Taliban are given far greater significance than
they actually merit and would not exist as a political force
without financial support from Pakistan. But at a 24
September press conference after his return to Moscow,
Seleznev conceded that Russia is concerned about reports that
the Taliban are deploying long-distance missiles on the
Afghan-Iranian frontier, according to Interfax. Seleznev also
said that Russia will continue to sell arms to Iran, which he
termed "a reliable partner." LF

KHACHILAEV SUPPORTERS STAGE PROTEST IN MAKHACHKALA. Several
hundred supporters of Magomed Khachilaev, one of the leaders
of the Kazi Kumukh organization representing Dagestan's Lak
minority, and his brother Nadirshakh, chairman of the Union
of Muslims of Russia, ended their march on the Dagestani
capital on 24 September and began a protest demonstration on
the outskirts of the city (see "RFE/RL Newsline," 22
September 1998), Interfax reported . The demonstrators are
demanding the release of Magomed Khachilaev, who was arrested
on 9 September for his role in the 21 May storming of the
government building. They further demand that a Russian State
Duma delegation travel to Makhachkala to meet with them. In a
vote that observers believe to have been falsified, the Duma
stripped Nadirshakh Khachilaev of his deputy's immunity on 18
September to facilitate his arrest for his involvement in the
21 May incident. Dagestan State Council chairman Magomedali
Magomedov assured Prime Minister Primakov on 24 September
that there are no anti-Russian or separatist sentiments in
Dagestan, according to ITAR-TASS. LF

TRANSCAUCASUS AND CENTRAL ASIA

KYRGYZ AUTHORITIES TRY TO BAN DEMONSTRATION... Between 500
and 1,000 people met in a cinema in the city of Dzhalalabad
on 25 September to formulate their opposition to the changes
to the Kyrgyz Constitution proposed by President Askar
Akayev, RFE/RL's correspondent in the city reported. The
organizers of the meeting had been prevented from convening
it on the city's central square by police, who also blocked
all roads leading into the city. The constitutional changes
legalize private land ownership, modify the structure of the
parliament, and restrict the parliament's role in drafting
key legislation, including the state budget. Those amendments
are to be submitted to a nationwide referendum in mid-
October. Three of the protest organizers were arrested on 22-
23 September. Two of them have been tried and sentenced to 15
days in prison for violating public order, while the third,
Nazarbek Nyshanov, chairman of the unregistered Patriotic
Party of Kyrgyzstan, has been charged with large-scale
embezzlement. LF

...AS OPPOSITION TO PROPOSED CHANGES MOUNTS. Interfax on 23
September quoted Communist Party leader Absamat Masaliev, who
was Kirghiz Communist Party first secretary from 1985-1991,
as saying that 80 percent of Kyrgyz citizens oppose the idea
of private land ownership, which he claimed was forced on
Kyrgyzstan by the IMF. On 24 September, the Bishkek daily
newspaper "Utro Bishkeka" predicted that a civil war
comparable to those in Chechnya and Tajikistan may be
imminent. The newspaper claimed that Masaliev and the
chairmen of the Ata-Meken and Agrarian-Labor parties are
planning to oust Prime Minister Kubanychbek Djumaliev.
Meanwhile, the local council in Osh Oblast had to cancel an
urgent session to discuss President Askar Akayev's proposed
constitutional changes for lack of a quorum, according to
RFE/RL's correspondent in the oblast capital. LF

KAZAKHSTAN, VATICAN SIGN AGREEMENT. Vatican Secretary of
State Cardinal Sodana and Kazakh Foreign Minister
Kasymzhomart Tokaev signed an agreement on 24 September
regulating the legal status of the Roman Catholic Church in
Kazakhstan, Reuters reported. The agreement, which grants the
Church full religious freedom and access to the media, is the
first of its kind signed between the Vatican and a former
Soviet republic. Following the signing ceremony, Kazakh
President Nursultan Nazarbayev had an audience with Pope John
Paul II. LF

TAJIK GOVERNMENT ACCUSES OPPOSITION. The Tajik government On
24 September issued a statement accusing United Tajik
Opposition field commanders of violating last year's peace
agreement and committing terrorist acts, ITAR-TASS reported.
The statement claimed that some opposition commanders engage
in looting and hostage-taking. It also identified opposition
detachments in the Darband region as being responsible for
the murders of four members of the UN observer mission in
July and of a leading customs official the following month.
The chief of staff of the UTO armed forces, Mirzokhudja
Nizomov, rejected the government's accusations. On 25
September, the U.S. embassy in Dushanbe announced it is
suspending its work indefinitely because of insufficient
security guarantees. LF

TURKMENISTAN'S CLANS LOOKING AHEAD TO POST-NIYAZOV ERA? The
17 September sackings by President Saparmurat Niyazov of
seven prominent military and security officials (see "RFE/RL
Newsline," 18 September 1998) may have been intended to
circumscribe the influence of former Interior Minister Gurban
Kasymov, according to "Nezavisimaya gazeta" on 24 September.
Niyazov has transferred Kasymov to the post of defense
minister. The newspaper claims that after Niyazov's cardiac
surgery one year ago, the various Turkmen clans began a
covert struggle for power in which each faction tried to
enlist Kasymov's support. The daily also claims that the
country's inability since March 1997 to export natural gas
has brought it to the verge of an economic catastrophe that
can be averted only if Niyazov draws on his personal funds in
Western banks, estimated at $3 billion. LF

ARMENIAN, RUSSIAN ARMED FORCES BEGIN MANEUVERS... Armenian
military units and Russian troops from the military base near
Armenia's second-largest city, Giumri, began four-day joint
maneuvers on 23 September at the Armavir training ground,
west of Yerevan, Russian media reported. Infantry units
backed by armor and aircraft will participate in the
exercises, which will simulate defense actions in mountain
conditions and a joint retaliatory strike, according to AP.
Armenian Defense Minister Vazgen Sargsian told "Nezavisimaya
gazeta" on 24 September that he hopes the Russian Defense
Ministry will soon replace the obsolete equipment of its
forces stationed in Armenia. LF

...AS DOES KARABAKH. The armed forces of the Nagorno-Karabakh
Republic on 25 September began three weeks of maneuvers that
coincide with the 27 September local elections in the
disputed enclave and with the 11 October Azerbaijani
presidential elections, RFE/RL's Stepanakert correspondent
reported. Those maneuvers are aimed at monitoring
coordination between various detachments of the Karabakh
Defense Army, testing combat readiness, and honing the
military skills of its personnel, according to a statement
released by the Karabakh Defense Ministry. The statement
affirmed that optimum combat readiness is an important
safeguard against renewed hostilities with Azerbaijan for
control of the enclave. LF

TURKISH MILITARY INSPECT RUSSIAN BASES IN GEORGIA. Turkish
defense experts have inspected Russian military bases in
Georgia and established that the levels of equipment deployed
there do not exceed those permitted under the 1990 Treaty on
Conventional Forces in Europe, ITAR-TASS reported on 24
September. An Italian contingent similarly inspected Russian
military installations in Leningrad Military District and
found no violations there. LF

GEORGIA, ABKHAZIA CONDUCT MORE TALKS. Georgian Minister of
State Vazha Lortkipanidze led a government delegation to
Sukhumi on 24 September for talks with the Abkhaz leadership.
Abkhaz President Vladislav Ardzinba said those talks focused
on creating confidence-building measures and defusing
tensions. As a first step toward achieving those aims, the
Georgian and Abkhaz interior and security ministers signed a
protocol on the disengagement of forces along the Inguri
River, which forms the border between Abkhazia and the rest
of Georgia. Abkhaz Prime Minister Sergei Bagapsh told
journalists after the talks that a meeting between Arzdinba
and Georgian President Eduard Shevardnadze will take place
"in the nearest future," according to ITAR-TASS. Meanwhile,
two Abkhaz local officials were shot dead by unidentified
gunmen in Abkhazia's southernmost Gali Raion during the night
from 23 to 24 September. LF

GEORGIA, AZERBAIJAN INITIAL OIL PIPELINE PROTOCOL. Georgian
and Azerbaijani representatives on 23 September initialed a
protocol stipulating that if the Baku-Ceyhan route is
selected for the Main Export Pipeline for Azerbaijan's
Caspian oil, that pipeline will be routed through Georgia,
Reuters and Interfax reported. The agreement is to be signed
by the presidents of Azerbaijan, Georgia, and Turkey on 9
October. The vice president of the Azerbaijan International
Operating Company, which represents the first consortium
created to exploit Azerbaijan's Caspian oil, told journalists
in Baku on 22 September that the decision on the final route
for the MEP will be made on schedule in late October, ANS
Press reported. The Turkish newspaper "Yeni Yuzil" reported
last week that the U.S. State Department has advised the AIOC
to delay a decision on the final route until early 1999. LF

AZERBAIJAN, UKRAINE DISCUSS OIL EXPORT. Azerbaijani First
Deputy Prime Minister Abbas Abbasov met with Ukrainian
President Leonid Kuchma on 24 September in Kyiv to discuss
the prospects for exporting some of Azerbaijan's oil by
tanker from the Georgian port of Supsa to Odessa and then via
a pipeline to Brody in western Ukraine, AP reported.
Ukrainian officials maintain that this is the shortest and
cheapest route for transporting Caspian oil to Europe.
Ukrainian First Deputy Premier Anatoliy Holubchenko said
completion of the half-built pipeline will cost approximately
$400 million and take some two years. The cost of the Baku-
Ceyhan pipeline is estimated at $3 billion. LF

TENSION BEFORE AZERBAIJAN PRESIDENTIAL ELECTIONS. Central
Electoral Commission spokesman Arif Guseinov told Interfax on
24 September that preparations are almost complete for the 11
October presidential poll. But Turan reported that the
opposition Movement for Democratic Elections and Electoral
Reform is still demanding that the poll be postponed for
three months. The Movement also demands that eight of the 24
seats on the Central Electoral Commission be allocated to
opposition representatives. Some 100 members of the movement
staged a picket on 24 September outside the Prosecutor-
General's Office to demand the release of the remaining 12
persons held in custody since the 12 September clashes
between police and opposition supporters in Baku. Musavat
Party spokesman Arif Gadjiev said on 24 September that the
opposition will proceed with plans for a march in Baku on 27
September along the route they have chosen rather than that
proposed by Baku Mayor Rafael Allakhverdiev. LF

END NOTE

LUZHKOV AND ZYUGANOV: FRIENDLIER THAN EVER

by Floriana Fossato

	 Not many Russian governors receive congratulations and
presents from the Kremlin on their birthday The powerful
mayor of Moscow, Yurii Luzhkov, does. And in the current
times of political and financial uncertainty, that is not by
chance.
	Earlier this week, President Boris Yeltsin wished
Luzhkov a happy 62nd birthday, and Russian television
channels showed Yeltsin holding a large present wrapped in
green paper. Hours later, Prime Minister Yevgenii Primakov
found time to go to Moscow City Hall and personally give
Luzhkov his present.
	Analysts in Moscow say that the Kremlin's show of
consideration is also a sign of fear, as it comes precisely
at the moment when populist, nationalist-leaning Luzhkov is
openly sealing his ties with Yeltsin's communists foes.
Yeltsin's comment that the Moscow mayor deserves a tribute on
the occasion of his birthday seemed to disguise a last-minute
attempt to make a "non-aggression pact" with Luzhkov, said
one analyst who wished to remain unnamed.
	Luzhkov has repeatedly denied having presidential
ambitions, but many--both in Moscow and across Russia--see
him as a likely presidential candidate in the year 2000, when
the next presidential vote is scheduled. They also see him as
a candidate in the event of early elections.
	Luzhkov and communist leader Gennadii Zyuganov in the
past week or so have revealed that their positions are
growing closer. Echoing earlier communist demands, Luzhkov
has urged Primakov to renationalize some former state
companies, adding that the architects of privatization
schemes, as well as officials involved in investment pyramid
schemes, should be put on trial.
	Zyuganov, for his part, has openly praised Luzhkov. He
said he is pleased to see that "in the present crisis
situation, Luzhkov has assumed positions aimed at
strengthening order in the country." Using Soviet-era
terminology, Zyuganov added that people like Luzhkov are
considered by the Communists to "poputchiki" or fellow-
travelers.
	"Kommersant-Daily" reports that Luzhkov has agreed that
his goals do, indeed, coincide with the Communists'. The
daily quoted him as saying that "as a matter of fact this is
a consolidation, aimed at implementing important principles
that we share."
	One of Luzhkov's closest allies, General Andrei
Nikolaev, is reportedly working to broaden the political
platform that could bring Luzhkov to power.
	Fired by Yeltsin earlier this year from the post of
Federal Borderguard Service, the ambitious general,
reportedly with Luzhkov's backing, soon obtained a seat in
the State Duma and created a political movement, the Union of
People's Power and Labor. Within a matter of only a few
months, the union has forged alliances with 12 centrist and
leftist political organizations. Most recently, it signed a
protocol aimed at coordinating its activities with those of
the communist-led Popular and Patriotic Union.
	Nikolaev has announced that his plans for the 1999
parliamentary elections include the creation of a wide bloc
that would become the "party of the majority." If such a bloc
emerges, he predicted, it is very likely that its common
candidate for the presidential vote will be Luzhkov.
	However, "Kommersant-Daily," quoting unnamed communist
Duma deputies, said Nikolaev's predictions overlook the fact
that most communists legislators would like to see their
leader, Zyuganov, as the common candidate for the next
presidential election. In the event of early elections, a
struggle for power could easily break out among the new
"fellow-travelers."
	Until the financial crisis started biting hard in the
capital, sweeping away savings and leaving the emerging
middle-class jobless, Moscow had been the symbol of coming
abundance. Having re-elected Luzhkov in 1996 with 90 percent
of the vote, Muscovites are now anxious that the capital
could end up resembling the deprived and neglected towns that
abound in Russia. They would most likely support the Moscow
mayor in a presidential ballot in the hope this would
guarantee them a better future. Other Russians, who have been
wary of Moscow's success so far, would have to be convinced
that the mayor of the capital would be able to improve their
situation to some degree.
	Luzhkov has been criticized by human rights
organizations and by many Russians for perpetuating Soviet-
era practices, such as the Moscow residency permit, or
"propiska." The Constitutional Court has twice instructed
Moscow authorities to abolish the propiska, but Luzhkov
responded by publicly telling officials to disregard the
ruling.
	Others underline that Luzhkov, far from being a
politician who counts on businesses to finance his political
initiatives, is himself a full-fledged member of Russia's
"oligarchy" and would have trouble finding the support of
other "oligarchs."
	The English-language daily "Moscow Times" wrote last
month that Luzhkov has never missed a chance to criticize
privatization over the past years and its main architect,
Anatolii Chubais. However, the daily noted that "few have
benefited more from Chubais' privatization than Luzhkov
himself."
	Luzhkov's financial and industrial resources include
telecommunications companies, television and printed media
assets, car, electronics, and food-processing plants,
refineries and dozens of filling stations. With such
"incredible resources," writes the newspaper, Luzhkov can
only be considered an oligarch who is "well ahead of the
pack," as he is "the only oligarch who holds elected office."

The author is an RFE/RL correspondent based in Moscow.

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