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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 206, Part I, 21 October 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 206, Part I, 21 October 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

* COMMUNISTS PUSH BUDGET NEGOTIATIONS DOWN TO THE WIRE

* PUTIN IN NORTHERN CHECHNYA

* U.S. DIPLOMAT ADVOCATES ARMENIAN-TURKISH RAPPROCHEMENT

End Note: MUCH ADO ABOUT UNITY
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RUSSIA

COMMUNISTS PUSH BUDGET NEGOTIATIONS DOWN TO THE WIRE. State
Duma deputies voted on 20 October to postpone a vote on the
draft 2000 budget until 22 October. Before making that
decision, the Communist Party, which has the largest faction
in the Duma (129 out of 450 seats), announced that it will
reject the budget. The document needs 226 votes to pass. The
Communists are insisting that revenues be raised again.
However, Credit Suisse First Boston economist Vladimir
Konovalev told AFP that the government is "already at the
limits of what's credible or believable as far as the
international community is concerned." First Deputy Prime
Minister Viktor Khristenko warned that if the Duma does not
pass the budget on 22 October, then there is no chance Russia
will have a budget before the beginning of 2000. In such a
situation, "Kommersant-Daily" commented on 21 October, the
IMF will use Russia's lack of budget as a pretext for
refusing to disburse further loan installments. JAC

PUTIN IN NORTHERN CHECHNYA. Prime Minister Vladimir Putin
chaired a cabinet session in Mozdok on 20 October to discuss
normalizing conditions in the three raions in northern
Chechnya that are under federal control, ITAR-TASS reported.
He then traveled with Nikolai Koshman, Moscow's designated
representative in Chechnya, to the Chechen village of
Znamenskoe, where he met with village elders. Putin pledged
Russian help in providing electricity and gas supplies to the
region and in providing accommodation for fugitives who wish
to return to Chechnya. Putin also met with Russian air force
pilots who are participating in the ongoing bombing raids on
Chechnya and praised their "professionalism" according to
Interfax. Also on 20 October, convalescing Russian President
Boris Yeltsin summoned senior officials including Defense
Minister Igor Sergeev, and Interior Minister Vladimir
Rushailo to his dacha to discuss the situation in Chechnya.
No details of those talks were made public. LF

FEDERAL TROOPS ADVANCE ON GROZNY... Russian forces have
crossed the Terek River and advanced to within 12-14
kilometers of Grozny, ITAR-TASS reported on 21 October
quoting sources in Koshman's entourage. The previous day, the
Russian artillery bombardment of the western village of Bamut
and the towns of Tolstoi-Yurt and Pervomaiskoe, north of
Grozny, continued. LF

...WHILE CHECHENS BRACE FOR ALL-OUT ASSAULT. In an interview
printed in "Kommersant" on 20 October, Chechen army commander
Isa Munaev predicted that Russian forces will launch an all-
out assault on Grozny before the end of October. He said
Russia's tactics currently differ from those adopted in early
1995, but he added that the Chechen forces are now better
prepared to repel an attack on the city. However,
"Nezavisimaya gazeta" on 21 October said that the Chechen
resistance effort is more spontaneous than coordinated,
adding that field commander Khattab is engaged in the defense
not of Grozny but of regions of central and eastern Chechnya.
Colonel General Valerii Manilov, who is first deputy chief of
staff of the Russian armed forces, told journalists in Moscow
on 20 October that "Grozny, as well as other places, will be
cleared of terrorists and the terrorists themselves
destroyed," Reuters reported. But Manilov said this would be
accomplished without "a standard frontal attack." LF

RUSSIA'S MONEY-LAUNDERING BILL CALLED ARBITRARY WEAPON...
"Kommersant-Daily" reported on 20 October that under draft
money-laundering legislation, Russian commercial banks will
be required to pass information to several law enforcement
agencies, including local police precincts, about any Russian
citizen who opens a bank account containing at least $7,000.
The newspaper suggests that existing authorities will
therefore be given a powerful instrument of influence against
anyone they oppose. It also predicts that the banking
information will likely be leaked to "criminal structures."
"Kommersant-Daily" is controlled by media magnate Boris
Berezovskii, who has himself been accused of money
laundering. However, the newspaper made a similar argument
against the first version of the bill proposed by Communist
Party faction member Viktor Ilyukhin, before Berezovskii
assumed control of the daily. JAC

...AND UNLIKELY TO PASS BEFORE YEAR'S END. Duma Deputy Viktor
Pokhmelkin told RFE/RL's Moscow bureau that at present,
crime-fighting legislation in Russia is perceived "not as
protection but as a stick that can be used arbitrarily by the
state or by competitors." He added that there is little
chance that a law on money-laundering will be passed before
the State Duma elections in December. According to
Pokhmelkin, one existing law encourages companies to report
any suspicious dealings, and some companies use the law to
denounce their competitors. During her visit to Moscow, U.S.
Attorney General Janet Reno praised the Russian government's
intention to introduce money-laundering legislation. And
Deputy Secretary of State Strobe Talbott said the U.S.'s
failure to back more vigorously bills in the Duma that would
have fought money-laundering was a mistake (see "RFE/RL
Newsline," 20 October 1999). JAC

ARMS CONTROL TALKS RESUME IN MOSCOW... U.S. Undersecretary of
State for arms control and international security affairs
John Holum and Russian Deputy Foreign Minister Grigorii
Berdennikov began in Moscow on 21 October the next round of
talks on disarmament, which are expected to cover START-3 as
well as U.S. and Russian stances on possible changes to the
1972 Anti-Ballistic Missile Treaty. Holum and Berdennikov
last met in Washington in August, but those discussions
reportedly yielded no results. The current round of talks is
scheduled to conclude on 22 October. JC

...AS MOSCOW STRESSES THERE CAN BE NO 'COMPROMISE' OVER ABM.
Addressing journalists in Moscow on 20 October, First Deputy
Chief of the Russian General Staff Colonel General Manilov
said that Russia considers attempts to destroy the "existing
system of arms treaties and agreements as a threat and [as]
destabilizing regional and global situation." He added that
there can be "no compromise" on the 1972 ABM Treaty. Foreign
Ministry spokesman Vladimir Rakhmanin, meanwhile, confirmed
on 20 October that the U.S. has recently "put forward a
number of proposals" on promoting cooperation in the sphere
of ABM defense (see "RFE/RL Newsline," 18 October 1999), but
he noted that those proposals are "confidential." At the same
time, Rakhmanin underlined that Moscow is not negotiating any
amendments to the ABM treaty. JC

MANILOV SAYS NATO-RUSSIA RELATIONS REQUIRE 'FUNDAMENTALLY NEW
BASIS.' At his 20 October press conference in Moscow, Manilov
commented that the potential for developing NATO-Russia
relations is "fairly big," Interfax reported. Those relations
have been frozen since the NATO bombing campaign against
Yugoslavia earlier this year. "A revival of relations with
NATO is possible only on a fundamentally new basis," Manilov
argued, remarking that the Atlantic alliance has "discarded"
the NATO-Russia Founding Act. JC

DUMA APPROVES PRODUCTION-SHARING PROJECTS. Deputies on 20
October approved in its third reading a bill that includes
the Priobskoe oil field in western Siberia and a field in the
Far North on a list of projects eligible for production-
sharing agreements terms, Interfax reported. The first
project will be developed with the participation of Yukos,
the latter with LUKoil and Conoco. The previous day, the Duma
approved in its first reading a bill that would permit the
development of the Vankorskoe gas and oil field in
Krasnoyarsk Krai on a production-sharing basis, according to
ITAR-TASS. The agency quoted Natural Resources Minister Boris
Yatskevich as saying that the field can be developed only
with foreign investment. Deputy Fuel and Energy Minister
Valerii Garipov announced earlier in the month that the
government will ease the quota on the number of oil projects
that are permitted to operate under production-sharing
agreements. JAC

RUSSIA TO EXPERIENCE GRAIN, MEAT SHORTFALL. The U.S.
Department of Agriculture is predicting that Russia will face
a shortfall of grain totaling 7.5-9.5 million tons in 2000,
Interfax reported on 20 October. The department also
concluded that there will be a meat shortfall, noting that
meat supply of 3.8 million tons of domestic production
combined with 1.45 million tons of imported meat will be
insufficient to meet the country's meat demand of 5.5 million
tons. According to the agency, the department's experts
believe that in order for Russia to maintain its already low
protein-consumption level of 1989-99, it will have to
supplement its meat supplies or the population will
experience a further decline in protein consumption. JAC

UNEMPLOYMENT HOLDS STEADY. The number of unemployed reached
12.4 percent of the workforce or 9.12 million at the end of
September, an increase of 6.2 percent compared with the end
of September last year, according to the Russian Statistics
Agency on 20 October. However, according to ITAR-TASS, that
figure did not increase significantly from the previous
month, and Interfax reported that it represents a fall from
the level recorded at the beginning of the year, when the
number of unemployed totaled 9.73 million. Labor Minister
Sergei Kalashnikov said on 20 October that 29 percent of
Russia's population are living below the minimum subsistence
level. He also noted that the government has accumulated a
backlog of unpaid child benefits, ITAR-TASS reported. JAC

VOLSKII PREDICTS COMMUNIST SUPPORT FOR PRIMAKOV. In an
interview with "Segodnya" on 20 October, Arkadii Volskii, the
head of the Union of Industrialists and Entrepreneurs, said
that he believes that the Communist Party (KPRF) will support
Fatherland-All Russia (OVR) alliance head Yevgenii Primakov
during the second round of presidential elections if current
KPRF head Gennadii Zyuganov is forced out of the race.
Volskii, who is a candidate on the OVR party list, added that
it also possible that Zyuganov will not be allowed to run for
president even in the first round since he failed to win the
last presidential election. Instead, Volksii suggests the
KPRF might nominate Primakov. When asked whether former Prime
Minister Primakov will seek the presidency, Volskii responded
that "Do you remember how he objected to his appointment as
prime minister? Lots of people visited him and persuaded him.
And he agreed." JAC

GORBACHEV FORMS NEW PARTY. Former Soviet leader Mikhail
Gorbachev has announced he will head a new united Social
Democratic Party, Russian Public Television reported on 20
October. The network reported that the party is being formed
too late to participate in the 19 December State Duma
elections but may be able to nominate a candidate for
presidential elections. The new party will hold a founding
congress in February. JAC

GOVERNMENT TO SPEND $12.5 MILLION ON CHRISTIANITY'S
ANNIVERSARY. Andrei Loginov, head of the domestic policy
department of the presidential administration, announced on
20 October that the Russian government will allocate 324
million rubles ($12.5 million) to celebrate the start of the
third millennium and the 2000th anniversary of Christianity,
Interfax reported. Loginov also revealed that the state has
allocated 18 million rubles for an encyclopedia on peoples of
the Orthodox faith. On 13 October, Security Council Deputy
Secretary Vladislav Sherstyuk had told reporters that Russia
will switch some crucial processes over to manual control
during the transition to the year 2000 owing to a shortage of
financing, AP and Interfax reported. JAC

TRANSCAUCASUS AND CENTRAL ASIA

U.S. DIPLOMAT ADVOCATES ARMENIAN-TURKISH RAPPROCHEMENT.
Meeting in Yerevan on 20 October with Armenian Prime Minister
Vazgen Sargsian, U.S. Assistant Secretary of State Steven
Sestanovich proposed that Turkey and Armenia open
"information centers" in each other's capitals as a first
step toward establishing diplomatic relations, RFE/RL's
Yerevan bureau reported on 20 October, quoting an Armenian
government spokesman. Sestanovich said such a step would
contribute toward a rapprochement between the two countries,
which Washington considers essential for stability in the
South Caucasus. He added that Ankara has responded positively
to the proposal. Sestanovich also praised the recent talks
between Armenian President Robert Kocharian, which whom he
also met on 20 October, and Azerbaijan's President Heidar
Aliev. Sestanovich said those talks "create a basis for
agreement that can then be taken further by the [OSCE Minsk
Group] mediators." LF

ARMENIAN FOREIGN MINISTER SAYS AZERBAIJAN OBSTRUCTING
TRANSPORT COOPERATION. In an interview with Armenian State
Television on 19 October, Vartan Oskanian said Azerbaijan has
rejected a proposal by the EU that rail communications be
resumed between Armenia and Azerbaijan, RFE/RL's Armenian
Service reported. He said that Armenia has offered to create
a 3-5 kilometer security zone along the railway, which runs
through Azerbaijani territory occupied by Armenian forces,
but that Azerbaijan has rejected that proposal, insisting on
the complete withdrawal of the Armenian troops from those
districts. Oskanian added that the EU and the U.S. are
unhappy with Azerbaijan's position. The EU-sponsored TRACECA
transport program envisages the restoration of transport
links between the South Caucasus states. LF

ARMENIA, IRAQ TO EXPAND ECONOMIC COPERATION. Senior Armenian
Foreign Ministry official David Hovhanisian told journalists
in Baghdad on 20 October that Armenia will soon open an
office in that city to promote economic and trade
cooperation, Xinhua reported. Hovhanisian said Armenia is
interested in industrial and trade cooperation with Iraq
within the framework of the UN oil-for-food program. Armenia
and Iraq have not yet established formal diplomatic
relations. LF

AZERBAIJANI OPPOSITION PLANS RESISTANCE TO KARABAKH
SETTLEMENT. A 20 October session of the Democratic Congress,
which unites a dozen leading Azerbaijani opposition parties,
agreed to create a working group to revive the National
Resistance Movement, Turan reported (see "RFE/RL Caucasus
Report," Vol. 2, No. 42, 21 October 1999). The movement was
created in 1994 to oppose a disadvantageous peace settlement
in Karabakh. On 16 October, former President and Azerbaijan
Popular Front Chairman Abulfaz Elchibey condemned U.S.
Secretary of State Madeleine Albright's letter to President
Aliev urging him to agree to concessions in order to resolve
the Karabakh conflict as "the most insulting document in the
history of world diplomacy," according to Turan LF

U.S. SUPPORTS GEORGIAN CALLS FOR RUSSIAN TROOP WITHDRAWAL.
Visiting Tbilisi on 19-20 October, U.S. Assistant Secretary
of State Sestanovich held talks with Minister of State Vazha
Lortkipanidze, parliamentary speaker Zurab Zhvania, and
President Eduard Shevardnadze on the Russian military
presence in Georgia and the North Caucasus, Caucasus Press
reported. Sestanovich told journalists on 20 October that the
U.S. shares Georgia's belief that Russian forces should be
withdrawn from Georgia. During his visit, an agreement was
signed under which the U.S. will provide Georgia with
military uniforms and other supplies worth $1.8 million, AP
reported. LF

KAZAKHSTAN'S PREMIER GIVES POSITIVE ASSESSSMENT OF
PARLIAMENTARY POLL... Qasymzhomart Toqaev told U.S.
Ambassador Richard Jones on 20 October that both he and
President Nursultan Nazarbaev believe that the 10 October
elections to the lower chamber of parliament marked a new
stage in the evolution of democratic processes in Kazakhstan,
Interfax reported. He added that the poll "largely met" the
standards set by the OSCE and other international bodies. An
RFE/RL correspondent reported earlier this week that the OSCE
plans to issue a report on the first round of the poll
criticizing instances of falsification of the results (see
"RFE/RL Newsline," 20 October 1999). LF

...AS OPPOSITION CANDIDATE PREDICTS FURTHER VIOLATIONS. Lira
Bayseitova, who heads the Respublika-200 political group,
told journalists in Almaty on 20 October that she has
information that the local authorities in Atyrau Oblast have
printed 15,000 additional ballot forms to ensure that their
preferred candidate secures victory in the 24 October runoff
over Ghaziz Aldamzharov, a leading member of former Prime
Minister Akezhan Kazhegeldoin's Republican People's Party of
Kazakhstan, RFE/RL's bureau in the former capital reported.
On 19 October, a district court in Almaty rejected a case
brought by defeated parliamentary candidate Gennadii
Belyakov, who accused the district electoral commission of
falsifying the outcome of the vote in the district in which
he ran. LF

NEW POLITICAL PARTY REGISTERED IN KYRGYZSTAN. Republican
Party Deputy Chairman Narkas Mulladjanov told RFE/RL's
Bishkek bureau on 19 October that the Ministry of Justice
formally registered the party last week. The Republican Party
was founded last month and is headed by Zamira Sydykova,
chief editor of the opposition weekly newspaper "Res Publika"
(see "RFE/RL Newsline," 20 September 1999). LF

KYRGYZSTAN BEGINS WITHDRAWING TROOPS FROM SOUTH. A Defense
Ministry spokesman said in Bishkek on 20 October that the
first detachments of army troops sent to Osh Oblast in August
following the hostage taking there by Uzbek guerrillas will
return to Bishkek later that day, RFE/RL's bureau in the
capital reported. He added that reservists called up in
August are being demobilized. Also on 20 October, an
unidentified source in the National Security Ministry said
Deputy Minister Valerii Verchagin traveled to Dushanbe that
day for talks aimed at securing the release of four Japanese
geologists still held by the guerrillas. Tajik Minister for
Emergency Situations Mirzo Zieev and other members of the
United Tajik Opposition helped mediate the release of several
Kyrgyz hostages (see "RFE/RL Newsline," 20 October 1999). LF

IRANIAN FOREIGN MINISTER VISITS TURKMENISTAN. Kamal Kharrazi
headed a delegation from the Oil, Energy, and Transport
Ministries that traveled to Ashgabat on 20 October, Reuters
and Interfax reported. Kharrazi and President Saparmurat
Niyazov discussed plans for cooperation in road building and
the extraction of Caspian gas and for the export of
electricity from Turkmenistan to Turkey via Iran. It is
unclear whether they also discussed exports of Turkmen gas
via Iran. Niyazov had told visiting Turkish Energy Minister
Cumhur Ersumer two weeks ago that the topic would be on the
agenda of their talks (see "RFE/RL Newsline," 7 October
1999). An agreement was signed on the construction of a $167
million dam and reservoir for irrigation purposes on the
Tedzhen River, which forms the border between the two
countries, Reuters reported (see "RFE/RL Newsline," 6
September 1999). LF

END NOTE

MUCH ADO ABOUT UNITY

by Julie A. Corwin

	If Prime Minister Vladimir Putin is Russian President
Boris Yeltsin's anointed successor, then the newly registered
interregional group Unity represents his bloc of choice for
December's State Duma elections. Putin himself attended
Unity's founding congress on 3 October as a guest, while
First Deputy Chief of Presidential Staff Igor Shabdurasulov
said that the bloc has "unequivocal support" from Yeltsin's
staff. And one of the most popular and longest-lasting member
of Putin's government, Emergencies Minister Sergei Shoigu,
has been tapped as its head.
	Although predictions of the bloc's success in upcoming
State Duma elections vary widely, the bloc may have already
achieved what most analysts believe to be its raison d'etre:
chipping away support for the popular Fatherland-All Russia
(OVR) alliance. In a recent interview with "Segodnya," Andrei
Fedorov of the Council for Foreign and Defense Policies
explained that Unity's "first task is to put Fatherland-All
Russia out of action and if possible, take 10 percent of the
vote from them, thus pushing them into third place in the
parliament, and after that it is supposed to try to become a
springboard for the Kremlin's candidate for president."
	If reports of its membership can be trusted, Unity has
already struck at core OVR interests by luring away four of
its members, including Primorskii Krai Governor Yevgenii
Nazdratenko. In fact, more than half of the governors who
have reportedly joined Unity were already aligned with other
political parties or movements: besides the four former OVR
members, the group includes six former members of Voice of
Russia, which is headed by Samara Governor Konstantin Titov.
In addition, five governors out of the seven enrolled in
former Prime Minister Viktor Chernomyrdin's Our Home Is
Russia (NDR) have expressed their wish for membership in both
groups, while a sixth, Saratov Governor Dmitrii Ayatskov, has
expressed his willingness to support Unity and has actively
sought a merger of the NDR with Unity.
	Also, Unity already appears to be acting as a bloc
within the Federation Council and can therefore counter any
OVR-backed efforts there. Consider the recent Kremlin-
initiated vote in the upper legislative chamber to oust
suspended Prosecutor-General Yurii Skuratov. The voting was
kept secret, but in interviews with senators that
"Kommersant-Daily," Russian Public Television, and NTV
conducted after balloting, all of the regional leaders
expressing support for Skuratov's dismissal, except one, were
members of Unity. Meanwhile, some of the most vocal
supporters for retaining Skuratov were OVR members, such as
Chuvash President Nikolai Fedorov.
	However, Unity's failure to align with the NDR has
prompted some analysts to conclude that the bloc will not
capture enough votes in the Duma election to enter the lower
legislative chamber. Unity officials claimed that NDR imposed
too many preconditions, while NDR faction leader Vladimir
Ryzhkov argued that NDR members resisted the union, despite
Kremlin pressure, because Unity lacks a coherent political
philosophy. NDR head Viktor Chernomyrdin put it this way:
Unity "has no ideology," it has only business magnate Boris
Berezovskii.
	While Berezovskii has denied that he was behind Unity's
creation, as has Unity head Shoigu, Unity member and Governor
of Kursk Aleksandr Rutskoi has acknowledged Berezovskii's
involvement. Also, coverage of the movement in his media
holdings suggests that Berezovskii has at least a mild
interest in the bloc's good fortunes. In its reporting on
Unity, "Nezavisimaya gazeta" has stressed the movement's
successful recruitment efforts and alignments with smaller
political parties and organizations following the failure of
efforts to merge with the NDR.
	Such coverage contrasts sharply with the picture
depicted in media owned by rival oligarch Vladimir
Gusinskii's Media Most group or in newspapers close to Moscow
Mayor Yurii Luzhkov, the head of Fatherland. "Segodnya" and
"Moskovskii komsomolets" have reported Kremlin pressure on
governors to join Unity, while "Obshchaya gazeta" claimed in
its most recent issue that according to its sources, which it
did not identify, only six or seven governors have actually
joined Unity. EWI's "Russian Regional Report" puts the tally
of governors affiliated with Unity at 28, including the five
members of the NDR who will maintain dual allegiance.
	Some skepticism about Unity's membership list is perhaps
natural, since little seems to unite its diverse members.
Even the top three names on that list present an odd
assortment of philosophies and professions: Emergencies
Minister Shoigu, former NDR member and Olympic wrestler
Aleksandr Karelin, and former top cop Aleksandr Gurov. Gurov,
the current head of the security department of Tepkobank, is
the former head of the Department Combating Organized Crime
at the Interior Ministry and has expressed his support for
General Aleksandr Lebed many times.
	Even more striking for a Kremlin-backed bloc are the
names of Rutskoi and Nazdratenko. Unity's congress occurred
on the sixth anniversary of the day Rutskoi, at the time
Yeltsin's vice president, called on Russian troopers to storm
Ostankino, while President Yeltsin has tried to remove
Nazdratenko and only this year recalled his envoy from
Primorskii Krai, whose main task was to rein in the governor.
It is possible that these Yeltsin's foes have been drawn to a
Kremlin-backed grouping for the same reason that one Chukotka
official claims his governor has signed on: additional
financial aid from the center. OVR members, on the hand, will
presumably have to wait until after the election.

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