One must learn by doing the thing; though you think you know it, you have no certainty until you try. - Sophocles
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 177, Part I, 10 September 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 177, Part I, 10 September 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
Russian Media Empires V (In English and Russian)
http://www.rferl.org/nca/special/rumedia5/index.html
A pre-election analysis of media owned by Russian government
and business entities.

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Headlines, Part I

* PUTIN, LUZHKOV GIVE DIFFERENT REPORTS ON CAUSE OF EXPLOSION

* TALBOTT 'SATISFIED' WITH ARMS TALKS

* FORMER KAZAKH PREMIER BARRED FROM RUNNING IN PARLIAMENTARY
ELECTION

END NOTE: MISSION IMPOSSIBLE?
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

RUSSIA

PUTIN SAYS CAUSE OF APARTMENT EXPLOSION STILL NOT CLEAR... In
a televised address on 10 September, Prime Minister Vladimir
Putin said investigators are still trying to determine
whether the blast at an apartment house in southeastern
Moscow the previous day was the result of criminal negligence
or was a terrorist attack. Eighty-four people are now known
to have died in the explosion, while dozens have been
hospitalized. Putin also said that 13 September will be a
national day of mourning for the victims of the apartment
blast as well as for those killed in the explosions at the
Manezh shopping mall in the Russian capital and in the town
of Buinaksk, in Daghestan. Interfax quoted Federal Security
Service (FSB) director Nikolai Patrushev as saying that Putin
has approved a plan to prevent acts of terrorism in Russia
and Moscow proposed by the FSB and the Interior Ministry. JC

...WHILE LUZHKOV INSISTS BLAST WAS TERRORIST ACT. Moscow
Mayor Yurii Luzhkov told Interfax on 10 September that the
explosion at the Moscow apartment house was "definitely the
work of terrorists." According to the city head, industrial
explosives were used and the time of the blast, at two
minutes to midnight local time, suggests that the device was
a time bomb. FSB chief Patrushev said that traces of hexogen
and TNT have been discovered at the site of the blast, which,
he added, "proves that the explosion was not accidental."
However, he said that all other possibilities should continue
to be investigated. JC

TALBOTT 'SATISFIED' WITH ARMS TALKS... Following two days of
talks in Moscow on nuclear arms reductions and possible
changes to the 1972 ABM Treaty, U.S. Deputy Secretary of
State Strobe Talbott said he was "satisfied" with those
discussions, ITAR-TASS reported on 9 September. He refused,
however, to comment on their outcome. A U.S. Embassy source
quoted Talbott as saying that he and Russian Deputy Foreign
Minister Georgii Mamedov had been laying the groundwork for a
meeting between U.S. President Bill Clinton and Russian Prime
Minister Vladimir Putin within the framework of the Asia-
Pacific Economic Cooperation summit in Auckland. With regard
to the money-laundering scandal, Talbott stressed that he
does not believe it would have a negative effect on U.S.-
Russian relations. JC

...WHILE MOSCOW CONTINUES TO OPPOSE AMENDING ABM TREATY. The
Russian Foreign Ministry, meanwhile, issued a statement after
the talks making clear it continues to oppose any changes to
the ABM Treaty, Interfax reported. And Grigorii Berdennikov,
director of the ministry's Security and Disarmament
Department, told RIA Novosti on 9 September that U.S. plans
to deploy an ABM system undermine the foundations of the
treaty and jeopardize strategic stability in the world. He
said the deployment of such a system would not only hinder
START-3 talks but also "force Russia to withdraw from the
START-2 treaty," which the Russian parliament has yet to
ratify. U.S. Defense Secretary William Cohen is due in Moscow
next week for talks with his Russian counterpart, Igor
Sergeev. JC

WITNESS IMPLICATES YELTSIN IN CORRUPTION SCANDAL. "The New
York Times" on 9 September reported that Felipe Turover, a
key witness in the Swiss investigation into alleged bribery
of Kremlin officials, says he saw credit card bills and
photocopies of credit cards bearing the signatures of Russian
President Boris Yeltsin and his daughters. He added that
those cards were provided by the Swiss construction company
Mabetex. Turover, who worked for the Swiss Banca del Gottardo
as a debt collector in Russia, also said that senior
officials of the bank had told him about a Kremlin meeting at
which senior Russian officials accepted money and gifts from
Mabetex. Banca del Gottardo spokesman Massimo Antonini
declined to comment on Turover's claims. JC

PARIS SUBSIDIARY OF RUSSIAN CENTRAL BANK UNDER SCRUTINY.
Citing "judicial sources," AP reported on 9 September that a
Paris prosecutor has ordered an investigation into how the
Paris-based Eurobank managed Russian Central Bank funds,
including money from IMF loans. The preliminary investigation
is aimed at determining whether Eurobank moved money from
Russia's Central Bank to FIMACO on the Channel Island of
Jersey. Eurobank owns FIMACO, and the Russian Central Bank
has a 70 percent stake in Eurobank, according to the news
agency. JC

IMF TRANCHE TO BE DELAYED UNTIL NEXT MONTH? IMF First Deputy
Managing Director Stanley Fischer said in Washington on 9
September that the fund's next loan installment to Russia,
worth $640 million, could be postponed until October for
"technical reasons" stemming from preparations for the annual
IMF meeting at the end of this month. ITAR-TASS quoted him as
saying that IMF directors are under no pressure from any
member countries to slow down cooperation with Russia.
Fischer also noted that Russia's economy has performed "a
little better than expected" with regard to efforts to
control the budget deficit, AP reported. Meanwhile, Aleksandr
Lebedev, chairman of the National Reserve Bank and deputy
leader of Our Home Is Russia, said that capital flight from
Russia over the past 12 months exceeded $20 billion, Interfax
reported on 9 September. JC

OIL EXPORT DUTIES TO INCREASE BY 50 PERCENT. Fuel and Energy
Minister Viktor Kalyuzhnyi announced on 9 September that oil
export duties are to be raised from 5 euros ($5.26) to 7.5
euros per metric ton. The move is seen as a bid to put a stop
to fuel shortages and rising gasoline prices throughout the
country and to increase government tax revenues. The minister
also noted that in the fourth quarter of 1999 Russia will
reduce its oil exports by 2 million metric tons, compared
with the third quarter of this year, Interfax reported. He
said that this move will help boost fuel supplies to the Far
North and to the agricultural sector. JC

GOVERNMENT TO SELL 9 PERCENT STAKE IN LUKOIL. Prime Minister
Putin has signed an order on the sale of a 9 percent stake in
LUKoil this year, Interfax reported on 9 September. The news
agency cited unidentified sources at the Ministry of State
Property as saying that the starting price for the stake is
likely to be $240 million. The buyer would also be required
to invest an additional $240 million in the company,
according to the same source. JC

LUKOIL, GAZPROM ANNOUNCE FIRST-HALF PRE-TAX PROFITS. LUKoil
posted a pre-tax profit of 11.7 billion rubles ($455 million)
for the first six months of this year, AP reported on 9
September, citing Interfax. In the same period of 1998, the
company's pretax profit was 1 billion rubles, which at the
exchange rate that preceded the August 1998 ruble devaluation
was the equivalent of some $167 million. LUKoil attributed
the growth in profits to higher world oil prices and
increased demand for energy. The same day, Gazprom announced
its pre-tax profit for the first half of this year as
totaling 32 billion rubles ($1.2 billion), compared with last
year's 8.1 billion rubles (worth $1.4 billion at the time).
JC

ALL PENSION ARREARS TO BE PAID BY MONTH'S END. The head of
the Pension Fund, Mikhail Zurabov, said on 9 September that
all pensions arrears will be paid by the end of this month,
Interfax reported. He noted that arrears shrank from 26.3
billion rubles ($1.02 billion) in January to 1 billion at the
beginning of this month. JC

LEBED SAYS RUSSIA NEEDS GENERAL AT HELM. Speaking in Paris on
9 September, Krasnoyarsk Governor and retired General
Aleksandr Lebed suggested Russia needs a military man as
president. France's General Charles de Gaulle "proved that a
general can rule the state," ITAR-TASS quoted Lebed as
saying. "In Russia, it is not only possible, but necessary.
Nobody will believe in us without a general [in power]. The
world no longer trusts us." The next day, however, Lebed
denied that he intends to run for president next year.
Interfax quoted him as saying that "I have not made any
decision yet concerning my participation in the presidential
election." JC

SKURATOV'S APARTMENT, DACHA SEARCHED. Officials from the
Prosecutor-General's Office searched the dacha and Moscow
apartment of Yurii Skuratov, who earlier this year was
suspended as prosecutor-general after Russian television
showed a video of a naked man resembling Skuratov with two
prostitutes. An investigation was subsequently launched into
whether Skuratov accepted the women's service as a bribe.
Skuratov claims he was suspended in order to halt corruption
investigations he had launched against top officials.
Recently, he said charges that President Yeltsin and his
family received kickbacks from the Swiss Mabetex company have
an evidentiary basis (see "RFE/RL Newsline," 6 September
1999). JC

U.S. REPORT NOTES CURBS ON RELIGIOUS FREEDOM AT REGIONAL
LEVEL. In its first annual report on religious freedom
worldwide, the U.S. State Department said that under a 1997
law, restrictions on religion at the local level are
increasing in Russia, Reuters reported on 9 September. While
noting that "to date, no religious organization has ceased
operations as a result of the law," the report commented that
"the vagueness of the law and regulations, the contradictions
between federal and local law, and varying interpretations
furnish regional officials with a pretext to restrict the
activities of religious minorities." The report called the
1997 law on religion "restrictive and potentially
discriminatory," adding that its "most controversial
provisions" are those "limiting the rights, activities, and
status" of religious groups that have existed in Russia for
less than 15 years. JC

RUSSIANS TARGETED IN KARACHAEVO-CHERKESSIA. The homes in
Cherkessk of three Russian supporters of Vladimir Semenov,
president-elect of the Republic of Karachaevo-Cherkessia,
were damaged by simultaneous explosions during the night of 8
September, "Nezavisimaya gazeta" reported on 10 September.
The paper further noted the appearance in Cherkessk of
slogans calling on the Russians, who constitute the largest
ethnic group in Karachaevo-Cherkessia, to leave the republic.
In an interview with that paper on 9 September, Semenov (a
Karachai) confirmed that during talks earlier this week his
defeated rival Stanislav Derev (who is Cherkess) had rejected
the post of prime minister of the republic. Derev's
supporters refused to acknowledge the republican court ruling
that Semenov's election victory is valid, and are campaigning
for the division of the republic into Cherkess and Karachai
entities. LF

CHECHEN PARLIAMENT MEETS. Chechen President Aslan Maskhadov
briefed a closed session of parliament on 9 September on
unspecified measures to be implemented to "prevent the
hostilities against the Chechen Republic from escalating,"
Interfax reported. Deputies declined, however, to impose
martial law in response to the Russian bombing raids of the
previous three days, which they condemned as "open and
unjustified aggression." Deputies called on the OSCE to
investigate those air strikes. They also adopted an appeal to
UN Secretary-General Kofi Annan and other international
leaders to take measures to prevent "an all-out war" by
Russia against Chechnya. LF

TRANSCAUCASIA AND CENTRAL ASIA

DASHNAKTSUTYUN TO SUE FORMER ARMENIAN PRESIDENT FOR LIBEL. A
spokesman for the Armenian Revolutionary Federation-
Dashnaktsutyun (HHD) told RFE/RL's Yerevan bureau on 9
September that the party is about to bring a libel suit
against former President Levon Ter-Petrossian. Ter-Petrossian
had said early this year that he had suspended the party's
activities in December 1994 because it was "engaged in
terror." Some 30 HHD activists were arrested and brought to
trial in 1996-1997 on charges of murder and preparing a coup,
but the court failed to endorse the prosecutor's argument
that the party as a whole was responsible for those
activities. The HHD was legalized and its imprisoned members
released following Ter-Petrossian's forced resignation in
February 1998. LF

ARMENIAN DEFENSE MINISTRY DENIES PLANNING TO SEND VOLUNTEERS
TO DAGHESTAN. A spokesman for the Armenian Defense Ministry
on 10 September told RFE/RL's Yerevan bureau that there is no
truth to reports that it plans to send volunteers to fight
against Islamic militants in Daghestan. The Azerbaijani news
agency Turan had reported those alleged plans on 9 September.
Turan claimed the Armenian volunteers would pose as Russian
citizens of Armenian origin. LF

ARMENIAN PRESIDENT OFFERS TO MEDIATE IN ABKHAZ CONFLICT.
Robert Kocharian told Caucasus Press on 9 September that he
is prepared to mediate between Tbilisi and the leadership of
the breakaway Republic of Abkhazia if requested to do so by
the Georgian leadership. Kocharian noted that some 72,000
ethnic Armenians, or 15 percent of the total population,
lived in Abkhazia before the 1992-1993 war. He added that
Armenia has an economic interest in the reopening of rail
traffic from the Russian Federation via Abkhazia to Armenia.
LF

TRIAL OF FORMER ARMENIAN INTERIOR MINISTER OPENS, ADJOURNS.
The trial of Vano Siradeghian, former interior minister and
chairman of the board of the Armenian Pan-National Movement,
opened in Yerevan on 9 September, but was immediately
adjourned until 17 September in order to enable Siradeghian
to engage a fifth defense counsel, RFE/RL's Yerevan bureau
reported. Siradeghian is charged with ordering the murder of
several government officials and police officers from 1992 to
1996. He has denied those charges claiming that they are
politically motivated. LF

UNHCR TO REDUCE FUNDING FOR DISPLACED PERSONS IN AZERBAIJAN.
Meeting with President Heidar Aliev in Baku on 9 September,
UN High Commissioner for Refugees Sadako Ogata said that
funding for those Azerbaijanis forced to flee during the
Karabakh war will be cut back, according to Turan. The UNHCR
estimates the number of displaced persons at 800,000, while
the Azerbaijani authorities says it exceeds one million. She
noted that the UN has supplied $41 million in humanitarian
aid to Azerbaijan, which is more than it granted to Armenia
or Georgia. Such assistance is intended as a temporary
measure pending a political solution to the conflict that
would enable the displaced persons to return to their homes,
Ogata said. Aliev had asked that assistance to the displaced
persons be increased. LF

AZERBAIJAN, GEORGIA DISCUSS WESTERN OIL EXPORT PIPELINE...
Officials from Azerbaijan's state oil company SOCAR and the
Georgian International Oil Corporation issued a joint
statement after talks in Tbilisi on 9 September reaffirming
their shared commitment to construction of the Baku-Ceyhan
oil export pipeline, Interfax reported. Some international
companies engaged in Azerbaijan's sector of the Caspian are
reportedly reluctant to make a firm commitment to that
pipeline. But on 5 September, Georgian Foreign Ministry
spokesman Avtandil Napetvaridze rejected as misinformation
reports that either Georgia or Azerbaijan or "foreign
partners" seek to revise plans for that project, according to
ITAR-TASS. LF

...AS NORTHERN PIPELINE CONTINUES TO OPERATE. A senior SOCAR
official said on 8 September that the fighting in Daghestan
has not yet negatively affected the transportation of
Azerbaijani oil via Daghestan to Novorossiisk, Interfax
reported the following day. A spokesman for the Russian
pipeline operator Transneft similarly said that the
hostilities in Daghestan are 80 km from the railroad that
transports Azerbaijan's crude. He said Azerbaijan exported
1.4 million metric tons of oil via Russia during the first
six months of this year, and 52,000 tons last month.
Azerbaijan's quota for 1999 is 2.2 million metric tons. LF

RUSSIA ACCUSES GEORGIA OF OBSTRUCTING WORK ON MILITARY BASES.
The Russian Defense Ministry has complained to the Georgian
government over the detention since 23 August at the Russian-
Georgian frontier of a convoy of over 200 trucks carrying
supplies for Russian military bases in Georgia, Interfax
reported on 9 September. Tbilisi disclaimed responsibility
for the delay in allowing the convoy to enter Georgia, which
it blamed on the British ITS company that now operates
Georgia's customs service (see also "End Note" below). LF

GEORGIAN FISHING CREW RELEASED. Nine Georgian fishermen whose
boat was intercepted in April in what Abkhazia claims are its
territorial waters were exchanged on 8 September for five
Abkhaz police held hostage in Georgia, Caucasus Press
reported the following day quoting the independent Rustavi-2
TV station (see "RFE/RL Newsline," 14 April and 25 August
1999). LF

FORMER KAZAKH PREMIER BARRED FROM RUNNING IN PARLIAMENTARY
ELECTION... Kazakhstan's Central Electoral Commission
registered the list of candidates for the 10 October
elections to the lower house of the Kazakh parliament
submitted by the Republican People's Party of Kazakhstan
shortly before expiry of the deadline for registration on 9
September, RFE/RL's Almaty bureau reported. But the
commission refused to register party chairman Akezhan
Kazhegeldin as a candidate. The party therefore announced
that it will boycott the poll. In a telephone interview with
"RFE/RL Newsline" on 9 September, Kazhegeldin predicted that
he would not be allowed to participate in the poll.
Kazhegeldin said that the present Kazakh leadership is
compromised by a series of major economic and foreign policy
errors, including the sale of MiG aircraft to North Korea,
and would rather incur the disapproval of the international
community by restricting election participation than risk
losing power in a free and fair poll. LF

...WHILE HIS PARTY BLAMES AUTHORITIES FOR LAWYER'S
DEFECTION... Also on 9 September, the Republican People's
Party of Kazakhstan issued a statement in Almaty
characterizing the decision of Kazhegeldin's lawyer, Vitalii
Voronov, to leave the party and break all ties with the
former premier as "an episode in the uncompromising political
struggle which the party is waging against the ruling
regime," according to Interfax. LF

...AND ANOTHER OPPOSITION POLITICIAN CALLS ON LEADERSHIP TO
RESIGN. Seydakhmet Quttyqadam, who heads the opposition Orleu
party, told a press conference in Almaty on 9 September that
"the time has come for the president and the government to
resign," according to Interfax. He added that Kazakhstan has
"enough competent, respected, and energetic politicians" to
lead the country out of the present crisis. Quttyqadam also
said that the government should immediately start drafting a
concept for protecting Kazakhstan's statehood, RFE/RL's
bureau in the former capital reported. Both Quttyqadam and
Kazhegeldin fear that Kazakhstan is ripe for social or
interethnic conflict. LF

KAZAKHSTAN'S PRESIDENT WANTS CLOSER ECONOMIC COOPERATION WITH
UKRAINE. Meeting on 9 September in Astana with a visiting
delegation from Dniprodzerzhinsk, Nursultan Nazarbaev
advocated reviving traditional economic cooperation between
the two countries, Interfax reported. Nazarbaev said that
cooperation is currently hindered by the high railroad
tariffs Russia imposes on foreign goods. Nazarbaev is
scheduled to visit Kyiv next week for talks on the export of
Kazakh crude to Ukraine for refining at the Lisichansk
refinery. LF

NO DATE SET FOR TALKS BETWEEN KYRGYZ LEADERSHIP, GUERRILLAS.
Human Rights Movement of Kyrgyzstan chairman Tursunbek
Akunov, who is acting as an intermediary between the
country's leadership and the ethnic Uzbek guerrillas
entrenched in the south of the country, told RFE/RL's Bishkek
bureau on 10 September that no firm date has been set for
talks on the release of the 12 hostages whom the guerrillas
still hold. Akunov said that there are now no more than 200-
300 Uzbek militants remaining in Batken Raion in southern
Kyrgyzstan. He added that the four Japanese geologists and
the Kyrgyz Interior Ministry general whom the guerrillas
seized three weeks ago are still alive. Some 2,000 of the
estimated 5,000 Kyrgyz villagers who fled their homes to
avoid being taken hostage by the guerrillas have now returned
to their villages from the town of Batken, according to
Reuters. A further 2,400 have returned to villages in Chon-
Alai Raion, where no guerrillas remain. LF

KYRGYZ GOVERNMENT APPROVES DRAFT BUDGET FOR 2000. Finance
Minister Oktyabr Mederov told a cabinet meeting on 9
September that the draft budget for 2000 envisages a budget
surplus equal to 2.5 percent of GDP, RFE/RL's Bishkek bureau
reported. It is the first deficit-free budget ever proposed
by the government. Revenues are predicted to rise by 12
percent compared with 1999, and spending will be cut by 17
percent. Industrial output should grow by at 2 percent, and
agricultural production by 5 percent, according to Interfax.
The inflation rate is estimated at 12 percent. LF

UZBEKISTAN ACCUSES TAJIK OPPOSITION OF ABETTING GUERRILLAS.
The Uzbek official newspaper "Slovo Uzbekistana" on 9
September said that members of the United Tajik Opposition
are behind the hostage-takers in southern Kyrgyzstan, and not
the Islamic Movement of Uzbekistan, as the Kyrgyz authorities
claim, Reuters reported. The paper claimed that the
guerrillas were armed by the UTO and are receiving supplies
of arms and ammunition from areas of Tajikistan controlled by
the Tajik opposition. LF

TURKMENISTAN TO AMNESTY MORE PRISONERS. Turkmen President
Saparmurat Niyazov told a cabinet meeting on 9 September that
he will pardon and amnesty a further 12,000 prisoners before
the end of 1999, RFE/RL's Turkmen Service reported. Some
22,000 prisoners, or more than half the entire prison
population, have been freed from the country's overcrowded
jails in two separate amnesties earlier this year. Many of
them were jailed for drug-related offenses. LF

JAPAN HOPES FOR STRONGER ECONOMIC TIES WITH UZBEKISTAN...
Kioko Nakayama, Japan's ambassador in Tashkent, told
journalists that her country is interested in expanding trade
with Uzbekistan, which last year stood at $122 million,
Interfax reported on 8 September. Nakayama said that 16
Japanese companies currently have offices in Tashkent, but a
further increase in investment is unlikely because the Uzbek
currency is not fully convertible. Japan has invested over $1
billion in Uzbekistan since 1995, of which the Japanese
government invested some $334 million. Nakayama said the
Japanese and Uzbek governments will sign agreements later
this month under which Japan will fund communications
programs in Uzbekistan and rebuild three airports. LF

...WHILE IRAN ASSESSES PROSPECTS FOR TRANSPORT COOPERATION.
An Iranian government delegation headed by Highways and
Transport Minister Mahmud Hojati-Najafabadi is currently
visiting Tashkent, "Nezavisimaya gazeta" reported on 9
September. The delegation will meet with representatives of
the Uzbek government and the national railroad and airline.
LF

END NOTE

MISSION IMPOSSIBLE?

By Liz Fuller

	Russian Foreign Minister Igor Ivanov toured the capitals
of the three South Caucasus states last week in what many
observers both in those countries and elsewhere saw as a
desperate attempt on Moscow's part to halt, if not reverse,
the ongoing erosion of its influence in the region. Ivanov's
stated objective of establishing "all-encompassing,
equitable, and mutually advantageous" relations with all
three states in the region is, however, unrealistic and
untenable, given the suspicions two of those countries
(Azerbaijan and Georgia) harbor concerning Russia's motives
and given the unresolved conflict between Armenia and
Azerbaijan over Nagorno-Karabakh.
	The existing tensions in Moscow's relations with
Azerbaijan and Georgia derive from those two countries' pro-
Western orientation and from their belief that Moscow has
sought to manipulate the Karabakh and Abkhaz conflicts in
order to weaken them. Georgia and Azerbaijan have both made
no secret of their desire to join NATO. Georgia is seeking
the closure--on its own terms--of at least two of the four
Russian military bases on its soil, while Azerbaijan wants
Moscow to reduce its defense cooperation with Armenia, in
particular by demanding the return of several billion dollars
worth of weaponry clandestinely supplied to that country from
1994-1996. Moreover, both Georgia and Azerbaijan announced
earlier this year that they have no interest in renewing
their membership in the CIS Collective Security Treaty.
	In addition, those two countries are founding members of
the GUUAM alignment, which many Russian politicians believe
is intended to sabotage the CIS from within. Another priority
of the GUUAM member states that is likewise anathema to
Moscow is cooperation in exporting Caspian oil and gas to
international markets via countries other than the Russian
Federation.
	In talks with Ivanov in Baku on 2 September,
Azerbaijan's President Heidar Aliev harshly criticized what
he termed Russia's differentiated approach to relations with
Armenia and Azerbaijan and its "passive" policy toward the
South Caucasus. That region, Aliev said, is no less strategic
than the Balkans. Aliev told Ivanov that Baku expects Moscow
to galvanize the efforts of the OSCE Minsk Group to find a
settlement to the Karabakh conflict, adding that his own
direct talks with his Armenian counterpart, Robert Kocharian,
are no substitute for such mediation. (Ivanov had said before
his meeting with Aliev that he considers those direct talks
"the best way" to resolve the conflict.) At the same time,
Aliev noted that Moscow's increasingly close military
cooperation with Armenia "is complicating the negotiating
process on Nagorno-Karabakh."
	Ivanov, for his part, replied that Moscow "understands
perfectly" that its defense cooperation with Armenia is a
sensitive issue for Azerbaijan and the entire South Caucasus,
stressing that it is not aimed at Azerbaijan or any other
third country. He called for closer contacts between the
defense and other power ministries of Russia and Azerbaijan.
Ivanov also said that Moscow does not intend to favor either
Armenia or Azerbaijan in seeking a solution to the Karabakh
conflict.
	Whether Ivanov made any concrete concession to specific
Azerbaijani concerns is unclear. After the talks, however,
Aliev struck a more conciliatory note, describing bilateral
relations as "friendly." He added that, despite
disagreements, Baku will continue its strategic policy of
strengthening cooperation with Russia.
	In Tbilisi two days later, Georgian officials similarly
made it clear to Ivanov that they consider the current state
of bilateral relations unacceptable and that Moscow is to
blame for that state of affairs. Parliamentary speaker Zurab
Zhvania pointed out, for example, that for five years the
Russian State Duma has declined to ratify the 1994 Georgian-
Russian agreement on friendship and cooperation. But, as in
Baku, it was the Russian military that proved the fundamental
bone of contention. Some Georgian opposition parliamentary
deputies, together with the chairman of the parliamentary
Defense and Security Committee, Revaz Adamia, have proposed
that at least two of the existing four Russian bases in
Georgia should be closed. The U.S. has indicated that it may
be prepared to meet part of the cost of doing so.
	But some Russian politicians have attempted to call
Tbilisi's bluff. Adamia told the Russian newspaper "Vremya
MN" last month that former Russian Premier Sergei Stepashin
responded to Tbilisi's demand to reduce its military presence
in Georgia by proposing to close at first the Russian
military facility in Akhalkalaki. That base is virtually the
sole employer for most of the disaffected Armenian population
of that region.
	Ivanov made it clear that as far as Moscow is concerned,
a withdrawal of its troops from Georgia is not on the agenda,
since their presence there "serves Russia's interests." There
were no reports on how Georgian officials responded to his
offer to raise the level of military cooperation between
Russia and Georgia to that between Russia and Armenia.
	By contrast, Ivanov expressed satisfaction after his
talks in Yerevan with President Kocharian and Foreign
Minister Vartan Oskanian with the level of cooperation
between countries that he termed "strategic partners."
	In all three capitals, Ivanov discussed the situation
throughout the Caucasus, stressing the need for cooperation
between the countries and republics there to restore
stability to the entire region. But the priorities of those
various republics and states are so diverse and the
centripetal process in Chechnya so far advanced, that
stability appears utopian. And Ivanov's statement that "it is
impossible to settle conflicts in this region without Russia
or against its interests" will inevitably be construed by
many politicians in the North and South Caucasus as a threat
rather than a promise.
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