RFE/RL NEWSLINE Vol 2, No. 209, Part I, 29 October 1998

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RFE/RL NEWSLINE Vol 2, No. 209, Part I, 29 October 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

* PRIMAKOV CALLS FOR MORE STATE REGULATION OF ECONOMY

* YELTSIN RESTS AT BARVIKHA

* CASPIAN PIPELINE DECISION TO BE DELAYED

End Note: IS GEORGIA INHERENTLY UNSTABLE?
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RUSSIA

PRIMAKOV CALLS FOR MORE STATE REGULATION OF ECONOMY.
Speaking in Vladikavkaz on 29 October, his 69th
birthday, Prime Minister Yevgenii Primakov said that his
government has "resolutely opted" for increasing the
role of the state in the regulation of the economy,
ITAR-TASS reported. Primakov said that "the state must
determine the parameters and trends in industrial
restructuring" in order to restore "order and
discipline" in the country and protect "all forms of
property." He also suggested that foreign investments
should be "channeled to us" so that production can be
increased. PG

MOSCOW SCRAMBLES TO DEAL WITH ECONOMIC PROBLEMS. In
order to service its foreign debts--which officials on
28 October said Russia can do--the Russian government is
expanding its exports of oil, Russian
agencies reported. The Russian government also
acknowledged several other problems: a budget deficit of
$3.4 billion during the first nine months of the year
and only 11.4 percent of expected privatization revenues
in the same period, according to Interfax. Finance
Minister Mikhail Zadornov said that Moscow will seek to
force five or seven foreign countries to pay their debts
to Russia, ITAR-TASS reported on 28 October. Meanwhile,
Russian officials met with the Paris Club to discuss
debt management, and Primakov appointed Economics
Minister Andrei Shapovalyants as the country's
coordinator for securing EU assistance, Interfax
reported on 27 October. PG

YELTSIN RESTS AT BARVIKHA. Houston heart specialist
Michael DeBakey told "Komsomolskaya pravda" on 28
October that Boris Yeltsin is not that sick and is
resting comfortably at the Barvikha sanitarium. Yeltsin
aides said that the president may go to Sochi to
convalesce. Meanwhile, Russian officials said that
Yeltsin's meeting with Croatian President Franjo Tudjman
has been postponed, although they indicated that his
November sessions with top officials from China, Japan,
Germany, Italy, and Holland are still scheduled to take
place. But Yeltsin cannot have been cheered by a recent
poll showing that only 5 percent of Russians approve of
his work, while 93 percent disapprove, according to
Interfax on 28 October. PG

YELTSIN'S ILLNESS PROMPTS CALLS FOR POLITICAL CHANGES...
Presidential spokesman Dmitrii Yakushkin told ITAR-TASS
on 28 October that Yeltsin has transferred most day-to-
day tasks to his prime minister but will remain in
office until the end of his term. The State Duma,
however, has announced that it will debate a law on
presidential health in early November, while other
politicians suggested more radical solutions. Duma
Chairman Gennadii Seleznev said in Beijing on 27 October
that Yeltsin should transfer power temporarily while he
is ill, and former Prime Minister Viktor Chernomyrdin
suggested that the constitution be changed to allow
Yeltsin to transfer power to Primakov for the remainder
of his term, Interfax reported. Communist leader
Gennadii Zyuganov, for his part, called for Yeltsin's
resignation and the election of a new president by a
special constitutional assembly. PG

...AND PROPOSALS FOR CHANGES IN ELECTION PROCEDURES. A
proposal by Federation Council Chairman Yegor Stroev
that the president be elected by a special electoral
college consisting of the parliament and local electors
drew support from Seleznev but was opposed by Central
Election Commission chairman Aleksandr Ivanchenko and
Yabloko leader Grigorii Yavlinskii. Yavlinskii told
Interfax on 28 October that such a shift would be like
"using the guillotine to cure a headache." PG

IVANOV SAYS RUSSIA 'TOO BIG' FOR NATO, EU. Foreign
Minister Igor Ivanov told "Izvestiya" on 28 October that
Russia is simply "too large" to ever join NATO or the
EU. Were Russia to try to join, "neither NATO nor the EU
could remain the same," he commented. At the same time,
Ivanov said seeking membership in those organizations is
something Russia will not do. PG

PRIMAKOV SAYS EU BACKS MOSCOW'S ANTI-CRISIS ACTIONS.
Following meetings with European Commission Chairman
Jacques Santer and Austrian Federal Chancellor Viktor
Klima on 27 October, Prime Minister Primakov said that
the EU supports Moscow's efforts to overcome the current
crisis, ITAR-TASS reported. Primakov also said he
reached agreements with Austrian firms and organizations
that will attract some $600 million in Austrian
investment to Russia, "Rossiiskaya gazeta" reported on
28 October. PG

YAVLINSKII SAYS CORRUPTION THREATENS PRIMAKOV
GOVERNMENT. In an interview with London's "Daily
Telegraph," Yabloko leader Yavlinskii said that
corruption threatens to undermine Primakov's government,
Russian agencies reported on 28 October. Yavlinskii's
remarks were sharply criticized by both government
officials and his parliamentary opponents. Yavlinskii
indicated that he still supports Primakov as prime
minister. PG

MOSCOW PLEASED BY NATO'S DECISION NOT TO USE FORCE IN
KOSOVA. Russian officials on 27-28 October both
expressed pleasure at and took credit for NATO's
decision not to use force in Kosova, Russian agencies
reported. But the Foreign Ministry made it clear that it
is still concerned about the possibility that NATO might
change its mind in the future. Meanwhile, Viktor
Ilyukhin, the chairman of the Duma's Security Committee,
said on 28 October that approximately 10,000 Russian
volunteers are "ready to help the Slavs in the Yugoslav
Federative Republic." But a Public Opinion Fund poll
found that only 16 percent of Russians support the
Serbs, 4 percent support the Kosovars, 43 percent back
neither, and 37 percent say they have no opinion or do
no know anything about the conflict. Moreover, 63
percent they said they oppose Russia providing military
assistance to Yugoslavia in the event of a NATO attack,
Interfax reported. PG

UNEMPLOYMENT RISES TO 11.5 PERCENT. The Labor Ministry
told ITAR-TASS on 28 October that it estimates that some
8.5 million working age people are now unemployed in
Russia, some 11.5 percent of the work force. That number
is significantly larger than the official numbers of
1.75 million or 2.5 percent that Russian officials have
given in the past. PG

MOSCOW STREAMLINES ARMS TRADE, MISSILE SYSTEMS. Former
Russian Economics Minister Yakov Urinson told Interfax
on 27 October that Russia's system for promoting arms
sales abroad is a good one because it does not allow
arms producers to enter the market directly or one
company to monopolize that trade. Meanwhile, Commander
Vladimir Yakovlev, the commander of Russia's Strategic
Missile Forces said that his forces will be armed with a
single modernized missile system Topol-M instead of its
current six types of missiles, ITAR-TASS reported on 28
October. Such an arrangement, Yakovlev said, will
improve the efficiency and effectiveness of his forces.
PG

LUZHKOV URGES CREATION OF EAST EUROPEAN MARKET. Moscow
Mayor Yurii Luzhkov has proposed establishing a new East
European market modeled on the EU, Interfax reported on
28 October. He said such a group would promote trade and
that it is probably not yet the right time to talk about
broader political ties of the kind associated with
COMECON. PG

HUMAN RIGHTS COMMISSIONER COMPLAINS ABOUT BANKS. Oleg
Mironov, Russia's commissioner for human rights, has
spoken out in support of depositors who are suing the
country's banks for failing to give them back their
deposits in a timely manner, ITAR-TASS reported on 28
October. And he has asked the chairman of the Supreme
Court to take all necessary measures to ensure the
protection of depositors' rights. PG

ATOMIC MINISTRY SAYS THEFT OF NUCLEAR MATERIALS HAVE
CEASED. Nikolai Redin, the deputy chief of the Atomic
Energy Ministry's security department, told ITAR-TASS on
28 October that there have been no thefts of nuclear
materials in the Russian Federation during the last
three years and that there have never been any thefts of
weapons-grade materials. He said that there was a wave
of thefts of sub-weapons-grade materials earlier because
the mass media had featured stories about a "black
market for nuclear materials with incredibly high
prices." Redin denied that there was such a market, and
he noted that the ministry is installing a new
computerized control system at its 23 plants around the
country. PG

NIKITIN TRIAL CONTINUES. The trial of retired Naval
Captain Aleksandr Nikitin continued in St. Petersburg on
28 October, Interfax reported. Nikitin is accused of
betraying state secrets in an environmental report on
pollution caused by Russia's Northern Fleet that he
wrote for the Norwegian Bellona environmental
organization. A Defense Ministry official testified that
Nikitin's report had inflicted 4.5 billion rubles in
damages on the Russian state. If found guilty, Nikitin
could face up to 20 years in prison. Meanwhile, the
"Russian Securities Market News" reported on 26 October
that Bellona has experienced difficulties with its E-
mail to Russia since the trial began. The publication
commented that these problems may be "a purely Soviet
coincidence." PG

PRIMAKOV PLEDGES TO SUPPORT DOMESTIC PRODUCERS. While
attending a meeting of the Greater Volga Association
Council in Saransk on 28 October, Prime Minister
Primakov said that his government will do what it can to
support domestic production, ITAR-TASS reported. The
association, created to improve cooperation among the
various political units in the Volga region, is
considering ways to overcome the country's economic
crisis. Meanwhile, the leaders of the seven major
industrial cities in this region signed an agreement on
28 October establishing an association of their own, the
Russian news agency reported. PG

YELTSIN SAID CONSIDERING LIMITS ON REGIONAL AUTONOMY.
Oleg Sysuev, Yeltsin's first deputy chief of staff told
"Segodnya" on 28 October, that the president is
considering changes in the constitution that would limit
the power of regional officials. "Our misfortunes on the
road of economic reforms," Sysuev said, "are largely
linked to the weakness of the executive branch. We have
89 regional units that, to put it bluntly, are not
accountable to the center." He thereby echoed Prime
Minister Primakov's recent proposals for legislation
that would allow Moscow to oust elected officials in the
regions if they violated central policies. PG

KURIL RESIDENTS WANT JAPAN TO LEASE THEIR ISLAND. Some
of the 3,800 residents on Shikotan Island, which belongs
to the Kuril chain, are sending a petition to President
Yeltsin to lease their home to the Japanese for 99 years
if the central government does not provide them with aid
by the end of November, ITAR-TASS reported on 28
October. They have also appealed to Moscow Mayor
Luzhkov. The petitioners cited Yeltsin's 1992 decree
that gave local governments in the region the right to
lease portions of their territories to foreign investors
for a 99-year period. PG

RUSSIAN-SOUTH KOREAN NAVAL MANEUVERS GET 'EXCELLENT
MARKS.' Russian-South Korean naval exercises in
communications and maneuvering received "excellent
marks" from the Russian Navy's Pacific Command, ITAR-
TASS reported. The exercises, held in Peter the Great
Bay on 27 October, involved the Russian destroyer
"Admiral Vinogradov" and the South Korean frigate
"Seoul" as well as support ships. In other news,
representatives of the South Korean government and the
Red Cross arrived in nearby Sakhalin on 28 October to
discuss the repatriation of ethnic Koreans deported to
that area by the Japanese authorities more than a half
century ago, Interfax reported. BP/PG

DUDAEV SAID TO BE STILL ALIVE. Aleksei Mitrofanov,
chairman of the Duma Committee on Geo-Politics and a
member of the Liberal Democratic Party of Russia, told
journalists on 28 October that former Chechen President
Dzhokhar Dudaev faked his death in a rocket attack in
April 1996 and may now be living in Istanbul. Liberal
Democratic Party of Russia leader Vladimir Zhirinovsky
is currently trying to locate him in that city, Reuters
reported. But former Chechen Foreign Minister Movladi
Udugov rejected Mitrofanov's claims as "ravings." There
were no witnesses to Dudaev's death, and his place of
burial is kept secret. LF

TRANSCAUCASUS AND CENTRAL ASIA

CASPIAN PIPELINE DECISION TO BE DELAYED. Azerbaijani
President Heidar Aliev told journalists on 28 October
that the Azerbaijan International Operating Company
(AIOC) will make its recommendation on the optimal route
for the so-called Main Export Pipeline for Azerbaijan's
Caspian oil on 12 November, Interfax reported. That
recommendation was to have been made public on 29
October. Following talks with AIOC head John Leggate on
27 October, Aliev had expressed concern that under the
terms of the contract signed with the AIOC in September
1994, construction of the pipeline should have been
completed within 54 months. Aliev reaffirmed his
determination that the Baku-Ceyhan route should be
chosen. Aliev's son Ilham, who is deputy president of
the Azerbaijan State Oil Company SOCAR, denied on 28
October that Baku will endorse an alternative route for
the MEP. LF

ARMENIAN-RUSSIAN MILITARY COOPERATION 'NOT A THREAT.'
Smbat Ayvazian, leader of the majority Yerkrapah group
within the Armenian parliament, has rejected Azerbaijani
President Aliev's claim that Russia is arming Armenia
against NATO, Caucasus Press reported on 27 October.
Ayvazian said that Aliev has emerged "weaker" and "more
vulnerable" from the 11 October presidential elections,
according to "Aravot." The Azerbaijani president had
told visiting NATO officials in Baku on 23 October that
they should make a serious effort to prevent the
"militarization of Armenia" (see "RFE/RL Newsline," 26
October 1998). NATO Secretary-General Javier Solana,
visiting Yerevan on 1 October, had said that Armenian-
Russian defense cooperation is not an obstacle to closer
NATO-Armenian cooperation. LF

ARMENIAN, KARABAKH PRESIDENTS MEET. Kocharian met with
the president and prime minister of the unrecognized
Nagorno-Karabakh Republic, Arkadii Ghukasian and Zhirair
Poghosian, on 27 October to discuss the economic and
social situation in the enclave and the Armenian state
budget for 1999, RFE/RL's Yerevan bureau reported.
Ghukasian had discussed economic issues with Armenian
Prime Minister Darpinian in Yerevan on 23 October. LF

FORMER GEORGIAN SECURITY MINISTER BLAMES UPHEAVALS ON
CASH SHORTAGE. Djemal Gakhokidze told Interfax on 27
October that budgetary constraints had precluded
implementing what he considered essential changes in the
country's security system. Those changes, he suggested,
might have prevented the assassination attempt on
President Shevardnadze in February and last week's
mutiny in western Georgia. He also said that his
resignation following the failed mutiny was voluntary,
and he endorsed the nomination of Vakhtang Kutateladze,
whom Shevardnadze has proposed as Gakhokidze's
successor. Kutateladze, who is a 43-year-old KGB veteran
and has been the head of Shevardnadze's bodyguard since
1994, told journalists on 28 October that he accepted
the nomination as security minister reluctantly. Like
his predecessor, he stressed that the Georgian security
system needs reorganizing. LF

KAZAKH PRESIDENTIAL CANDIDATE ENCOUNTERS DIFFICULTIES AT
AIRPORT. National Security Committee authorities at
Almaty airport sought to prevent presidential candidate
and former Prime Minister Akezhan Kazhegeldin from
boarding a Lufthansa plane bound for Germany on 27
October, RFE/RL correspondents reported. Officers
confiscated Kazhegeldin's passport but returned it when
they learned they were being videotaped. Kazhegeldin was
allowed to depart but the flight was delayed 30 minutes.
Also on 27 October, the court that found Kazhegeldin
guilty of participating in "a session and mass
gatherings of an unregistered organization" upheld its
verdict, ordering Kazhegeldin to appear before the
court. BP

KAZAKH NEWSPAPER REPORTS ON NAZARBAYEV'S PROPERTY
ABROAD. The independent newspaper "DAT" reported in its
28 October edition that President Nursultan Nazarbayev
owns a villa in Saint Tropez, France, worth $119
million, according to RFE/RL correspondents in Almaty.
The newspaper published a picture of the alleged
Nazarbayev villa. BP

AKAYEV ENDS JAPAN VISIT. Kyrgyz President Askar Akayev
wrapped up an unofficial three-day visit to Japan on 27
October, Reuters and "Nezavisimaya gazeta" reported.
Akayev and Japanese Prime Minister Keidzo Obuchi signed
a document aimed at boosting economic, political and
cultural ties. Interfax reported on 28 October that
Japan will loan Kyrgyzstan $40 million to improve the
Bishkek-Osh highway. BP

UZBEKISTAN REPORTS GDP GROWTH. According to a government
report on 27 October, Uzbekistan's GDP increased by 4.4
percent in the first nine months of 1998, Interfax
reported. Industrial output grew by 6.1 percent and
agricultural output by 4.9 percent. Capital investment
also increased by 13.1 percent and services by 12.4
percent. The budget deficit is on target, and less money
was printed than planned. Some cabinet members
criticized the delay in utilizing foreign credits for
small and medium -sized businesses and the slow pace of
agricultural reforms. BP

END NOTE

IS GEORGIA INHERENTLY UNSTABLE?

by Liz Fuller

	Georgia hit the headlines again last week, when an
army lieutenant identified as a former supporter of the
late President Zviad Gamsakhurdia apparently attempted
to overthrow the country's leadership, only to abandon
the undertaking later the same day.
	The failed insurrection was the fourth major
upheaval the country has experienced this year
(following the botched assassination attempt on
President Eduard Shevardnadze in February, the abduction
10 days later of four members of the UN observer force
in western Georgia, and renewed hostilities in
Abkhazia's Gali Raion in late May). The circumstances
surrounding all four crises remain nebulous, and
official explanations have generally been contradictory.
That lack of clarity, in turn, creates the impression
that the country is inherently unstable. Yet while that
impression is accurate, the upheavals are not the cause
of the malaise, rather merely a symptom of it.
	Three factors make Georgia vulnerable to
subversion. Two of those factors are internal: the
domestic political power structure and centrifugal
tendencies in regions on the periphery. The third is the
vested interest of some circles in Russia in preventing
the export of Caspian hydrocarbons to international
markets.
	Georgian domestic politics are dominated by
Shevardnadze, who since his return from Moscow to
Tbilisi in March 1992, following Gamsakhurdia's violent
ouster has systematically neutralized almost all
political figures who could pose a challenge to him. He
has simultaneously crafted a personal power base in the
form of the Union of Citizens of Georgia (SMK),
currently the largest parliamentary group, in which
former nomenklatura apparatchiks with whom Shevardnadze
worked in the 1970s and early 1980s vastly outnumber the
energetic young reformers whom he has selected and
promoted over the past few years.
	As a result of that personnel policy, many people,
both in Georgia and abroad, have come to perceive
Shevardnadze as the embodiment and guarantee of a
tenuous stability. But that stability is at the same
time threatened by endemic corruption within the central
government and at the local level, where councilors
stubbornly resist any reform plans that might
circumscribe their personal power.
	This "crisis in the reform process" has, in turn,
alienated many of the young reformers who last summer
threatened to quit the SMK and form a "loyal opposition"
within the parliament. Popular disillusion with the
ruling SMK is so great that domestic observers believe
the party's only hope of winning the majority of seats
on local councils in 15 November elections lies in
resorting to large-scale falsification.
	The anticipated beneficiary of the erosion of
support for the SMK is Aslan Abashidze, chairman of the
Supreme Council of the autonomous Republic of Adjaria on
the Black Sea coast bordering Turkey. Abashidze's
individualistic and autarkic policies (which many
Tbilisi observers believe have Moscow's support) have
resulted in a markedly higher degree of stability and
economic prosperity than elsewhere in Georgia. A strong
showing in the November local elections by Abashidze's
All-Georgian Union of Revival, which is the second-
largest parliamentary group, could lead to an open power
struggle between Abashidze and Shevardnadze.
	Nor is Adjaria the only region in Georgia over
which the jurisdiction of the central government does
not extend. Tbilisi effectively forfeited control of
South Ossetia in 1992 and of Abkhazia a year later. The
former is now financed almost solely by Moscow, which
nonetheless refuses to condone its unification with the
Republic of North Ossetia within the Russian Federation.
As for Abkhazia, it is de facto an independent statelet.
	Only minimal progress has been made at negotiations
on formal agreements that would define the relationship
between those former autonomies and the central
government as well as pave the way for the return to
their homes of those forced to flee during the
hostilities. The estimated 200,000 ethnic Georgian
displaced persons from Abkhazia are increasingly
exerting pressure on the Georgian government to secure
an internationally guaranteed settlement that would
enable them to return home and protect them from
anticipated reprisals from the Abkhaz. The ethnic
Armenian population of the southern region of
Djavakheti, bordering on Armenia, is reportedly lobbying
aggressively for autonomous status. And the population
of the west Georgian region of Mingrelia, Gamsakhurdia's
ancestral home, tends to regard Shevardnadze as a
usurper.
	This alienation of much of the periphery from the
capital constitutes the ideal leverage with which to
plunge Georgia into chaos, a fact of which the Georgian
leadership is acutely aware. Who precisely would have a
vested interest in doing so is less easy to say.
	Several prominent Georgian politicians have hinted
that last week's failed mutiny by Lieutenant Akaki
Eliava (like the assassination attempt on Shevardnadze
in February) may have been orchestrated in Moscow by
individuals who recruited supporters of Gamsakhurdia who
still refuse to acknowledge Shevardnadze's legitimacy.
The identity of the instigators may be unknown, but most
observers are convinced that they are motivated by the
determination to contain the growing U.S. presence in
the Transcaucasus and to prevent the export of
Azerbaijan's Caspian oil via Georgia.

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