RFE/RL NEWSLINE Vol. 3, No. 136, Part I, 15 July 1999

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RFE/RL NEWSLINE Vol. 3, No. 136, Part I, 15 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

* SWISS PROSECUTORS TAKING UP WHERE SKURATOV LEFT OFF?

* OIL PRICE RISE TRIGGERS FEARS OF HIGHER FUEL PUMP PRICES

* KAZAKHSTAN, RUSSIA REACH AGREEMENT OVER BAIKONUR LAUNCHES
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RUSSIA

SWISS PROSECUTORS TAKING UP WHERE SKURATOV LEFT OFF?
Prosecutors in Geneva, Switzerland, have opened a criminal
investigation into allegations of money-laundering against
Kremlin facilities directorate head Pavel Borodin and other
Russian citizens, AP reported on 14 July, citing an anonymous
Swiss judge. According to a Geneva-based newspaper that day,
these citizens include Borodin's wife and other members of
the Russian presidential administration. According to "The
Moscow Times" on 15 July, most Russian press organs are
steering clear of the story, with only NTV providing coverage
during its evening news broadcast on 14 July. On 15 July,
Interfax carried only Borodin's categorical denial. He told
the agency that "neither I nor my wife have any relationship
with any Swiss bank accounts. I have not conducted any
commercial or other types of activities on Swiss soil."
Borodin's lawyer called the investigation a purely political
action against the Russian president initiated by Swiss
Prosecutor Carla del Ponte. Borodin's name has been linked
with the Swiss firm Mabatex, which suspended Prosecutor-
General Yurii Skuratov has been investigating. JAC

OIL PRICE RISE TRIGGERS FEARS OF HIGHER FUEL PUMP PRICES. The
price of gasoline has continued rising in regions across
Russia. "Rossiiskaya gazeta" reported on 15 July that
gasoline has all but disappeared in Arkhangelsk Oblast since
13 July and that during the first 10 days of this month, the
price of oil products rose by 10- 15 percent in Belgorod,
Orlov, Rostov Oblasts and by almost one-third in Tambov
Oblast and the Republic of Dagestan. Also on 15 July,
"Komsomolskaya Pravda" reported that prices for gasoline and
diesel fuel increased in 70 regions across Russia last month
and that the increase exceeded 15-20 percent in 47 of them.
The newspaper concluded that Russian consumers should perhaps
brace themselves for a 100 percent rise since the price of
crude oil is rising and Russian producers will want to
preserve the maximum amount of their output for export rather
than refining. JAC

GDP SLIDES IN FIRST QUARTER, AS GOVERNMENT MISSES BUDGET
TARGET IN FIRST HALF. GDP sank by 2.9 percent in the first
quarter of 1999, compared with the same period last year,
according to the Russian Statistics Agency on 14 July. During
the first six months of 1999, Russia recorded a primary
budget surplus of 1 percent of GDP, Finance Minister Mikhail
Kasyanov announced the same day. (The primary budget measure
excludes debt payments.) Kasyanov predicted that the
government will eventually meet the 2 percent primary budget
surplus target agreed upon with the IMF. He noted that tax
collection is increasing, having grown from 10 percent of GDP
in January to 15 percent in June. JAC

GOVERNMENT TO EXTEND GUARANTEES TO DOMESTIC INVESTORS...
Russian President Boris Yeltsin has asked the government to
prepare a new law providing guarantees for Russian investors
against unfavorable changes in domestic legislation, Interfax
reported on 14 July. The same day, a similar law protecting
foreign investors came into force, Bloomberg reported.
According to the agency, Mikhail Zadornov, presidential envoy
to international financial institutions, said the World Bank
wants the law in place before it releases new loans. On the
issue of protecting domestic investors, Anton Danilov-
Davidov, head of the presidential administration's economic
directorate, told Interfax that the Economics Ministry may
discuss amendments to the law on investment activity as early
as 16 July. JAC

...AS FEDERAL SECURITIES COMMISSIONS CRACKS DOWN ON TRADING
FIRMS. The Federal Securities Commission (FKTB) has pulled
the trading licenses of more than 200 companies, "Vremya MN"
reported on 13 July. FKTB Chairman Dmitrii Vasiliev told
reporters that the firms were not observing basic rules, such
as maintaining up-to-date financial records. According to
Vasiliev, the commission has provided the Interior Ministry
with a list of more than 99 investment funds suspected of
other violations. Vasiliev also criticized the Central Bank
for its bond issues, saying that they should be limited as
much as possible, according to ITAR-TASS. JAC

ZHIRINOVSKII'S LATEST GUBERNATORIAL CAMPAIGN HITS A BUMP. The
Sverdlovsk Oblast Election Committee rejected all 30,000
signatures collected to support Liberal Democratic Party
leader Vladimir Zhirinovskii's candidacy for governor of the
oblast, "Segodnya" reported on 14 July. After losing his bid
to run for governor of Belgorod Oblast, Zhirinovskii
announced that he would seek the governor's office in both
Leningrad and Sverdlovsk Oblasts (see "RFE/RL Russian
Federation Report," 16 June 1999). According to "Segodnya,"
Zhirinovskii's supporters believe that they can gather
another 30,000 signatures before the commission's deadline.
Elections are scheduled for 29 August. JAC

NIZHNII REFORMERS' PAST UNDER SCRUTINY. The Prosecutor-
General's Office has launched a criminal investigation into
former First Deputy Prime Minister and ex-Nizhnii Novgorod
Governor Boris Nemtsov for possible violations of campaign
finance laws during his 1993 Federation Council bid,
"Tribuna" reported on 15 July. Meanwhile, "Obshchaya gazeta"
in its 1-7 July issue examined former Premier Sergei
Kirienko's activities at the Garantiya Bank in Nizhnii
Novgorod. The newspaper claims that Kirienko "launched his
career bilking old people" and describes how under his
leadership the bank diverted monies from the oblast Pension
Fund. Among the methods used were withholding dividends to
the fund, which was the bank's main shareholder, and engaging
in various schemes with promissory notes that, "according to
certain calculations," made up to $10 million a month. The
newspaper also describes how the bank concluded an
information-processing contract worth 14.9 billion old rubles
for "17 pages of text paraphrasing newspaper articles." One
of the two companies involved, AMK Concern, was owned and
managed by Kirienko. JC/JAC

RUSSIAN GOVERNMENT APPOINTS YUGOSLAVIA AID COMMISSION. An
unnamed official at the Russian Economics Ministry told
Interfax on 13 July that the government has decided to
create a commission to administer aid to Yugoslavia. Prime
Minister Sergei Stepashin will chair the body, but
Economics Minister Andrei Shapovalyants will be in charge
of coordinating that aid among various Russian ministries
and departments. FS

YUGOSLAV AMBASSADOR UNSATISFIED WITH RUSSIAN KFOR ROLE.
Yugoslav Ambassador to Russia Borislav Milosevic told ITAR-
TASS on 14 July that he is "dissatisfied" with the level of
Russian participation in the Kosova peacekeeping force
(KFOR). Milosevic acknowledged that the "Russian troops are
in [Kosova] not in order to protect the Serbs, but in order
to treat everybody objectively." He added: "I do not think
that ordinary Albanians are against the Russian
contingent.... Anti-Russian actions by...Albanians are
inspired by NATO in order to create an uneasy situation for
the Russian peacekeepers." Milosevic, who is the brother of
Yugoslav President Slobodan Milosevic, said: "I cannot speak
about the significance of [anti-government protests in
Serbia].... I do not consider them a major political factor."
He stressed that "naturally, there is discontent in
Yugoslavia and some are using it. But these are not the
forces whom the people trust." FS

ORTHODOX CHURCH OBJECTING TO ACTIVITIES OF OTHER RELIGIOUS
GROUPS IN FAR EAST. The Russian Orthodox Church diocese in
Vladivostok has asked the office of the Primorskii Krai
prosecutor to examine the activities of three religious
organizations operating in the krai, Interfax-Eurasia
reported on 14 July. The diocese believes the groups have
violated the controversial 1997 law on religion, under which
local authorities may ban a religious organization. According
to AP, the church has accused the Jehovah's Witnesses,
Seventh Day Adventists, and a splinter group of Hare Krishnas
of recruiting potential converts illegally by "using
deception and totalitarian methods." According to the agency,
the Orthodox Church objects to the practice of the Jehovah's
Witnesses of visiting people in their homes, approaching them
on public transportation, and compiling lists of all
residents in neighborhoods where the group is active. A
Moscow city prosecutor is currently seeking to ban the
Jehovah's Witnesses in the capital (see "RFE/RL Newsline," 8
March 1999). JAC

FSB EXPELS U.S. AID WORKER FROM VORONEZH FOR SPYING. The
Voronezh Regional Directorate of the Federal Security Service
(FSB) recently expelled Justine Hamilton, a U.S. citizen, who
had been living there for the past two years working on
humanitarian assistance programs, "Izvestiya" reported on 15
July. According to the newspaper, Hamilton was the official
representative to Voronezh of the state of Kansas. FSB
officials suspect Hamilton of compiling classified
information on defense enterprises in Voronezh. They also
noted that she was particularly interested in the oblast's
ecological situation. JAC

NORTH OSSETIAN, INGUSHETIAN PRESIDENTS MEET. Aleksandr
Dzasokhov and Ruslan Aushev have held talks in Dzasokhov's
residence near Vladikavkaz on the two republics' combined
efforts to combat crime and the process of repatriation of
ethnic Ingush displaced persons forced to flee North
Ossetia's disputed Prigorodnyi Raion during the interethnic
violence of 1992, "Nezavisimaya gazeta" reported on 15 July.
LF

HAS RADICAL OPPOSITION NEUTRALIZED CHECHNYA'S PRESIDENT?
"Nezavisimaya gazeta" on 15 July cited unnamed sources in
Grozny as reporting that President Aslan Maskhadov has in
effect been rendered powerless in a bloodless palace coup by
former acting Prime Minister Shamil Basaev and field
commanders Ruslan Gilaev and Khottab. The field commanders
subsequently announced the creation of a Council for National
Security, intended to function as the highest organ of state
power. Both Maskhadov and his opponents are to sit on that
council. Basaev and his supporters called for the creation of
such a supreme body of state power in February during a
standoff with Maskhadov (see "RFE/RL Caucasus Report," Vol.
2, No. 6, 10 February 1999). On 14 July, "Vremya MN" quoted
former Chechen Foreign Minister Movladi Udugov as saying that
"Islamic military detachments" intend to launch a campaign
next year to liberate Nagorno-Karabakh, which he
characterized as "Muslim territory," from Armenian
occupation. LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN PRESIDENT HOPES FOR FURTHER PROGRESS ON KARABAKH
SETTLEMENT. Speaking in Warsaw on 14 July after talks with
Polish President Aleksander Kwasniewski, Robert Kocharian
expressed optimism at the prospects for resolving the
Karabakh conflict, adding that Armenia and Azerbaijan are
holding direct talks to this end, ITAR-TASS reported. The
Azerbaijani presidential press service reported the same day
that Azerbaijan's President Heidar Aliev will fly to Geneva
on 15 July to meet there with Kocharian to discuss the
conflict, Reuters reported. LF

SUSPECT IN ARMENIAN LOCAL ELECTION VIOLENCE ARRESTED.
Businessman Ashot Aghababian, whose campaign staff beat and
opened fire at supporters of a rival candidate during the 11
July election for mayor of the Yerevan district of Ajapniak,
was arrested on 14 July, RFE/RL's Yerevan bureau reported
citing a statement by the Prosecutor-General's Office. Eight
people were injured during the violence, and the poll results
have been annulled (see "RFE/RL Newsline," 12 July 1999). LF

AZERBAIJAN MARKS 30TH ANNIVERSAY OF ALIEV'S ELECTION AS CP
FIRST SECRETARY. President Aliev visited an exhibit in Baku
on 14 July pegged to the 30th anniversary of his election as
First Secretary of the Central Committee of the Communist
Party of Azerbaijan, Reuters reported. The exhibition was
organized by Ramiz Mehtiev, a senior member of Aliev's
presidential staff, who in the 1980s served as ideological
secretary of the republican CP Central Committee. During the
13 years as Azerbaijani party boss, Aliev claimed to have
minimized corruption and achieved spectacular growth of the
previously stagnating economy. Press articles after his
enforced retirement from the post of first deputy chairman of
the USSR Council of Ministers in October 1987 cast doubts on
those claimed successes. LF

AZERBAIJANI PARTY LEADER PROPOSES POWER-SHARING WITH
OPPOSITION. Speaking at a press conference in Baku on 15
July, Ihtiar Shirinov, who is chairman of the pro-government
National Congress Party, proposed the creation of a
government of national unity in which both the present
leadership and unspecified opposition parties would be
represented, Turan reported. Shirinov said such a body is
needed in light of the serious problems Azerbaijan currently
faces. Those problems include failure by the OSCE to propose
an acceptable solution to the Karabakh conflict, continued
arms deliveries to Armenia by Russia and China, Iranian
claims to ownership of Azerbaijan's Caspian oil reserves, and
the perceived readiness of France and the U.S. to recognize
the self-proclaimed Republic of Nagorno-Karabakh. Among the
tasks the new government should tackle, Shirinov listed the
conduct of free and fair municipal and parliamentary
elections and the adoption of programs to safeguard
Azerbaijan's territorial integrity and sovereignty as well as
to ease social and economic tensions. LF

AZERBAIJAN COMMENTS ON IRANIAN DEMONSTRATIONS. Azerbaijan
Popular Front Party chairman and former President Abulfaz
Elchibey told Turan on 14 July that he believes that the
student demonstrations in Tehran and Tabriz are a struggle
against the present regime that will trigger a "national-
liberation struggle" by Iran's ethnic Azerbaijani population
by this fall. State Foreign Policy Adviser Vafa Guluzade
characterized the protests as Iran's internal affair and the
consequence of the policies pursued by the present Iranian
leadership. Guluzade said he excludes the possibility that
they were inspired by forces outside the country. LF

KAZAKHSTAN, RUSSIA REACH AGREEMENT OVER BAIKONUR LAUNCHES.
Following 10 hours of talks on 14 July with Kazakhstan's
Prime Minister Nurlan Balghymbaev and President Nursultan
Nazarbaev, Russian Deputy Prime Minister Ilya Klebanov told
journalists in Astana that Kazakhstan has agreed to a
resumption of rocket launches from the Baikonur cosmodrome,
with the exception of Proton rockets. In return, Moscow
agreed to pay $115 million for the lease of Baikonur, part in
cash and part in barter goods, from August through November.
The agreement paves the way for the launch of a supply ship
to dock with the orbiting "Mir" space station. That launch
will take place on 16 July, according to Reuters. Meanwhile,
residents of the village in central Kazakhstan's Karaganda
Oblast, where chunks of debris from the rocket landed, are
demanding to be evacuated until the precise extent of the
ecological damage caused by the explosion is determined,
Interfax reported. LF

TAJIK CURRENCY LOSES VALUE. Tajikistan's National Bank on 13
July succeeded in stabilizing the exchange rate for the Tajik
ruble against the U.S. dollar, setting an official rate of
1,400 Tajik rubles to the dollar, "Izvestiya" reported on 14
July. The Tajik ruble had traded at 1,400 to the dollar at
the beginning of the previous week before falling to 1,800-
2,000. The fall in the value of the national currency led to
steep price rises. Speaking on national television, National
Bank chairman Murodali Alimardonov and Finance Minister
Anvarsho Muzaffarov both denied rumors that the Tajik
government intends to introduce a new national currency--the
somon--in September to mark the 1,100th anniversary of the
Samanid dynasty. LF

ANOTHER UZBEK HUMAN RIGHTS ACTIVIST SENTENCED... On 14 July,
a court in Tashkent sentenced 48-year-old Mahbuba Kasymova to
five years' imprisonment on charges of fraud and harboring a
criminal. Human Rights Watch termed the three-hour trial "a
farce." Kasymova is a member of the unregistered Independent
Human Rights Organization of Uzbekistan and of the banned
Birlik opposition party. Uzbek police arrested Ravshan
Khamidov, who had been living with Kasymova's family in their
Tashkent apartment since November 1998, on 12 May on
suspicion of involvement in the 16 February Tashkent
bombings. He has not yet faced trial on those charges. Two
members of the Independent Human Rights Organization were
arrested in June and a third died in custody (see "RFE/RL
Newsline," 28 June 1999). LF

...AS TRIAL OF MORE BOMBING SUSPECTS BEGINS. Uzbekistan's
Supreme Court opened proceedings on 14 July against 20 people
suspected of involvement in the Tashkent bombings, AP
reported. Six people were sentenced to death and a further 16
received prison terms ranging from 10 to 20 years in a trial
that ended last month (see "RFE/RL Newsline," 29 June 1999).
LF

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