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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 169, Part I, 31 August 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 169, Part I, 31 August 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

* SCANDAL CHARGES DENIED, CONFIRMED

* FEDERAL FORCES BATTLE MILITANTS IN CENTRAL DAGHESTAN

* KYRGYZ TROOPS HALT MILITANTS' ADVANCE
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RUSSIA

SCANDAL CHARGES DENIED... Boris Berezovskii, an oligarch
close to President Boris Yeltsin, told Ekho Moskvy on 30
August that unless Moscow responds promptly to "false Western
charges" about money-laundering, "all business in Russia will
be represented as criminal," Interfax reported. He said that
the scandal charges are being made by individuals both inside
the country and beyond "who do not want Russia to be
represented by its best components." Berezovskii concluded
that those spreading such charges in the West include people
"who are trying to obstruct" the construction of a democratic
society in Russia. At the same time, he added that "there is
no law that bans a Russian citizen, including the president,
from holding accounts in foreign banks." PG

...CONFIRMED... Georgii Chuglazov, the federal prosecutor who
was removed from the Mabetex case last week, told Interfax on
30 August that "at least 90 percent of published material
[about the case] is true, and investigators have the
documents to support this." Various media outlets have
reported that Mabetex paid $1 million into an account held in
Yeltsin's name and paid off his daughters' credit card
balances. Meanwhile, Aleksandr Lebedev, the president of
Russia's National Reserve Bank and deputy head of the Our
Home Is Russia movement, told Interfax that reports about
money-laundering through the Bank of New York are probably
true, although he said claims that IMF money was laundered
through that bank are "absolutely false." PG

...AND MINIMIZED. IMF director Tom Dawson told journalists in
Washington on 30 August that there is "absolutely no
evidence" that any IMF funds were diverted through the Bank
of New York. Former Russian Prime Minister Viktor
Chernomyrdin also downplayed the charges. In comments to
"Moskovskii komsomolets" on 30 August, he said: "You can
steal anything. But how do you steal an IMF loan?... It's
improbable." Mikhail Khodorkovskii, a Russian industrialist
who ran a bank now under investigation, said on Ekho Moskvy
on 30 August that U.S. law enforcement agencies made a
mistake because it is highly unlikely that Russians could
move the amounts of cash specified during that period. And in
an interview with "Newsweek", U.S. Deputy Secretary of State
Strobe Talbott said "Calm down world" when he was asked about
crime and corruption in Russia, adding that those phenomena
have been known to Washington for a long time and will take
"decades" to overcome. PG

SCANDAL REPORTING DRIVES MOSCOW MARKET DOWN. The charges and
countercharges concerning money-laundering and other corrupt
activities have driven the Russian stock market down,
Interfax reported on 30 August. Most issues were off 3-7
percent on a volume of 170 million rubles ($6 million).
Aleksandr Korchagin, an analyst at a Moscow brokerage, said
the scandal could lead to a suspension of IMF lending to
Russia. PG

RUSSIAN BUSINESSMEN IN U.S. SEEK TO AVOID EXPULSION. Some 13
Russian businessmen and their families have filed suit to
avoid expulsion from the U.S. as a result of recent changes
in U.S. immigration law, ITAR-TASS reported. Their lawyers
said that they were participating in a "secret program" that
allowed Russian and other immigrants who invest significant
amounts of money in the U.S. to remain. One of their lawyers
added that the 13 Russians have invested more than $20
million in the U.S. PG

MOSCOW PREDICTS TAXES TO FALL, REVENUES TO GROW. Tax
collections will decline by more than 59 billion rubles ($2.3
billion) in 2000, but state revenues will increase as a
result of tax simplification and better collection efforts,
the government told the State Duma, ITAR-TASS reported on 30
August. As a result, Moscow will be able to meet IMF targets
and also increase social spending. But the Central Bank of
Russia has cast doubt on one of the key assumptions of the
budget now being considered by the parliament. A spokesman
for the bank told Interfax on 30 August that the ruble will
fall below the 32 to the dollar rate on which the budget
numbers are based. He added that the government's prediction
is already having a negative impact on the economy because
firms are purchasing and holding hard currency as a result of
uncertainties. PG

MOSCOW TO TREBLE COAL INDUSTRY FUNDING. After a 30 August
meeting with President Boris Yeltsin, Prime Minister Vladimir
Putin told ITAR-TASS that Moscow will triple funding for the
country's troubled coal industry over the next year. He said
that Yeltsin specifically called for the involvement of
mining unions in the disbursement of these funds. PG

STEPASHIN VIEWS PUTIN AS PLAUSIBLE PRESIDENTIAL CANDIDATE.
Former Prime Minister Sergei Stepashin said on RTR television
on 29 August that he believes his successor, Vladimir Putin,
is credible as a candidate for president next year, Interfax
reported. "Putin is a strong political figure who has gotten
off to a good start," Stepashin said, repeating his view that
the current prime minister behaved "flawlessly" in his
handling of Daghestan. PG

COMMUNISTS AIM FOR BROAD ELECTORAL BLOC. Communist Party
leader Gennadii Zyuganov told journalists in Moscow on 30
August that the KPRF will participate in the upcoming
parliamentary elections as part of a "broad people's
patriotic bloc, 'For Victory,'" Interfax reported. He said
that this union will be an "association of the country's
citizens rather than a group of two or three public and
political organizations." And he added that "respected
leaders and people famous in this country" will join it.
Zyuganov criticized Agrarian Party leader Mikhail Lapshin for
joining the Fatherland-All Russia bloc and suggested that
"Lapshin is not the whole Agrarian Party." PG

PRESS MINISTRY WARNS ORT ABOUT CAMPAIGN COVERAGE. The new
Russian Ministry for the Press warned ORT television on 30
August that it could be stripped of its broadcasting license
for abusing "freedom of the mass media," ITAR-TASS reported.
Minister Mikhail Lesin issued the warning after ORT aired
footage of a mass demonstration by supporters of the Right
Cause bloc in St. Petersburg. The minister insisted that this
was not a question of censorship but simply of respecting
existing legislation. PG

FEDERAL FORCES BATTLE MILITANTS IN CENTRAL DAGHESTAN. Backed
by helicopters and armored vehicles, Russian federal forces
and Daghestani Interior Ministry troops launched ground and
artillery attacks on 30 August against some 300-500
guerrillas entrenched in the villages of Karamakhi,
Chabanmahki, Kadar, and Durangi in Daghestan's Buinaksk
Raion. Four Russian troops were killed in the fighting and 15
wounded. Four Karamakhi villagers were also killed. It is
unclear how many of the "guerrillas" are members of the
Chechen-led force that invaded Daghestan earlier this month
and how many are devout Muslim residents of the villages in
question, whom the Daghestani authorities have branded as
"Wahhabis." Also on 30 August, Daghestan's Prosecutor-General
Imam Yaraliev wrote to his Chechen counterpart to request the
extradition of four residents of Daghestan who helped
organize the attack on the republic, Interfax reported. LF

CHERKESS APPEAL TO YELTSIN TO RESTORE THEIR AUTONOMY.
Supporters of defeated Karachaevo-Cherkessia presidential
candidate Stanislav Derev have called on President Yeltsin to
issue a decree on re-establishing the Cherkess Autonomous
Oblast (abolished in 1957) and on prolonging the temporary
appointment of Valentin Vlasov as head of executive power in
the Republic of Karachaevo-Cherkessia until the new
government of the Cherkess Autonomous Oblast is appointed,
Caucasus Press reported on 31 August. Derev's supporters
launched a protest demonstration on 27 August against the
republican Supreme Court's ruling that the results of the 16
May presidential runoff are valid. According to official
figures, ethnic Karachai Vladimir Semenov won more than 70
percent of the vote, while Derev, who is Cherkess, received
only 20 percent. ITAR-TASS reported on 30 August that both
Derev and Semenov proposed to Yeltsin a month ago that he
defuse tensions in the North Caucasus by appointing Boris
Berezovskii as presidential envoy to the region. LF

CHECHEN PRESIDENT MOVES AGAINST UDUGOV, FIRES SECURITY CHIEF.
Aslan Maskhadov issued a decree on 29 August removing Movladi
Udugov from Chechnya's National Security Council, Interfax
reported. Presidential spokesman Selim Abdumuslimov said that
Udugov "became a member of a large-scale ideological sabotage
operation against the Chechen state" and "pushed the
traditional friendship between the Daghestani and Chechen
peoples to breaking point." Udugov is believed to be allied
with Chechen field commander Shamil Basaev, who coordinated
the incursion into neighboring Daghestan earlier this month.
ITAR-TASS reported on 31 August that Russian specialists have
inactivated Udugov's Web site, which Daghestan Defense
Ministry sources claim he used to spread false information
about the Russian military operations against Chechen-led
militants in Daghestan. On 30 August, Maskhadov also fired
Ibragim Khultygov as National Security chief for
concentrating on the oil sector rather than ensuring his
agency performed its proper function. LF

MEETING OF NORTH CAUCASUS PRESIDENTS POSTPONED INDEFINITELY.
A meeting of North Caucasus presidents in Magas, the new
capital of Ingushetia, has been postponed indefinitely,
Caucasus Press reported on 30 August, quoting a spokesman for
Ingushetia's President Ruslan Aushev. The meeting was
originally scheduled for 25 August and then postponed to 30
August. According to Aushev, Chechen President Maskhadov had
planned to attend. The reasons for the postponement are
unclear. LF

YELTSIN NAMES FIVE HEROES IN DAGHESTAN OPERATIONS. President
Yeltsin on 30 August presented five Hero of Russia awards,
including three posthumously, to soldiers who showed
particular gallantry and heroism in the recent Daghestani
fighting, Russian agencies reported. The Russian leader said
that "Russian troops and Daghestani civilians have manifested
the utmost courage and heroism while defending Daghestani
territory from guerrilla aggression." PG

PUTIN SAYS RUSSIAN NUCLEAR WEAPONS GUARANTEE PEACE. Speaking
at a ceremony marking the 50th anniversary of the detonation
of the first Soviet nuclear weapon, Russian Prime Minister
Putin said that Russian nuclear weapons remain "the guarantor
of national security and global peace in the current
geopolitical setting," Interfax reported on 30 August. He
said that the explosion of the first Soviet nuclear weapon
"blew to smithereens any plans for an atomic war against
Russia," adding that "it is impossible to win a nuclear war."
PG

RUSSIAN GENERAL SAYS KOSOVAR PROTESTS WERE PLANNED.
Lieutenant-General Nikolai Staskov, the chief of staff of
Russian airborne units, told Interfax on 30 August that he is
convinced that Kosovar protests against Russian peacekeepers
in Orahovac were "a thoroughly-planned provocation." He said
that he hopes that "reason will prevail and that our
peacekeepers will enter Orahovac without incident." However,
there was no progress reported toward that end on 30 August.
PG

RUSSIAN GAS PRICES DOUBLED THIS YEAR. Gasoline prices in the
Russian Federation have increased by 111.9 percent since the
start of 1999, the Russian Statistics Agency told Interfax on
30 August. PG

RUSSIAN FAR EAST SEEKS JAPANESE INVESTMENT. The governors of
Sakhalin, Primore, and Khabarovsk are scheduled to present a
package of investment projects to Japanese officials in Tokyo
on 31 August, Interfax reported. Their presentations are part
of the intergovernmental Russian-Japanese commission on trade
and economic and technological cooperation. Meanwhile, a
Tokyo newspaper reported on 29 August that the Japanese
government is considering a resumption of its loans to
Russia, Reuters reported on 30 August. PG

MOSCOW APPEALS FOR HELP IN SAVING BOLSHOI THEATER... The
Russian Foreign Ministry has released a statement calling on
other countries to respond to a UNESCO appeal to provide
funds to reconstruct Moscow's Bolshoi Theater, ITAR-TASS
reported on 30 August. The statement said that Moscow will
not impose customs duties or other taxes on any contributions
to this work. PG

...AND 'MIR.' Writing in the Berlin newspaper "Die Welt" on
30 August, Yurii Semenov, the president of the Russian
Energiya concern, appealed to Germany and 25 other countries
whose citizens have worked on the "Mir" space station to
provide funding to keep it operational, ITAR-TASS reported.
His appeal followed a statement by the last crew commander
that the now unmanned craft may soon spin out of control. PG

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN PREMIER OUTLINES PARLIAMENT'S TASKS. Vazgen Sargsian
appealed to parliamentary deputies on 28 August to cooperate
with the government in overcoming Armenia's current problems,
Noyan Tapan reported on 30 August. Sargsian identified three
factors contributing to those problems: "confusion" following
the collapse of the USSR and the war with Azerbaijan;
inappropriate policy decisions by previous governments; and
the "criminal activities" of unnamed individuals whom he said
should be brought to account. Sargsian proposed that the
parliament appoint special commissions to assess
controversial privatization deals and to supervise the
implementation of credit programs. He also urged deputies to
enact legislation on credits, audits, and the civil service.
"Iravunk" on 27 August estimated that more than 100 of the
131 parliamentary deputies are either members of the
Miasnutyun bloc, which unites Sargsian's Republican Party amd
Karen Demirchian's People's Party of Armenia, or back the
government's policies rather than risk falling out of favor
with Sargsian. LF

GEORGIA OPPOSES RUSSIAN PROPOSAL TO LIFT ABKHAZ SANCTIONS.
Speaking in Tbilisi on 30 August at his weekly press
briefing, President Eduard Shevardnadze strongly criticized
Russian Border Guards commander General Konstantin Totskii's
proposal that Moscow might unilaterally lift the "economic
blockade" imposed on Abkhazia in 1996. That proposal,
Shevardnadze said, is "unjustified" and exceeds the general's
sphere of competence, Caucasus Press reported. Totskii had
argued that Russia is entitled to take its own decisions
regarding controls and restrictions on its borders.
Shevardnadze claimed that the ban on allowing residents of
Abkhazia to cross the border into the Russian Federation or
Russian citizens from bringing goods into Abkhazia does not
constitute a blockade, but rather economic sanctions. He
added that such statements create tensions in bilateral
relations. Georgian Border Guards chief General Valerii
Chkheidze said any unilateral attempt by Russia to raise the
blockade would violate bilateral agreements. In a 30 August
statement, the Georgian Border Guard Service condemned
Totskii's statement as directed against Georgia's sovereignty
and territorial integrity. LF

KAZAKH PRESIDENT REDEFINES ROLE OF STATE OIL COMPANY.
Nursultan Nazarbaev has signed a new law detailing the status
and duties of the state oil company KazakhOil, Interfax
reported on 30 August. The law has not yet been published,
but a spokesman for KazakhOil told Interfax that the company
has approved its content. The law defines KazakhOil as a
state company in which the state owns 100 percent of shares.
It assigns KazakhOil the duty of monitoring the work of
foreign oil companies operating in Kazakhstan to ensure they
comply with Kazakh law and the terms of their contracts. And
it includes a provision requiring all oil companies to engage
the services of local companies to provide goods and
services. LF

KAZAKHSTAN DELAYS DECISION ON RESUMPTION OF PROTON ROCKET
LAUNCHES. Kazakhstan has secured the indefinite postponement
of a 30 August meeting between the Russian and Kazakh
government commissions that assessed the damage caused by the
July explosion of a Russian Proton rocket shortly after
blastoff from the Baikonur cosmodrome, Interfax reported on
30 August, quoting Russian Space Agency Deputy Director Boris
Ostroumov. Ostroumov said that Kazakh experts have found more
debris from the rocket and sent it to Moscow to determine
whether it is contaminated with toxic heptyl fuel. The
government commissions were to have agreed at the 30 August
meeting on lifting the Kazakh ban on further launches of
Proton rockets from Baikonur. LF

KAZAKHSTAN'S OPPOSITION POLITICIANS, PENSIONERS MARK
CONSTITUTION DAY. Pensioners in Almaty gathered in the city's
central square on 30 August, the anniversary of the 1995
adoption of Kazakhstan's Constitution, for their monthly
demonstration to protest inadequate pensions, RFE/RL
correspondents in the former capital reported. Opposition
leaders Madel Ismailov (Workers Movement), Seydakhmet
Quttyqadam (Orleu Party), and Ghaniy Qasymov (an independent
presidential candidate who failed in his bid for that office
earlier this year) took advantage of the public holiday to
engage in electioneering, trying to persuade voters not to
support the pro-presidential Otan (Fatherland) Party in the
upcoming parliamentary poll. LF

SECRET AMMUNITION CACHE DISCOVERED IN KAZAKHSTAN. Grenades,
detonators, and two explosive devices have been discovered
during the demolition of garages in Astana belonging to the
Interior Ministry, ITAR-TASS reported on 30 August. It is
unclear who owns the ammunition. LF

KYRGYZ TROOPS HALT MILITANTS' ADVANCE... The office of
Kyrgyzstan's President Askar Akaev issued a statement on 30
August saying that earlier that day Kyrgyz troops engaged the
guerrillas who had seized control of several villages in Osh
Oblast and taken several dozen hostages, thereby preventing
the guerillas from advancing further into Kyrgyz territory.
The fighting took place in the Chon-Alai district. Also on 30
August, General Bolot Djanuzakov, who heads the Defense and
Security Department within the presidential administration,
told journalists that Kyrgyzstan has lodged an official
protest with Uzbekistan over Uzbek bombing raids the previous
day over Chon-Alai and Batken Raions, in which several
civilians were killed. The raids were intended to target the
guerrillas. LF

...AS OFFICIALS PONDER OPTIONS. Kyrgyz Foreign Minister
Muratbek Imanaliev said in Bishkek on 30 August that the
Kyrgyz authorities are capable of localizing and neutralizing
the guerrillas without outside help, Interfax reported. But
the same day, Kyrgyzstan's First Deputy Prime Minister Boris
Silaev met in Moscow with Russian Defense Minister Igor
Sergeev to discuss the optimum tactics to use against the
militants. In Almaty, Kazakhstan's acting Defense Minister
Bakhytzhan Yertaev told Khabar News Agency that Kazakhstan
will this week give Kyrgyzstan ammunition and some military
hardware (but not armored vehicles) to combat the militant
threat, Interfax reported. LF

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