Caucasus Report: September 17, 1999

The Fighting In Daghestan: Djihad Or War Of Attrition? Last weekend, former acting Chechen premier Shamil Basaev, who commands the predominantly Chechen forces fighting in Daghestan, ordered the retreat of those forces from Novolaksk Raion to Chechnya, where they are reportedly regrouping at three locations close to the border with Daghestan. That maneuver was the second such tactical withdrawal, following a retreat in late August from Botlikh and Tsumadin Raions, the object of the original Chechen incursion. As on the previous occasion, Russian Defense Minister Igor Sergeev reported to Russian Prime Minister Vladimir Putin on 15 September that Daghestan had been "cleansed" of "terrorists." But Sergeev added that the Russian army is ready to repel a new attack, implying that the Russian military anticipates that the Chechen tactics of attacking, entrenching, engaging federal forces, and then retreating, is likely to be repeated.

Basaev himself has offered no hint of his future actions, other than to assert yet again that he will continue fighting until the Russian military is driven out of Daghestan. "Nezavisimaya gazeta" on 16 September quoted unnamed observers in Daghestan as focusing on two possible scenarios: either a Chechen attack on the Daghestan border towns of Babayurt and Kizlyar, close to which the Chechens are regrouping on their side of the border, or a new attack along the mountain section of the border, which is only sparsely guarded by Daghestani police and volunteers. A third possibility, mentioned by the commander of the 58th Russian army, Major-General Vladimir Shamanov, is that the Chechens will attempt to stir up anti-Russian feelings in Ingushetia. Shamanov said, however, that he remains convinced that the main focus of the Chechen attacks will be Khasavyurt.

Basaev's choice of tactics corroborates the hypothesis put forward by a French specialist on the North Caucasus that his primary objective in leading the military attack on Daghestan is his own thirst for glory. In an interview published on 8 September in "La Liberation," Marie Broxup-Bennigsen notes that Basaev's reputation as a war hero had been tarnished by his activities as a member of the Chechen government in 1997-1998, and by rumors that he had amassed a fortune by dubious means. She suggests that Basaev may have founded the so-called Congress of the Chechen and Daghestani Peoples in April 1998 as a basis for launching a new war.

Broxup-Bennigsen also notes the possibility for a resurgence of earlier tensions between Chechen field commander Khattab, whom she terms "a 'true' Wahhabi" (he was born in Saudi Arabia), and Basaev, who is a naqshabandi, an adherent of one of the local North Caucasus sufi sects. In a recent interview with the Czech daily "Lidove noviny," Basaev asserts that Western fears of fundamentalism in the Caucasus are baseless, adding that "I did not dress my wife in a chador," and that he does not intend to compel others to do so. (It is worth remembering that in January 1997, when he unsuccessfully challenged Aslan Maskhadov for the Chechen presidency, Basaev told journalists that he envisaged Chechnya as a moderate Islamic state within the CIS and which, he argued, could serve as an intermediary between Russia and the Muslim world.)

By the same token, if Khattab is indeed a "true" Wahhabi, there may in turn be tensions between him and the Daghestanis who have been identified as the ideologues of the war. Several Russian observers express contempt at their alleged rudimentary and primitive understanding of Islamic theology. Broxup-Bennigsen characterized Mohammed Tagiev, one of those Daghestani leaders, as a "typical representative of local nationalism," who seeks above all to expel the Russians from Daghestan and is seeking an imam to head that campaign.

Such details appear, however, to be irrelevant to leading Russian politicians. In the wake of the bombings in Buynaksk, Moscow, and St. Petersburg, for which they hold unnamed Chechen terrorists responsible, Russian leaders are increasingly blurring the dividing line between the Chechen radicals fighting under Basaev and Khattab, the Chechen leadership, and the Chechen population, and casting all Chechens in the collective role of instruments of international terrorism. (Maskhadov has acknowledged Basaev's role in the fighting in Daghestan, but stressed that the Chechen leadership has no part in those hostilities, or in the bomb attacks on Russian cities.) The Russian air force has for the past two weeks bombed villages and towns in southern Chechnya while insisting that only guerrilla bases are being targeted.

Russian Prime Minister Putin, who on 9 August affirmed that the situation in Daghestan would be "normalized" within two weeks, five weeks later proposed a three-part plan for containing the perceived Chechen threat. That plan comprised a "dispassionate" assessment of the 1996 Khasavyurt agreement signed by Maskhadov and then Russian Security Council Secretary Aleksandr Lebed, which postponed a decision on defining formal relations between Russia and Chechnya; the imposition of a cordon sanitaire along Chechnya's borders (he did not specify whether this would extend to Chechnya's border with Georgia) and the "destruction" of all Chechen guerrilla bands; and the creation of a Chechen government in exile. (That latter point recalls the ill-fated Provisional Council headed by Umar Avturkhanov which Moscow backed in late 1994 in the hope that its armed formations could unseat then Chechen President Djokhar Dudaev.)

Russian journalists predict, however, that Moscow will refrain from launching a full-scale invasion of Chechnya as it did in December 1994, in which case the war of attrition/djihad will remain confined to the territory of Daghestan (Liz Fuller)

Moscow Again Plays For Time In Karachaevo-Cherkessia. On 14 September, Vladimir Semenov took his oath of office as president of the Republic of Karachaevo-Cherkessia, despite requests from the Russian leadership not to do so (see "RFE/RL Caucasus Report," Vol. 2, No. 30, 30 July 1999 and No. 35, 2 September 1999). Semenov travelled to Moscow the following day, where he met with Prime Minister Vladimir Putin and presidential chief of staff Aleksandr Voloshin, who, Semenov told Interfax later, assured him of Moscow's support. Semenov added that he planned to hold consultations with his defeated rival presidential candidate Stanislav Derev, and would form a new government within six weeks.

In Cherkessk, however, 900 supporters of Derev representing the republic's Cherkess and Abazin minorities and some organizations representing the Russian and Cossack communities on 16 September made good on their threat to split the republic. They voted to restore the Cherkess Autonomous Oblast that was territorially subordinate to Stavropol Krai, and elected Derev as its leader. Derev told the gathering that he had spoken by telephone to Voloshin, who told him that Semenov had been given 45 days to "restore order" in the republic. Derev replied that he doubts Semenov's ability to do so. A spokesman for Derev told Interfax that Semenov's inauguration had compounded tensions, and that neither the Cherkess nor the Abazins (who together acccount for only approximately 10 percent of the republic's population) do not recognize Semenov as the legitimate president. He added that those two ethnic groups will not join Semenov's government. Derev last week had rejected the post of prime minister under Semenov. (Liz Fuller)

Downturn In Armenian Privatization Process Deepens. The long-running privatization process in Armenia, which faced serious difficulties in 1998, has slowed to a snail's pace this year, with officials blaming the lack of lucrative investment opportunities, logistical hassle and political uncertainty caused by the May parliamentary elections and subsequent change of government.

Only 31 out of some 100 state enterprises put up for sale have been privatized in the first eight months of the year, according to Deputy Minister of Privatization Ashot Markosian. Last year, less than one third of medium-sized and large state companies found buyers.

Markosian reckons that the downturn is in part caused by an "unfavorable entrepreneurial climate," in which many private businesses are operating at record-low profit margins. This is particularly true for the country's regions other than Yerevan and the central Kotayk province, he says.

"In terms of [the attractiveness] of economic activity, we have a lot to think about," Markosian said in an RFE/RL interview. The parliamentary elections and the change of the cabinet that followed are also seen as contributing to the lack of interest in the enterprises remaining in state hands. "When a government is changed it takes some time before its successor can win the confidence of the business community," he says.

Also discouraging company takeovers is the lengthy and rather expensive procedure for registering the purchase or sale of property with the appropriate government bodies. There are in fact two such bodies, one of them being the Ministry of Privatization. Markosian acknowledges that policy differences frequently arising between them is a problem needing government action.

Another significant factor hampering privatization is the huge sums of money (mostly unpaid taxes and utility charges) owed by state-controlled companies. Their cumulative debt nears $200 million. Heavily indebted enterprises are not attractive for private investors. But Markosian insists that only privatization can cure the problem.

Writing off the debts in exchange for an obligation to get an idle factory working is one of the solutions. In one such example, the Armenian parliament last March endorsed terms of the takeover by an Armenian-Russian businessman of two chemical factories and a power plant in the northern city of Vanadzor. The businessman, Senik Gevorgian, paid $1.5 million and pledged to invest up to $50 million after the government agreed to write off the factories' total debt of $7 million. Officials then said the deal will result in 5,000 new jobs.

Markosian also says the government is looking for new sell-off techniques to spur the stalled process. In particular, it is preparing to sell government shares at the fledgling Yerevan stock exchange. This, he anticipates, will help ensure equal conditions and a realistic price for all potential buyers.

State companies in Armenia have so far been sold off through privatization certificates (so-called vouchers handed to all citizens free of charge in 1994-95) and money actions. The government switched to the auction privatization in late 1997.

According to official figures, 80 percent of Armenia's GDP is currently created by the private sector. (Atom Markarian)

Quotations Of The Week. "Terrorism has no national identity. It is unacceptable to punish innocent people merely because they are from the Caucasus." Tatarstan's President Mintimer Shaimiev, quoted by RFE/RL's Kazan bureau on 14 September.

"The biggest tragedy of what is happening in the Caucasus is that a war against guerrillas is turning into a war against all the Caucasian peoples." -- Assembly of Peoples of Russia chairman Ramazan Abdulatipov, quoted in "Nezavisimaya gazeta" on 15 September.

"We all need to realize that a foreign intervention is being carried out in the North Caucasus. And its goal is not the national liberation of peoples, but neo-colonial enslavement in the form of spreading the extremist ideology of radical Islamism and establishing control over the national resources of the region after detaching it from Russia." -- Krasnoyarsk Krai governor Aleksandr Lebed, writing in "Nezavisimaya gazeta," 9 September.

"The role of the Minsk Group is in creating a favorable atmosphere, which can be transformed into certain guarantees given simultaneously with the parties' decision. [...] I do not think that it is the Minsk Group that is to decide who will sit at the negotiating table the day the negotiating process will be resumed. It is very important that roles and responsibility be distinguished. [...] "The most important thing here is a compromise which, of course, should be preceded by political will. The European experience shows that the longer a conflict remains unresolved, the more difficult it is to find a solution to the problem. It is the reason for our believing in compromises, in that it is the conflicting parties that are supposed to reach them." -- Michel Fouche, chief advisor to the French foreign minister, speaking in Yerevan on 8 September (quoted by Noyan Tapan).