If there is technological advance without social advance, there is, almost automatically, an increase in human misery. - Michael Harrington
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 184, Part I, 21 September 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 184, Part I, 21 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

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Headlines, Part I

* ARE SWISS, U.S. INVESTIGATORS GETTING CLOSER TO KREMLIN?

* DEFENSE MINISTRY KEEPS ALL OPTIONS OPEN IN CHECHNYA

* MILITANTS KILL MORE KYRGYZ TROOPS
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RUSSIA

ARE SWISS, U.S. INVESTIGATORS GETTING CLOSER TO KREMLIN? An
unidentified U.S. presidential administration official told
"The New York Times" on 21 September that the FBI has found
Bank of New York transactions involving Pavel Borodin, head
of the Kremlin's facilities directorate, and Leonid
Dyachenko, the husband of Tatyana Dyachenko, Russian
President Boris Yeltsin's daughter. According to the
official, while earlier there had been only rumors and
suspicions, "now U.S. investigators are saying it."
Meanwhile, Geneva investigating magistrate Daniel Devaud told
Reuters on 20 September that his team has detected ties
between bank accounts in the Bank of New York case and
accounts frozen in Switzerland as part of a Swiss probe into
alleged kickbacks to the Kremlin by the Swiss construction
firm Mabetex. Borodin has denied any wrongdoing with regard
to Mabetex or having a bank account in Switzerland (see
"RFE/RL Newsline," 15 July 1999). JAC

U.S. HEARINGS ON RUSSIAN FINANCIAL SCANDAL OPEN... After
meeting with U.S. Secretary of State Madeleine Albright in
New York on 20 September, Russian Foreign Minister Igor
Ivanov told reporters that Russia "has an interest no less
than the U.S.'s" in getting to the bottom of the financial
scandal involving the Bank of New York, AP reported. Ivanov's
declaration comes the same day as hearings into the matter
are scheduled to begin in the U.S. Congress. Aleksandr
Kulikov, head of the State Duma's delegation to the hearings,
told Russian Television on 20 September that delegation
members hope to gather documents or information proving
corruption. JAC

...BUT SKURATOV, KHODORKOVSKII NOT EXPECTED TO APPEAR. A
number of top Russian officials have been invited to the
hearings, including suspended Prosecutor-General Yurii
Skuratov. According to Interfax, Skuratov, who has declined
the invitation, said that his "status as Russian prosecutor-
general makes it impossible to attend hearings in another
country." Another invitee, Rosprom head Mikhail
Khodorkovskii, notified the U.S. House of Representatives'
Banking Committee last week that he is not prepared to appear
yet, a committee spokesman told RFE/RL's Washington bureau.
Russian investigative journalist and State Duma deputy Yurii
Shchekochikhin of Yabloko is expected to testify. JAC

'HE SAID, HE SAID' CONTINUES WITH REGARD TO ALLEGED CENTRAL
BANK MISDEEDS. Central Bank First Deputy Chairman Sergei
Aleksashenko told Interfax on 20 September that there is "not
a single ounce of real fact" in mass media accusations that
the Central Bank misused IMF funds in summer 1998. According
to Aleksashenko, all transactions selling more than $4
billion from the IMF loan to 18 major domestic banks "were
fully documented" and took place at market rates. Andrei
Illarionov, director of the Institute for Economic Analysis,
told "Ekonomika i zhizn" in September that former Central
Bank Chairman Sergei Dubinin "lied" when he said the Central
Bank spent $9 billion in summer 1998 supporting the ruble.
According to Illarionov, "$6.9 billion was given directly to
some private banks when it became clear that the 6 rubles to
$1 exchange rate was unsupportable." "In the long run, these
operations resulted in the collapse of the ruble and
disintegration of the financial system," he added. JAC

GOVERNMENT DECLARES PENSION BACKLOG CLEARED. Russian Prime
Minister Vladimir Putin announced on 21 September that the
federal government has paid all pension arrears in full.
First Deputy Finance Minister Aleksei Kudrin explained the
same day that sufficient funds were transferred by 20
September to pay off all debts owned to pensioners by 1
October, according to ITAR-TASS. The pension backlog totaled
1 billion rubles ($39 million) at the beginning of September,
according to Pension Fund head Mikhail Zurabov (see "RFE/RL
Newsline," 10 September 1999). With this declaration, the
Putin government appears to have made good on an earlier
pledge by then Prime Minister Sergei Stepashin to wipe out
the debt by September (see "RFE/RL Newsline," 2 July 1999).
JAC

NEXT YEAR'S BUDGET MEETS WITH MORE RESISTANCE. State Duma
Budget Committee head Aleksandr Zhukov announced on 20
September that his committee will recommend rejecting those
provisions of the tax laws submitted with the 2000 budget
that would raise levies on tobacco and alcohol and streamline
personal income tax regulations, according to ITAR-TASS. The
Duma will consider the budget on 28 September and the tax
laws on 24 September, the agency reported. Last week,
Communist Party leader Gennadii Zyuganov said the lower house
is unlikely to approve the 2000 budget because one-third of
the budget will be used to pay foreign debts and "there is no
hint that real living standards will improve." Earlier,
regional leaders in the Federation Council rejected the
budget, objecting in particular to its uneven split of
revenues between the center and regions (see "RFE/RL
Newsline," 16 September 1999). JAC

DEFENSE MINISTRY KEEPS ALL OPTIONS OPEN IN CHECHNYA...
Speaking at a press conference in Moscow on 20 September,
Russian First Deputy Chief of General Staff Colonel-General
Valerii Manilov said Moscow will resort to any methods to
neutralize terrorist bases in Chechnya, thereby not excluding
a ground invasion against Chechnya, which Prime Minister
Putin had ruled out last week. Manilov said the "second
stage" of the operation to eliminate the threat of a new
Chechen incursion into Daghestan would entail deploying two
or three lines of troops along the border between Daghestan
and Chechnya. Those troops would control all cross-border
movement. Manilov estimated the Chechen forces' strength at
some 6,000, adding that it could be increased to 10,000. The
Chechen forces are equipped with several armored vehicles, 15
air defense systems, and large numbers of grenade launchers
and mortars, Manilov added. LF

...AS TROOP BUILDUP CONTINUES ON CHECHEN BORDER. Reuters on
20 September quoted a Russian Defense Ministry source as
saying that another 10,000 troops are being brought to the
North Caucasus to help "seal" Chechnya's 540-kilometer border
with other federation subjects. The number of Russian troops
currently deployed in Daghestan alone is estimated at 30,000.
LF

CHECHEN FIELD COMMANDER ANNOUNCES CREATION OF ISLAMIC SUICIDE
SQUAD. Shamil Basaev, who is believed to be coordinating the
actions of the Chechen forces in Daghestan, announced in
Grozny on 20 September that he will create a squad of 400-500
men to undertake suicide terrorist missions in Russia if
Moscow continues its bombing of Chechen territory, ITAR-TASS
reported. The ultimate objective of that squad will be the
"liberation of the Caucasus," Basaev added. ITAR-TASS also
quoted unnamed Russian security officials as saying that some
100 Arab militants are to be sent to Chechnya from a training
base in Afghanistan in response to an appeal to Saudi-born
terrorist Osama Bin Laden by Chechen field commander Khattab.
In Riyadh, the state-run Saudi Press Agency on 20 September
issued an official denial of Russian claims that Saudi Arabia
is financially supporting the Chechen militants, Reuters
reported. LF

RAISA GORBACHEV LIONIZED AFTER DEATH. The death of Raisa
Gorbachev, the wife of former Soviet leader Mikhail
Gorbachev, has triggered an outpouring of sympathy from the
formerly critical Russian press as well from top foreign
officials. "Izvestiya" on 21 September called her the woman
"who changed the world" and "who ennobled our motherland."
The daily suggested that "she provoked respect and irritation
in equal measure" because "the Gorbachevs had accomplished
their own mini-counterrevolution, but we, the masses, had
not." German Chancellor Gerhard Schroeder said he was
"devastated" by the death, noting that for Germany, the
Gorbachevs represented "the opening of a new world and a new
future of cooperation between our two states." Nancy Reagan,
the wife of former U.S. President Ronald Reagan, called Raisa
Gorbachev "an important voice in the friendship that our two
countries established." JAC

MORE MOVEMENTS REGISTERED... The Central Election Commission
has authorized nine political movements and election blocs to
collect signatures in support of their candidates for
upcoming State Duma elections, Ekho Moskvy reported. These
groups include Yabloko, Our Home Is Russia, the Communist
Party, Peace and Unity, the Fatherland-All Russia alliance,
the Stalin's Bloc, the National Salvation Front, Officers of
the USSR, and Communists of Working Russia for the Soviet
Union. According to commission chairman Aleksandr Veshnyakov,
the commission is now processing documents for the Liberal
Democratic Party, Spiritual Heritage, and the Movement in
Support of the Army. Fatherland-All Russia coordinator Oleg
Morozov announced on 21 September that 525,000 signatures
have already been collected, well above the 200,000 needed
for registration. Morozov added that the region with the
highest number of signatures is Saratov Oblast, whose
governor, Dmitrii Ayatskov, supports another party, Our Home
Is Russia. JAC

...AS WOMEN CHOOSE OWN CANDIDATES. Delegates to the congress
of Women of Russia approved a list of candidates on 20
September, according to ITAR-TASS. Movement leader Alevtina
Fedulova said the party's federal and regional lists are
composed primarily of candidates from the regions because the
movement does not want to use the regions as an instrument to
bring Moscow activists to the State Duma. Women of Russia
left the Fatherland-All Russia alliance on 1 September partly
because very few women have been included on that alliance's
list, according to Fedulova. Those women who were included on
the list have poor prospects of being elected, she added. JAC

NEMTSOV TO RUN FROM NIZHNII. Boris Nemtsov, former first
deputy prime minister and currently a leader of the Union of
Rightist Forces, has announced his decision to run in the
State Duma elections from a single-mandate district in
Nizhnii Novgorod, ITAR-TASS reported on 20 September. Nemtsov
was governor of Nizhnii Novogorod Oblast from December 1995
to March 1997. JC

ACTING GOVERNOR RE-ELECTED IN LENINGRAD OBLAST... Valerii
Serdyukov won the 19 September gubernatorial ballot,
garnering some 30 percent of votes, ITAR-TASS reported the
next day, citing the Leningrad Oblast Election Commission.
Under oblast election regulations, a candidate must gain 25
percent plus one vote to be elected in the first round. Vadim
Gustov, who had been head of Leningrad Oblast before quitting
that post last year to become deputy prime minister in
Yevgenii Primakov's cabinet, received some 23 percent of the
vote. A total of 16 candidates contested the ballot. Turnout
was estimated at 42 percent. JC

...WHILE TOMSK HEAD WINS HANDS DOWN. Governor Viktor Kress
has succeeded in holding on to his post, gaining some 73
percent of the vote in the 19 September ballot to easily beat
the five other candidates, ITAR-TASS and Interfax reported
the next day, citing preliminary data. Turnout was put at 49
percent. Kress, who has been Tomsk Oblast head since 1991, is
chairman of the interregional association Siberian Accord and
a member of Our Home Is Russia. JC

CENTER AGREES TO REDEPLOY TATAR SOLDIERS FROM CONFLICT ZONE.
Tatarstan parliamentary speaker Farit Mukhametshin told
reporters on 20 September that Prime Minister Putin and
Defense Minister Igor Sergeev have given Tatarstan's
government assurances that soldiers from the republic will be
re-deployed from Dagestan to other areas, RFE/RL's Kazan
bureau reported. Tatarstan's parliament on 15 September
issued a decree suspending conscription to the Russian armed
forces (see "RFE/RL Newsline," 16 September 1999).
Mukhametshin added that this decision may be overruled at an
upcoming session on 23 September. Meanwhile, in Moscow,
Valerii Astanin, deputy chief of the armed forces'
mobilization and organization board said that military
recruitment in Tatarstan will be resumed. According to ITAR-
TASS, Astanin said the Defense Ministry would "happily
satisfy" Tatar parliamentary deputies' request not to send
Tatarstan's soldiers to fight in armed conflicts if those
soldiers have been in the army less than six months. JAC

INITIAL GRAIN HARVEST FIGURES SHOW IMPROVEMENT OVER LAST
YEAR. Farmers had gathered 42.7 million metric tons of grain
as of 13 September, up 14.2 percent on the same period last
year, Russian agencies reported. Farmers have cleared 28.2
million hectares or 68 percent of the planned area. The
Agriculture Ministry forecast earlier that the grain harvest
would reach 60 million metric tons. JAC

TRANSCAUCASUS AND CENTRAL ASIA

NEW LEFT-WING ALLIANCE FORMED IN ARMENIA. Nine political
parties that failed to win representation in the parliament
elected last May announced on 20 September their plans to
form a bloc named Artarutyun (Justice), which is intended to
fight for "social justice," RFE/RL's Yerevan bureau reported.
The parties in question include the Democratic Party of
Armenia, the Scientific-Industrial and Civic Union, and the
social-democrat Hnchakian Party, one of the three oldest
Armenian political groups represented both in Armenia and
within the diaspora. The bloc will hold its founding congress
in October, but it is not known whether it will field
candidates in local elections later this fall. LF

BUDGET COMMITTEE LAMBASTES ARMENIAN CENTRAL BANK. In a 20
September statement, the Armenian parliament's office on
budgetary oversight claimed that the Central Bank's 1998
report to the National Assembly is flawed and full of
statistical discrepancies, RFE/RL's Yerevan bureau reported.
The Oversight Chamber also said that the Central Bank last
year exceeded some quotas set by the legislature: in
particular, it spent 454 million drams ($857 million) on its
employees' salaries instead of the planned 394 million drams.
Central Bank chairman Tigran Sarkisian rejected that
criticism, explaining that the extra payments to the staff
were made after the bank slashed other expenditures. LF

AZERBAIJAN MARKS FIFTH ANNIVERSARY OF 'DEAL OF THE CENTURY.'
Representatives of 10 governments and 24 international oil
companies congregated in Baku on 20 September to celebrate
the fifth anniversary of the signing of a $10 billion
contract, the first of 18 Azerbaijan has concluded with
international consortia, to extract off-shore Caspian oil,
AFP and Reuters reported. After numerous delays, that first
consortium, the Azerbaijan International Operating Company
(AIOC), began exporting crude via Russia in late 1997 and via
Georgia in spring 1999 (see "RFE/RL Newsline," 10 November
1997 and 19 April 1999). Addressing participants in the
celebrations, Azerbaijan's President Heidar Aliev said that a
cornerstone of future oil strategy is construction of the
planned Baku-Ceyhan export pipeline. The AIOC is not
convinced of the viability of that project. LF

AZERBAIJANI POLICE PREVENT THIRD DEMONSTRATION. Police in
Baku on 20 September prevented members of the opposition
Azerbaijan Popular Front Party from picketing the Mayor's
Office to demand a response to their request for permission
to hold a demonstration on 25 September, Turan reported. It
was the third time within five days that police have thwarted
an opposition action (see "RFE/RL Newsline," 20 September
1999). LF

GEORGIAN PRESIDENT SLAMS UN APPROACH TO ABKHAZ CONFLICT.
Addressing the UN General Assembly on 20 September, Eduard
Shevardnadze slammed what he termed the world community's
"gross indifference" to the plight of displaced persons
forced to flee Abkhazia during the 1992-1993 war, Caucasus
Press reported. Last March, Abkhaz President Vladislav
Ardzinba declared that those displaced persons may return to
Abkhazia if they wish to do so. Shevardnadze expressed
disappointment that UN resolutions on the Abkhaz conflict
fail to condemn explicitly what he termed genocide and ethnic
cleansing by the Abkhaz. Stressing his support for the NATO
intervention in Kosova, Shevardnadze suggested that the UN
should condone a similar peace enforcement operation in
Abkhazia. A NATO official said in Tbilisi last week that NATO
is unlikely to do so as Abkhazia does not constitute a threat
to European security (see "RFE/RL Newsline," 15 September
1999). LF

IS GEORGIAN AGRICULTURE MINISTRY TO BLAME FOR ANTHRAX
EPIDEMIC? Speaking at a press conference in Tbilisi on 16
September, city council member Djondo Baghaturia accused the
Agriculture Minister Bakur Gulua and the head of the
veterinary department within the Ministry of Agriculture of
embezzling funds allocated for vaccinating cattle against
anthrax over the past two years, Caucasus Press reported two
days later. Baghaturia said he will ask the prosecutor-
general to open criminal proceedings against the two men.
Dozens of people have been hospitalized with anthrax in
Tbilisi after eating contaminated beef (see "RFE/RL
Newsline," 9 and 16 September 1999). LF

KAZAKHSTAN AGAIN HOPING TO SELL ARMS ABROAD. Foreign Minister
Qasymzhomart Toqaev, who accompanied President Nursultan
Nazarbaev to Bulgaria and Ukraine last week, told Interfax in
Kyiv on 17 September that Astana hopes to sell with Ukraine's
help almost 1,500 pieces of heavy military equipment formerly
deployed by the Soviet Army in East Germany. Those vehicles
are primarily tanks, which would be sent to Ukraine for
repairs. Ukraine would keep three or four and sell the rest
to foreign buyers, Toqaev explained. He added that Ukraine
could also help to find a market for the output of the Uralsk
Small Arms Plant. At an arms fair in Almaty in April 1998,
Kazakhstan exhibited former Soviet military hardware,
including MiG-21 fighters, for which the asking price was
$150,000-$180,000 each. Kazakh government officials have
denied any knowledge of the sale of those aircraft to North
Korea (see "RFE/RL Newsline," 23 August and 13 September
1999). LF

KAZAKHSTAN SUSPENDS EXPORTS OF FUEL OIL. Prime Minister
Nurlan Balghymbaev signed a decree on 18 September halting
exports of fuel oil for three months beginning 25 September,
Interfax and AP reported. That measure is intended to ensure
that the country has adequate supplies of fuel for domestic
heating. The city authorities in Astana and Almaty will be
required to report at 10-day intervals on the level of fuel
oil reserves. LF

MILITANTS KILL MORE KYRGYZ TROOPS... Five government troops
were killed and another five wounded on 20 September when
guerrillas opened fire on their truck in Osh Oblast, dpa
reported. The previous day, one officer was killed and two
servicemen wounded when their armored personnel carrier hit a
land mine laid by the militants, according to ITAR-TASS. In
Bishkek, Security Council Secretary Bolot Djanuzakov told
journalists on 20 September that the 13 hostages, including
four Japanese geologists, who are currently being held by the
guerrillas are alive and well. But he added that the
guerillas are constantly moving the hostages from one
location to another. Meanwhile, the number of fugitives from
the fighting gathered in the raion center of Batken has
reached 4,200, RFE/RL's Bishkek bureau reported on 20
September. LF

...AS RUSSIA PROMISES ARMS. The Russian Defense Ministry will
send several war planes and two trainloads of ammunition and
arms, including sub-machine guns and grenade launchers, to
Kyrgyzstan within a week, an unidentified Kyrgyz military
source told ITAR-TASS on 20 September. That decision was
taken at a meeting of CIS defense ministers in Moscow last
week. Armenia has already sent a plane-load of technical
equipment to Bishkek. Kyrgyz parliamentary deputy Dos Bol Nur
Uulu told RFE/RL's Bishkek bureau on 20 September that the
government forces deployed in the south of the country are
short of ammunition. LF

ISLAMIC EXTREMISTS ARRESTED IN TAJIKISTAN. Several members of
an underground radical Islamist party allegedly founded by
Uzbek fundamentalists were apprehended in Tajikistan's
Leninabad Oblast on 19 September, ITAR-TASS reported the
following day, citing the Tajik Security Ministry. In the
town of Khojend, the activists were reportedly handing out
leaflets calling for the creation of an Islamic state in
Central Asia. LF

TURKMEN PRESIDENT CRITICIZES BANKING OFFICIALS. Meeting on 17
September in Ashgabat with banking sector officials,
Saparmurat Niyazov criticized the work of both the Central
Bank and the Foreign Trade Bank and fired the latter's
chairman, Deputy Prime Minister Yula Gurbanmuradov, Interfax
reported three days later. Niyazov criticized the Foreign
Trade Bank for failing to repay loans on schedule. He added
that the information supplied by the Turkmen government to
international financial institutions is frequently incorrect,
and he called for a review of data on the country's foreign
debt. Meanwhile, German Ambassador to Ashgabat Hans-Jurgen
Keilholz told businessmen on 20 September that bilateral
trade fell by 10 percent over the first eight months of this
year, compared with 1998. LF

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