The last of the human freedoms- to choose one's attitude in any given set of circumstances, to choose one's way. - Victor Frankl
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 28, Part I, 10 February 1999


________________________________________________________
RFE/RL NEWSLINE Vol 3, No. 28, Part I, 10 February 1999

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Headlines, Part I

* RANKS OF BANKS MAY THIN BY 80 PERCENT

* EFFORT TO BAN RELIGIOUS GROUP CONTINUES

* ANOTHER ARMENIAN SENIOR OFFICIAL SHOT DEAD

End Note: DOWN TO SUBSISTENCE
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RUSSIA

RANKS OF BANKS MAY THIN BY 80 PERCENT... Central Bank
Chairman Viktor Gerashchenko told reporters on 9 February
that Russia may have only 200-300 commercial banks by the end
of 1999. According to Gerashchenko, Russia had about 1,500
banks as of early September 1998. Since then, 200 banks have
lost their licenses, while 200 more licenses are likely to be
pulled. The next day, more than 300 angry Inkombank
depositors gathered in Moscow to plan a 23 February march on
the Central Bank to demand their savings, the "Moscow Times"
reported on 10 February. Inkombank's customers want earlier
compensation than they are currently likely to get if they
wait for Inkombank's bankruptcy case to make its way through
Russian courts. JAC

...AS CENTRAL BANK SCANDAL PASSED OVER BY PRESS. Meanwhile,
recent allegations by former Prosecutor-General Yurii
Skuratov against the Central Bank have failed to attract much
Russian press attention. According to the "Journal of
Commerce," the Duma's Audit Chamber concluded that more than
50 percent of the bank's annual operating expenses was spent
on staff compensation. Gerashchenko told the chamber that
this was in line with practices at Western banks. However,
citing Western banking sources, the newspaper reported that
20 percent is standard for most Western commercial banks,
while most countries' central banks spend less than 10
percent on staff. In statements after news of Skuratov's
allegations broke, Gerashchenko praised the work of the Audit
Chamber to the detriment of the Prosecutor-General's Office.
JAC

DEBT DOWNGRADE LOOMING. Standard & Poor's warned on 9
February that it will downgrade Russia's foreign debt "in the
near future" if the country does not receive new external
loans or take action to bolster its foreign exchange
reserves. The previous day, former Prime Minister Sergei
Kirienko told reporters in Germany that Russia and its
creditors should make a "political decision" to write off
half of Russia's debts inherited from the Soviet Union and to
refinance IMF loans without coordinating an economic program,
Interfax reported. According to "Kommersant-Daily" on 10
February, Prime Minister Yevgenii Primakov sent Kirienko to
Bonn for talks with financiers and will deploy him during the
next round of negotiations with the IMF. First Deputy Prime
Minister Yurii Maslyukov reported an IMF mission will be in
Moscow 18-20 February, while IMF Moscow representative Martin
Gilman told Interfax no date has been set. JAC

COMMUNISTS, YABLOKO PAN POLITICAL PACT. While State Duma
Chairman Gennadii Seleznev echoed the call by Communist Party
leader Gennadii Zyuganov for constitutional amendments to
shift the country's balance of power, the Communist Party's
Duma faction announced on 10 February that it will not
support the draft political cease-fire agreement approved by
the Security Council on 5 February, Interfax reported.
Zyuganov said that supporting the document would be
tantamount to "acting in a tragicomedy staged by [Russian
President Boris] Yeltsin." Yabloko faction deputy chairman
Sergei Ivanenko said that his faction does not take the
document seriously either. The Duma must approve the pact for
it to enter into force. Meanwhile, Duma deputies Sergei
Yushenkov (Democratic Choice) and Konstantin Borovoi (who has
no party affiliation) have started collecting signatures to
demand a vote of no confidence in the government. JAC

EFFORT TO BAN RELIGIOUS GROUP CONTINUES. A Moscow district
court resumed hearing the case brought by city prosecutor
against the religious group, Jehovah's Witnesses, on 9
February. The prosecutor is seeking to ban the group from
Moscow under a 1997 controversial law on freedom of
conscience and religious organizations (see "RFE/RL
Newsline," 30 September 1998). Metropolitan Kirill of
Smolensk and Kaliningrad spoke out against the group that
day, saying that the Russian Orthodox Church "categorically
disagrees with the methods of the organization, whose members
go from door to door...engage in personal manipulation, in
effect intruding on people's spiritual world and exerting
psychological pressure on them." Russian Public Television
reported that police investigators were looking into a
possible link between the Jehovah's Witnesses and the recent
joint suicide of three schoolgirls in Moscow. JAC

ITALY TO NUDGE IMF FOR RUSSIA... Visiting Italian Prime
Minister Massimo D'Alema has expressed support for Russia's
effort to obtain new money from the IMF, ITAR-TASS reported
on 9 February. He pledged that Italy will assist Russia in
forging an agreement with the fund. After his meeting with
D'Alema, Prime Minister Primakov told reporters that Russia
and Italy see eye to eye on many international problems, such
as Kosova. D'Alema also met with Moscow Mayor Yurii Luzhkov
and Duma Chairman Seleznev, and he chatted with former acting
Premier Yegor Gaidar, Liberal Democratic Party leader
Vladimir Zhirinovskii, Yabloko leader Grigorii Yavlinskii,
and others at a party at the Italian embassy. JAC

...AS YELTSIN'S PLANE BUMPS ITALIAN PRIME MINISTER'S.
President Yeltsin's Il-96 plane knocked the tail wings off
Prime Minister D'Alema's plane while taxiing at Vnukovo-2
airport in Moscow, "Kommersant-Daily" reported on 10
February. Neither the president, who was on board, nor the
plane sustained any damage. According to the newspaper, the
incident occurred because of the poor condition of the tarmac
rather than a pilot error. JAC

KREMLIN SENDING ASSISTANCE TO LEBED? Security Council
Secretary and head of the presidential administration Nikolai
Bordyuzha announced on 5 February that an operational group
from the Interior Ministry, the President's Main Control
Department, and staff from the Security Council would be sent
to Krasnoyarsk Krai to address the region's very serious
crime problem, "Kommersant-Daily" reported on 9 February.
Krasnoyarsk Governor Aleksandr Lebed visited Moscow in late
January to try to enlist Prime Minister Primakov's and
Bordyuzha's support in his battle with local business titan
and former ally Anatolii Bykov. "Moskovskii novosti" in its
7-14 February issue suggests that Krasnoyarsk is in effect
ruled by two governors, Lebed and Bykov, both of whom are
running for future office, although neither has officially
declared their intentions. Lebed, according to the newspaper,
will run for president of Russia, while Bykov is planning to
seek the governor's seat. JAC

BREAD SHORTAGE IMMINENT IN VORONEZH? Bakeries in Voronezh
Oblast have enough white flour to last only five or six days,
"Tribuna" reported on 9 February. Local bakers are concerned
that a bread shortage may ensue since the oblast's wheat
reserves have run dry and the cash-strapped authorities
cannot afford to pay farmers for new supplies. According to
"Tribuna," such a state of affairs has never before occurred
during peace time in the heart of the country's black earth
region. Last year's grain harvest was the worst in a quarter
of a century. Agricultural experts recently predicted bread
shortages and sharp increases in bread prices would occur
throughout Russia (see "RFE/RL Newsline," 1 February 1999).
JC

GREECE ACQUIRES CONTROL OVER CONTROVERSIAL RUSSIAN
MISSILES.
The defense ministers of Cyprus and Greece, Yannakis
Chrisostomis and Akis Tsohatzopoulos, signed an agreement in
Athens on 8 February whereby Greece will assume operational
control of the Russian S-300 air defense missiles that Cyprus
contracted to buy from Russia, Reuters reported the following
day. The missiles will remain Cypriot property. In response
to threats by Turkey to destroy the missiles and following
U.S. and European pressure to renege on the deal, the Greek
Cypriot leadership announced in December that the S-300s
would be deployed in Greece, not on Cyprus (see "RFE/RL
Newsline," 4 January 1999). Chrisostomis will travel to
Moscow on 15 February for talks with the Russian Defense
Ministry and the arms export concern Rosvooruzhenie on
unspecified amendments to the January 1997 contract to
purchase the S-300s, according to Interfax. LF

STROEV LEADS DELEGATION TO INDIA. Russian Federation Council
chairman Yegor Stroev told a meeting of Indian business
executives on 10 February, the last day of his three-day
visit to India, that the "government of Yevgenii Primakov
enjoys the confidence of society, the Federal Assembly, and
all the branches of power," ITAR-TASS reported. Stroev added
that "Russia has finally chosen the right road, and the
economy will develop successfully." Stroev is in India to
seek to improve bilateral relations, particularly trade
relations. The previous day, the speaker of India's lower
chamber of parliament, Ganti Mohan Chandra Balayogi, termed
those ties "not lost but [in need of] renovation." Stroev
admitted to Balayogi that there has been "a period of
cooling" but pointed to the size of his delegation as proof
that Russia highly values its relations with India. BP

KALININGRAD GOVERNOR FAVORS 'SELF-RELIANCE.' In an interview
published in the 9 February "Nezavisimaya gazeta--Regiony,"
Leonid Gorbenko recommends that his oblast strive for
economic self-reliance. Noting that Kaliningrad has suffered
more than other regions during the financial crisis, owing to
its distance from Moscow and dependency on fuel and energy
imports, he said that "we consider the main principle of our
economic policy to beŠthe support and protection of local
manufacturers." The same day, ELTA quoted Gorbenko as telling
the Baltic Sea States Council that Kaliningrad will be
increasingly used to "establish and maintain mutually
beneficial relations with an expanding EU." He also said the
exclave will seek to enlarge the visa-free zone in the Baltic
region to create a "Baltic Schengen." JC

HOUSING REALLOCATION PROPOSED IN SVERDLOVSK. Members of the
Our Home, Our City faction in the Sverdlovsk Oblast Duma
suggested selling the new, reportedly luxurious, residence of
Governor Eduard Rossel in order to raise money for state
employees' overdue wages, "Izvestiya" reported on 9 February.
State workers have been picketing the governor's residence as
well as the oblast's White House, which houses the government
and the Duma, "Tribuna" reported on 9 February. Rossel's
supporters suggest that the logical outcome of the sale of
Rossel's residence would be auctioning off the White House,
according to "Tribuna." Earlier, "Izvestiya" reported that
the southern half of the oblast, particularly Beloyarsk
Raion, has seen a sharp increase in the number of homeless
animals, such as dogs, cats, and horses, who have been
abandoned by their owners. JAC

CHECHEN OPPOSITION CREATES SHADOW GOVERNMENT. Meeting in
Grozny on 9 February, Chechen field commanders opposed to
President Aslan Maskhadov elected a state council that is
intended to rule the republic in accordance with Islamic law,
AP and Interfax reported. Maskhadov was named a member of the
council, together with former acting President Zelimkhan
Yandarbiev, field commanders Shamil Basaev and Ruslan Gilaev,
and former Chechen Foreign Minister Movladi Udugov. Also on 9
February, the field commanders threatened reprisals for the
sentencing by a Russian court of two Chechen women on charges
of planting a bomb at a railway station in the North Caucasus
town of Pyatigorsk in April 1997 (see "RFE/RL Newsline," 29
April 1997 and 13 January 1999). LF

TRANSCAUCASUS AND CENTRAL ASIA

ANOTHER ARMENIAN SENIOR OFFICIAL SHOT DEAD. The body of
Deputy Interior and National Security Minister Major-General
Artsrun Markarian was found close to a major highway north of
Yerevan on 9 February, RFE/RL's bureau in the Armenian
capital reported. He had been shot in the head and chest.
Markarian had been seriously wounded in January 1998 in what
appeared to have been an assassination attempt (see "RFE/RL
Newsline," 21 January 1998). LF

ARMENIAN PARLIAMENT UPHOLDS TELECOM MONOPOLY. Deputies
voted
narrowly on 9 February to reject an opposition demand that
ArmenTel be stripped of its monopoly on the
telecommunications sector, RFE/RL's Yerevan bureau reported.
Eduard Yegorian of the opposition Hayrenik faction, who had
initiated the debate, told RFE/RL that the vote means
Armenians will continue to pay high prices for mediocre
telephone connections. On 8 February, former Communications
Minister Grigor Pokhpatian issued a statement denying
allegations made by a former U.S. employee of ArmenTel that
he accepted bribes from the company's former shareholder,
Transworld Telecom Company (see "RFE/RL Newsline," 9 February
1999). LF

FIRE HALTS EXPORT OF AZERBAIJANI OIL VIA CHECHNYA. The
Azerbaijan state oil company SOCAR has been forced to halt
the pumping of Caspian crude through the Baku-Grozny-
Novorossiisk export pipeline as a result of a 4 February fire
in the Chechen sector of the pipeline, ITAR-TASS reported on
9 February. The incident had led to a complete halt in the
extraction of oil from the offshore Chirag field, which
earlier had produced 90,000 barrels per day. Also on 9
February, a Georgian official with Chevron's Georgian
subsidiary said the Georgian government has agreed to reduce
from $7.75 to $5 per metric ton the tariff for the rail
shipment from Baku via Georgia to the Black Sea port of
Batumi of Kazakh oil produced by the Tengiz-Chevroil joint
venture, Reuters reported. LF

AZERBAIJANI OPPOSITIONISTS SENTENCED. Seven supporters of
defeated Azerbaijani presidential candidate Etibar Mamedov
were sentenced to terms of two to three years' hard labor on
9 February on charges of hooliganism, resisting arrest, and
insulting the honor and dignity of President Heidar Aliev,
Turan reported. The men had participated in an unsanctioned
demonstration in Baku in November 1998 to protest the alleged
falsification of the outcome of the 11 October presidential
election (see "RFE/RL Newsline," 9 November 1998). Also on 9
February, parliamentary deputies representing six opposition
parties, together with an unspecified number of independent
deputies, announced the creation of the Democratic Bloc,
which will hold its founding congress on 16 February. LF

AZERBAIJANI PARLIAMENT DENIES DESTRUCTION OF ARMENIAN
MONUMENTS. Deputies adopted a statement on 9 February
rejecting as "a lie" reports of the destruction of an
Armenian cemetery and other Armenian monuments in the
Azerbaijani exclave of Nakhichevan (see "RFE/RL Newsline," 14
and 15 December 1998), Turan reported. They said such reports
are aimed at "preparing the ground for new territorial claims
by Armenia." Responding to an appeal from Armenian Foreign
Minister Vartan Oskanian to intervene to prevent further such
destruction at the Old Julfga cemetery in Nakhichevan, UNESCO
Director-General Federico Mayor said measures have been taken
to prevent a repeat of such "vandalism," Noyan Tapan reported
on 8 February. LF

RUSSIA APPREHENDS GAMSAKHURDIA-ERA GEORGIAN OFFICIAL.
Valerii
Gabelia, who was a local administration official under Zviad
Gamsakhurdia in 1990-1991, has been arrested by Russian
police near Moscow, where he has lived since leaving Georgia
in 1994, "Nezavisimaya gazeta" reported on 10 February. The
Georgian government had requested his extradition to stand
trial on charges of treason, attempting a coup d'etat, and
banditry. LF

KAZAKHSTAN LIMITS IMPORTS FROM KYRGYZSTAN, UZBEKISTAN.
Kazakhstan's Prime Minister Nurlan Balgimbayev told
journalists in Astana on 9 February that in order to protect
domestic producers, his country will limit imports from
neighboring Kyrgyzstan and Uzbekistan, Interfax reported.
Kazakhstan's Minister of Energy, Industry, and Trade, Mukhtar
Ablyazov said the restrictions will affect several food
imports. He also said the government will form an anti-
dumping committee. BP

KAZAKHSTAN'S GOVERNMENT HOLDS SESSION ON ECONOMIC
RESULTS...
Prime Minister Balgimbayev told the government on 9 February
that last year, Kazakhstan was able to mitigate the impact of
the world financial crisis, Interfax reported. However, he
noted that Kazakhstan posted a $1.7 billion trade deficit
owing to the fall in world prices of the country's major
exports: oil, metals, and grain. At year's end, inflation was
1.9 percent, significantly below the 9.5 percent forecast.
The average wage in Kazakhstan remained the highest among CIS
countries, at the equivalent of $120-130 monthly, while the
average monthly pension rose to $48. He said the government
has paid nearly all pension arrears also. Balgimbayev also
noted that the country attracted $2.2 billion in investments
in 1998, up on the 1997 level. BP

...FOLLOWING REPORT BY STATE STATISTICS COMMITTEE. The
chairman of Kazakhstan's State Statistics Committee, Jaksybek
Kulekeyev, announced on 8 February that foreign trade in the
first 11 months of 1998 fell by 7 percent, Interfax reported.
Exports fell by 15 percent, compared with 1997, and totaled
$5.5 billion. Imports increased during the same period by 1
percent, totaling $7.13 billion. Trade with CIS countries,
including "shuttle" trade, totaled $5.8 billion, an 11
percent drop from 1997. Exports to the CIS were worth $2.4
billion, while imports were unchanged against 1997 figures,
at $3.4 billion. BP

KYRGYZ PRESIDENT MEETS WITH BANK OFFICIALS... Askar Akayev,
meeting with the heads of the country's 24 commercial banks
in Bishkek on 9 February, said bankers need to formulate a
plan for building a national banking system, RFE/RL
correspondents reported. Akayev recommended the banks do more
to attract private investors, noting that small and medium-
sized banks that have already done so survived the initial
impact of the Russian financial crisis. Akayev also
emphasized the importance of the bank's support for
agriculture, noting that this is a strategic industry and
that 95 percent of state loans to farmers in 1998 were paid
back. Akayev warned that the government, the National Bank,
and commercial banks must ensure that there is no repeat of
last fall's devaluation of the som. BP

...HEARS COMPLAINTS. The chairwoman of the Association of
Bankers, Sharipa Sadybakasova, said the National Bank has too
much control over commercial banks, and she recommended
greater independence for the latter. The chairman of the
National Bank, Ulan Sarbanov, said his institution will
continue to exert strong control over commercial banks. He
favored limited independence for commercial banks. The
chairman of the board of directors and the owner of KRAMDS
bank brought up the subject of Erkinbek Alimov, the bank's
chairman, who is currently held on charges of embezzlement.
Both said there is no legal reason for his arrest, as Alimov
had only approved loans to people who then embezzled that
money. They demanded his release, threatening that otherwise
they will appeal to international organizations. BP

TURKMEN FOREIGN MINISTER VISITS IRAN... Boris Shikhmuradov
made a one-day visit to Iran on 6 February to discuss
possible routes for exporting Turkmen natural gas and oil,
IRNA reported. In his meeting with Iranian Foreign Minister
Kamal Kharrazi, Shikhmuradov said his country is in favor of
exporting oil via Iran as "the Iranian route is economical
and safe." The chairman of Iran's Expediency Council, Akbar
Hashemi Rafsanjani told Shikhmuradov in a separate meeting
that he agrees with that viewpoint and hopes for the speedy
implementation of agreements between the two countries,
"despite overt and covert opposition of the U.S. to the
transfer of energy...via Iranian territory." Shikhmuradov
also met with Iranian President Mohammad Khatami, who
described Tehran-Ashgabat relations as "deep-rooted and
strong." BP

...HINTS AT IMPROVEMENT IN REGIONAL TIES. In his talks with
Kharrazi, Shikmuradov mentioned that during his recent visit
to Islamabad, Pakistani officials spoke of a desire to "open
a new chapter in Tehran-Islamabad relations" (see "RFE/RL
Newsline," 26 January 1999). Shikhmuradov said he had also
met with representatives of Afghanistan's Taliban movement in
Islamabad who had assured him that the murderers of Iranian
diplomats and a reporter would soon be brought to justice.
The Taliban officials had said they want good relations with
all their neighbors, including Iran. Shikhmuradov and the
Iranian officials with whom he met agreed on the need for
clearly defining the "Caspian Sea's legal regime." BP

END NOTE

DOWN TO SUBSISTENCE

By Paul Goble

	Nearly three out of every four Russians now grow some or
all of their own food, a measure of the ways in which they
are attempting to cope with their ever-increasing
impoverishment.
	That figure comes from a U.S. Information Agency-
sponsored survey of more than 2,000 residents of the Russian
Federation. Conducted in September-October 1998 and released
last month, this poll not only helps to answer "just how bad"
poverty in Russia now is but, equally important, undercuts
some assumptions about how Russians are dealing with their
economic difficulties.
	The poll's findings about subsistence farming are
perhaps the most striking. More than half of all Russians--
some 55 percent--currently grow approximately half or more of
their food in private gardens, at their dachas, or on other
plots of land. Only 27 percent, the poll found, do not grow
any of the food they consume--and that in a country whose
population remains more than 70 percent urban.
	But this is just one of the ways Russians are trying to
cope at a time when only 50 percent of Russian adults are
employed and only one in four of those who are employed are
being paid on a more or less regular basis.
	Not surprisingly, many Russians are turning to family
and friends. Some 57 percent of those polled had borrowed
money, and another 52 percent had accepted assistance of one
kind or another from family or friends in the six months
before the poll. But most expressed fear that this source may
be drying up. Fewer than 40 percent said they believe they
can count on this source of alternative income if things
become even worse.
	Russians are not turning to two potential sources of
income that many have assumed they are using to keep afloat.
As the USIA report notes, "contrary to popular accounts, the
substitution of barter for wares overall is not that
prevalent." And workers not paid on time are not making money
"in a flourishing second economy."
	With regard to barter, the survey found that in the six
months before the poll, only 27 percent of those working had
received goods in lieu of wages and that in half of these
cases, this was only a one- or two-time event. And the survey
found such wage substitutes are doing little to help those
not being paid on a regular basis. Some 35 percent of workers
who have either not been paid or have been paid more than a
month late "never receive payment in kind," the report said.
	With regard to the question of second jobs, the USIA
survey failed to find much evidence that Russians are making
use of them to supplement their incomes. While some may have
underreported their participation in such jobs owing to
concerns about taxation, 82 percent said they do not have a
second job. Only 10 percent said they have a regular second
job, and only 6 percent indicated they sometimes do.
	Moreover, most of these jobs provide relatively little
income. Forty-three percent of those with such jobs say it
provides them with less than 25 percent of their income; only
16 percent say that it provides more than half.
	Given the assumptions many have made about the role of
the second economy in Russia, the USIA survey intriguingly
found that those not paid regularly are no more likely to
have a second job than those who are paid on time. That lack
of individual entrepreneurship in much of the Russian labor
force was reflected in another finding of the USIA-sponsored
poll: namely, that large majorities of working Russians were
unwilling to leave their current jobs even if they are not
being paid on a regular basis. Most believe that it would be
difficult, if not impossible, to find an equivalent position
quickly or at all.
	And all are aware that the government is unlikely to
provide them with unemployment benefits in the interim.
Indeed, two out of three unemployed Russians today have never
received such benefits.
	Given such concerns and difficulties, Russians are
turning toward subsistence, an obvious survival strategy and
one that represents an unspoken call for help from the
outside.

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