RFE/RL NEWSLINE Vol. 3, No. 132, Part I, 9 July 1999

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RFE/RL NEWSLINE Vol. 3, No. 132, Part I, 9 July 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

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Headlines, Part I

* RIGHT-CENTRISTS WAVERING OVER ELECTORAL BLOC?

* SWISS POLICE INVESTIGATING COMPANIES AT REQUEST OF RUSSIAN
AUTHORITIES

* AZERBAIJANI CURRENCY LOSES 7 PERCENT OF VALUE
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RUSSIA

RIGHT-CENTRISTS WAVERING OVER ELECTORAL BLOC? Vladimir
Ryzhkov, leader of the Our Home Is Russia (NDR) faction in
the State Duma, said on 8 July that it is too early to talk
about the possible union of his party with Pravoe Delo (Right
Cause), Novaya Sila (New Force), and Golos Rossii (Voice of
Russia), Interfax reported (see "RFE/RL Newsline, 2 July
1999). He said that last week in Salzburg the leaders of the
four groups discussed the need to ensure right-centrist
forces are represented in the new parliament, but he stressed
that no decision on uniting was made. Also on 8 July, "Vremya
MN" reported that "certain governors" belonging to Golos
Rossii are "rather skeptical" about uniting with Pravoe Delo.
The newspaper argued that currently only Unified Energy
Systems chief Anatolii Chubais (Pravoe Delo) and former Prime
Minister Sergei Kirienko (Novaya Sila) are interested in
forming a wide coalition. Leaders of the four groups are
scheduled to resume talks on 12 July. JC

NDR, COMMUNIST LEADERS CRITICIZE DECISION ON 'MINISTRY OF
TRUTH.' NDR Duma faction leader Ryzhkov also said on 8 July
that he is "perplexed" by President Boris Yeltsin's decree to
set up a Ministry of the Press, Television and Radio
Broadcasting, and Mass Media Communications (see "RFE/RL
Newsline," 7 July 1999), Interfax reported. He noted that
former Prime Minister Yevgenii Primakov, during his term in
office, had suggested that "something of this kind be done
[but] had acted reasonably in giving up this idea." Valentin
Kuptsov, deputy head of the Duma Communist faction, accused
the executive of seeking to "launch counter-propaganda
against the leftist opposition." The previous day, "Vremya
MN" wrote that the new body can only be compared to George
Orwell's Ministry of Truth in the scope of its potential
tasks. The newspaper argued that the ministry will become
"one of the most significant election tools of the powers
that be." JC

SWISS POLICE INVESTIGATING COMPANIES AT REQUEST OF RUSSIAN
AUTHORITIES. Swiss police raided several firms in Lausanne
last week at the request of Russian authorities to seek
information on suspected fraud and money laundering by
unnamed Russian citizens, Reuters reported on 8 July. A
spokesman for the Swiss Prosecutor-General's Office said that
many documents were confiscated during the operation, but he
did not name the companies involved. "The Moscow Times" on 9
July quoted an employee of the Swiss firm Mabetex as saying
that company was not among those raided. Mabetex is alleged
to have bribed Kremlin officials to win lucrative contracts
to renovate President Yeltsin's Kremlin residence and other
official buildings. Suspended Prosecutor-General Yurii
Skuratov was investigating that allegation and claims that
attempts to remove him from office were part of an effort to
halt the inquiry (see "RFE/RL Newsline," 16 and 23 March
1999). JC

SKURATOV THREATENS TO BEGIN TELLING ALL. Meanwhile, in an
interview published in the 8 July issue of "Nezavisimaya
gazeta," Skuratov warned that if he is dealt with "in an
unlawful way," he will have no choice but to disclose "many
things." He said he could not discount the possibility that
the investigation by the Russian authorities into the case of
Mabetex may result in a scandal like Watergate. Last month,
the Supreme Court ruled that the criminal case against
Skuratov has legal grounds and may continue (see "RFE/RL
Newsline," 22 June 1999). On 3 July, the chairman of the
Constitutional Court, Marat Baglai, told ITAR-TASS that the
court will not review until the fall the Federation Council's
inquiry about the legitimacy of Yeltsin's suspending Skuratov
from office. JC

REPAIRS TO GRAND KREMLIN PALACE COST $335 MILLION. Pavel
Borodin, head of the Kremlin facilities directorate, told
journalists on 7 July that the renovation of the Grand
Kremlin Palace over the past two years has cost $335 million,
Interfax reported. The repairs were carried out mostly by
Russian companies, although firms from Italy, Austria, and
other foreign countries were involved, he added. AP quoted
Borodin as saying that the Swiss company Mabetex did not work
on the renovation of the palace. JC

CENTRAL BANK PLANNING 2.5 BILLION RUBLE CREDIT TO SBS-AGRO
BANK. Addressing a conference devoted to problems facing the
agro-industrial complex, Prime Minister Sergei Stepashin
announced that the Central Bank plans to extend a loan worth
2.5 billion rubles ($103.3 million) to SBS-Agro Bank on
condition that 1 billion rubles are used as favorable loans
for agriculture. In exchange, the bank must hand over 75
percent of its stock to the government. Stepashin said that
Central Bank Chairman Viktor Gerashchenko had suggested this
arrangement to him, but the premier added that "the question
is where to find this money," ITAR-TASS and Interfax reported
on 8 July. JC

YELTSIN SAYS RECENT MANEUVERS PROVED ARMED FORCES' ABILITY.
Addressing top military commanders at the Kremlin on 6 July,
President Yeltsin said that the Russian armed forces' recent
"West-99" exercises proved that those forces "have nothing to
fear." "In spite of present difficulties, the armed forces
are able to ensure the security of Russia and let this be
known to all the world," he commented, adding that reports in
the West that the army has collapsed are "utter nonsense."
During the "West-99" maneuvers, Russian bombers flew close to
NATO airspace near Norway and Iceland. The exercises were
seen as attempting to prove that Russia is still a force to
be dealt with, particularly after it had failed to prevent
NATO air strikes against Kosova. Russian officials denied
that the maneuvers had anything to do with the NATO campaign
in Yugoslavia (see "RFE/RL Newsline," 1 and 2 July 1999). JC

RUSSIAN UN AMBASSADOR COMPLAINS ABOUT SLOW UCK DISARMAMENT.
Sergei Lavrov told an open session of the UN Security Council
in New York on 8 July that the demilitarization of the Kosova
Liberation Army (UCK) is "insufficiently dynamic," ITAR-TASS
reported. He added that the Kosova peacekeeping force (KFOR)
"is clearly not doing everything in that direction." Lavrov
stressed that UN Security Council Resolution 1244 "clearly
and unambiguously envisages the demilitarization of the [UCK]
and other armed groups of [Kosova] Albanians..., a true
disarmament of the [UCK] militants with a complete
liquidation of all military structures of the organization
which cannot reappear in any form." FS

RUSSIAN KFOR COMMANDER SATISFIED WITH 'ATMOSPHERE OF
OPENNESS.' Major-General Valerii Yevtukhovich, who is the
commander of the Russian KFOR contingent, told ITAR-TASS on 9
July that cooperation with NATO KFOR units is proceeding
"effectively." He added that "it is this atmosphere of
openness that should be typical of peacekeeping operations of
this level." On 8 July, three Russian navy vessels, carrying
180 soldiers, 43 vehicles, and 100 tons of other supplies,
left the Black Sea port of Tuapse. They are expected to
arrive in Thessaloniki on 14 July, Interfax reported. FS

MOSCOW REJECTS U.S. THREATS OVER POSSIBLE ARMS SALES TO
SYRIA. Russian Foreign Ministry spokesman Vladimir Rakhmanin
told journalists on 8 July that the U.S.'s recent threat to
stop assistance to Russia if Moscow sells weapons to Syria is
"groundless and unjustified," Russian media reported. U.S.
State Department deputy spokesman James Foley's warning about
a possible halt in aid came on the same day Yeltsin met with
his Syrian counterpart, Hafez Assad, in Moscow (see "RFE/RL
Newsline," 7 July 1999). Rakhmanin said that the main focus
of the Russian-Syrian talks was "international policy issues"
and the situation in the Middle East, the Balkans, and Iraq.
He added that military-technical cooperation was discussed in
general terms, although it remains an "important component of
mutually advantageous bilateral cooperation." JC

AGARIAN PARTY TO GO IT ALONE. The Agrarian Party has decided
to run by itself in the upcoming elections to the State Duma,
ITAR-TASS reported on 8 July. According to Agrarian Party
leader Mikhail Lapshin, the party's central committee voted
unanimously in favor of going it alone at the polls.
Meanwhile, at the conference devoted to discussing problems
facing the agro-industrial sector, Prime Minister Stepashin
said he would like to see a "powerful agrarian faction" in
the next State Duma. JC

BID TO OUST TULA GOVERNOR UNDER WAY. RFE/RL's Russia Service
reported on 8 July that representatives of political parties
and social organizations in Tula have sent a letter to
President Yeltsin requesting that Governor Vasilii
Starodubtsev be removed from office. Starodubtsev has been
charged with tax evasion estimated to have caused losses to
the state totaling 130 million rubles but has not yet
appeared in court (see "RFE/RL Russian Federation Report," 24
March 1999). JC

ENVIRONMENT OFFICIAL SAYS RESERVOIR 'ILLEGAL.' State
Environment Committee head Viktor Danilov-Danilyan told
journalists on 7 July that the construction of the
Yumaguzinskii reservoir in the Republic of Bashkortostan
violates federal law on protected territories and has not
received approval from his committee, AP reported. He urged
that the project be abandoned, saying it would cause
"devastating damage to the area." The environmental group
Greenpeace, for its part, said the reservoir would submerge
half a national park and threaten endangered animals and
plants. Plans for constructing the complex were rejected by
the Soviet environmental authorities in 1989, but the project
was revived by the Bashkortostan administration last
September to meet the region's growing water needs. JC

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN CATHOLICOS BURIED. The head of the Armenian
Apostolic Church, Catholicos Garegin I, was buried in the
courtyard of the main Armenian cathedral in Echmiadzin on 8
July, RFE/RL's Yerevan bureau reported. Armenia's political
leadership, foreign dignitaries and religious leaders, and
thousands of Armenian believers attended the ceremony, which
was preceded by a three-hour liturgy, and during which
religious and political leaders paid tribute to the deceased
catholicos. President Robert Kocharian said Garegin's tenure
was short but "fruitful." He said Garegin was "one of the few
fortunate [chief clerics]" who led their flock in an
independent Armenia." Archbishop Nerses Pozapalian, who was
named interim vicar-general of the Armenian Apostolic Church
on 4 July, said Garegin "was able to explain God's word to
the nation," according to Reuters. LF

ARMENIA, GEORGIA PLAN JOINT BUSINESS FORUM. Georgian
parliamentary speaker Zurab Zhvania, who attended the
obsequies for Garegin, met later in Yerevan on 8 July with
President Kocharian to discuss bilateral relations, RFE/RL's
Yerevan bureau reported. The two men repeated earlier calls
for an intensification of bilateral economic ties, and
discussed convening a joint economic forum to that end.
Zhvania characterized the March meeting in Strasbourg under
Council of Europe auspices of the parliamentary speakers of
all three South Caucasus states as an important step towards
strengthening regional cooperation, according to Noyan Tapan.
LF

AUSTRIAN FOREIGN MINISTER DISCUSSES TRANSCAUCASUS CONFLICTS.
Visiting Yerevan on 7 July and Tbilisi the following day,
Wolfgang Schuessel helds talks with Armenian and Georgian
leaders on the Karabakh and Abkhaz conflicts. Schuessel told
President Kocharian that he hopes that during Austria's
chairmanship of the OSCE next year progress will be made in
drafting a settlement of the Karabakh conflict that will be
acceptable to all sides, according to Noyan Tapan. Speaking
at a press conference in Tbilisi on 8 July after talks with
Georgian President Eduard Shevardnadze, Schuessel called for
greater international involvement in the Abkhaz peace
process, according to Caucasus Press. The OSCE is engaged in
mediating a solution to the Karabakh conflict, while a UN-
sponsored group including the U.S., France, Germany, the U.K.
and Russia mediates between the central Georgian government
and the Abkhaz leadership. Schuessel also told journalists in
Tbilisi that Austria intends to invite the speakers of the
Transcaucasus parliaments to Vienna in 200 to discuss
possible solutions to regional conflicts. LF

AZERBAIJANI CURRENCY LOSES 7 PERCENT OF VALUE. Azerbaijan's
manat lost 6.9 percent of its value against the U.S. dollar
in trading on 8 July, Turan and AP reported. The manat
exchange rate had been stable for the past four years.
National Bank chairman Elman Rustamov told journalists that
the devaluation had been planned in order to stimulate
domestic production and improve the country's trade balance.
He said the manat was over-valued by 10 -15 percent. But
former Deputy Premier and Azerbaijan Popular Front Party
Deputy Chairman Ali Masimov told Turan that the devaluation
will not affect prices because of the population's minimal
purchasing power, and predicted a further depreciation.
National Independence Party of Azerbaijan Chairman Etibar
Mamedov similarly predicted that the manat exchange rate will
fall to 5,000 to the U.S. dollar within the next month from
the previous rate of 3,950:$1. Mamedov suggested that the
government's withdrawal of support for the manat was
connected with plans to pay off overdue wages and pensions.
LF

AZERBAIJAN SEEKS ALTERNATIVE OIL EXPORT OUTLET. Plans to
transport some 3,500 metric tons of Azerbaijani Caspian oil
by rail from Makhachkala in Dagestan to Novorossiisk are in
jeopardy because of limited storage capacity in Makhachkala,
ITAR-TASS reported on 9 July. Azerbaijan is seeking an
alternative to the Baku-Novorossiissk pipeline, which runs
through Chechnya, and has been out of commission for most of
this year. Pumping of oil through that pipeline resumed on 3
July after a shutdown of almost one month but was halted the
following day. Representatives of the Russian pipeline
operating company Transneft are due in Baku on 12 July to
discuss a permanent solution to the problem. LF

GEORGIAN PARLIAMENT COMMITTEE UNENTHUSIASTIC OVER PLANNED
BUDGET SEQUESTRATION. The Georgian parliament's Budget and
Financial Committee on 8 July discussed, but took no decision
on, the proposal put forward the previous day at a government
session chaired by President Shevardnadze to cut the 1999
budget by 16 million lari (approximately $8 million). Finance
Minister David Onoprishvili had termed that proposal "hard
but indispensible," adding that it was one of the
preconditions set by the IMF for the release of a $115 loan
tranche due on 26 July. Onoprishvili said the planned budget
cuts will not affect pensions, salaries and allowances for
displaced persons. Mikhail Djibuti, who is deputy chairman of
the parliament budget committee, told Caucasus Press that the
government's proposal envisages different levels of cuts for
different items of expenditure. That, he said, entails
amendments to the budget law, which only the parliament is
entitled to pass. LF

RUSSIA PRESSURES KAZAKHSTAN TO LIFT BAIKONUR LAUNCH BAN...
Russian First Deputy Prime Minister Viktor Khristenko sent a
telegram to Kazakhstan's Premier Nurlan Balghymbaev on 8 July
expressing regret for the 5 July explosion of a Russian
Proton rocket launched from the Baikonur cosmodrome, ITAR-
TASS reported (see "RFE/RL Newsline," 7 and 8 July 1999).
Khristenko acknowledged Astana's claim for compensation for
the damage to Kazakh territory, but added that "the Russian
side believes that the accident should not entail a ban on
all flights from the Baikonur cosmodrome." Russian Foreign
Ministry spokesman Vladimir Rakhmanin told journalists on 8
July that Moscow is counting on Astana not banning the launch
of space vehicles that do not use Proton carrier rockets,
according to Interfax. And Russian presidential aide Yevgenii
Shaposhnikov said that President Yeltsin and his Kazakh
counterpart Nursultan Nazarbaev may have to address the issue
personally if lower-level Russian efforts to persuade
Kazakhstan to lift the ban on future launches fail. LF

 ...AS KAZAKH OFFICIALS ASSESS ENVIRONMENTAL DAMAGE.
Kazakhstan's Minister for Natural Resources and Environmental
protection, Serikbek Daukeev, who is one of the members of
the State Commission created to investigate the impact of the
disaster, said on 8 July that at least 5,000 square meters of
land in Kazakhstan's central Karaganda Oblast are
contaminated with highly toxic heptil rocket fuel, RFE/RL's
Kazakh service reported. Meirbek Moldabekov, the head of
Kazakhstan's space agency, also told Reuters that poisonous
gas was released into the atmosphere when the rocket
exploded. No decision has yet been made on whether to
evacuate residents from the regions worst affected. In
Almaty, several political movements picketed the Russian
Embassy on 8 July to demand a permanent ban on launches from
Baikonur, RFE/RL's correspondent in the former capital
reported. LF

KYRGYZSTAN'S PRESIDENT TERMS RUSSIA 'STRATEGIC PARTNER.' In
an interview published in "Nezavisimaya gazeta" on 7 July,
Askar Akaev said that in the light of Kyrgyzstan's
geographical situation, Russia is and will remain its "main
strategic partner," particularly in the economic sphere.
Akaev said that the objectives of the CIS and the Central
Asian Union are similar, and focus on economic cooperation
and complementarity. He downplayed the potential threat posed
to Kyrgyzstan by Islamic radicalism, saying that a bomb
attack last year against a traditional mosque in southern
Kyrgyzstan was the work of terrorists. Akaev further rejected
as "lies" claims by some Kyrgyz opposition politicians that
Uzbekistan has moved its border posts several kilometers into
Kyrgyz territory, adding that relations with Tashkent are
"good-neighborly." LF

DOZENS KILLED, MISSING IN LANDSLIDES IN TAJIKISTAN. At least
35 people have died and up to 30 are missing following a
series of mudslides that have devastated villages in northern
Tajikistan over the past three days. The presidential press
service reported that the country will appeal for
international aid for reconstruction of the villages
affected. LF

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