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Editorial Digest Volume 3 Number 13 (September 16, 1998)


RUSSIAN FEDERATION

EXECUTIVE BRANCH

PRESIDENCY
Yel'tsin weakened but Constitutional Change unresolved
Communist Party leader Gennadi Zyuganov must have been as giddy as Yabloko chief Grigori Yavlinsky over his role in preventing the return of Viktor Chernomyrdin as prime minister -- giddy enough not to realize they surrendered the war in order to win a battle. In the midst of negotiations over Chernomyrdin's candidacy, President Yel'tsin was eventually compelled to agree to a power-sharing pact that would drain substantial authority from the executive branch and create a closer parity between executive and legislative powers.

Among the more salient elements of the accord was a provision that would require Yel'tsin to consult with the Duma before making any ministerial appointments (not just the power ministries), seek confirmation of appointments by the Duma, and prevent the dismissal of ministers (by the prime minister) without Duma approval. (ITAR-TASS, 1327 GMT, 7 Sep 98; FBIS-SOV-98-250). This would clearly serve to make the creation of a government, and subsequently control over policy, a joint enterprise between the president and parliament.

What has, in fact, occurred since the confirmation of Yevgeni Primakov as prime minister is the resumption of a familiar pattern of governmental appointments: Primakov selects the ministers and Yel'tsin appoints them through the power of decree. If President Yel'tsin has been weakened by the recent crisis, and he most assuredly has been, it is in relation to the strength of the government, specifically a more authoritative prime minister, and not, at least procedurally, in relation to the legislature.

Have Zyuganov and Yavlinsky realized the folly of their ways? Both leaders have rejected the possibility of participation in the government on behalf of their parties (Communist Yuri Maslyukov is a notable exception, discussed below) and renewed their opposition tactics. (Moscow Times, 15 Sep 98; nexis) Zyuganov has also, this week, called for implementation of the power-sharing accord. Whether or not it is already too late to revive this agreement will have to wait for future developments. It does appear, however, that whether by design or fool's luck, Yel'tsin has reserved for himself the possibility for yet another comeback.


APPARAT
Personnel replacements commence
Whenever a new authority figure emerges in the Russian executive -- either in the Kremlin or government -- personnel changes are sure to follow. It is often an important moment for Kremlinologists as it serves to elucidate the relationships and alliances among Russia's leading officials. In this spirit, the first few days of the Primakov premiership have been no disappointment.

Among the first to be dismissed were Presidential Press Secretary and Deputy Chief of Staff Sergei Yastrzhembsky and Security Council Secretary Andrei Kokoshin. There had been some debate over the relationship between Primakov and Yastrzhembsky, but his dismissal (without transfer to another significant post) would suggest that Primakov was displeased with the press secretary's independence in making foreign policy statements, as well as his access to Yel'tsin.

Some analysts have interpreted these dismissals as a result of their support for Luzhkov in the Chernomyrdin confirmation battle. According to this line of thought, Yastrzhembsky and Kokoshin drew the ire of Chief of Staff Yumashev and Tatiana Dyachenko, who engineered their ouster. (Moscow Times, 15 Sep 98; nexis) While this is possible, it seems unlikely that the greatly weakened Yel'tsin protectors could have influenced these personnel decisions without the support of Primakov.

Replacing Kokoshin as secretary of the Security Council is General Nikolai Bordyuzha, the head of the Border Guards Service. Yastrzhembsky's replacement, Dmitri Yakushkin, has worked most recently for Russian Television and is a descendant of a Decembrist revolutionary. (ITAR-TASS, 16 Sep 98; nexis) Other Kremlin personnel news: Presidential foreign policy adviser Sergei Prikhodko has been appointed deputy chief of the president's staff; so too has Andrei Voloshin. (ITAR-TASS, 14 Sep 98; nexis) Oleg Syusev, former deputy prime minister, has also been transferred to the Kremlin as a deputy chief of staff. (Agence-France Presse, 16 Sep 98; nexis)


GOVERNMENT
Chernomyrdin withdraws, Primakov confirmed as prime minister
Despite a vote of support (91-17) from the Federation Council in a constitutionally irrelevant but strategically elegant maneuver, Viktor Chernomyrdin's candidacy could not survive the onslaught of opposition from, most notably, the Communist Party and Yabloko. While the involvement of the regional leaders from the Federation Council would have marked a true turning point in Russian federative relations, Duma leaders asserted their authority in the confirmation of a prime minister and repeatedly rejected Chernomyrdin.

As the president and Duma settled on a compromise candidate, Chernomyrdin withdrew his candidacy and addressed the nation in a likely attempt to salvage public support in preparation for his presidential bid in 2000. A chest-thumping patriotism characterized the speech: "... I think that if today, at this stage, Chernomyrdin has become a stumbling block, that Chernomyrdin is bringing discord -- I give up my powers, I cannot be the person to harm Russia. I will not do so because I am a true Russian -- in my roots, in my whole being, all the long way that I have come from being a metal worker to the highest government position -- I feel this with all my being, with all my life experience." (Reuters, 10 Sep 98; Johnson's Russia List, 10 Sep 98)

Foreign Minister Yevgeni Primakov was nominated by the Yabloko Party as an alternative to Chernomyrdin. Vladimir Lukin, a Yabloko deputy and foreign policy analyst, is the likely link between Primakov and Yabloko's Yavlinsky. Usually in Russian policy an individual's nomination to office implies the candidate's interest in obtaining the position, but it is unclear that Primakov sought or willingly accepted the post of prime minister. Certainly his public statements suggested otherwise.

With foreign policy one of the only fields in which Russia has a persuasive voice and meaningful role to play, Primakov's decision to accept the prime ministerial nomination and (nominally) separate himself from foreign policy suggests near career suicide. Unfortunately, an elaboration of Primakov's motivations in this governmental crisis is not likely to be made explicit in the near future.

On Friday, 11 September, the State Duma easily confirmed Yevgeni Primakov as prime minister by a vote of 315-63. (Moscow Times, 15 Sep 98; nexis) Primakov's complete ministerial roster is still in development, but thus far the following appointments appear to be secure:

In the power ministries, MVD Chief Stepashin, Defense Minister Sergeev and Emergencies Minister Shoigu will be retaining their posts. (Moscow Times, 15 Sep 98) The recently appointed head of the FSB, Vladimir Putin, who is closely identified with Anatoli Chubais, is rumored to be on his way out, to be replaced by Valentin Sobolev, the current deputy director of the FSB's Anti-Terrorism Department. (Nezavisimaya gazeta, 12 Sep 98; Russian Press Digest/nexis);

Yuri Maslyukov has been named, by presidential decree, as first deputy prime minister in charge of economic policy. (ITAR-TASS, 11 Sep 98; nexis) Maslyukov, it may be recalled, is the one Communist deputy who agreed to serve in the Kirienko government in July 1998 (See previous Digest). Although CP leader Zyuganov has rejected the idea of participation of members of his party in the new government, Maslyukov continues to act independently in this regard;

Acting Chief of the Government Staff Igor Shabdurasulov has been replaced by former Deputy Foreign Minister Yuri Zubakov. Zubakov has most recently been involved in consular negotiations in Israel. (Interfax, 19 Aug 98; nexis) Shabdurasulov, said to have played a key role in the Chernomyrdin nomination, has been nominated, by presidential decree, to the Berezovsky-controlled ORT and awaits final approval by the Board of Directors. (Moscow Times, 15 Sep 98; nexis);

Viktor Gerashchenko, former head of the Central Bank, has been tapped to reprise the role by Yel'tsin. His nomination is subject to Duma confirmation, which is expected this week. (Interfax, 1016 GMT, 11 Sep 98; nexis);

Alexandr Shokhin, head of the Duma faction of Chernomyrdin's NDR, has been named a deputy prime minister, tasked with the financial portfolio. (Agence-France Presse, 1146 GMT, 15 Sep 98; nexis) On 16 September, Shokhin also replaced Anatoli Chubais as liaison to international financial organizations. (AFX-Exxtel News, 16 Sep 98; nexis);

Also from NDR, Vladimir Ryzhkov has been appointed as deputy prime minister in charge of social issues and Vladimir Bulgak, the acting science minister and longtime communications minister, has been elevated to deputy prime minister with the science and technologies portfolio. (Agence-France Presse, 16 Sep 98; nexis);

Igor Ivanov, former deputy foreign minister, has been named the new foreign minister. Ivanov's previous experience is in the European Department of the foreign ministry with a specialty in Spain. (Interfax, 1016 GMT, 11 Sep 98; nexis);

and Mikhail Sinelin has been named head of the Secretariat for the first deputy prime minister (Maslyukov). Sinelin appears to have a long working relationship with Maslyukov. (ITAR-TASS, 14 Sep 98; NEXIS)

by Susan J. Cavan




FOREIGN RELATIONS
Russia maintains position on Kosovo

Deputy Foreign Minister Igor Ivanov told Russian reporters in Belgrade on 4 September that Russia still believes NATO would only be deepening the existing problems in Kosovo with the use of force. Ivanov, in Belgrade to deliver a letter from President Boris Yel'tsin to President of the Federal Republic of Yugoslavia Slobodan Milosevic, told reporters that now it was vital to solve all issues pertaining to a return of Kosovo-Metohija refugees to their homes before the beginning of winter. Ivanov said that Yel'tsin's letter concerned the implementation of his agreement with President Milosevic reached in Moscow on 16 June, with a special emphasis on the humanitarian aspect of the Kosovo-Metohija problem. Ivanov also stated that in his reply to Yel'tsin's letter, Milosevic expressed assurances that all Yugoslav and Serbian authorities guaranteed the safety and unhampered return of all persons who had temporarily left their homes in Kosovo-Metohija. (Tanjug, 2125 GMT, 4 Sep 98; FBIS-EEU-98-248)

Ivanov's statements came on the same day that Russian Ambassador to the UN Sergei Lavrov denied reports that Moscow would back a UN resolution for military intervention in Kosovo in order to avoid a humanitarian catastrophe. Responding to German press reports, Lavrov stated that there had been no change in the Russian position, which he noted had been spelled out in Bonn at a six-nation "Contact Group" meeting on 8 July. He also said that there were no discussions on a UN draft resolution providing for the use of force in the southern Yugoslav province. "There is no resolution," said Lavrov.(Agence-France Presse, North European Service, 1529 GMT, 4 Sep 98; FBIS-EEU-98-248)

Russian-India defense ties termed a 'sovereign right'
During a Moscow briefing on 8 September, Russian foreign ministry spokesman Vladimir Rakhmanin reiterated Moscow's intention to maintain strong military and defense-technology ties with India, stating that the "bilateral cooperation in defense is Russia's and India's sovereign right and nobody intends to curtail it." Rakhmanin, referring to the Joint Statement of the Russian and US presidents "On the Common Challenges to Security at the Threshold of the XXI Century" signed during President Bill Clinton's recent visit to Moscow, emphasized that Russia's contacts with India in the sphere of defense was not stipulated in either this document or elsewhere during the summit. (ITAR-TASS, 1512 GMT, 8 Sep 98; FBIS-TAC-98-251)

These statements were issued just three days after a prominent Indian newspaper published an editorial stating that American pressure on Russia to curtail military cooperation with India was a "Hostile Act Against India." Among many other claims, the editorial said that Moscow needs to maintain its existing defense deals with New Delhi out of financial necessity. (The Pioneer, 3 Sep 98, p. 8; FBIS-TAC-98-248)

Requests for international aid bypass Moscow
Several areas in Russia have apparently requested food assistance from the Nordic countries as the ongoing economic crisis in Russia has persisted with no end in sight. Arkhangelsk and the Kaliningrad enclave have requested help, said Bjorn Rosengren, the governor of the Swedish province of Norrbotten. Yuri Evdikomov, the governor general of Murmansk, telephoned his colleagues in northern Sweden, Norway, and Finland to get them to meet regional food deficits in Murmansk. Governor Rosengren stated that a panic situation does not exist now but that one could develop in the next two weeks.

At the same time there have been reports that need is emerging in the militarized Russian enclave of Kaliningrad on the Baltic. According to the Danish media, Danish Foreign Minister Niels Helveg Petersen is contemplating sending emergency assistance to Kaliningrad. Additionally on 7 September Finnish President Martti Ahtisaari said that Finland and the EU should prepare emergency food shipments to Russia for the elderly and children. (Politiken, 10 Sep 98; FBIS-WEU-98-253)

These latest reported requests for humanitarian assistance mark another element of regional cooperation with foreign powers that bypasses Moscow.

Tehran daily urges Russia to adopt 'clear policy' on Iran
Referring to the recent visit by US President Bill Clinton to Moscow, and the announcement that three Russian companies were asked to stop cooperation with Iran, the English daily Iran News on 7 September suggested Russia adopt a clear policy towards Iran stressing that the imposition of and participation in embargoes would be to the disadvantage of Russia alone. The daily stressed that the three companies already had been barred from cooperating with Tehran under the D'Amato law, claiming that these latest US remarks were just a repetition of its stance against Iran and its aim to tarnish Russia-Iran ties.

The article also implied that it was in the best interest of Moscow to cooperate with Tehran "in view of the grave circumstances prevailing in the region," an apparent reference to the growing tensions between Iran and Taliban-controlled Afghanistan. (IRNA, 0827 GMT, 7 Sep 98; FBIS-NES-98-250) Russia has long opposed Taliban control of Afghanistan and has repeatedly been accused of assisting anti-Taliban forces in Afghanistan.

by John McDonough


* * * * *




Relations with China, Japan weather the Russian crisis
With cautious reactions, China and Japan proved that their attention is fixed on developments in Russia. Both countries have voiced support for an economically sound, politically stable Russia. Toward that goal, Japan approached Tony Blair about convening a G-7 summit to discuss Russia's economic and political crises. (Kyodo, 1011 GMT, 31 Aug 98; FBIS-EAS-98-243) Furthermore, at the inauguration of the new Japan-Russia Friendship Forum, Japan signaled a measure of optimism. Japanese Prime Minister Keizo Obuchi stated that "There is no change whatsoever in the policy of doing our best to conclude a peace treaty by 2000." Mr. Obuchi added that he will travel to Russia in November to work on the peace treaty. (Kyodo, 1158 GMT, 9 Sep 98; FBIS-EAS-98-252)

Chinese-Russian relations also appear to have remained on track, albeit with a certain dose of caution. Initially President Jiang Zemin's September visit to Moscow was indefinitely postponed, but last week the trip was rescheduled for sometime in October. (ITAR-TASS, 1433 GMT, 2 Sep 98; FBIS-SOV-98-245) Calling China a "friendly neighbor," a foreign ministry spokesman in Beijing expressed his country's desire to ensure that "Sino-Russian relations can continue to develop." (Xinhua 1536 GMT, 1 Sep 98; FBIS-CHI-98-244) In light of the successful completion of the demarcation project on the Russian-Chinese border and news reports of a possible $540 million in Chinese financial assistance to Russia, it seems that Sino-Russian relations are well on their way. (Interfax, 1506 GMT, 7 Sep 98; FBIS-SOV-98-250)

With some success in improving relations with China and Japan, Russia announced it will now strive "to develop with the Democratic People's Republic of Korea goodneighborly relations based on mutual respect" as well. (ITAR-TASS, 1314 GMT, 8 Sep 98; FBIS-SOV-98-251) It is unclear how Russia's new friends will react to that venture.

by Sarah K. Miller




DOMESTIC AFFAIRS & LEGISLATIVE BRANCH
FEDERAL ASSEMBLY
Duma passes resolution calling for Yel'tsin's resignation
During its extraordinary session the State Duma passed a resolution demanding President Boris Yel'tsin's immediate resignation. In all, 245 deputies voted for the resolution, 32 against, with no abstentions. The resolution is not binding.

The impeachment process continues, however, with 225 delegates having signed the requisite documents in support of Yel'tsin's removal; 300 signatures are required to initiate the process. Support seems to be building around the country for Yel'tsin's resignation, and with the president's latest sacking of the government, the unconvinced may decide that Yel'tsin's better days are now behind him and a new leader is necessary. (ITAR-TASS World Service, 1056 GMT, 21 Aug 98; FBIS-SOV-98-233)

REGIONS
Russian regional leaders view government dismissal
Regional support for the return of former prime minister Viktor Chernomyrdin was high. The primary reason was the desired need for economic and political stability. According to an article from an unnamed Nizhny Novgorod journal published in Rossiyskaya gazeta, Kirienko's dismissal was not caused by the machinations of wealthy power brokers, it was simply that Kirienko was threatening to effect real reform, which Yel'tsin worried would lead to social unrest. Apparently it was Yel'tsin's desire for stability over reform which brought Chernomyrdin back to Moscow, and which eventually led to the nomination and subsequent approval by the Duma of ex-foreign minister Y. Primakov to the post of prime minister. (Rossiyskaya gazeta, 29 Aug 98, pp. 3, 6; FBIS-SOV-98-248)

The Duma speaker of the Maritime Territory expressed relief at Kirienko's dismissal because of the prime minister's overly harsh economic reforms, but noted that the office of the prime minister needed to be invested with greater powers over the cabinet as well as policy formulation, and it should be more responsible to the Federal Assembly. This attitude seems to be generally felt across the country. (ITAR-TASS, 0713 GMT, 24 Aug 98; FBIS-SOV-98-236)

However, as of this writing, it is not clear how the regions feel about Y. Primakov as prime minister, a situation in which stability rather than reform is the promise, presuming an economic meltdown can be stopped by executive fiat. It seems that one, if not the only, reason Russian democracy has managed to exhibit moments of popular sovereignty and democratic accountability in the last few years is that the conduits to power have not yet reified, and thus cannot be controlled or dominated by any one section or institution of society. This is largely due to the political chaos in Moscow, where the former centralized state has given way to a much looser assortment of local and regional power centers. However, if his past is any guide, Prime Minister Primakov will do his best to stop this process.

POLITICAL PARTIES
Dictatorship of the constitution: Zyuganov the democrat?
In a radio call-in show, CPRF leader and chief officer of Boris Yel'tsin's not-so-loyal opposition in the Duma, Gennadi Zyuganov admitted that the solution to recent economic and political crises needed to be found within the existing constitution.

In responding to a caller's doubts that demonstrations will bring about Yel'tsin's removal from office, Zyuganov replied, "I assure you, if 25-30 million people take to the streets [Yel'tsin] and his clique will be forced to go. We must under no circumstances allow carnage to occur Only well-organized social protest initiated by the impeachment procedure and supported by the regions, strike committees, and mass action can save Russia from disintegration today and save the people from repression and genocide."

When asked if he thought bloodshed would be required, Zyuganov cautioned that "the change of power can be carried out bloodlessly only under the auspices of the legislature, it has the constitutional right to do this. We must introduce into the constitution around 15 amendments to limit the president's sovereignty. We must redistribute these powers among a strong and effective government, but under the control of the Federal Assembly, to ensure that the government is accountable to it."

But the media, Zyuganov warns, needs to have its impartiality attend to by "observer councils" presumably set up in each media outlet around the country. A re-nationalization of the media is also not out of the question because, after all, only the people's government can provide for non-biased reporting. Deja vu all over again? (Sovetskaya Rossiya, 20 Aug 98, p 2; FBIS-SOV-98-239)

by Michael DeMar Thurman


ARMED FORCES

'Loose Missile' apprehended in the Czech Republic
After a year-long investigation, a Russian identified as only "AK" was arrested about 100 miles south of Prague on charges of selling nearly 400 items of heavy military equipment to China, North Korea and Slovakia. He allegedly had been illegally selling his wares -- Tatra heavy trucks adapted for carrying missile launchers and bridging equipment -- from 1992-1997. (Agence-France Presse, North European Service, 0000 GMT, 5 Sep 98; FBIS-EEU-98-248) Considering the devaluation of the ruble, the arrest came at the most inopportune time for the receiving countries who were probably poised for some bargain basement deals.

Once burned up -- twice shy
Problems continued to plague satellite launches for Strategic Missile Troops again this month (see Editorial Digest, Vol. III, No. 10) as a Zenith-2 booster carrying 12 commercial satellites aborted its mission shortly after blast-off Thursday, 10 September, and came crashing back to Earth in an uninhabited area in Khakasia (southern Siberia). This failure, which follows on the footsteps of multiple delays and improper launchings in June and July, resulted in the total loss of the 12 American "Globalstar" communication satellites aboard the vessel. Adapted from former Soviet intercontinental ballistic missiles, the two-stage Zenith-2 rockets are designed and produced by the Pivdenne Bureau and Pivdenmash plant in Dnipropetrovsk, Ukraine. The crash has already been traced to two computer faults that affected the functioning of the boosters. (Jamestown Foundation Monitor, 11 Sep 98)

The Zenith-2 rocket blasted off just after midnight Friday morning. The liftoff passed smoothly. However, an emergency cut-off of the second stage engine took place 272 seconds later. At that point, the rocket and payload dropped to Earth in a specially set area of southern Siberia. Officials at the Russian Space Agency relayed that the emergency command was given in the control system and the engines of the Zenith rocket shut down. At the time of the shutdown, the rocket had already passed through the dense layers of the atmosphere and was in space. Therefore, it had cast off the nose fairing which protects the satellites from high temperatures. (ITAR-TASS World Service, 0602 GMT, 10 Sep 98; FBIS-SOV-98-253) This would logically result in the burnup of the launch vehicle and satellites upon re-entry. The satellites were filled with fuel for maneuvering in space, which may have also added to their demise.

The launch was the first in a series of three. It represents a joint Russian-Ukrainian contribution to the Globalstar consortium's program to put 36 commercial communication satellites into orbit by the end of 1999. Led by the US company Loral, the consortium includes additional US as well as French, German, British, Italian and South Korean firms. It plans two further Zenith-2 launches from Baikonur in October and December. That plan is now under serious question. (Jamestown Foundation Monitor, 11 Sep 98) Though the terms of the launch contract have not been released, the launch was estimated to cost about $30 million. The launch was fully insured and the insurance will fully compensate the Americans for the loss of the satellites. (ITAR-TASS, 1244 GMT, 10 Sep 98; FBIS-SOV-98-253)

There's a lot of "finger-pointing" going on to determine blame for this one. The head of the Russian Space Agency press service, Vyacheslav Mikhailichenko, was quick to state, "The launching was considered Ukrainian responsibility, the Russian side exercised only general coordination of work under the project." Pivdenmash management pointed out that an institute in Moscow produced the malfunctioning computer. Pivdenne management, while admitting to "a great blow to the Bureau and to Ukraine," noted that the Russian Soyuz rocket failed in 13 out of 30 launches, compared to a failure rate of 8 out of 29 launches for Ukraine's Zenith-1 and Zenith-2 rockets. (Jamestown Foundation Monitor, 11 Sep 98)


Just another day at the office
Recently, the Russian ministries of defense and internal affairs have been working hard to calm fears that their respective forces are in a state of heightened readiness around the capital given the aggravated sociopolitical situation in the country. Responding to claims by the mass media, the defense minister's press secretary, Gen. Anatoli Shatalov, stated, "No orders have been given [to concentrate] troops around the capital. All units are stationed in the usual places and engaged in routine training." (Interfax, 0744 GMT, 4 Sep 98; FBIS-SOV-98-248). An interior ministry spokesman defended the agency's troop activities by stating they "are doing their routine jobs in aiding the interior agencies in protecting law and order in the capital and around it. No unusual steps are being taken, the patrols have not been reinforced." (Interfax, 0744 GMT, 4 Sep 98; FBIS-SOV-98-248, and Rossiskaya gazeta, 8 Sep 98, p. 1; FBIS-SOV-98-250)

Well, it's comforting to receive such assurances that nothing ominous or unique is occurring which would be reminiscent of events in the capital a few years ago. And as further proof, Commander-in-chief of the Airborne Force Georgy Shpak, when queried about a recent exercise, said that neither the president nor the defense minister gave him any special instructions to conduct certain "planned maneuvers." He simply said, "The force remains in its usual position of full alert." (Interfax, 1008 GMT, 8 Sep 98; FBIS-SOV-98-252)

Apparently, while pilots are getting only 10 to 20 percent of their required flight training, defense equipment and facility maintenance and repair are barely (if at all), being accomplished and most of the military is not even being paid, Shpak has been able to save up enough of the Airborne Forces' budget to conduct these "planned maneuvers"... and at this particular time.

Working towards a common goal
On 3 September, Russian Defense Minister Igor Sergeev attended a combined air defense exercise which brought together the forces of Russia, Belarus, Kazakhstan, and Kyrgyzstan. The exercise, code-named Combat Commonwealth '98, involved 1,000 troops and 42 fixed and rotary wing aircraft. Sergeev said, "It was the first time that [these four countries'] air defense forces interacted in a training session." Sergeev also handed Kazakh officers a symbolic key to an S-300 air defense system that Russia had handed over to Kazakhstan. (Interfax, 1245 GMT, 3 Sep 98; FBIS-SOV-98-246)

by LtCol Michael K. Reardon

* * * * *




Base realignment and closure, Russian-style
Like the United States military, the armed forces of Russia are closing unneeded bases, with the hope of reducing operating costs. Part of this process includes selling off the military property on those bases, with the goal of then putting much of the generated revenue towards the payment of back wages of servicemen. To put it bluntly, the process is not working.

Several related reasons are responsible for this failure. First, the number and pace of base closings have greatly exceeded the involved ministries' abilities to sell any of the property, either real estate or material on the bases. Already over 800 bases have been closed, with another 700 scheduled to be vacated (due to the tenant units being disbanded) within the next year. Moreover, the military budget has no room in it to maintain or even guard the closed posts, so that, in the words of the reporter from Obshchaya gazeta, the "...citizens, seeing ownerless structures, are increasingly satisfying their material needs there." In other words, the posts are being looted on a grand scale. The two primary players in the property sale process are the Ministry of Defense and the Ministry for Management of State Property.

Despite the Judge Advocate's Office beginning criminal proceedings in a limited number of cases, there does not appear to be any solution in sight to stop the loss of millions of rubles from non-use and theft. The sheer number of closed facilities is overwhelming the bureaucracy. (Obshchaya gazeta, 20-26 Aug 98, p. 2; FBIS-SOV-98-245)

Can the US help the Russians in this regard though? Recently, Secretary of Defense William Cohen offered American assistance, in the form of lessons learned instead of monetary aid, in the armed forces' downsizing effort. Unfortunately for the Russians, the American examples of converting unneeded military facilities to civilian use (and profitability) are not necessarily directly applicable to their situation. For instance, many of the closed US bases are located in prime real estate markets, and/or involve air bases that are easily converted to civilian use (i.e., those located in areas that have a market demand for expanded commercial air operations). However, US military assistance and advice to the former Soviet Union is not limited to the sale and disposal of installations. The US Navy recently assisted the Georgian navy, in conjunction with a port visit of the flagship USS LaSalle, in developing its naval staff and infrastructure. (RFE/RL Newsline, 11 Sep 98) So, perhaps assistance in Russia's downsizing efforts is not an unrealistic possibility.

Dissatisfaction turns deadly, again
The most recent, and dramatic, example of military personnel dissatisfaction occurred in the Northern Fleet at the Skalisty naval base near Murmansk. On 11 September, a 19-year-old conscript sailor opened fire on his shipmates, killing eight persons, while barricading himself on an Akula-class (NATO reporting name) attack submarine. (Jamestown Foundation Monitor, 11 Sep 98) A pyschologist, a priest, and the sailor's mother were brought in during attempts at negotiation, but after 23 hours the conscript killed himself just as Federal Security Service personnel were to overtake him. (Moscow Times, 12 Sep 98, and The Bellona Report, 1998-09-12)

This is just another in a long string of military personnel, both officer and enlisted, reaching a breaking point. Of concern was that, in this case, the incident took place on a nuclear-powered Russian submarine. The Akula-class SSN is an attack-cruise missile platform, and not a strategic ballistic missile submarine (SSBN); however, it is capable of carrying nuclear-tipped tactical weapons. There was no indication that such weapons were on board, although apparently there were conventionally armed torpedos loaded. Ships moored nearby were moved and the immediate area next to the pier was evacuated as Russian authorities reacted to the sailor's threat to explode a torpedo. (St. Petersburg Times, 12 Sep 98, Bellona Report, 1998-09-12 and BBC World Report, 1114 GMT, 12 Sep 98)

The Bellona and the BBC reports differed on what prompted the sailor's actions; however, this incident fits a general pattern of discontent within virtually all the branches of the Russian armed forces. Most military members are owed months of backpay, many units are reported to be underfed, and morale overall is very low. Combined with the often brutal treatment of conscripts, incidents such as this are regrettable, but not surprising.

by LCDR Fred Drummond



NEWLY INDEPENDENT STATES
CIS
Summit postponed, cooperation continues

The 10 September meeting of Customs Union members (Russia, Kazakhstan, Kyrgyzstan, and Belarus) plus Tajikistan was abruptly called off by the Russian government on 7 September. Although the meeting was officially postponed, neither a new date nor a reason for the postponement was specified. Topics were to include the signature of the Customs Union treaty and the formation of a council for border matters. It was indicated that the closed session was to include discussion of the crises in Afghanistan and Russia. (Interfax, 1929 GMT, 28 Aug 98; FBIS-SOV-98-240)

Despite this cancellation, CIS border security efforts continued with the completion of the joint Military Partnership-98 Air Defense Exercises. (Interfax, 0837 GMT, 29 Aug 98; FBIS-UMA-98-241) For his efforts, the commander of a Kyrgyz Air Defense regiment received an engraved watch from Russian Defense Minister Igor Sergeev as well as the information that, effective immediately, his regiment was assigned to combat duty protecting CIS external borders. (Vecherniy Bishkek, 8 Sep 98; FBIS-UMA-98-252) Support for the use of CIS troops to guard their external borders has been strong from Central Asian states, given the external threat that countries such as Afghanistan present. In a radio address, Tajik President Emomali Rakhmanov pledged support for these efforts, saying that "under the collective security agreement...Tajikistan will along with [the CIS] strengthen its southern borders...[and] make our contribution in order to settle the Afghan problem as soon as possible." (Komsomol'skaya pravda, 19 Aug 98, p. 3; FBIS-SOV-98-238) Kyrgyz President Askar Akaev said the "CIS should work out unanimous and decisive counter-actions against Islamic fundamentalism to prevent political and economic destabilization in Kyrgyzstan, Russia and other CIS states." (Interfax, 1548 GMT, 3 Sep 98; FBIS-SOV-98-247) As part of these efforts, Russia has said that it will absorb the training costs of 1,000 servicemen from Armenia, Kazakhstan, Kyrgyzstan, and Tajikistan, all of which have been supporters of the collective security agreement. (ITAR-TASS World Service, 1315 GMT, 27 Aug 98; FBIS-UMA-98-240) Conspicuously not included in this program are the members of GUAM (Georgia, Ukraine, Azerbaijan, Moldova).

At a meeting of members of the Interparliamentary Union, a new coordination body, the Eurasia Group, was created. The group is tasked with formulating a "common stance" on parliamentary issues within the CIS, said Yegor Stroev, head of the CIS Interparliamentary Assembly. He also intimated that such efforts within the assembly would allow the CIS to protect more successfully its interests in the world arena. (ITAR-TASS, 1612 GMT, 6 Sep 98; FBIS-SOV-98-249)

Despite the recent economic and political crises within Russia, it is apparent that Russia is continuing to assert itself as the primary player in the CIS. In fact, in a recent interview, CIS Executive Secretary Boris Berezovsky emphatically stated that each of the 12 member states' presidents "clearly understands that Russia is absolutely invaluable for everyone, without exception, for all the CIS states, and that it has an absolute priority." (Radiostantsiya Ekho Moskvy, 1018 GMT, 2 Sep 98; FBIS-SOV-98-245) With the confirmation of Primakov as Russian prime minister, it is not implausible that Russia will even more aggressively pursue CIS cooperation efforts in order to maintain its supremacy within the CIS.

by Sarah Miller




WESTERN REGION
UKRAINE
First, the bad news...
Ukraine effectively devalued the hryvnya on 4 September, as the Russian economic crisis took its toll. Deputy Prime Minister Sergei Tigipko announced that the government would widen the hryvnya's fluctuation corridor to 2.5-3.5 from 1.8-2.25. Ukrainian finance experts are predicting that the hryvnya will lose 30-40 percent of its value against the dollar before the crisis is over. (Agence-France Oresse North European Service, 1556 GMT, 4 Sep 98; FBIS-SOV-98-248)

...Now, the good
As expected, on 7 September the International Monetary Fund officially offered Ukraine an Extended Fund Facility loan, worth in excess of $2.2 billion. The money will be paid out in several tranches over the next three years, with approximately $250 million paid immediately, most likely to be used to help "prop-up" the hryvnya. (Radio Rossii Network, 0900 GMT, 5 Sep 98; FBIS-SOV-98-248)

Following the IMF's decision, the World Bank announced $900 million in loans to be disbursed among four projects in Ukraine: farm restructuring, a coal industry project, a project aimed at fostering small- and medium-sized businesses, and a program for the financial sector. (Interfax, 1431 GMT, 7 Sep 98; FBIS-SOV-98-250)

The European Bank for Reconstruction and Development (EBRD) will not follow suit, however. The organization has announced that it is reassessing its projects of cooperation with Ukraine in the state sector. The EBRD Director for Ukraine, Moldova and Armenia said the EBRD would rather deal with "enterprises in whose affairs the state does not interfere."(ITAR-TASS, 1345 GMT, 28 Aug 98; FBIS-SOV-98-240)


Yuri Luzhkov, mayor of the world
Luzhkov was the star speaker, as ethnic Russians chanted, "Thank you, Luzhkov"and "Thank you, Russia." Moscow? Nope. This was Ukraine.

On 26 August, Moscow Mayor Yuri Luzhkov rode into Sevastopol, decrying the "forcible Ukrainization of ethnic Russians" and vowing to oppose it everywhere in Crimea. The official reason for his visit was the opening of a Russian school built with the aid of the Moscow city government.

He vowed to do everything possible "for Black Sea Fleet sailors to feel that Moscow and Russia care for them and to keep alive their hope that Sevastopol will be back in Russia one day." And, he explained that "The Russian city of Sevastopol must be protected from steps which are inconsistent with the traditions and standards recognized by the civilized world." (Interfax, 1120 GMT, 26 Aug 98; FBIS-SOV-98-238)

But don't worry, Ukraine. A spokesman for the Russian foreign ministry cleared up the whole situation. ITAR-TASS reported that Russia does not question Ukraine's ownership of Sevastopol. As evidence, the foreign ministry spokesman explained, "The territorial belonging of Sevastopol is not put to doubt." There. That explains it. (ITAR-TASS, 1215 GMT, 3 Sep 98; FBIS-SOV-98-246)


BELARUS
Belarus to World Bank and IMF: Here's your hat, what's your hurry?
The World Bank has announced plans to "lower its presence" in Belarus, a decision that, in effect, will result in the closure of the bank's only office in the country. David Phillips, the head of the World Bank office in Belarus, has left the country, and according to Phillips there will be no replacement. During his final news conference, Phillips noted that not one of the reforms agreed to by Belarus in exchange for World Bank assistance has been implemented. (ITAR-TASS, 1710 GMT, 26 Aug 98; FBIS-SOV-98-239)

Belarusian President Alyaksandr Lukashenka had no comment on Phillips'departure. However, during a 31 August interview, Lukashenka repeated his frequent assertion that Belarus would not depend on "injections" from international organizations, and responded angrily to rumors that representatives of the International Monetary Fund (IMF) would leave Belarus. He said, "We have never had nor are we currently receiving anything from the IMF -- not a dollar or a cent. So it is up to them: If they want to leave -- please go, the airports are open, we have never closed them, let them go." The IMF office in Belarus, however, noted that the IMF has provided a total of $270 million in loans to the country. (Belapan, 1148 GMT, 31 Aug 98; FBIS-SOV-98-244)

Meanwhile, on 3 September, three days after Lukashenka's remarks, Belarusian Minister of Economics Uladizimir Shymaw expressed regret over the low level of international presence in Belarus. He told reporters in Minsk that foreign credits are necessary to integrate the Belarusian economy into "the world's economic ties." Shymaw said that Belarus received a total of $60.8 million in foreign loans over the first seven months of 1998, which is "only 17 percent of the sum planned for this year." He said that his government is attempting to attract a higher level of foreign investment by conducting dialogue with the European Bank for Reconstruction and Development, the IMF, and ... the World Bank. (Belapan, 1450 GMT, 3 Sep 98; FBIS-SOV-98-247) Good thing the airports are open.

Russian crisis? No problem...
Shortly after the onset of the Russian currency crisis, President Lukashenka told his countrymen not to worry. He said, "It will be harder for Ukraine..., but it will be a little bit easier for Belarus" because "it anticipated such turmoils and gradually devalued the national currency." (ITAR-TASS, 2114 GMT, 28 Aug 98; FBIS-SOV-98-240)

...Well, maybe a little
By 3 September the Belarusian ruble had lost 90 percent of its value against the dollar. On 1 September, the dollar was trading at BR110,000-120,000. On 3 September, it was trading at BR200,000 to 230,000. (Belapan, 1255 GMT, 3 Sep 98; FBIS-SOV-98-246)


MOLDOVA
Dniestr threatens to block nuclear fuel shipment
As the stalemate over Dniestr's status continues, the Dniestr administration seems to have found an issue over which it can flex its muscles. The director of the Civil Defense Service of the breakaway Dniestr Republic, Valeriy Kireev, is warning that Dniestr residents will block the railways in order to stop reprocessed nuclear "tailings" (a type of waste) from traveling through the area on its way from Bulgaria to Russia.

Just two weeks ago, the Dniestr administration reached an agreement with both Bulgaria and Russia which allowed "fresh"fuel to be sent from Eloctrostal City in Russia to the Kozloduy Nuclear Power Plant in Bulgaria. (Basapress, 1700 GMT, 13 Aug 98; FBIS-SOV-98-225) However, Kireev is so far refusing to allow trains to transport the fuel's waste back to Russia. (Basapress, 1615 GMT, 26 Aug 98; FBIS-SOV-98-238) According to the Moldovan deputy minister of environment protection, the waste is more dangerous than "fresh" fuel. (Basapress, 1700 GMT, 13 Aug 98; FBIS-SOV-98-225)

Although it is unclear whether Kireev has the support necessary to block the railways, the threat has apparently delayed the transport, which was scheduled to head back to Russia by the first week of September.

Ukrainian 'peacekeepers' welcomed
The joint control commission for a settlement in Transdniestr announced on 26 August that an agreement has been reached to bring Ukrainian "peacekeepers" into the security zone. The co-chairman of the commission, Vladimir Bodnar, called the decision a breakthrough, and said that Ukraine now becomes an "equal party" as a guarantor country of the peace effort. He also said that this move follows on a decision made at a 20 March meeting between the leaders of Moldova and Transdniestr, as well as Ukrainian President Leonid Kuchma and then-Russian Prime Minister Viktor Chernomyrdin.

There are currently over 2,000 peacekeepers in the security zone: 700 each from Moldova, Transdniestr and Russia. (Interfax, 1447 GMT, 26 Aug 98; FBIS-SOV-98-239)

Comment:
It is important to note that buried in the report announcing this agreement is one sentence explaining that there will be a total of 10 Ukrainian "observers" operating in the security zone, traveling in four vehicles. That number -- and the fact that they will apparently not operate as "peacekeepers" -- brings into serious question statements claiming that Ukraine will now be an "equal party" in the issue.

In fact, on 20 March, Ukrainian President Kuchma made it clear that, despite protestations to the opposite (particularly by Russia) Ukraine is not deeply involved in the "peacekeeping" process. After that meeting, Chernomyrdin said, "Russia and Ukraine, as guarantor countries, shall do everything to eliminate the problems existing between the sides." Kuchma responded, "The problem of introducing Ukrainian peacekeeping troops into the Dniestr region is not on the agenda." At that same meeting, Moldova and Dniestr agreed to lower gradually the number of peacekeepers in the security zone from their areas, leaving only "light, mobile patrol posts on the zone borders." (FBIS-SOV-98-079) There was no mention of any reduction in the number of Russian troops. It would, therefore, appear to be important for Russia to be able to point to another country as deeply involved in the issue as it is. In reality, however, Ukraine does not fit the bill.

by Tammy M. Lynch



CENTRAL ASIA
KAZAKHSTAN
Kazakh economy to experience only limited effects of Russian crisis
President Nazarbaev assured investors at a press conference in Almaty on 8 September that Kazakhstan's economy should have little trouble withstanding the effects of Russia's financial crisis, due to the fact that its monetary system is entirely independent from Russia's. As further proof of Kazakhstan's financial stability, he stated that Kazakhstan has the highest ratio of foreign exchange reserves to money supply of any of the CIS countries, and that the government should be able to maintain its $2 billion gold and foreign exchange reserves until the end of the current year with the capital inflows that it expects over the next four months. The Russian crisis is even proving to be somewhat advantageous, by providing Kazakhstan with cheap Russian-made products. (Interfax, 1559 GMT, 8 Sep 98; FBIS-SOV-98-251)

Consequently, Kazakhstan continues to offer a good investment climate, and President Nazarbaev has also pledged to sign additional agreements in September in order to provide foreign investors with further benefits. (Interfax, 1559 GMT, 8 Sep 98; FBIS-SOV-98-251) Earlier, on 1 September, at the convention of the Kazakh parliament's fourth session, the president also attempted to allay recent fears for Kazakhstan's political stability, by declaring that he had absolutely no plans to dismiss Prime Minister Nurlan Balgymbaev and his cabinet. (Interfax, 0734 GMT, 1 Sep 98; FBIS-SOV-98-244)

Prime Minister Balgymbaev also addressed the Kazakh parliament on 1 September, but on a slightly different note. He announced that, although the two countries' monetary systems were completely independent of one another and Kazakhstan possessed a financial rating one grade above Russia's, the Kazakh economy had still been affected by the crises in Southeast Asia and Russia. Kazakhstan's stock market had declined sufficiently so that the government had postponed the issuing of Eurobonds and the privatization of certain industrial firms, which had a negative effect on incoming state revenues. Agricultural production and exports had also declined from the previous year. Nonetheless, the prime minister gave his country's economy an overall positive rating, based on increases in foreign investment, GDP, and production. (Interfax, 0937 GMT, 1 Sep 98; FBIS-SOV-98-244)

Romania obtains share in Kazakh oil industry
Romanian Prime Minister Radu Vasile recently reported that his government had agreed to lease two oil fields (34,000 square kilometers each) in Kazakhstan. Romania's national oil company, SNP PETROM, initially intends to invest $20 million in oil prospecting. Under the current lease agreement the company may search for new oil deposits for a period of five years and then has 25 years to extract any oil that it has found. A certain percentage of the company's profits will go to the Kazakh state. (Azi, 3 Sep 98, p. 3; FBIS-EEU-98-251)

Kazakh security services detain alleged Pakistani Wahhabis
Sources in Kazakhstan's law enforcement agencies reported that six Pakistani citizens, alleged to be Wahhabi missionaries, had been detained by the National Security Committee's Dzhambul department. The Pakistanis were in Dzhambul Region (southern Kazakhstan bordering on Kyrgyzstan) to attend a Muslim conference. Kazakh authorities have charged the men with practicing missionary activity without accreditation by the government, as well as with violating Kazakhstan's temporary residence laws. Apparently the men had been ordered to leave the country three months earlier, but had not complied. The men were scheduled to be expelled from Kazakh territory on 10 September. (Interfax, 1113 GMT, 7 Sep 98; FBIS-SOV-98-250)

Comment:

Kazakhstan is now the fourth Central Asian republic to take up the banner of anti-Wahhabism. Uzbekistan has already held a number of trials to prosecute alleged Wahhabis, and the Tajik and Kyrgyz governments have also detained a number of persons on charges of disseminating Muslim fundamentalism/Wahhabism. Since the Taliban have managed to gain control of northern Afghanistan, these four Central Asian regimes have intensified their anti-Muslim fundamentalist rhetoric, as well as adopting a fairly hostile stance vis-a-vis Pakistan, whose interior ministry supports the Taliban. The Uzbek and Tajik presidents have gone so far as to make speeches in which they have branded the Taliban as both Wahhabi/Muslim extremists and international terrorists whose goals include, at the very least, the political destabilization of Central Asia. The Taliban are far from a benign force, but their leaders have declared on a number of occasions that they seek only to bring all of Afghanistan under their control and have no designs on any part of Central Asia. Nonetheless, if the Central Asian leaders are able to convince their own publics, as well as members of the international community, that the Taliban do pose a threat to Central Asia, then it will be easier for them to justify the use of repressive measures against their own populations.

KYRGYZSTAN
Kyrgyz banks halt Russian currency exchanges
Due to the Russian ruble's rapid fall in value, most Kyrgyz banks, as well as central exchange offices, suspended all cash transactions in Russian currency on 19 August. The banks still permitted non-cash ruble transactions, however. The Kyrgyz som also experienced what financial experts termed a "soft" devaluation, in the wake of devaluations in the Russian ruble and Kazakh tenge. Since Russia and Kazakhstan are Kyrgyzstan's main trading partners, the Kyrgyz economy was bound to be negatively affected by their currency devaluations. Moreover, there are also internal causes for the drop in the som: a deterioration in Kyrgyzstan's balance of trade and the fact that most of the payments on state securities fall due in September. (Vecherniy Bishkek, 20 Aug 98, p. 2; FBIS-SOV-98-237)

President Akaev signs decree for constitutional referendum
On 1 September, President Akaev signed a decree on holding a nationwide referendum to approve a number of constitutional amendments. Later that evening, he appeared on national television in order to promote the amendments. He explained that they would help strengthen Kyrgyzstan's legislative branch, create equal opportunities for all types of ownership, and help ensure freedom of the press and freedom of speech, by prohibiting the adoption of all laws which would restrict these two freedoms. (Interfax, 0623 GMT, 2 Sep 98; FBIS-SOV-98-245)

One amendment would result in the increase of the Legislative Assembly from 33 to 67 deputies (Interfax, 0623 GMT, 2 Sep 98; FBIS-SOV-98-245), while decreasing the number of deputies in the Assembly of People's Representatives (the second chamber of the Kyrgyz parliament). Furthermore, 15 seats in the Legislative Assembly would be reserved only for parties which managed to garner at least five percent of all votes. The amendment would also require that those who wish to stand for election in the Assembly of People's Representatives must first establish a minimum three-year residency in the area that they choose to represent. (Kyrgyz Radio First Programme, 1400 GMT, 1 Sep 98; British Broadcasting Corporation/nexis) In the amendments to the Kyrgyz constitution passed by referendum in 1994, the Legislative Assembly is described as "a standing body elected to represent the interests of the republic's entire population," whereas the Assembly of People's Representatives "works in sessions and is elected to represent territorial interests." (Kyrgyz Radio First Program Network, 1500 GMT, 23 Sep 94; FBIS-SOV-94-186) President Akaev also advocates restricting parliamentary immunity, amid protests from some of the deputies, who fear that such a restriction might result in the arbitrary arrest of some of some parliament members. The Kyrgyz parliament is drawing up its own set of constitutional amendments, which it plans to submit to President Akaev by 5 October. (AP Worldstream, 2 Sep 1998; nexis)

TAJIKISTAN
Further evidence implicating Khudoiberdiev's group in mayor's murder

General Ghafur Mirzoev, commander of Tajikistan's Presidential Guard, informed Interfax on 28 August that automatic weapons and ammunition which were used in the attack on Tursunzade's mayor, Nurullo Khairulloev, had been found on Uzbek territory. The discovery of these arms is considered further evidence that it was Col. Mahmud Khudoiberdiev's supporters who carried out the shooting of Mayor Khairulloev and five of his aides. Gen. Mirzoev also stated that several residents of Tursunzade had been detained on suspicion of having aided the mayor's attackers, and that it was unlikely that Khudoiberdiev's men would have known the mayor's schedule without help from someone in the town. (Interfax, 0703 GMT, 28 Aug 98; FBIS-TOT-98-240) Tajik law enforcement officials also claimed to have identified a few of Khudoiberdiev's closest associates among the attackers, as well as information that two armed men had been detained by Uzbek border guards and police in Uzbekistan's Uzunskii District, as they attempted to cross the Tajik-Uzbek border on the day of the mayor's assassination. However, the Uzbek charge d'affaires to Tajikistan, Bakhtier Urdashev, denied that his country had provided refuge to any of Khudoiberdiev's supporters, or that any conclusive evidence had been found which could link Khudoiberdiev's men to Uzbekistan. He also stated that Uzbek authorities had joined the Tajik security services in their search for the mayor's attackers, in accordance with the terms of a cooperation treaty signed earlier this year between the two republics' internal affairs ministries. (ITAR-TASS, 1016 GMT, 30 Aug 98; FBIS-SOV-98-242)

UTO transfers UNMOT murder suspects to Dushanbe; UN resumes work
On 31 August, the Radio Tajikistan First Channel Network issued a report stating that three of the men who are suspected of having been involved in the fatal 20 July assault on four UN Mission of Observers in Tajikistan (UNMOT) representatives had been transported to Dushanbe by United Tajik Opposition (UTO) forces and transferred to the custody of government law enforcement officials. The men were arrested by UTO authorities in territory controlled by the opposition. (Radio Tajikistan First Channel Network, 1200 GMT, 31 Aug 98; FBIS-SOV-98-243) On 3 September, the UN secretary-general's special envoy to Tajikistan, Jan Kubis, responded by issuing a press release which stated that the UN mission was now ready to resume its full responsibilities in the supervision of the inter-Tajik peace process, including the repatriation of over 200 opposition forces who remain in Afghanistan. (Interfax, 0627 GMT, 3 Sep 98; FBIS-SOV-98-246) The men are gathered near the Sherkhan-Bandar settlement on the Afghan-Tajik border, which recently fell under the control of the Taliban. (Interfax, 0620 GMT, 27 Aug 98; FBIS-UMA-98-239)

Tajik economy suffers consequences of Russian ruble's devaluation
The Russian ruble's devaluation has hit the Tajik economy hard, especially in the northern province (oblast') of Leninobod, where most transactions are carried out in Russian rubles. Tajikistan's own currency has dropped significantly in value over the past two weeks, although at official exchange offices and at the banks it was continuing to trade at the previous rate of 754 Tajik rubles to $1US as of 6 September. On the black market, however, the Tajik ruble's value declined sharply, trading at 1,032 to $1US as of 6 September. Prices of manufactured goods and food rose substantially. (Voice of the Islamic Republic of Iran, 0330 GMT, 6 Sep 98; FBIS-SOV-98-249)

On 9 September, the National Bank of Tajikistan issued a statement warning people against conducting market transactions in Russian currency. Bank officials fear that there are those who might be tempted to buy large quantities of Russian rubles, exchange them for Tajik currency to buy US dollars and invest them outside the country. This would inflict even more damage on Tajikistan's already beleaguered economy. (ITAR-TASS World Service, 0820 GMT, 9 Sep 98; FBIS-SOV-98-252)

Comment:
Tajikistan's economy and the value of its currency are still irrevocably connected to the Russian economy, and therefore are very much dependent on Russia's financial well-being. The Russian government finances a good portion of Tajikistan's budget, including its military expenditures. To make matters worse, many Tajik citizens do not appear to have developed much confidence in their own currency, and often prefer to carry out their transactions in hard currency. The fact that official exchange rates have remained stable is of little significance; most currency trading is probably conducted on the black market, which is extremely sensitive to negative news and/or rumors about the country's financial state of affairs. Most residents of Tajikistan also prefer to handle all their transactions in cash, whether they are buying food, manufactured goods, or paying rent. Consequently, Russia's economic crisis is likely to have a devastating effect on the Tajik economy. This does not bode well for President Rahmonov's recently declared war on corruption in government organs and in the military. Many government and military officials have likely been engaging in illegal activities in order to make ends meet; now, as the real value of the Tajik ruble falls and prices rise, they may become even more dependent on the income from their illegal transactions, and will not react well to President Rahmonov's threatened crackdown. The situation may become particularly acute among those who receive their salaries in Russian rubles: the 25,000 Russian troops and border guards, a number of Tajik border guards, and civilians who work for Russian enterprises.


by Monika Shepherd


CAUCASUS
Officials optimistic about economy

The degree to which neighboring countries suffer from Russia's economic woes will reflect not only the soundness of their macroeconomic policies but also the level of economic autonomy they have achieved in the last five years. So far, the three Caucasian states have not been affected in any substantial way. Armenian Prime Minister Armen Darbinian told reporters that Russia's financial crisis should not damage the Armenian economy. Armenia does not suffer from the debilitating tax collection shortfalls and budget deficits that have plagued the Russian economy. (Noyan Tapan, 0500 GMT, 29 Aug 98; FBIS-SOV-98-242) Although some black market currency exchanges have sprung up in Azerbaijan, the finance minister, Fikret Yusifov, said the currency remains at the normal level of 3,900 to 3,920 manats to the dollar. (Interfax, 1731 GMT, 9 Sep 98; FBIS-98-252) Georgia's President Eduard Shevardnadze told listeners that an economic commission convened by his government in response to the Russian crisis found no reason to expect a devaluation of the Georgian lari. (Radio Tbilisi Network, 0602 GMT, 7 Sep 98; FBIS-SOV-98-250) In fact, Georgia has substantially recovered from the lows of 1994, so that the rate of inflation for 1997 was 7.5 percent even as average wages increased. (ITAR-TASS, 1830 GMT, 5 Sep 98; FBIS-SOV-98-248)

ARMENIA
More complications in relations with Turkey

The war over Nagorno-Karabakh, the resulting Turkish embargo against Armenia, and the latter's all-out thrust to obtain international recognition for the "genocide" of 1915 have so poisoned Armenian-Turkish relations that even relatively minor issues are taken very seriously by the regional press. Turkey's President Suleyman Demirel invited Robert Kocherian, the Armenian president, to Ankara to celebrate Turkey's 75th anniversary in late October. So far the Armenian side has not replied. (Snark, 1420 GMT, 28 Aug 98; FBIS-SOV-98-241) In the past Armenia sent much lower level officials to other regional forums hosted by Turkey or Azerbaijan. The Armenian president stated that his country does not harbor Kurdistan Workers' Party (PKK) bases on its territory, as has been repeatedly alleged by Azeri and Turkish sources. To dispel that claim Kocharian invited Turkey to send monitors to Armenia. At the same time he refused to label the PKK a terrorist organization, saying instead that their cause should be approached with understanding. (Snark, 0600 GMT, 2 Sep 98; FBIS-SOV-98-245) A day earlier the president's press secretary, Kasiya Abgarian, accused Turkey of influencing the election of the patriarch of the Armenian Apostolic Church in Constantinople and discriminating against the Armenian football and chess teams. (Snark, 1300 GMT, 1 Sep 98; FBIS-SOV-98-245)

AZERBAIJAN
Air time and campaign funding for all candidates

All six presidential candidates standing in Azerbaijan's 11 October election will have the opportunity to broadcast their message on television. Every contender will have 12 free appearances, each one lasting one-half hour. On 4 October all the candidates will participate in a two-hour press conference. On the eve of the elections each candidate will have 10 minutes more. In addition, each candidate will receive an equivalent of $15,000 for campaign funding. (ITAR-TASS, 0022 GMT, 1 Sep 98; FBIS-SOV-98-244) These measures signal the degree to which Aliev wishes to placate the opposition and win international approval of the elections.

TRACECA summit adopts Baku Declaration
TRACECA, the EU-sponsored conference on restoring the "Silk Road" routes between Asia and Europe through the Caucasus, approved the Baku Declaration and the Final Communique on 8 September. The representatives of 33 countries and 12 international organizations in attendance supported nine interconnected transportation projects outlined in the declaration. Azerbaijan reserved the right to contravene an article of the main document which guarantees the unrestricted transport of goods to Armenia. (RFE/RL Caucasus Report, 15 Sep 98) The agreements regulate transport between the countries and aim at developing economic relations among them. It also creates an interstate commission with a permanent secretariat headquartered in Baku. (Turan, 1600 GMT, 8 Sep 98; FBIS-SOV-98-251)

GEORGIA
US ship visits Poti, Georgian border guards reclaim frontier

The US Sixth Fleet flagship LaSalle arrived at Georgia's Black Sea port Poti on 15 September. In part to forestall any negative Russian reaction, President Shevardnadze described the event as a normal occasion which should not be seen in the context of the Cold War. (Jamestown Foundation Monitor, 15 Sep 98) The event's significance, especially in the context of last week's Silk Road conference, lies in Poti's strategic position on the oil transit route to Turkey and Ukraine. The event followed closely on the transfer of the coast guard from Russian to Georgian forces on 31 August. According to an agreement reached with the Russian side in June, all the border installations will be transferred to Georgian border guards. Other installations awaiting transfer in the next few months include the Akhalkalaki checkpoint on the Armenian-Georgian border. (Interfax, 1108 GMT, 2 Sep 98; FBIS-UMA-98-245) Last month this region was the site of a standoff between a division of the Georgian army and a local Armenian militia. (See Digest, Vol. III, No. 12) The matter of Russian military bases remains under discussion. A meeting between Georgian Defense Minister David Tevzade and his Russian counterpart, Igor Sergeev, in late August produced the decision to resolve the question in light of a future document, a "concept of bilateral military cooperation." (ITAR-TASS, 1937 GMT, 27 Aug 98; FBIS-UMA-98-239)

by Miriam Lanskoy


BALTIC STATES
Foreign military moves rattle sabers and Baltic leaders
Baltic leaders were watching closely as unexpected military activity occurred near their borders. While the activity ended without incident, there were enough occurrences to make the Baltic states understandably quite jumpy, especially given the turmoil in Russia.

Over 1,000 Russian paratroopers, along with 20 transport aircraft IL-76, 40 armored vehicles and artillery, held joint exercises in the Pskov region in mid-August. Although the region borders Estonia and Latvia, Russian foreign ministry spokesman Valeri Nesterushkin described the exercises as too unimportant to warrant neighbor notification. (BALTIC NEWS SERVICE Daily Report, 1000 GMT, 25 Aug 98). In contrast to Nesterushkin's perspective, Latvian foreign ministry press secretary Andrejs Pildegovics said the maneuvers were the biggest Russian military tactical exercises near the Latvian border since Latvian independence in 1991. (Radio Riga Network, 1700 GMT, 18 Aug 98; FBIS-SOV-98-230)

Lithuania complained about not being informed of recent Russian Baltic Fleet maneuvers, during which the fleet practiced shooting its new S-300 PS surface-to-air missiles (with a range of 150-200 km). The fleet, based in the adjacent Russian exclave Kaliningrad, reportedly is the only military unit equipped with the missiles. The fleet's air defense chief, Maj. Gen. Fedor Krisanov, described the missiles as accurate and powerful. (BALTIC NEWS SERVICE Daily Report, 1700 GMT, 22 Aug 98) He did not elaborate on why the fleet would need such missiles.

At the end of August, a Belarusian warplane violated Lithuanian air space. Lithuanian officials were investigating how far into Lithuanian territory the plane flew (ELTA, 1021 GMT, 26 Aug 98; FBIS-SOV-98-238); Belarusian Minister of Defense Aleksandr Chiumakov said he had not heard of the incident. (BALTIC NEWS SERVICE Daily Report, 1000 GMT, 27 Aug 98).

More than likely, the abovementioned events constituted attempts to rattle both sabers and Baltic leaders. Still, as NATO Supreme Allied Commander in Europe General Wesley Clark reportedly told Estonian President Lennart Meri during a meeting in Tallinn, Russian armed forces should not be underestimated. According to a presidential spokesman, General Clark reminded Meri that Russian soldiers were of a very high caliber, and no one should lose sight of that despite the current financial/morale crisis the military is facing. (BALTIC NEWS SERVICE Daily Report, 1600 GMT, 5 Sep 98)

LATVIA
Citizens want say on proposed amendments
All Latvian citizens will have the chance to vote on the fate of the proposed amendments to the citizenship law, after an incredibly successful signature campaign brought sweeping support for a referendum. According to the Central Election Commission, 226,530 signatures were collected; 131,145 were needed.

The amendments, strongly recommended by the Organization for Security and Cooperation in Europe (OSCE) and the international community, would grant citizenship to children born in independent Latvia and would close naturalization windows. Non-citizens would still be required to pass tests on Latvian laws, history and language. The signature petition began at the instigation of the nationalist For the Fatherland and Freedom/LNNK parliamentary faction, a longtime opponent of any easing of citizenship requirements. The referendum will be put before voters at the same time as the parliamentary elections scheduled for 3-4 October. (Interfax, 1603 GMT, 27 Aug 98; FBIS-SOV-98-239)

According to President Guntis Ulmanis, the success of the signature drive could be attributed to resentment at international pressure to change the law. "[W]e are able by ourselves to decide our fate.... We need [international] support, but...[other countries] will reach only the opposite effect if they attempt to force people" to make immediate changes, Ulmanis said in a radio interview. (BALTIC NEWS SERVICE Daily Report, 1224 GMT, 24 Aug 98; FBIS-SOV-98-236)

OSCE High Commissioner for Human Rights and National Minorities Max van der Stoel continues to see a need for the citizenship law amendments. (Radio Riga Network, 1700 GMT, 25 Aug 98; FBIS-SOV-98-237) "I hope the Latvian people will comprehend what these amendments imply and what they don't imply," he said after a meeting with Ulmanis. Despite claims from For the Fatherland and Freedom/LNNK that the passage of the amendments would put the country at risk, Stoel said the approximately 18,000 children aged seven and younger who would be affected by the amendments should not endanger the Latvian people or language. (BALTIC NEWS SERVICE Daily Report, 1800 GMT, 25 Aug 98)

Meanwhile, other members of the international community have sent signals to Latvia that defeat of the referendum would have international repercussions. At a meeting of the foreign ministers of the Nordic Council, Sweden's Lena Hjelm-Wallen came right out and said so. (Radio Riga Network, 1500 GMT, 25 Aug 98; FBIS-SOV-98-239) According to Baltic News Service (1600 GMT, 4 Sep 98), President Bill Clinton in a letter to Ulmanis expressed the conviction that the enactment of the amendments is very important for Latvian efforts to speed up integration into international institutions. He reportedly described the new law as a key element that could give new impetus for the development of relations between Latvia and the United States. US Ambassador to NATO Alexander Vershbow said the fate of the amendments had become a yardstick against which further progress would be measured. (BALTIC NEWS SERVICE, 1600 GMT, 2 Sep 98) "We hope there is a good and informed debate on the amendments and Latvians make the right choice. This will have an effect on Latvia's integration into Western institutions," Vershbow said.

While Latvians apparently seek international support and security, they are less willing to accept international recommendations and pressure. Prime Minister Guntis Ulmanis, a supporter of the referendum and the man at whose suggestion the signature drive began, seemed to confirm Ulmanis' view of the motivation behind the referendum when he responded to international reaction to the drive's success. "These elements of political pressure, no doubt, create a rather negative impression to the people," he said. (BALTIC NEWS SERVICE Daily Report, 1457 GMT, 5 Sep 98; FBIS-SOV-98-248) It remains to be seen whether Latvian pride will stand in the way of Latvian progress.



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