July 31, 1997  
This Date's Issues: 1103 •1104 •1105  1106

Johnson's Russia List
#1103
31 July 1997
djohnson@cdi.org

[Note from David Johnson:
JRL will be on vacation next week.
1. Interfax: Lebed Views Nemtsov Electability, Housing 
Reforms.
2. Zavtra: 'Den Security Service' on Army Reform, Caucasus 
Plan.
3. Reuter: Gareth Jones, Remote Russian region pins hopes
on tourism, mines.
4. The Times (UK): Obituary for PROFESSOR PETER WILES.
(DJ: Wiles was at Brandeis when I was there).
5. Komsomolskaya Pravda: Security Checks at Yeltsin Vacation 
Site.
6. Voice of America report on CENTRAL ASIA AND THE CASPIAN.
(Interviews with Robert Ebel and Fred Starr).
7. Informatsionnoye Agentstvo Ekho Moskvy: Criminal Proceedings 
Issued Over Russia-India MiG Contract.
8. ITAR-TASS: Russian 'Source' on Background to Svyazinvest 
Deal.
9. Paul Goble (RFE/RL): Looking Beyond The Kuriles.
10. Moskovskiy Komsomolets: Ukraine's New Language Law To 
'Suqeeze' Russians.
11. Rossiyskiye Vesti: Upsurge' in Yeltsin's Activity Viewed.
12. Rossiyskaya Gazeta: Big Players Increasing Role in Economy.
13. RIA Novosti: STATE DUMA HAS ENOUGH VOTES TO OVERCOME 
PRESIDENTIAL VETO ON FREEDOM OF CONSCIENCE LAW -- GENNADI SELEZNEV.]

*********

#1
Lebed Views Nemtsov Electability, Housing Reforms 

MOSCOW, July 29 (Interfax) -- Russia's ex-security chief Aleksandr
Lebed does not think that First Deputy Prime Minister Boris Nemtsov has any
chance of being elected president in the 2000 presidential elections.
He told Interfax on Tuesday that "Nemtsov has made too many mistakes
and cannot be viewed as a serious candidate to the presidential post."
He also said that among Nemtsov's most serious mistakes was his
housing utilities reform, as a result of which "the poor will lose 18% of
their incomes and the rich 3%-6%."
In the first place the Russian citizens' living standards must be
enhanced and then a reform intended for 15 years must be implemented,"
Lebed said.
"Presently, the housing utilities reform looks like the authorities'
attempt to shift their problems onto the population's shoulders," he said.
Speaking about his possible allies in presidential elections he said
that "talks on the issue are underway."
He also said that Mayor of Moscow Yuriy Luzhkov might be his ally.
He said in comment on the scandal over the sale of Svyazinvest shares
that "it is the authorities' agony."
In his opinion, "the Russian leaders have no will to preserve unity
indispensable for their survival."
"There is only one person in the government who has will - First
Deputy Prime Minister Anatoliy Chubays," he said. "But his will is negative
and people do not trust him," Lebed said.

*******

#2
'Den Security Service' on Army Reform, Caucasus Plan 

Zavtra, No. 29
July 25, 1997
[translatoin for personal use only]
"Agents' reports" from the Den Security Service "Bulletin Board"

Yeltsin's edicts on abolishing the Ground Forces, the air defense
forces, the missile-space defense forces, and the railroad troops while
simultaneously merging military districts, were evaluated in Washington and
the White House as a brilliant victory for the Chubays-Baturin group in the
dismantling of Russia's Armed Forces. They are regarded here as the almost
complete destruction not only of strategic potential, but also of general
army potential. Analytical structures in the White House believe that
these kinds of measures create total confusion and, in conditions of
financial strangulation, will take the Russian army out of a status of even
limited combat capability for at least one year, the time needed in order
to unleash the next series of hot conflicts in the Caucasus with the
intention of "forcing Russia's total exit from the Caucasus region,
followed by its ouster from Central Asia and its isolation from energy
sources." The lowering of the Russian Federation's potential in the
military-political sphere to the level of an average European country
incapable of global influence is considered to be the second result of
these acts. According to available information, the new Defense Minister
Sergeyev, according to instructions drawn up by the U.S. special services
and transmitted by the Chubays group, should soon begin secretly destroying
the missile control systems and "cutting heavy missiles capable of reaching
American territory." At one recent session of the U.S. National Security
Council it was also indicated that it is extremely important, for both
propaganda and political reasons, not to allow opposition to the edicts
from the Russian Federation State Duma or the opposition, because this
could "create a dangerous union between the military and anti-Yeltsin
forces".... [passage omitted]
According to our sources, the publication of data concerning the
personal fortunes of Russian individuals (Berezovskiy -- $3 billion,
Khodorkovskiy -- $2.4 billion, and Vyakhirev -- $1 billion) among the 200
richest people in the world was connected to a personal request made by
Chubays and Potanin to their American partners in order to "discredit the
Chernomyrdin group" ahead of the next round of privatization bargaining in
the fall....
According to information from Washington, the purpose of
Shevardnadze's visit to Washington was related to his proposal for "the
creation of an international zone in the Caucasus," with the subsequent
formation of a Caucasian Confederation which he could head. The first
stage of the project he proposed to Clinton, which was subsequently
discussed in detail with the leadership of the U.S. secret services, is the
internationalization of the conflict with Abkhazia and the replacement of
Russian troops there with UN troops with the participation of Turkey. Then
a similar model would be applied to Karabakh. Similar schemes could also
be applied simultaneously to Ossetia as well as other Caucasian components
of the Russian Federation. The U.S. leadership on the whole reacted
positively to the "plan," but recommended that it be carried out "with
maximum secrecy and caution".... [passage omitted]

***********

#3
Remote Russian region pins hopes on tourism, mines
By Gareth Jones 
July 30, 1997
ULAN UDE, Russia (Reuter) - The name Siberia means ``Sleeping Land'' in one
of the Mongolian languages spoken in this vast region of birch forests and
rolling taiga, and six years after the end of Soviet communism Siberia's
autonomous republic of Buryatia still seems mired in slumber. 
On the central square of its, Ulan Ude, stands the world's biggest bust of
Bolshevik leader Vladimir Lenin and city streets still bear the names of
revolutionary heroes in the old Soviet tradition. 
``These are our history. Changing the names, removing the bust -- that would
achieve nothing. We cannot and should not run away from our past,'' Vladimir
Agalov, first deputy chairman of the Buryat government, said. 
But Buryatia, which nestles between Lake Baikal and the Mongolian border, is
learning that the past can also be a heavy burden. ``Our region was closed to
outsiders until 1988 for security reasons,'' Agalov told Reuters, noting
Buryatia's strategically sensitive location near to Mongolia and China. 
``This put us at a big disadvantage after the fall of the Soviet Union. We
lack the infrastructure and connections needed to revive our economy,'' he
said. 
Buryatia's economy is dominated by smokestack industries closely tied to the
country's sprawling, cash-starved military complex. It is rich in mineral
deposits including gold and tungsten -- but, critically, not oil or gas --
and could be a magnet for tourists. 
``But we will need time, and of course a lot of money, to be able to exploit
these natural resources and to build up tourist infrastructure like hotels,''
Agalov said. 
LAKE BAIKAL NEAR BURYAT CAPITAL 
Lake Baikal, the ``Pearl of Siberia,'' is just two hours drive from Ulan Ude.
The world's deepest lake is roughly the size of Belgium, holds 20 percent of
the world's fresh water and is home to around 2,000 species of plants and
animals. 
Long popular with Russians for camping, trekking and kayaking, it is starting
to attract more foreign tourists but its remoteness, 3,500 miles from Moscow,
probably deters many. Other regional attractions include mineral springs,
abundant wildlife, fast-flowing rivers and snow-capped mountains. 
But many of the foreign tourists that stop off in Ulan Ude are simply taking
a break from the week-long trip on the Trans-Siberian railway, which runs
from Moscow to Beijing or to Russia's Pacific port of Vladivostok. 
``We are still hampered by our low international profile and by Russia's
relatively high prices and low quality services compared to many popular
tourist destinations,'' said Erzhena Mintasova of Buryatia's State Committee
on Tourism. 
With its mixed population including Buddhists, Russian Cossacks, Orthodox
Christian Old Belivers and animistic Shamanists, Buryatia, whose indigenous
people are formerly nomadic ethnic Mongols, ranks as one of Russia's most
fascinating regions for students of religion and ethnography. 
Near Ulan Ude stands the colorful Ivolginsk Datsan (monastery), traditional
center of Buddhism in Russia, with its shrines, stupas and prayer wheels in
the Tibetan style. 
RICH COLLECTION OF BUDDHIST ART 
The capital itself is home to the richest collection of Buddhist art in the
former Soviet Union. Its sculptures, thankas (icon-tapestries) and masks were
assembled from Buryatia's temples and monasteries in the 1930s during Soviet
dictator Josef Stalin's campaign against religion. 
``We are also trying to develop the theme of the old Tea Road, which
parallels the better known Silk Road of Central Asia,'' Mintasova said. The
Tea Road was the camel route once used to transport tea from China across the
Mongolian steppes to Russia and Europe. 
But foreign investment is sorely needed to help exploit such ideas and
officials concede this has been slow in coming. ``The South Koreans are very
interested in the tourist and timber sectors. They are building hotels, but
Russia's ban on foreign ownership of land remains a deterrent (to further
long-term investment),'' Mintasova said. 
Total foreign investment in Buryatia since 1992 stands at just $22.3 million.
Some 100 joint ventures with foreign firms have been formed, mainly in the
timber industry, but only half are currently operating, said Regina
Morozhoyeva, who heads the regional government's foreign investment
department. 
As everywhere in Russia, officials attribute foreigners' reluctance to set up
shop to unpredictable and sometimes contradictory laws and cumbersome taxes.
But Agalov said a bill now before the Buryat parliament would waive all
regional taxes on foreign investment. 
He said the region was particularly eager to use its location in eastern
Siberia, not far from booming Pacific Rim economies like Japan and South
Korea, to lure investors. 
Buryatia likes to boast of its political stability and lack of ethnic
tensions compared to some other ethnically-based autonomous republics,
notably Chechnya where separatist rebels fought Russian troops for 21 bloody
months. 
``People here are very mild-mannered and stoic,'' Alexander Yelayev, who
oversees media issues in the government, said. He said separatist feelings
were weak, not least because about 70 percent of Buryatia's population were
ethnic Russians, though he noted a revival of Buddhism among the Buryat
people. 
``In the final analysis, we are still very dependent on the broader economic
picture in Russia. We rely on the center for as much as 80 percent of our
budgetary needs,'' he said. ``Moscow takes the important decisions affecting
us, just as in the old days.'' 

*********

#4
The Times (UK)
31 July 1997
[for personal use only}
Obituary
PROFESSOR PETER WILES 

Professor Peter Wiles, FBA, economist and Sovietologist, died on July 11 
aged 77. He was born on November 25, 1919. 
PETER WILES was a brilliant, unorthodox and ingenious economist. 
Remarkable arithmetic with figures from obscure sources gave him a true 
sense of economic magnitudes, but his intuitive numerical adjustments 
often shocked more staid economists as they proceeded formally and 
decorously towards the wrong answer. 
Of his own technical skills as an economist, he once said: "Supply and 
demand, inflationary gap; after that I live on my wits." Perhaps he did, 
but his wits were prodigious. 
As a writer and debater he was incapable of being solemn, which meant 
that shockingly often, more conventional colleagues failed to appreciate 
that he was right. The bulk of his work was about communist economies, 
though he also wrote well on subjects from the philosophy of history to 
British inflation. 
Books such as The Political Economy of Communism (1962), Distribution of 
Income East and West (1974) and Economic Institutions Compared (1977) 
are treatises of great erudition, thoroughness and subtlety. Wiles 
thought issues through without regard for conventional wisdom, and he 
cited sources in a daunting number of languages and disciplines. This 
scope of research meant that he often had to wait a long time before 
others recognised that he had been right. During the 1960s, 1970s and 
1980s, for instance, the CIA greatly overestimated the size of the 
Soviet economy. Its figures were generally accepted, even though in an 
abstruse debate during the 1950s Wiles had identified fundamental flaws 
in them. When the flimsiness of the Soviet-bloc economies was eventually 
exposed, his criticisms were vindicated. 
He was also correct in saying that most of his colleagues underestimated 
the degree of material inequality in the communist countries, and 
overestimated the possible effect of economic sanctions. 
Wiles's investigations had more in common with those of the geologist 
than those of the modern mathematical economist. He looked for meaning 
beneath the surface. He would wander the misty, boulder-strewn hillside 
of the East European actualité, tapping rocks and collecting specimens, 
which he loved to set out in his books, labelled with arcane 
abbreviations, driving the reader incessantly to the glossary, if not to 
distraction. Reviewers might scratch their heads, but behind the 
agglomeration of detail, there was usually a powerful insight. 
Peter John de la Fosse Wiles was brought up near Guildford, and in 1932 
went from Lambrook School to Winchester, where he was second on the roll 
of scholars. Although small for his age, he made up for lack of inches 
by his fertility of wit and ferocity of style. In 1937 he was elected 
senior scholar of New College, Oxford, overcoming the Latinist who had 
beaten him just five years before. 
The Second World War broke out at the end of his first year at Oxford, 
and he served five years as an officer in the Royal Artillery, becoming 
a specialist in the interception of enemy wireless traffic. He was in 
charge of the 8th Army's listening unit in the Western Desert, which was 
so effective that Montgomery's chief of intelligence, Bill Williams, 
boasted that the Ultra secret intelligence he received usually only 
confirmed what he already knew. 
Never one to suffer fools gladly, Wiles was dismissed from the 8th Army 
for impertinence shortly after the second Battle of Alamein. He returned 
to Woolwich, on the way solving at a glance a cipher conundrum that had 
baffled colleagues in Algiers. Some use was made of his extraordinary 
gifts at Bletchley Park in the closing months of the war. 
He then returned to Oxford to read Modern Greats. At the suggestion of 
one of his tutors, he applied for and won an All Souls fellowship in 
1947. Advised by the Warden of All Souls not to place temptation in the 
examiners' way, he never took his schools. 
After a year in that most unblemished of ivory towers, he returned to 
New College as a Fellow, and taught economics for 12 years. The 
brain-drain then took him to America, and he spent the first four years 
of the 1960s at Brandeis University. After spells in Stockholm, at 
Columbia and at the City College of New York, he became Professor of 
Russian Social and Economic Studies at the University of London from 
1965 to 1985. He was elected a Fellow of the British Academy in 1990. 
A lifelong Liberal, he spurned economic dogma, and his economic thinking 
was humane to the core. He was passionate about economic efficiency, but 
saw markets as merely means to satisfy human wants. In his last years he 
saw the triumph of the market in Eastern Europe and much of the old 
Soviet Union, but he was angered by the extent to which the poor were 
being sacrificed to the new economic system ­ what he called "capitalist 
triumphalism". 
Unlike some abstract reasoners, Peter Wiles was acute, perceptive and 
rather soft-hearted about people ­ though naturally in an unconventional 
way. He had, for example, a most effective way of breaking the ice when 
introduced to the wives of colleagues. He would open the conversation by 
saying of the more or less innocent husband in question: "He is an 
absolute bastard, isn't he?" 
At the end of the war, Peter Wiles married a childhood friend, Elizabeth 
Coppin. They had a son and two daughters, but the marriage was dissolved 
in 1960, and he married Carolyn Stedman of New York, who looked after 
him during his protracted final illness and survives him, as do his 
children. 

***********

#5
Security Checks at Yeltsin Vacation Site 

Komsomolskaya Pravda
July 22, 1997
[translation for personal use only]
Article by Andrey Polyinskiy: "The "Iron
Curtain" Falls on Volzhskiy Utes: Our Correspondent Raises
It All the Way"

Volzhskiy Utes-Usolye--The distance from Tolyatti
to Usolye, near where the President vacations, is 15 kilometers.
I stopped a group of travelers on the road that turns toward
Volzhskiy Utes. I was in luck--the travelers were residents
of the village who worked at the sanatorium.
"Well, has Yeltsin arrived?"
"Yesterday evening. He dropped out of the sky--in
a helicopter."
"Then why were there GAI [state automotive inspection] posts
at every kilometer on the highway from Tolyatti to Perevoloki—a
total of 40? Do the local police have nothing better to do?"
It turns out that they were on duty for prevention. The helicopter
pad near Usolye was left there from Ustinov, who at one time had
thought of flying here from the airport in a helicopter.
...At the control point at the entrance to this sanatorium,
the guard checked the passports of the driver and the passenger
without paying any attention to my credentials. We entered the territory
of the sanatorium compound. From here we walked on foot.
A second control point. The guard gave us a questioning look
but did not stop us. It was about 500 meters to the main building.
Every minute or so from the left and the right, appearing from somewhere
out of the bushes, the road was crossed by small groups of muscular
men in sports clothing with walkie-talkies in their hands.
The sanatorium director refused to answer any questions, blaming
my lack of accreditation.
"But I just wanted to know under what conditions you keep
Boris Nikolayevich here." Having clarified that Boris Nikolayevich
is not kept here but vacations here, the director still agreed to
take me to the very last "secret" control point, beyond which the
country"s chief vacationer is located.
Beyond the locked iron gates, two pairs of eyes attentively
studied my identification card as a correspondent from Komsomolskaya
Pravda.
"They did not catch you in Karelia?"
(You can read the article on how our correspondents followed
Yeltsin in Shuyskaya Chupa in our next "thick" issue.—ed.)
A stern, fit person came up and introduced himself as a worker
of the President"s Security Service.
"No name?" I asked.
"No name. And you cannot go beyond this point. Have your superiors
call Yastrzhembskiy first, he is in Moscow now..."
I was disappointed and spent about 20 minutes circling through
the paths, constantly coming up against those strange people in
sports clothing.
"They are under every bush here," explains a guy in work clothing,
mixing a solution with a shovel. "I have been working here for many
years and this is the first time I have seen such a thing."
"I suppose the entire sanatorium came out to meet the President?"
"No. Yesterday when his helicopter landed on the pad, 20 vehicles
immediately drove up and took everyone to the state dacha, through
the third control point, without stopping."
"Where is the President now?"
"See those white stone buildings beyond the bushes? Even sanatorium
workers are not allowed in there, the doors there make no noise,
they are operated by photoelectric cells. The decor and the furniture
are in the Eastern style. There is a mud bath, a winter garden,
and an examination room. In addition to the covered swimming pool,
there is access to the bay and the beach..."
"Can I talk to you for a minute!" Two "sportsmen" appeared
out of nowhere. And they immediately reported on their walkie-talkie:
"We have found an interesting object. We will bring him to
the service entrance."
On the walkie-talkie you could hear how this report was being
conveyed along the "chain."
At the service entrance I was awaited by a stranger who introduced
himself as the chief of the Federal Guard Service. He carefully
wrote my passport information down in his notebook and wanted to
know how I got here—by land, water, or air—and
he was quite surprised at how I managed to get through two control
points. Then he delivered a brief lecture about how we live in a
rule-of-law state, the main distinction of which is that entry to
official facilities is strictly forbidden and he advised me to get
accredited in Moscow, and "so as not to get separated from my friends,"
he took me to the first control point.
"How many journalists have already gone through accreditation?"
I wondered later.
"No one! You are the first..."

*********

#6
Voice of America
DATE=7/30/97
TITLE=CENTRAL ASIA AND THE CASPIAN
BYLINE=FRANK RONALDS
DATELINE=WASHINGTON

INTRO: A GREAT DEAL OF INTERNATIONAL ATTENTION IS CENTERED 
RIGHT NOW ON THE CASPIAN SEA AND ADJACENT AREAS IN CENTRAL ASIA 
AND THE SOUTH CAUCASUS. FROM TURKMENISTAN, ON THE SOUTHEAST OF 
THE CASPIAN, A PIPELINE WILL CARRY SOME OF ITS ENORMOUS RESERVES 
OF NATURAL GAS ACROSS IRAN TO TURKEY. IN KAZAKHSTAN, TO THE 
EAST, CHINA HAS MADE ITS LARGEST FOREIGN INVESTMENT EVER, TO 
DEVELOP THE AKTYUBINSK OIL FIELD. AND HEYDAR ALIYEV, THE 
PRESIDENT OF AZERBAIJAN, ON THE WEST COAST OF THE CASPIAN, HAS 
BEEN IN WASHINGTON TALKING, AMONG OTHER THINGS, ABOUT PIPELINES 
THAT WOULD DELIVER OIL FROM ITS IMMENSE OFF-SHORE OIL DEPOSITS TO
BUYERS IN THE WEST. WITH BACKGROUND, HERE IS VOA'S FRANK 
RONALDS.

THE CLINTON ADMINISTRATION HAS SAID THAT IT DOES NOT OPPOSE THE 
CONSTRUCTION OF A PIPELINE ACROSS IRAN, EVEN THOUGH IT CONTINUES 
TO ACCUSE THE REGIME THERE OF EXPORTING TERRORISM. ROBERT EBEL, 
DIECTOR FOR ENERGY AND SECURITY AT THE CENTER FOR STRATEGIC AND 
INTERNATIONAL STUDIES IN WASHINGTON, SAYS THAT THIS COULD BE 
POLITICALLY, AS WELL AS ECONOMICALLY, SIGNIFICANT.
// 1ST EBEL ACT //
ARE WE SENDING A SIGNAL TO IRAN? DOES THIS PROVIDE IRAN
AN OPENING? CAN WE GET INTO A DIALOG WHICH HOPEFULLY 
WOULD LEAD TO BETTER RELATIONS BETWEEN THE TWO 
COUNTRIES? IS IT AN INDICATION THAT WE CONTINUE TO BE 
VERY SUPPORTIVE OF TURKEY? TURKEY VERY MUCH NEEDS 
ADDITIONAL NATURAL GAS SUPPLIES TO MEET THEIR GROWING 
ENERGY REQUIRMENTS. TURKEY IS A VALUED NATO PARTNER. 
OR IS IT AN EFFORT BY THE UNITED STATES TO DO SOMETHING 
FOR TURKMENISTAN? TURKMENISTAN IS SITTING ON WORLD 
CLASS NATURAL GAS RESERVES, BUT IT HAS NO WAY TO GET 
THESE RESERVES TO MARKET. PERHAPS ALL THREE PURPOSES 
ARE BEING SERVED.
// END OPT //
MR. EBEL POINTS OUT THAT THE RECENT ELECTION OF MOHAMMED KHATAMI,
CONSIDERED A RELATIVE MODERATE, TO BE IRAN'S NEW PRESIDENT, WAS 
DESCRIBED BY UNITED STATES PRESIDENT BILL CLINTON AS A "POSITIVE 
AND POSSIBLY HOPEFUL SIGN."

FREDERICK STARR, DIRECTOR OF THE CENTRAL ASIA INSTITUTE AT JOHNS 
HOPKINS UNIVERSITY'S SCHOOL OF ADVANCED INTERNATIONAL STUDIES, IS
ALSO ENCOURAGED THAT CHINA HAS INVESTED 3 BILLION DOLLARS INTO 
KAZAKHSTAN'S AKTYUBINSK OIL FIELD, AND IS NEGOTIATING WITH JAPAN 
AND SOUTH KOREA ON THE CONSTRUCTION OF A PIPELINE THAT WOULD 
CARRY THE OIL INTO ITS NORTHWESTERN PROVINCE OF XINJIANG.
// 1ST STARR ACT //
UP TO NOW, THE CONVERSATION HAS FOCUSED ON EUROPEAN AND 
AMERICAN BUYERS, BUT THE RECENT SHIFT WITH CHINA 
ENTERING THE PICTURE IS, I THINK, A SIGN OF THE TIMES. 
IN TERMS OF POLITICS, IT'S VERY GOOD NEWS FOR CENTRAL 
ASIA, BECAUSE JUST AS THEY WANT TO DIVERSIFY THE NUMBER 
OF CHANNELS FOR SHIPPING THE OIL OUT, THEY ALSO WANT TO 
DIVERSIFY THE NUMBER OF PEOPLE WHO ARE COOPERATING WITH 
THEM IN THE DEVELOPMENT OF THE RESOURCES. SO WHAT YOU 
END UP WITH IS A SITUATION IN WHICH THE CENTRAL ASIAN 
AND STATES OF THE CASPIAN BASIN HAVE MORE OPTIONS. IT 
GIVES THEM GREATER CONTROL OVER THEIR OWN FATE.

THE AKTYUBINSK OIL FIELD IS NOT NEARLY SO LARGE AS THE TENGHIZ 
FIELD AT THE NORTHEAST TIP OF THE CASPIAN SEA. SO FAR, IT 
APPEARS THAT OIL WILL BE CARRIED FROM TENGHIZ TO THE RUSSIAN PORT
OF NOVOROSSISK, ON THE BLACK SEA, ALTHOUGH IT IS POSSIBLE THAT 
TENGHIZ OIL MAY EVENTUALLY GO ACROSS THE CASPIAN TO BAKU, THE 
CAPITAL OF AZERBAIJAN. SOME OF THE GREAT OIL RESERVES OFF THE 
SHORES OF AZERBAIJAN MAY ALSO GO NORTH THROUGH CHECHNYA TO 
NOVOROSSISK, BUT MOST OF IT IS EXPECTED TO PASS THROUGH GEORGIA, 
TO THE PORT OF SUPSA, ALSO ON THE BLACK SEA, AND THEN ON TO A 
TURKISH PIPELINE THAT WOULD CARRY IT TO CEYHAN (CHAY'-HAN) ON THE
MEDITERRANEAN SEA. ROBERT EBEL SAYS THAT RUSSIA HAS EXPLOITED 
CONFLICTS BETWEEN AZERBAIJAN AND ARMENIA, AND ALSO WITHIN GEORGIA
ITSELF, TO PREVENT THE CONSTRUCTION OF PIPELINES WHICH IT DOES 
NOT CONTROL.
// 2ND EBEL ACT //
OVERTLY, RUSSIA IS NOT TRYING TO SUBVERT THESE 
PIPELINES. COVERTLY MAY BE A SLIGHTLY DIFFERENT MATTER.
I WOULD PRESUME THAT RUSSIA WILL SEE IT IN ITS INTEREST 
TO KEEP THE POT BOILING BETWEEN ARMENIA AND AZERBAIJAN 
AND TO KEEP THE POT BOILING INSIDE GEORGIA. RUSSIA HAS 
COME OUT PRETTY MUCH A WINNER IN EVERYTHING IT HAS TRIED
TO DO IN THE CASPIAN AND IN AZERBAIJAN AND KAZAKHSTAN. 
NONE OF THESE PROJECTS REALLY WERE MOVING FORWARD UNTIL 
RUSSIA WAS GIVEN A PIECE OF THE ACTION. ONCE THAT 
HAPPENED, THEN POSITIVE THINGS BEGAN TO TAKE PLACE. 
// END ACT //
EVEN THOUGH RUSSIA HAS BEEN GIVEN A PIECE OF THE ACTION, 
FREDERICK STARR SAYS THAT VAST CHANGES HAVE TAKEN PLACE IN THE 
REGION SINCE THE COLLAPSE OF THE SOVIET UNION.
// 2ND STARR ACT //
THE BORDER TO THE SOUTH WAS ONE OF THE MOST TIGHTLY 
CLOSED BORDERS IN THE WORLD. EVERY DAY THE OLD SOVIET 
BORDER BECOMES LESS AND LESS IMPORTANT AS TRADITIONAL 
RELATIONS AND LINKS REOPEN. WHAT IS HAPPENING IS, 
FIRST, A PLURALIZATION OF THE CHANNELS OF EXPORT AND OF 
OWNERSHIP AND DEVELOPMENT OF ENERGY RESOURCES. THIS 
DOES STRENGTHEN SOVEREIGNTIES IN CENTRAL ASIA. WHAT IS 
ALSO HAPPENING THROUGH ALL THIS IS THE FURTHER DECAY OF 
THE OLD SOVIET STATE SYSTEM AND THE EMERGENCE OF 
HISTORICAL RELATIONS THAT GO ACROSS THE BORDERS BOTH TO 
THE SOUTH AND TO THE EAST, AND TO THE WEST.

EVENTUALLY, MESSERS STARR AND EBEL AGREE, THE GREAT ENERGY 
RESOURCES OF CENTRAL ASIA AND THE CASPIAN BASIN WILL FIND THEIR 
WAY TO WORLD MARKETS, CHANGING THE GEOPOLITICAL MAP OF THE WORLD.

*********

#7
Criminal Proceedings Issued Over Russia-India MiG Contract 

Informatsionnoye Agentstvo Ekho Moskvy
July 29, 1997

Russia's General Prosecutor Yuriy Skuratov has decided to start
criminal proceedings over the abuse of budget funds allocated for the
production and sale by the MAPO-MIG company of MiG-21-95 Sokol fighter
planes to India (the so-called Indian contract), Radio Ekho Moskvy has been
informed by sources in the General Procuracy.
We remind you that, according to a recent statment by Central Bank
Chairman Sergey Dubinin, Andrey Valilov, former first deputy finance
minister and chairman of the commercial MFK Bank, took part in this
transaction. The Central Bank Chairman said the money did not go on the
building of planes, but was left in Unikombank, incurring losses for the
budget of $237 million.
The General Procuracy Press Service declined to confirm or deny
information to Radio Ekho Moskvy about the start of criminal proceedings.

**********

#8
Russian 'Source' on Background to Svyazinvest Deal 

by ITAR-TASS correspondent Liliya Kuznetsova

Moscow, 29 Jul -- The trouble started by the ORT and NTV television
channels over the tender to sell a major block of the shares of the
Svyazinvest public company is linked to the desire of several
representatives of Russian big capital to carry out a new stage in the
privatization of state assets in Russia according to their own criminal
rules, according to a well-informed source in the Russian government.
In an interview with an ITAR-TASS correspondent this government
source, who asked not to be named, said that the Russian government
established new rules this April for the conduct of privatization: Tenders
for the sale of shares must be honest and the highest bidders are the
winners. This is the principle under which the bidding for the sale of
shares in the Tyumenskaya Neftyanaya Kompaniya [Tyumen oil company] and
Svyazinvest was conducted.
The source said that in the latter case the government came under very
strong pressure from a number of long-established finance and industry
groups who wanted the opportunity to acquire Svyazinvest shares for low
prices.

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#9
Russia: Analysis From Washington--Looking Beyond The Kuriles
By Paul Goble

Washington, 30 July 1997 (RFE/RL) -- The current rapprochement between
Russia and Japan opens the way for Moscow to play an expanded diplomatic
role in Asia. But at the same time, it appears likely to exacerbate tensions
between Moscow and its Far Eastern regions. 
The blossoming of these ties gives Moscow the opportunity to play a more
independent role vis-a-vis China on a variety of questions, including
relations between the two Koreas and the future status of the Pacific rim
states. 
But the more immediate consequence of this warming may in fact work
against Moscow's interests. Russian leaders, from President Boris Yeltsin on
down, have sought better ties with Tokyo in the hopes that Japanese firms
would step up investments in Russia. 
That is now likely to happen. But because most Japanese investment is
likely to go into Russia's Siberia and Far East, this influx of foreign cash
may make the already independent-minded leaders there ever less willing to
follow Moscow's lead. 
And consequently what is obviously a major foreign policy victory for
Moscow could quickly be translated into a major domestic policy problem. 
Since World War II, relations between Moscow and Tokyo have been
complicated by a still-unresolved dispute over an archipelago of small
islands seized from Japan by Soviet troops in 1945. 
Japanese officials have always insisted that Moscow must return what
Tokyo calls the Northern territories before Japan could begin to become more
involved in the Russian economy. 
But Moscow has insisted that it is unwilling to make any concessions on
sovereignty over islands it calls the Kuriles. 
Despite this impasse, there have been signs in recent years that each
side would like somehow to look beyond this particular issue but to do so in
a way that it would not lose face either at home or in the region as a whole. 
Last Thursday, Japanes Prime Minister Ryutaro Hashimoto appeared to have
found a formula for doing just that. He said that Tokyo's relationship with
Moscow should be based on three new priorities -- "mutual benefit,"
"building trust," and "long-term prospects." 
Significantly, he did not mention the Northern Territories, thus implying
that Japan was willing to proceed with expanded ties even before any
progress was made on this politically sensitive issue. 
On Friday, a Japanese foreign ministry made that point explicit, although
he did try to take some of the sting out of this by suggesting that the two
sides had made some progress toward a resolution of the territorial dispute. 
But Japan's real calculations on this point were probably better
reflected in a comment made last week by Hashimoto. The Japanese premier
noted that Tokyo would be "isolated" if did not have "fully normalized"
relations with Russia, as other powers now have. 
On Monday, Yeltsin's press secretary said that the Russian president was
delighted by this breakthrough and looked forward to talks with the Japanese
leader later this year somewhere in the Russian Far East. 
Yeltsin's happiness about the Japanese decision is entirely
understandable. It suggests that Tokyo will drop much of its scepticism
about Russian participation in G-7 activities, and it means that Japanese
firms will invest more in Russia itself. 
Both on the face of it are good news for Russia. Japanese acceptance will
only enhance Yeltsin's own ability to deal with other world leaders and to
advance Russian interests in the Pacific. And Japanese investments will help
Russia's still troubled economy. 
But the second of these contributions does entail some risks for Moscow.
Officials in the Russian Far East have been increasingly unwilling to follow
Moscow's lead on a variety of issues. Increased Japanese investment there
will exacerbate this situation. 
And thus Moscow may come to regret that Tokyo has decided to look beyond
the Kuriles in its dealings with Russia. 

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#10
Ukraine's New Language Law To 'Suqeeze' Russians 

Moskovskiy Komsomolets
July 26, 1997
[translation for personal use only]
Report by Vladimir Kolychev, own correrspondent in Crimea, under
"Languages" Rubric: "'Mova' (language) Ueber Alles?"

Kiev has decided to "step on the toes" of all Russians living in
Ukraine. Ukraine's Cabinet of Ministers, with the support of the Council
for Language Policy under the President of Ukraine, plans to propose to the
Supreme Council a new draft bill "On the Development and Use of Languages
in Ukraine," which is essentially directed against the country's
Russian-speaking citizens. It stipulates that in all spheres of Ukraine's
public life, including record keeping, education, culture, communications,
the courts, the army, transportation, communal and social services, the
mass media, science and sports, Ukrainian is the mandatory language of
communication. It is also envisaged that all pre-school education, as well
as education in schools and higher educational institutions will be
conducted in the Ukrainian language.
Anyone who violates the aforementioned law will be mercilessly fined. 
According to Vladimir Alekseyev, Ukrainian people's deputy from Kharkiv,
who is also the deputy head of the commission for the legislative
guaranteeing of freedom of speecj and the media, Ukraine's new language law
runs counter to the Constitution of Ukraine and the European Charter "On
Local Languages and Language Minorities," even though one of the conditions
of Ukraine's admission into the Council of Europe was its unconditional
observance of human rights. Alekseyev called the law a "return to the
Middle Ages." According to him, the deliberate flouting of the Russian
language is regarded as a sign of patriotism in Ukraine. To all intents
and purposes, the new language law is a sort of filter which will be used
to squeeze members of the "non-indigenous" population out of state and
social structures and local self- government bodies.

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#11
Upsurge' in Yeltsin's Activity Viewed 

Rossiyskiye Vesti
July 29, 1997
[translation for personal use only]
Article by Lyubov Tsukanova: "Boris Yeltsin's Vacation Work
Campaign. Head of State Sets Real Test for Authorities"

It is well known that the best time of year is when the boss is on
vacation. Even the most hardworking and conscientious people allow
themselves to relax and slow down at work for three-four weeks a year,
depending on their luck. On the eve of the president's vacation the
occupants of many senior Moscow offices must have been looking forward to a
breathing space. But they did not get a chance to relax. Before his
departure on vacation to Karelia, Boris Yeltsin assigned the government two
difficult tasks: to give servicemen their back pay within two months and to
clear the debts to budget-funded organizations within three months. Boris
Nemtsov, one of those who bore the brunt of this assignment, said that its
fulfillment will require the "utmost mobilization" of the entire government
and presidential apparatus. "I think that this will be a real test for the
authorities," the first vice premier said.
The three weeks during which the president has been on vacation have
shown, first, that the head of state himself does not intend to "loosen the
reins" even for a day and, second, that the government and apparatus
evidently know how to work hard even when the president is on vacation, not
just at times of crisis. Witness the stream of important documents which,
far from drying up in recent weeks, seems even to have increased.
Of course, the president has constitutional business which neither a
vacation nor illness can defer: the signing of laws adopted by the
parliament, for which a strictly prescribed number of days is allotted. 
Some of the 20 or so documents submitted for the president's consideration
were of the greatest importance for the state and reform, and Boris Yeltsin
signed those of them whose conception, conformity with the constitution,
and legal technicalities were not in doubt. These are the laws "On
Bailiffs," "On Final Process," and "On State Registration of Rights to Real
Estate and of Deals Involving Real Estate." Other equally important laws
were rejected: on freedom of conscience and religious associations, on
relations between krays (oblasts) and their constituent autonomous okrugs,
and the land code. Of course, the legal assessment of laws is the business
of the president's legal administration, which advises the president
whether or not to sign a law. But the fundamental decision is always the
president's. Boris Yeltsin's rejection of the law on freedom of conscience
and the land code will clearly neither increase his popularity nor improve
his relations with the State Duma. But it does enhance the value of any
state decision affecting fundamental constitutional principles and the
interests of a huge number of people. While on vacation the president has
been resolving tactical tasks by means of edicts. Last week saw the
signing of a whole package of economic documents; some of them (such as the
one on trade in gold) caused a considerable stir, while others passed by
"quietly," but they all have the same aim: to swell the budget and to
attract investment in the economy. Before that, the public was galvanized
by military edicts which have already been described as the first real step
in the reform of the Armed Forces. Still earlier, in the first days of his
vacation, the president issued an edict of great importance for the
development of the state: on the powers of regional representatives. 
Careful observers noted a well-conceived set of decisions concerning the
YeES Russian Joint-Stock Company. The immediate tasks for the coming
two-three months were also the subject of B. Yeltsin's meetings in
Shuyskaya Chupa and on the Volga: with Nemtsov, Kokh, Kudrin, Livshits,
Premier V. Chernomyrdin, and again with Nemtsov and a group of young senior
managers. The decision to send young specialists to the West "to study
capitalism" provided a personnel element in this same system of economic
and political decisions designed to achieve real changes.
Characteristically, the president has also continued his radio
addresses to Russians during this period, and the themes of the addresses
have been closely linked to the decisions made. Boris Yeltsin seems to
have resolved to show all the branches of power how to set about taking
action, as well as the nature of that action: rapid tempo, responsibility,
and openness.
The Presidential Press Service, which has also been working flat out
recently, has announced the VIP vacationer's next plans: On Tuesday he
intends to visit another agricultural enterprise. It is a very appropriate
time to do so: The harvest campaign is beginning, and the affairs and
problems of the peasantry are plainly visible. Everyone who has recently
seen the president at close hand remarks that his meetings with people at
different levels are not formal rituals but genuinely businesslike. Boris
Yeltsin seems to be attempting to compensate for the enforced lack of live
information which he experienced in the fall and winter. To all
appearances, the president's current thirst for activity even on vacation
is linked not only to the restoration of his physical health, but also to
an improvement in his morale. Summoned to office by his election victory a
year ago, he was then depressed and set back by illness. We may now be
witnessing the start of the upsurge planned as long ago as last spring. It
has now become possible. But hopefully this is attributable not only to
the doctors' skill and B. Yeltsin's own vital energy, but also to the
efforts of Yeltsin's revamped team, which is demonstrating the desire and
ability to work even when "the boss" is on vacation.

**********

#12
Big Players Increasing Role in Economy 

Rossiyskaya Gazeta
July 26, 1997
[translation for personal use only]
Report by Aleksandr Potemkin under "Financier's Column" rubric:
"Financial-Industrial Groups' Increased Role in Russian Economy"

The role of financial-industrial groups in the Russian economy is
rapidly increasing. Thus, in 1996 the volume of industrial production in
the country as a whole decreased by 5 percent, whereas in
financial-industrial groups it increased fourfold. As a result the share
of financial-industrial groups' products in GDP increased from 2 percent to
10 percent over the past year. In 1996 the 15 largest financial-industrial
groups increased capital investment by 250 percent (in the country as a
whole investment decreased by 18 percent). Their exports went up 28
percent at the same time as total Russian exports went up 8 percent. The
number of people employed in financial-industrial groups increased from 3
million to 4 million. Currently there are 62 financial-industrial groups
in the country bringing together over 1,000 enterprises and organizations
and over 90 financial and credit institutions.

*********

#13
STATE DUMA HAS ENOUGH VOTES TO OVERCOME PRESIDENTIAL VETO
ON FREEDOM OF CONSCIENCE LAW -- GENNADI SELEZNEV 
MOSCOW, JULY 30 /FROM RIA NOVOSTI CORRESPONDENT JULIA
PANYUSHKINA/ -- In case the Duma committee for religious
associations thinks unacceptable the presidential remarks
regarding the law On the Freedom of Conscience and Religious
Associations, which he has rejected, deputies will have enough
votes to overcome the presidential veto. This opinion was voiced
today at a press conference by Gennadi Seleznev, chairman of the
State Duma. 
Boris Yeltsin's rejection of this law surprised speaker
Seleznev. He said that at the repeated discussions of the
document by the presidential administration and the Council for
Religious Associations "no substantial remarks had been made".

*********