Newsline - August 21, 1998

YELTSIN DENOUNCES U.S. AIR STRIKES

Speaking in Murmansk on 21 August, Russian President Boris Yeltsin condemned U.S. air strikes in Afghanistan and Sudan, ITAR- TASS reported. "My attitude is indeed negative as it would be to any act of terrorism, military interference, failure to solve a problem through talks. I am outraged and I denounce this." Yeltsin added that it was "indecent" that he was not informed in advance. Yeltsin's press spokesman, Sergei Yastrzhembskii, appeared to be less critical: he suggested that with regard to terrorism, Russia and the U.S. are "in the same boat," and he reaffirmed that the September summit will take place as scheduled. Communist chief Gennadii Zyuganov said that the U.S. has "in fact become a terrorist state." And Liberal Democratic Party of Russia leader Vladimir Zhirinovsky said that the U.S. action should lead Russia to change its foreign policy and cancel the summit. The Russian Foreign Ministry announced it will issue a formal statement later on 21 August. PG

YELTSIN TAKES DIRECT CONTROL OVER MILITARY POLICY

Having arrived in Murmansk on 21 August to observe a fleet exercise and missile launch, Yeltsin announced that he will take full control over military policy and military technical cooperation, presidential press spokesman Sergei Yastrzhembskii told ITAR-TASS. Yeltsin indicated that by doing this, he will be able to ensure that officers and soldiers are paid. PG

KIRIENKO, GOVERNMENT FACE HOSTILE DUMA

Speaking to the State Duma on 21 August, Prime Minister Sergei Kirienko said that the country is now entering "a serious financial crisis" as a result of the growing state debt and falling prices for Russia's major exports, ITAR-TASS reported. Kirienko added that "we cannot allow ourselves the luxury of being a popular government," pointing out that the full impact of the country's economic difficulties is still ahead. Finance Minister Mikhail Zadornov and Central Bank chairman Sergei Dubinin also spoke to the deputies, noting respectively that Russia now has few opportunities to borrow abroad and that the Duma needs to adopt the anti-crisis measures the government has proposed. Many Duma members were sharply critical, while the Communists said they now have enough signatures to force a no- confidence vote and again called on Yeltsin to resign. PG

POLITICIANS DIVIDED ON GOVERNMENT'S FATE

In advance of the 21 August Duma session, politicians across the political spectrum staked out positions revealing just how divided they remain and how unlikely they are to unite on most questions, Russian agencies reported. Communist leader Zyuganov said his party will demand Yeltsin's immediate resignation or ouster. Liberal Democratic Party leader Zhirinovsky said some people in the government should be replaced but not the entire cabinet, a view shared by many other leaders. Duma speaker Gennadii Seleznev and Federation Council chairman Yegor Stroev both argued that the resignation of the government will not solve anything. Former Prime Minister Viktor Chernomyrdin was in partial agreement with the left opposition on the economic situation but disagreed on the question of whether Yeltsin should go. Chernomyrdin urged that all politicians consult in order to prevent the escalation of the economic crisis into a political one. Meanwhile, Yabloko leader Grigorii Yavlinskii said that Central Bank chairman Dubinin is doing a good job and should stay but that the government may have to leave in the fall. And former Soviet President Mikhail Gorbachev repeated his call for early presidential and parliamentary elections. PG

CENTRAL BANK GUARANTEES RUSSIAN DEPOSITS

In a move designed to restore confidence in the country's beleaguered banking system, the Russian Central Bank on 20 August promised to guarantee deposits in Russian banks, ITAR-TASS reported. The guarantees would be given through arrangements with Sberbank, according to statement released by the Central Bank. But Central Bank Deputy Chairman Sergei Aleksashenko told Interfax that a number of banks, including some of the 20 largest, may soon go bankrupt. And he acknowledged that Central Bank reserves fell $2 billion in the last week alone and that there has been some $4 billion in capital flight from Russia between May and mid-August. PG

MOSCOW SEEKS TO REASSURE FOREIGN INVESTORS

Prime Minister Kirienko, presidential envoy to international financial institutions Anatolii Chubais, Deputy Prime Minister Boris Fedorov, and Central Bank chairman Dubinin met with 50 major foreign investors on 20 August to reassure them that the government will not discriminate against them and will pursue a "transparent" approach to any policy changes, ITAR-TASS reported. But some investors may not have been entirely reassured. Dubinin said earlier in the day that even more of Russian bank commitments to foreign investors should be restructured, Interfax reported. Also on 20 August, Dubin sent a letter to the central banks of the G-7 countries and Switzerland asking them to show "moral support" for Russian banks during this "difficult period" and saying that all problems could be solved during negotiations beginning on 24 August, ITAR-TASS reported. PG

RUBLE STABILIZES, EQUITY MARKETS CONTINUE TO FALL

The ruble declined by half a kopeck on 20 August closing at 6.995 to $1, ITAR-TASS reported. Exchanges on the street reported rates of 7.5 to 9.0 rubles to the dollar, with markedly less fluctuation and demand than earlier this week. But stock markets continued to fall from 4 to 6 percent on the lightest day of trading so far this year. There was little demand, and traders said the market is likely to continue to fall until the government resolves the treasury bond rescheduling. PG

LIVSHITS SAYS MOSCOW NOW CANNOT BORROW ABROAD

Aleksandr Livshits, President Boris Yeltsin's former economic adviser, who resigned on 17 August, told AP on 20 August that Moscow will be unable to borrow much on world financial markets for at least the next two years because of its radical and unexpected change in economic policy. Livshits said that he told people that "we'd do everything possible to keep the ruble stable, not to let it drop. I'd said if it drops, I go." PG

EU CONSIDERS GIVING RUSSIA MORE HELP

European Commission President Jacques Santer has asked the EU to propose ways in which the EU might be able to help Russia overcome its financial crisis, ITAR-TASS reported on 20 August. But EU Finance Commissioner Yves Thibault said Moscow must work to restore the trust of its Western partners and that East European countries seeking to join the EU should be "vigilant" in dealing with any impact the Russian crisis may have on them. PG

ECONOMIC CRISIS HITS KALININGRAD, OTHER REGIONS

The introduction of the broader ruble corridor has made it impossible to implement a program to provide housing certificates to Russian military personnel, an official overseeing the program told ITAR-TASS on 21 August. Leningrad Oblast deputy governor Sergei Susekov told the Russian agency the same day that price increases of 23-30 percent are likely by the end of the year. He added that local police officials are busy tracking down cases of unlawful price hikes and inflated exchange rates. But in most regions, people are more concerned about the instability that the decline in the ruble signals rather than about the decline itself, Russian agencies reported. PG

YELTSIN MARKS PRAGUE SPRING, 1991 COUP

President Yeltsin on 20 August said that the 1968 Prague spring, crushed by Soviet tanks, was an attempt to "escape from ideological dogmatism and lies," AP reported. And he also suggested that Russians should remember the August 1991 coup when in "protecting democracy," they proved that there is "no power that can stop the drive of the people toward democracy. " Yeltsin's comments came in a message to a gathering of poets, activists, and former dissidents who were marking the 30th anniversary of the Czechoslovak reform move (see also Part II). PG

1991 COUP LEADER SEES NO POSSIBILITY OF REPETITION

Former Soviet Prime Minister Valentin Pavlov told Interfax on 20 August that there is no possibility of a coup like the one he helped launch seven years ago. "Those who have offices similar to those of the 1991 coup leaders will not take the risk," Pavlov said. He claimed that he and his colleagues would have prevented the economic and political collapse of the country, noting that "today everyone can see where an accelerated, Bolshevik-like approach to building a capitalist society has led us." PG

GORBACHEV WOULD TESTIFY AGAINST YELTSIN

Reversing his earlier statements that he would not appear before a Duma commission considering the impeachment of Boris Yeltsin, former Soviet leader Gorbachev told Ekho Moskvy on 20 August that he would appear before such a commission. Gorbachev said that Yeltsin's approach had made it impossible for the Soviet Union to continue. PG

HEALTH MINISTRY TO KEEP MEDICINE PRICES LOW

Health Minister Oleg Rutkovskii told ITAR-TASS on 20 April that the ministry is to introduce a system of price controls on pharmaceutical products. While he acknowledged that the prices of some imported medicines will inevitably increase, Rutkovskii suggested that there is no need for Russians to stock up now in anticipation of shortages. PG

CYPRIOT DIPLOMAT DENIES S-300s ALREADY DEPLOYED

The controversial Russian S-300 air defense missiles that originally were to have been delivered to Cyprus in July or August have not yet been sent to the island, the Cypriot charge d'affaires in Moscow told Interfax on 20 August. He added that the new delivery date was agreed to during a meeting in July between Russian President Yeltsin and his Greek Cypriot counterpart, Glafcos Clerides. Clerides told journalists after the meeting that the schedule for deployment remains unchanged (see "RFE/RL Newsline," 14 July 1998). But Cypriot spokesmen subsequently said the missiles will be deployed in November. LF

DAGESTAN'S MUFTI KILLED BY CAR BOMB

Saidmukhamed Abubakarov and two other passengers were killed when the car in which they were traveling was destroyed by a car bomb in Makhachkala on 21 August, ITAR-TASS reported. Abubakarov was known for his hard- line stance on Wahhabism. LF

DAGESTAN SAYS WAHHABIS COULD SPARK CIVIL WAR...

Speaking at an emergency session of Dagestan's State Council on 19 August, chairman Magomedali Magomedov said the decision by three villages to declare an "independent Islamic territory" (see "RFE/RL Newsline," 18 August 1998) "will lead to civil war," "Vremya-MN" reported on 19 August. Dagestani Security Council acting Secretary Magomed-Salikh Gusaev said the residents of the three villages, most of whom are Wahhabis, are propagating the concept of an independent Islamic republic comprising Chechnya, Dagestan, Ingushetia, Kabardino- Balkaria, and Karachaevo-Cherkessia. The council ordered the Dagestani police to take resolute action to restore control over the villages. The villagers themselves told journalists from "Nezavisimaya gazeta" earlier this month that they armed themselves only in response to systematic oppression by the republic's authorities. LF

...BUT MOSCOW DOWNPLAYS DANGER

Russian Nationalities Minister Yevgenii Sapiro stressed on 20 August that only three villages are involved, and that the use of force to resolve a "local problem" could cause the protest to escalate "on the Chechen scale." Chechen field commander Shamil Basaev warned that he will deploy his troops to protect the villagers if the Dagestani authorities resort to violence against them, Interfax reported on 20 August. In response, Gusaev stated that Dagestan will treat any Chechen move to support the Wahhabis as an act of war, RFE/RL's North Caucasus correspondent reported on 21 August. LF

CHECHEN RAID FAILS TO LOCATE, FREE VLASOV

Acting on information received, members of the Chechen anti- abduction squad raided a town in the southern raion of Shatoi on 19 August but failed to locate and free kidnapped Russian presidential envoy Vladimir Vlasov, whom they believed was being held there, ITAR-TASS reported. Anti- abduction squad commander Shadid Bargishev told journalists in the Chechen capital on 20 August that one Russian hostage was released during the Shatoi operation. Bargishev estimated the number of hostages still being held in Chechnya at 17, including two British and two Turkish citizens. Independent observers believe the number is closer to 50. LF

INGUSH LEADERSHIP'S ECONOMIC POLICY UNDER FIRE

Employees of Ingushetia's oil and gas complex have written to the republic's government requesting that it reconsider a deal concluded in May with the U.S. oil company Pacific Petroleum, "Nezavisimaya gazeta" reported on 21 August. The deal allows the U.S. company to exploit the republic's most promising deposits and retain over 80 percent of the anticipated profits, leaving the local oil workers to develop deposits that are virtually exhausted. In a letter to President Ruslan Aushev, Ingushetian oil and gas industry head Belan Khamchiev outlined alternative proposals for the sector to expand annual production from 1998-2001 to 300,000 metric tons. Khamchiev was subsequently fired. On 12 August, "Nezavisimaya gazeta" criticized Aushev's policy of investing the proceeds from Ingushetia's status as an offshore zone in grandiose projects that proved economically unviable. LF




PLANS FOR TURKMEN-PAKISTAN PIPELINE SUSPENDED

Following the U.S. strikes on terrorist-related positions in Afghanistan and Sudan on 20 August, the U.S. company UNOCAL Corp. has suspended its participation in a planned Turkmen-Pakistan natural gas pipeline via Afghanistan, the "Los Angeles Times" reported. A spokesman for the company is quoted as saying that "In light of the U.S. government's actions...., we feel it appropriate to suspend all activities on the proposed pipeline. We will not move forward." For several years, UNOCAL and Saudi Arabia's Delta Corp. have been discussing the pipeline with the Turkmen and Pakistani governments as well as representatives of Afghanistan's Taliban movement. Turkmen President Saparmurat Niyazov said earlier this month that construction of the pipeline will begin before the end of 1998. BP

YERKRAPAH OFFERS MINOR CONCESSION ON ELECTION LAW

Smbat Ayvazian, chairman of the majority Yerkrapah parliamentary group, told RFE/RL's Yerevan bureau on 20 August that the group still advocates allocating the majority of seats in the next parliament in single-member constituencies but is prepared to increase from 30 percent to 40 percent the number allocated on the basis of party lists. Other political parties, however, are likely to reject that proposal and to continue insisting that the majority of seats be allocated in accordance with the party-list system. Ayvazian said the group will submit its own draft election law to the relevant parliamentary committees within the next few days. It rejects all three existing variants, which give precedence to the party list system. LF

GEORGIA, ABKHAZIA TO CREATE WORKING GROUP ON BORDER ISSUES

Meeting in Sukhumi on 20 August, Abkhaz President Vladislav Ardzinba and Georgian Border Guard commander Major-General Valerii Chkheidze agreed to create a working group to discuss the defense of Georgia's frontiers, Caucasus Press reported on 21 August. Arzdinba rejected Chkheidze's proposal that Abkhaz and Georgian forces jointly control the Abkhaz sector of Georgia's frontiers, according to an RFE/RL correspondent in Tbilisi. Meanwhile, Abkhaz units continue to erect concrete and barbed wire fortifications along the Inguri River (see "RFE/RL Newsline," 19 August 1998), according to Caucasus Press. LF

AZERBAIJANI POLICE RELEASE DETAINED OPPOSITIONIST

Democratic Party leader Sardar Djalaloglu was released from custody on 20 August, 24 hours after being detained on suspicion of calling for crimes against the state, Turan reported. On 18 August, Azerbaijani television had aired footage of a Baku resident who claimed Djalaloglu had offered him money to telephone bomb warnings to various locations in Baku on the eve of the 15 August opposition demonstration. An investigation is continuing. Also on 19 August, Musavat Party chairman Isa Gambar called for the postponement of the presidential elections scheduled for 11 October and the adoption of a new and democratic election law that would prevent the present authorities from monopolizing the election campaign, AP reported. LF




UKRAINIAN NATIONAL BANK TO KEEP TIGHT REIN ON HRYVNYA

The Ukrainian National Bank has decided to keep the hryvnya within the exchange rate corridor of 1.8- 2.25 to $1, which was set by the government in January 1998 for the entire year. "We have decided to take several measures to improve the trade balance so as to preserve the corridor," a bank official told Ukrainian News on 20 August. Meanwhile, Ukrainian Television reported the same day that the Ministry of Economy has prepared a package of measures to soften the impact of the Russian ruble's decline on the Ukrainian economy. Deputy Economy Minister Leonid Minin told journalists that "there are no reasons for panic in Ukraine." JM

BELARUSIAN MAIN BANKER SAYS BELARUS NOT HIT BY RUSSIAN CRISIS

Belarusian National Bank Chairman Pyotr Prakapovich said on national television on 19 August that Russia's financial crisis has not "directly" affected Belarus's banking system. Prakapovich added that in anticipation of a crisis in Russia, his bank recommended Belarusian commercial banks to sharply reduce transactions with Russian securities. But he voiced concern about Belarusian exports to Russia if the Russian crisis provokes an economic decline. Prakapovich stressed that the National Bank intends to fulfill its pledge several months ago to introduce a single exchange rate of the Belarusian ruble in non-cash transactions by year's end. JM

UN CALLS ON BELARUS TO OBSERVE HUMAN RIGHTS

A subcommission for discrimination and minorities of the UN Commission for Human Rights has called on Belarus to observe human rights, Belapan reported on 20 August. A resolution adopted by the subcommission at the current 50th UN Session in Geneva appeals to the Belarusian government to ensure the freedom of criticism, the protection of journalists and human rights defenders, and the establishment of an independent judiciary. Minsk's official position was expressed by Ambassador Stanislau Ahurtsou, who said the resolution "will essentially complicate the work of the OSCE consultation and monitoring group [in Belarus], right up to its leaving the country, and bring the entire negotiation process to the brink of disruption." JM

BELARUSIAN PARTY CALLS FOR 'ORTHODOX, SLAVIC MORALITY'

The Belarusian Patriotic Party has appealed to Belarusian citizens to reject the Western model of life and "to form their life and free time on the basis of Orthodox and Slavic morality," Belapan reported on 20 August. The party believes that the spread of "the Western model of life, television advertising, independent free press, and computer toys" will bring about national "degradation and debilitation.... The mass admiration of Western culture leads to [psychological] disorders and to an erroneous and destructive orientation in society," the appeal reads. The party is also concerned by the future of the young generation which, according to the appeal, is gradually transforming into "music lovers, television addicts, hackers, and sectarians." JM

RUSSIA AGAIN URGES LATVIA TO CEASE DISCRIMINATION

Moscow on 21 August renewed its call for Latvia to cease discriminating against its Russian- speaking minority, according to ITAR-TASS. Sergei Prikhodko, Russian presidential adviser on international affairs, told visiting chairman of the moderate Latvian Party of Popular Accord Janis Jurkans that "only the elimination of Latvian legislative provisions that discriminate against the non-indigenous population and the compliance of legislative norms with international recommendations can normalize bilateral relations and bring economic cooperation to the level that meets the potential of neighboring countries." He added that Moscow welcomes the efforts of those political forces in Latvia that favor the development of relations with Russia. Earlier this week, the Fatherland and Freedom party claimed it had collected enough signatures for a referendum on the citizenship law amendments (see "RFE/RL Newsline," 19 August 1998). The official results of the signature collecting campaign are due to be announced on 24 August. JC

LITHUANIAN PRESIDENT 'CONFUSED' BY SPEAKER'S STATEMENT ON TALIBAN

Valdas Adamkus has expressed "confusion" over parliamentary speaker Vytautas Landsbergis's statement that if the situation in Afghanistan stabilizes, Lithuania may "have concrete deeds that will promote relations" with the Taliban, according to ITAR- TASS on 20 August. Adamkus told the Russian news agency that the speaker's statement "is the opinion of a private individual who does not represent the foreign policy of Lithuania." Under the Lithuanian Constitution, the president and the government are responsible for such policy. JC

GERMANY'S KANTHER PLEDGES AID TO REINFORCE POLISH BORDER

German Interior Minister Manfred Kanther announced during his visit to Warsaw on 20 August that Germany will continue financing the modernization of Polish border posts, PAP reported. He added that German border guards will assist in training their Polish counterparts. Kanther visited the Polish-Ukrainian border crossing at Medyka to see how Poland is implementing an EU program for sealing its eastern border. According to the Polish agency, Kanther praised the Polish border guards, noting that "we have to be sure that the future border of the EU will be secure." Since 1993, Germany has provided Poland with some $67 million to reinforce border posts on Poland's eastern frontier. JM

POLISH ZLOTY FALLS IN WAKE OF RUSSIAN RUBLE DECLINE

The Polish National Bank exchange rate of the zloty fell to 3.67 to $1 on 20 August, down by 7.5 percent since early August, "Gazeta Wyborcza" reported. According to a bank expert quoted by the daily, the decrease in the value of the zloty is due to the retreat of Western investors from East European markets following the de facto ruble devaluation in Russia. The expert says Western investors are selling Polish securities and buying dollars in order to compensate for their losses in Russia. The Polish National Bank has not taken any measures to prop up its currency. JM

HAVEL ON 1968 SOVIET INVASION

President Vaclav Havel, in a Czech Radio address on 20 August marking the 30th anniversary of the 1968 Soviet-led invasion of Czechoslovakia by Warsaw Pact countries, said the invasion had revealed Communism's "totalitarian character." He said that for him, the short period of the so-called Prague Spring meant "a time when one could breathe and speak again after 20 years" and that "nobody who lived in that era can forget it." RFE/RL organized at its headquarters in Prague a symposium attended by several key participants in the 1967-1968 reforms, including former officials and dissidents (see related Russian items in Part 1). MS

NEW SLOVAK CHIEF OF STAFF PROMOTED TO GENERAL

Parliamentary chairman Ivan Gasparovic on 20 August promoted the newly appointed chief of staff, Marian Miklus, to the rank of general. Rejecting criticism that the appointment was illegal because the recommendation of the Defense Ministry was ignored, Gasparovic told an RFE/RL correspondent that "there is no point in discussing legal questions now." RFE/RL's Bratislava bureau said the speedy replacement of outgoing chief of staff Jozef Tuchyna with Miklus indicates the strong interest of Vladimir Meciar's government in having the army under its control. MS

SLOVAK JOURNALIST DETAINED, BEATEN BY POLICE

The New-York based Committee to Protect Journalists on 19 August protested in a letter to Slovak Prime Minister Vladimir Meciar against the detention and the beating of a Slovak journalist. Vladimir Bacisin, an investigative reporter for the private business daily "Narodna Obroda," was stopped on 7 August by Bratislava police for crossing a street on a red light. The committee says Bacisin was then beaten and jailed. It suspects the beating was in retaliation for his reports revealing illegal practices by firms with links to the ruling coalition. Bacisin was released the next day. MS




CHIRAC SAYS INTERVENTION IN KOSOVA MAY BE NECESSARY

French President Jacques Chirac told Russian President Boris Yeltsin in a telephone conversation on 20 August that UN-sanctioned military intervention in Kosova "will become difficult to avoid" unless a cease-fire comes into effect and negotiations begin soon. Chirac said that Russia's role in the former Yugoslavia is "crucial." An aide to Chirac told AP that the president will soon telephone German Chancellor Helmut Kohl to discuss Kosova. Chirac and U.S. President Bill Clinton had a conversation on that topic on 8 August. Also in Paris on 20 August, Foreign Minister Hubert Vedrine blamed "extremists" among Serbs and Kosovars alike for the absence of any progress toward a negotiated settlement. PM

RUGOVA SEEKS 'NO FLY ZONE'

Kosovar shadow-state leader Ibrahim Rugova said in Prishtina on 21 August that the international community should declare a "ban on military flights over Kosova. That is one of the ways to stop Serbian war machinery." Serbian forces have frequently used aircraft and helicopter gunships in the crackdown. Rugova also asked the international community to supply protection for Kosovar refugees who want to go home. He added that the Serbian paramilitary police are preventing civilians from doing so. PM

SERBIA WARNS AGAINST 'LIES'

Ivica Dacic, who is a spokesman for Yugoslav President Slobodan Milosevic's Socialist Party of Serbia, said in Belgrade on 20 August that warnings of an impending humanitarian catastrophe in Kosova are "sensationalist lies" (see "RFE/RL Newsline," 20 August 1998). He stressed that the real problem in Kosova is "separatism and terrorism." Elsewhere, Serbian Deputy Prime Minister Vojislav Seselj said that, after a negotiated settlement is reached in Kosova, the authorities will take a new census, "correct" the voting lists in line with the results of the census, and hold new elections, an RFE/RL's South Slavic Service reported. PM

MEIDANI SAYS KOSOVARS CANNOT LIVE UNDER SERBS...

Albanian President Rexhep Meidani told dpa on 20 August in Tirana that he believes the Kosova problem can be solved in two stages, the first of which would be autonomy. But, he added, "for me the final solution is quite clear; there is only one...the Albanians can no longer live under the Serbian regime." Meidani said the Kosovars are "fighting for their freedom, for a normal life for their children, for a life in which they will not be suppressed," adding that "history teaches us that when there is a struggle for life, freedom, and normal education, it will end only after it achieves its goals." Meidani nonetheless said he is opposed to the creation of a "greater Albania," which implies that he favors independence for Kosova. FS

...CALLS FOR INTERNATIONAL INVOLVEMENT

Meidani also told dpa in Tirana on 20 August that the international community should become more involved politically and militarily in Kosova. "An international presence in Kosova is needed to stop the fighting and open the way to negotiations...If the bloodshed continues...the negotiations [will] produce [no] results." Meidani argued that international emphasis on talks is a "miscalculation, which has actually given a free hand to the Serbs" to carry out their crackdown. Meidani denied allegations that Tirana gives material and training support to the Kosova Liberation Army (UCK). He added that "these fighters have been helped only by individuals, not by the Albanian state.... Until now [the state's] support has been only moral, but this support could change, it could become stronger, if there is no end in fighting." He doubted Serbia would attack Albania, because in the past "they have attacked Albania two or three times and have been defeated." FS

MOSCOW DIVIDED ON NATO EXERCISES IN ALBANIA

Foreign ministry spokesman Valerii Nesterushkin told ITAR-TASS on 20 August that the NATO exercises in Albania, in which Russian troops are also taking part, do not pose "any threat to the Federal Republic of Yugoslavia." Nesterushkin said the exercises are a "timely measure" to prevent the escalation of the conflict in Kosovo." But the Defense Ministry's newspaper "Krasnaya zvezda" the same day portrayed the exercises as precisely that. "The West is not even trying to conceal its aggressive plans against Yugoslavia," the newspaper said. Instead, it is trying to find some legal basis for a "NATO invasion of Yugoslavia." Consequently, "Krasnaya zvezda" continued, the Russian soldiers taking part in the exercises should be seen as "monitors" of NATO's intentions. PG

OSCE WANTS NATO TO HELP KOSOVAR REFUGEES

OSCE Ambassador to Albania Daan Everts told Reuters in Tirana on 19 August that NATO units should be deployed in Albania to help house Kosovar refugees. He said NATO troops could assist the office of the United Nations High Commissioner for Refugees to renovate buildings, following the example of French troops who have been renovating a dilapidated school in Kruja during maneuvers this week. Everts warned that northern Albania could face a humanitarian crisis if there were another major influx of refugees in addition to the 14,000 who have registered with the Albanian authorities since the beginning of 1998. Tham Meechubot, who heads the UNHCR's Tirana office, said that his organization is making contingency plans for the arrival of up to 50,000 refugees. FS

U.S. TIGHTENS SECURITY IN ALBANIA

U.S. officials on 21 August canceled a planned visit by journalists to the "USS La Salle," a warship that is taking part in NATO's "Cooperative Assembly 1998" exercises. The ship left the port of Durres but is still in Albanian waters. AP reported from Tirana that the moves are security precautions in the wake of U.S. attacks on presumed terrorist centers in Afghanistan and Sudan the previous day. PM

SPECIAL BOSNIAN SECURITY UNIT NOW READY

Italian Colonel Vicenzo Coppola, who heads the Multinational Specialized Unit in Bosnia, said in Sarajevo on 20 August that his 350-strong force is ready to begin its work in maintaining public order and controlling crowds. The unit is based in the capital but maintains "outposts" in other places. Most of the highly-trained police officers are Italian Carabinieri. Some 70 Argentineans and Romanians will arrive soon to join the unit, which is under orders to use as little force as possible when dealing with civilians. Coppola added that his group's mandate does not include arresting suspected war criminals. PM

REPUBLIKA SRPSKA GOVERNMENT MOVES SRNA

The government decided on 20 August to move the headquarters of the official news agency, SRNA, from Pale to Banja Luka. The new director will be Dragan Davidovic, who is a former government minister for religious affairs. On 12 August, the government temporarily closed down SRNA, which until then was a mouthpiece for the Pale- based hard-line faction loyal to Radovan Karadzic (see "RFE/RL Newsline," 13 August 1998). Meanwhile in Zagreb, the international community's Carlos Westendorp and his deputy, Jacques Klein, told President Franjo Tudjman on 19 August that they expect Croatian Television not to favor any one political party in its coverage of the upcoming Bosnian elections, RFE/RL's South Slavic Service reported. Croatian Television can be received in much of Bosnia. PM

TENSION MOUNTS AGAIN IN ROMANIAN COALITION

Democratic Party leader Petre Roman, in a letter to President Emil Constantinescu, has complained about reports leaked to the media that police, prosecutors, and the Romanian Intelligence Service (SRI) are investigating alleged illegal dealings by and links to foreign espionage of cabinet ministers that represent his party. The letter was leaked to the press. On 20 August, Democratic Party deputy chairman Bogdan Niculescu-Duvaz said three members of his party's staff have been dismissed for "unprofessionalism" in making public the contents of a letter that was "confidential." The same day, Constantinescu met with Roman but they discussed only accelerating economic reform and privatization. In a separate press release, Constantinescu said the allegations against the Democrats will be discussed with representatives of the police, the SRI, and the Foreign Intelligence Service at a special Supreme Defense Council meeting. MS...

ROMANIAN INTERIOR MINISTER DENIES POLICE SURVEILLANCE OF POLITICIANS

Interior Minister Gavril Dejeu on 20 August denied accusations made earlier this week by Democratic Party deputy chairman Traian Basescu that he has been placed under police surveillance at Dejeu's orders, RFE/RL's Bucharest bureau reported. Dejeu said that neither himself nor any other Interior Ministry official has issued orders "for any cabinet member to be put under surveillance for his political activity." Also on 20 August, government spokesman Gabriel Peiu said the restructuring of the government has been "postponed" until after the approval by the cabinet of the 1999 budget. Peiu also said that the National Liberal Party has been warned that Finance Minister Daniel Daianu is infringing government regulations by continuing to publicly oppose the deal with Bell Helicopters Textron after that agreement was approved by the cabinet. MS

MOLDOVA NOT AFFECTED BY RUBLE DEVALUATION

The impact of the ruble devaluation on Moldova's economy will be "insignificant," National Bank deputy governor Veronica Bacalu told the independent news agency Flux on 19 August. She said Moldova has "enough foreign currency reserves" to deal with the impact but added that Moldovan exporters that have ruble-dominated contracts with Russian partners are likely to suffer. In an interview with Infotag the same day, Deputy Premier Ion Sturdza said the immediate impact was not strong but that Moldova must "restructure" its trade. He said that some 60 percent of Moldovan exports are currently to Russia. Sturdza added that the ruble crisis broke out "at the peak of the agricultural export season" and that Moldovan exporters must now be particularly careful to negotiate contracts in U.S. currency only. MS

TRANSDNIESTER PRISONER THANKS RFE/RL

Ilie Ilascu, who has been condemned to death in the Transdniester and has been in prison for more than six years, has written to RFE/RL thanking the Romanian Service for having begun broadcasts of a special program for Moldova a few months ago. Ilascu says he is able to listen to the program and that he and the other members of the Moldovan group condemned for alleged terrorist activities are encouraged in their struggle by the RFE/RL coverage. MS

IMF LOAN TO BULGARIA STILL UNCERTAIN

Reuters reported on 20 August that the IMF board, which is to consider an agreement reached in July for a three-year $800 million loan, is still demanding that some 15 so-called "prior actions" be taken before the loan is approved. Those "actions" would lay the ground for further reforms. MS




MOSCOW MAYOR'S MEDIA EMPIRE CONTINUES TO GROW


by Laura Belin

Of all the Russian politicians who deny harboring presidential ambitions, none has worked harder to gain favorable media exposure than Yurii Luzhkov. The Moscow mayor has long enjoyed the support of some newspapers, such as the popular daily "Moskovskii komsomolets." But during the last year and a half, several new outlets for Luzhkov have appeared, with substantial financing from the Moscow city government. They include the television network TV-Center, which began broadcasting in June 1997, the weekly newspaper "Metro," created in the fall of that year and distributed free of charge, and the newspaper "Rossiya," founded in March 1998.

"Literaturnaya gazeta," one of the oldest Russian- language weeklies, has also drifted into Luzhkov's orbit and now belongs to a new holding company called Metropolis. That company has no formal ties to the Moscow government but is controlled by the Sistema corporation, which is close to Luzhkov's administration. Metropolis manages various pro-Luzhkov publications.

In addition, "Kommersant-Daily" reported on 12 August that Sistema is to purchase a major advertising firm, Maxima, which will service outlets in the Metropolis holding. Controlling advertising flows is important not only as a source of potential revenue for pro-Luzhkov media. During the 1996 presidential campaign, some newspapers that supported Boris Yeltsin's re-election effort reportedly refused to print advertising in support of Yabloko leader Grigorii Yavlinskii. At that time, Yavlinskii was Yeltsin's only serious competitor for votes from the "democratic" wing of the Russian electorate.

That Metropolis was formed with more than business in mind has been acknowledged by the holding company's top executive, Lev Gushchin. Speaking to "Kommersant- Daily," Gushchin argued that only Vladimir Gusinskii's Media-Most rivals Metropolis for potential influence. In the same interview, he discounted other apparent competitors, saying that the holding company for newspapers financed by Oneksimbank is ignoring the matter of "influence on public opinion." Gushchin's remark reflects the belief--widespread among Russian journalists--that the media's role is to help shape events rather than merely to report the news.

As Metropolis "grows like a mushroom after rainfall," in the words of Maxima president Vladimir Yevstafev, Luzhkov is poised to gain control over another powerful media-related property. "Kommersant-Daily" reported on 6 August that the State Property Ministry has approved plans to transfer the Moskovskaya pravda printing press to the Moscow city government. The newspaper said Moskovskaya pravda prints 40 magazines and 128 newspapers, including "Moskovskii komsomolets," the muck-raking weekly "Novaya gazeta," and the daily "Segodnya" (part of Gusinskii's Media-Most empire).

Luzhkov has sought for six years to persuade the federal government to transfer Moskovskaya pravda to the city authorities. But "Kommersant-Daily" said Anatolii Chubais repeatedly thwarted the mayor's efforts. For most of the last six years, Chubais held senior government posts, and he headed the presidential administration for eight months following Yeltsin's re-election. Luzhkov and Chubais have long-standing policy differences, and the privatization programs implemented by Chubais are among the mayor's favorite targets.

Chubais's dismissal from the government in late March removed the main obstacle to Luzhkov's designs on the printing press, according to an unidentified State Property Ministry official quoted by "Kommersant-Daily." The same official noted that the federal government lacks the financial resources to maintain Moskovskaya pravda, let alone provide the capital investment needed to make the press competitive with foreign companies that currently print numerous Russian magazines. Officials now reason that "Moscow clearly has more money. Let Luzhkov invest [in Moskovskaya pravda]."

The Moscow city government already has substantial financial leverage over media based in the capital. The prospect of, say, a hike in rent or utility rates has led many media outlets to handle Luzhkov with care in their reporting. Ownership of the Moskovskaya pravda press could become another instrument with which to deter publications from criticizing Luzhkov or supporting the mayor's rivals. This applies not only to the presidential election scheduled for 2000 but also to the 1999 parliamentary elections. A pro-Luzhkov alliance called Unity will seek to gain a substantial share of the seats in the State Duma in those elections.

Despite the rapid growth of Luzhkov's media empire, the mayor has no chance of creating a monopoly. He will continue to receive unfavorable exposure in some print and electronic media, in particular those influenced by CIS Executive Secretary Boris Berezovskii. Luzhkov has complained, and former executives at Russian Public Television have acknowledged, that the network's news programs depict the mayor in an unflattering light. Gushchin, the head of the Metropolis holding, was a longtime editor of the weekly magazine "Ogonek," which forms part of Berezovskii's media empire. Speaking to "Komsomolskaya pravda" in February, he charged that Berezovskii exerts pressure on the media he funds to attack "enemies" such as Luzhkov.

But one newspaper's enemy is another's hero in Russia today. The expansion of Luzhkov's sphere of influence in the media is a reminder that coverage of the next presidential election will be vastly different from the near-unanimity that characterized Russian journalism during the 1996 contest between Yeltsin and Communist Party leader Gennadii Zyuganov. The author is a specialist in Russian politics and media.