August  30, 1997  
This Date's Issues: 1158• 1159 • 

Johnson's Russia List
#1158
30 August 1997
djohnson@cdi.org

[Note from David Johnson:
1. AP: Russia Dismisses Nuclear Suspicions.
2. Jamestown Foundation Monitor: CHUBAIS DENIES RUMORS 
OF RUSSIAN GOVERNMENT REFORM and DOUBTS CAST ON RUSSIA'S
DRAFT 1998 BUDGET. 
3. RIA Novosti: Marina Shakina, BUDGET CLASHES COMING AS 
CABINET FACES PARLIAMENT WITH FIRST PRACTICABLE BUDGET.
4. Journal of Commerce: John Helmer, Waves of grain at a 
standstill in Russia. Lacking credit, farmers can't reap 
harvest. (DJ: Is there a busier journalist on the Russia beat
than Helmer?)
5. Washington Post: Charles Krauthammer, Who's Afraid Of 
NATO?
6. Obshchaya Gazeta: Bank War Viewed as Political.
7. Vercherniy Peterburg editorial: We Are Waiting for an 
Economic Miracle, but We Should be Realistic.
8. Reuter: Caspian oil group eyes non-Chechen export routes.
9. The Times (UK) editorial: MAGNIFICENT PREDATORS. Russia's 
attempts to save Siberian tigers deserve world support.
10. Paris AFP: Russian Expert Declares 'OSCE Is Dead' 
During B-H Debate.
11. Rossiyskiye Vesti: Upcoming National, Local Byelections 
Outlined.
12. Rossiyskiye Vesti: Parameters of New Law on Religion 
Virtually Ready.
13. Reuter: Yeltsin names civilian to monitor military 
reform.]

*******

#1
Russia Dismisses Nuclear Suspicions 
By Sergei Shargorodsky 
Associated Press Writer 
August 29, 1997
MOSCOW (AP) -- A top Russian nuclear official today dismissed U.S. 
suspicions that Moscow carried out an underground nuclear test, saying 
seismic activity in the north was the result of ``an ordinary 
earthquake.'' 
A tremor with magnitude 3.5 was recorded in the Arctic Kara Sea 12 days 
ago, just east of the former Soviet nuclear test site on the Novaya 
Zemlya archipelago, according to reports from Norway. 
Underground nuclear tests were banned under the Comprehensive Nuclear 
Test Ban Treaty, a pact signed by the United States, Russia and scores 
of other countries. But the treaty has not been ratified in Moscow or in 
the United States. 
State Department and Pentagon officials said Thursday that initial 
indications suggested an underground explosion was touched off in the 
area, and the Americans were asking the Russians about the event. Norway 
also has asked for an explanation. 
But Russia's Atomic Energy Minister Vyacheslav Mikhailov, a veteran of 
the Soviet nuclear program, insisted there were no grounds for concern. 
``An ordinary earthquake took place in the Kara Sea, 60 miles away from 
Novaya Zemlya,'' Mikhailov told the ITAR-Tass news agency. ``This is a 
seismic area and everybody knows it.'' 
``I can state with full responsibility that oscillations recorded during 
nuclear tests have absolutely different characteristics. The world 
seismic service can confirm it,'' he added. 
Russia's Earth Physics Institute and its Emergency Situations Ministry 
said they had no reports of an earthquake. Officials at Russia's Defense 
Ministry were not immediately available for comment. 
In Washington, a Pentagon spokesman said Thursday that while preliminary 
indications pointed to an underground explosion, the Pentagon was unable 
to determine the exact nature of the event. Earthquakes and other 
seismic phenomena could register in the same manner, said the spokesman, 
Navy Capt. Michael Doubleday. 
Mikhailov insisted that Russia is abiding by its promise not to conduct 
the nuclear tests. 
``The nuclear testing ground on Novaya Zemlya was closed down, and 
Russia is strictly following the Comprehensive Nuclear Test Ban 
Treaty,'' he said. 

*******

#2
>From Jamestown Foundation Monitor
29 August 1997

CHUBAIS DENIES RUMORS OF RUSSIAN GOVERNMENT REFORM. Russian first deputy
prime minister Anatoly Chubais has dismissed as "complete fantasy" an
Izvestia report that he will soon hand over his responsibilities as finance
minister to his trusted deputy, Aleksei Kudrin. (Izvestia, August 23; RTR,
August 24) Chubais told Russian TV that he intends to remain as finance
minister for the foreseeable future. Izvestia had claimed that a sweeping
reform of the Finance Ministry is in the offing. It said Chubais is so busy
with his other duties that he rarely has time to visit the ministry. In
Chubais' absence, the paper said, deputy ministers numbering "about 15"
(no-one knows precisely how many there are) have lost control of the
bureaucracy. The result is that department heads are making policy and
presenting it to their superiors as a fait accompli. Izvestia's report,
which was written by a seasoned and usually well-informed journalist, also
claimed that Finance Ministry reform is to usher in a wider reform of the
government apparatus in the autumn.

DOUBTS CAST ON RUSSIA'S DRAFT 1998 BUDGET. Russian parliamentarians have
been provided with plenty of ammunition to use against the government's
draft budget by the Russian media -- even those sympathetic to reform.
Criticisms include the following. Liberal critics warn that some traditional
sacred cows of federal spending have not been slain, presumably to appease
at least some powerful interests. There is a rise in the economic
"development" budget, which means a continuation of arguably damaging
economic intervention, and increases in farm and coal-mine support (two
well-known black holes in the budget). More traditionally-minded critics
query whether an adequate central state can be maintained at the relatively
low levels of central-government spending that are proposed. Perhaps of
greatest significance, however, are worries about the draft budget that
concern its economic and political feasibility, and which have been noted by
writers from across the political spectrum.

Two such concerns loom particularly large. One is that the federal budget
plan is based on a projection of reported GDP rising by 2 percent in 1998.
Even if, as many believe, a true measure of GDP could have shown a recovery
starting two years ago, it is the reported GDP that is relevant to the tax
base, and people are being asked yet again, as they have been since 1992, to
believe that an officially-measured recovery is just around the corner.
After an apparent decline lasting seven years, that is an act of faith. The
second major concern is the dependence of the budget plan on the
installation of the new tax code by the start of next year. The tax code is
controversial and remains to be passed by parliament. It may well contain
too many internal anomalies to be easily used from the start, even if it
does become law in time.

There are other concerns as well. Tax collection remains below target even
under the downward revisions for this year, and Duma deputies are expected
to believe that problems can be sorted out in time for 1998. Also, even if
some concessions are made in the draft to powerful interests, hostages are
given to others. In particular, the new tax code and the draft budget divert
some tax revenue from the regions to the federal budget and, far from
offsetting this with larger transfers, aim to reduce the transfers from
Moscow to the regions. At a time when the regions are perhaps more powerful
than before, this looks risky. In short, this reformers' draft budget is
bold, but it is also seen by many well-informed and sensible observers in
Moscow as far from watertight. (Izvestia, August 21, 26; Finansovie
izvestia, August 26)

*******

#3
RIA Novosti
August 28, 1997
BUDGET CLASHES COMING AS CABINET FACES PARLIAMENT WITH FIRST PRACTICABLE BUDGET
By Marina SHAKINA, RIA Novosti political analyst

Just as the last year, the Cabinet is presenting the next
year's draft federal budget to the Duma strictly on time and
in its due format. The government's well-wishers have ample
reasons to regard this compliance as starting a good
tradition.
The ministers mean to establish another tradition
today--to face the Parliament with a realistic and practicable
budget. For the first time did the government publicly repent
its sins of the last year, when it was deliberately
prettifying its draft budget to get it smoothly through the
State Duma, and stooped to further prettifying later under
MPs' impact.
A make-believe budget gave rise to exorbitant mutual
corporate debts, which are desperately harassing the national
economy to this day. More than that, it sent corruption
skyrocketing by making executive officers distribute scanty
money in a swarm of allocation-hunters to give rise to rampant
bribery.
This year, the Cabinet is guaranteeing top quality of its
draft budget, which the most conscientious parliamentarians
have perused while their carefree colleagues are on summer
vacation. These inquisitive minds find the draft quite
realistic, with basic indices close to actual compliance with
this year's budget for today.
Nevertheless, the Cabinet will not avoid coming to grips
with both parliamentary houses over the budget. The Duma will
surely protest against prospective cuts on investment
expenditures and agro-industrial allocations, and rising
executive upkeep outlays. We also can expect the lower house
to try bloating federal revenue earmarks.
The Federation Council, upper house, will be likely to
resist the draft even more doggedly, coming out against a
proposed regional allocation cut from the current 15 per cent
to 13, with spendings closely monitored. The draft budget
shifts northern areas' supplies, support of small business and
certain other items of federal expenditures down to a regional
level, and saves on allocations to Moscow for its metropolitan
functions--a move which makes us expect tough resistance by
the municipal administration.
Last but not least, the budget was drafted on patterns
rooted in a new Tax Code and a package of social reform
acts--none of which have been adopted by the Duma for now--and
a privatisation programme, which the MPs have also shelved and
which envisages sales of major blocks of giant companies'
shares. If Parliament makes thorough objections to these three
sets of legal acts (as we have every reason to expect), all
efforts to put this realistic budget through will be
pointless. But then, the Cabinet has nowhere to retreat after
its public penitence, and will have to stand for its draft to
the bitter end.
The ministers are anxious to see their forecast of a 2
per cent economic rise come true in 1998. Duma experts, in
their turn, complain that the draft is not aimed at
development and social welfare, acknowledging its realism, at
the same time. Though they have only a nodding acquaintance
with the draft budget for now, they appear determined to
thoroughly revise it.
So Russia is in again for lances broken round its budget.

*******

#4
Journal of Commerce
2 September 1997
[for personal use only]
Waves of grain at a standstill in Russia 
Lacking credit, farmers can't reap harvest
BY JOHN HELMER
JOURNAL OF COMMERCE SPECIAL

MOSCOW -- To hear government officials tell it, the late-summer fields 
are bumper-full of grain, and Russia is about to enjoy a record harvest.
Russian Ministry of Agriculture officials were estimating a month ago 
that a harvest of 80 million metric tons of grain were standing in the 
fields, a record volume waiting to be gathered.
Agriculture Minister Victor Khlystun has been pushing his forecasts 
upward recently. He claimed last week that this year, Russia's farmers 
would reap 10 million tons more than they did last year, when the 
official ministry total for the harvest was 69.3 million tons.
President Boris Yeltsin, at a chicken farm in Saratov province a few 
days ago, declared: "The economic and agricultural indicators are good, 
and they want to collect a record harvest this year." 

Operative word

The operative word there is "want."
For government officials and farmers admit there can be no record, 
unless the grain is reaped. According to the Ministry of Agriculture's 
mechanization division, there is a shortage of 136,000 working combine 
harvesters across the country. Fuel to power those machines that work, 
and money to pay for spare parts and repairs, are also in desperate 
shortage.
This was acknowledged by the less ebullient prime minister, Victor 
Chernomyrdin, who made a tour of the southern Russian farm belt in July. 
Blaming the commercial banks for charging 40% on farm credits, he said 
the government is considering a proposal to provide loans at 12%. Even 
if they are approved -- and such subsidized credits are opposed by the 
deficit-cutters at the Ministry of Finance -- they won't arrive in time 
for this year's harvest.
"I will make certain," Mr. Chernomyrdin said, "that everything will be 
done to put bank credit in motion." High-quality farm machinery must 
also be provided, he added. 

Old system blamed

Tight-money advocates like First Deputy Prime Minister Anatoly Chubais, 
who is also Russia's finance minister, blame the old Soviet system of 
state and collective farming for inefficiency and mismanagement of the 
credits they have received. He advocates reform of the state 
land-holding system and radical privatization of farm ownership. 
Legislation to achieve this has been defeated by Russia's Parliament. A 
land code that restricts large-scale rural land sales was enacted by the 
two chambers of Parliament, but it was vetoed by Mr. Yeltsin as the 
harvest season began.
According to Robert McIntrye, an economics professor from Bowdoin 
College, Maine, who is on a Fulbright teaching fellowship in Russia, 
privatization of Russia's farms, since Mr. Yeltsin came to power, has 
been "a fiasco." Combing through the property registers and analyzing 
production figures since 1992, Mr. McIntyre says most of the collective 
and state farms merely changed their names and re-registered themselves 
as companies.
Of the tiny 4% of Russian farmers, who opted to leave the larger units 
and create individual farms of their own, Mr. McIntyre says less than 
one in 25 is "reported to have a marketable surplus. Most of the rest 
are literally subsistence farms undertaken with the intention of feeding 
only themselves and city relatives." 

'Low productivity'

According to data gathered by Mr. McIntyre, the productivity figures of 
the private plots that have operated in conjunction with collective 
farms for years don't reveal how much of the inputs and costs were paid 
out of the collective budget. On their own, private farming, says Mr. 
McIntrye, has "extraordinarily low productivity."
Mr. McIntyre shares Prime Minister Chernomyrdin's assessment that lack 
of cash and credit, and shortages of fuel and equipment explain part of 
the reason Russia's farmers keep falling behind field projections. He 
also blames European Union governments of heavily subsidizing food 
exports to Russia that are sold at prices below even low Russian costs 
of production.
"The effects of the EU's butter mountains and milk lakes are so strong 
in Russia, not because of inherent weaknesses of collective agriculture, 
but because the Russian government has failed to take fundamental 
measures to protect its own producers until conditions stabilize 
sufficiently."
First Deputy Trade Minister, Georgy Gabounia, agrees. His calculations 
show that in the final Soviet years, 1989-91, state support of 
agriculture in Russia was between $80 and $90 billion. "Now it's a 
negative figure. That means the pricing of farm products is supporting 
the rest of the economy."

*******

#5
Washington Post
29 August 1997
[for personal use only]
Who's Afraid Of NATO?
By Charles Krauthammer

We are about to enter upon the most important foreign policy debate this
country has had since the Persian Gulf War. One might say -- given the near
pathological indifference Americans have developed toward affairs foreign --
the first foreign policy debate this country has had since the gulf war. No
matter. We had better get used to thinking of something other than ourselves.
The issue is NATO expansion. It ought to be an easy call. After all, we
won the Cold War, and the Cold War was largely about control of Central
Europe. How perverse, after 50 years of trying to wrest it free from Russian
control, to now disdain our winnings at the cashier's window.
Moreover, the Poles, the Czechs and the Hungarians, allowed finally to
express themselves, have declared loudly their unequivocal desire to join
the West.
So what is the problem? Russia. Even pro-Western Russians warn that NATO
expansion is an act of encroachment, a threat to a Russia that thought it
had finally become a partner of the West. Alexei Arbatov, a pro-democracy
Duma member, writes plaintively that while he and his colleagues have
cooperated with the West, "nobody took the trouble to warn Russians that
NATO, the most powerful military alliance in the world, would start moving
toward Russian borders."
There is irony in this Russian complaint. In May Russia signed a treaty
that effectively absorbs its western neighbor Belarus. I do not recall
Russia consulting with the West about thus moving the Russian defense
frontier 350 miles west, indeed to within 80 miles of Warsaw. Yet that same
Russia is now objecting bitterly about the alliance -- with popular consent
and without annexation -- expanding east.
But more important than the chutzpah is the illogic of the Russian
position. It rests on the assumption that NATO expansion into Poland (and
the others) is a threat to Russia.
Ask yourself this: Is Poland a threat to Russia, or is Russia a threat to
Poland? The Poles want to be in NATO because they have a centuries-old
history of being trampled underfoot by their various Germanic and Slavic
neighbors. In the 18th century alone, Russia participated in three
partitions of Poland that finally caused it to disappear from the map.
Poland then came back to independent life in the 20th century, only to be
overrun again, first by Germany, then by Russia.
Disputes over the status and stability of Central Europe have been at the
heart of the three world wars of this century. (The Cold War was World War
III.) As Peter Rodman of the Nixon Center for Peace and Freedom points out,
NATO expansion will once and for all remove the ambiguity surrounding the
status of Central Europe.
Stability through finality. NATO expansion defines the place of Central
Europe. It is no longer to be a buffer between Russia and the West,
manipulated and bullied into complying with the wishes of its powerful
eastern neighbor. It is no longer to be camped, as one wit put it looking
back on Poland's history, in the passing lane of the interstate highway
connecting Russia and Germany. It will be part of the West -- where it wants
to be.
As for the threat to Russia, this is sheer nonsense. Neither Poland, nor
NATO through Poland, has any designs on Russia proper. Russia lost its
empire, but its homeland is secure. Only Hitler repeated Napoleon's folly,
and no one is about to repeat Hitler's. Russia's concern is, in fact, not
about its homeland but about its vanished empire. NATO expansion means the
definitive end to the Soviet imperium's westernmost domain.
This upsets the Russians. Well, the British were upset when they lost the
American colonies, and, in this century, everything else. But that gave the
British no claim on their former dominions nor trumps their former colonies'
wish to follow their own destinies.
Hence the final argument of expansion opponents: They concede Russian
fears are either irrational (if sincerely felt) or disingenuous (if merely a
nostalgia for empire) -- and then capitulate to them. To trample Russia's
desires and ignore her claims, they say, is to jeopardize democracy in
Russia and, in particular, to undermine those democrats in Russia who have
been advocating closer ties with the West.
More nonsense. Democracy will rise or fall in Russia the way it does in
other countries. The outcome will depend on whether its economic system
(presently bandit capitalism) and political structure (presently
authoritarian democracy) satisfy the material and social needs of the
people. Foreign policy comes -- there, as here -- very low on the list.
NATO expansion will have only the most marginal effect on the evolution
of Russian democracy. But it will have a decisive effect on European
stability. We mustn't pass up this chance to achieve it. 

********

#6
Bank War Viewed as Political 

Obshchaya Gazeta
August 7-13, 1997
[translation for personal use only]
Article by Andrey Fadin: "The Fighters Have Passed Midpoint"

The most brutal war between Russian banks in the entire post-Soviet
history has drawn a line under the "Davos alliance" and the "rule of seven
banks" that emerged from it. The coincidence in time of two
events--ONEKSIMbank's victory at the Svyazinvest stock auction and the
finalizing of its property rights to the Norilsk Nickel pledge
portfolio—suggest that a single leader has emerged in Russian
business. Such a concentration of different kinds of resources (financial,
raw material, and political) in the hands of one corporation is something
undoubtedly new for Russia. And so far its consequences are absolutely
unclear. But it is obvious that such a dramatic redistribution of financial
power could not occur without equally momentous shifts in the sphere of
power as such. Moreover, all these shifts also required ideological
cover--the fierce infighting at the pinnacle of the financial and
political pyramid had to be convincingly explained to the people
somehow--it was simply necessary to present it as something
bigger--and hence more decent--than simple bickering over a fat
piece of pie. Otherwise, the degree of discreditation of the authorities as
such would become simply dangerous for public politicians.
Nevertheless, after all the justifications, versions, and explanations
presented by the participants in the "clash of the titans," the meaning of
the events remains completely foggy for the Russian public.
According to the version of the so-called "young reformers," who gave
political cover to the redistribution of financial might and property,
everything that has happened is a natural and logical step in the
development of a healthy competitive market economy, in which the strongest
wins and the bid is won by whoever offers the greater price. They brandish
cliches such as "transition from gangster capitalism to normal capitalism,"
"end of the era of favorites," and such.
At the same time, a serious conflict with part of the banking
establishment is God's gift for Boris Nemtsov. Because he came to power
with a program of "honest competitive capitalism" and had no ties to the
"Davos convention." In the logic of his public policy, the Svyazinvest
auction is a completely natural continuation of a bid on the procurement of
sugar for the military.
Chubays is in a much worse position: It is rather hard to explain to
the public why the same person who recently organized clearly fictitious
(prearranged) pledge auctions now is starting a new, honest life and will
be holding honest and transparent auctions. What especially suggests this
nasty thought is the fact that both the first—and the most
scandalous--Norilsk Nickel auction and this "honest and procedurally
impeccable" Svyazinvest auction were won by the same corporation. To this,
Chubays has a simple answer: We have to pay the military and the
budget-funded sphere; the state needs money, and I have been instructed by
the President to get it. Hence, the change of rules: Whoever gives more,
wins.
(We recall, though, that the budget crisis was hardly less severe at
the time of the "old rules" either...)
Analysts suggest two versions of events.
One interprets the "young reformers'" policy as a way of completely
shaking off the shackles of the "Davos convention."
In the environment of complete disintegration of the state apparat,
regional barons' autocracy, and a catastrophic budget crisis, Anatoliy
Chubays, the mutually agreed-upon "seven-banks commissar attached to
Yeltsin," was bound hand and foot by the "Davos convention." Any state
decision was carried out only to the extent that it was lucrative to the
financial moguls, supported by them (and oftentimes even informally
financed by them--out of budget funds).
Such a situation could not sit well with the people whose position
depended not so much on accounts, assets, and sales as on the power of
state authority and sociopolitical stability in the country. Who is the
master in the country, after all? Traditionally, Russia is indeed a
"society of power," and the less than decade-long free market
transformation has hardly removed this civilization-dependent limitation.
The summer banking war over the division of the remainder of state
property opened up a unique opportunity for Chubays and his team: to play
the financial moguls off against one another and achieve previously
unattainable independence.
Perhaps the key moment in this was the coming to power of Nemtsov, who
had no historical ties to the "seven banks rule," with his team of
provincials and his undisguised presidential ambitions. Nemtsov is bound to
think about the upcoming elections. And in this sense his interests are
much more pegged on the general situation in the country than on
private--even the most powerful--corporations.
All this is, however, only the "young reformers'" own version. The
facts are, however, that Chubays and Nemtsov have grown so dangerously
close to one of the financial empires that this rapprochement could
transform into a dependence even more dangerous than the Davos one. The
intimate "material" connection between many "baby Chubayses" in the
government and ONEKSIM could turn into a previously unimaginable degree of
economic favoritism, where state functions will be privatized no longer by
seven bank group members but by just one corporation.
On the other hand, this also is just a hypothesis. Of much more
interest is something else: How will it all end?
Most likely, the new correlation of forces in the world of big money
and in the government (keeping in mind Chernomyrdin's public humiliation in
the conduct of the final auction of Norilsk Nickel) will be balanced in the
course of subsequent auctions, the most important of which--of
Rosneft--is expected soon. Russia is, after all, a monstrously rich
country, and there will be a piece of bread for everyone. That is why the
fights at the top usually are not to the death but to first blood.
The other aspect of the past banking war affects all citizens
directly. In Russian conditions, the schism in the financial oligarchy and
the public battle between powerful financial-political clans, the pluralism
of their interests and positions, represent the only guarantee of the
separation of power and property and at least partial insurance of rights
and freedoms, including the freedom of the press.

*********

#7
>From Russia Today press summaries
http://www.russiatoday.com
Vercherniy Peterburg
29 August 1997 
Lead editorial 
We Are Waiting for an Economic Miracle, but We Should be Realistic 
Summary
Russia has been searching for its national ideology. Many think that once
they have one, their lives will somehow be better. The ideology will be a
guideline of how to choose friends and enemies. Some people need a slogan
around which to rally, said the daily. 
The liberal ideology hardly seems to fit Russia. Russia had a brief fling
with it in the early 1990s, but all it brought was a destroyed industrial
base and collapsing economy, and the loss of Russia's superpower status. 
Now, the country has noticeably moved to a nationalistic stance, with
communist overtones. 
Russian foreign policy is trying to reassert its independence, and
rebuild the Soviet Union -- although in a more voluntary and agreeable form.
Once again, Russia is acting as if the West was the enemy and is resisting
the expansion of NATO with threats of a new Cold War. Such behavior is only
empty posturing, said the daily, because Russia does not have the economic
might and power to substantially challenge the West. 
Russia's main goal should be improving its economy and not global power
politics. In the post-war era, the world has seen a number of economic
miracles in Asia and Europe. This is because they subscribe to the liberal
American world view. Those countries which subscribe to the
imperialist-socialist view ran their countries into the ground. Russia now
must choose where it wants to go -- forward or backward. Of course, it is
always easier to go backward than forward into unexplored territory, the
daily concluded. 

*******

#8
Caspian oil group eyes non-Chechen export routes
By Lynnley Browning 

MOSCOW, Aug 29 (Reuter) - A flagship international oil project in the
Caspian, close to a start-up date but lacking its first-choice export route
due to Moscow's problems with rebel-minded Chechnya, is eyeing other export
options. 
Despite Russia's last-minute push to seal an agreement with Chechnya for use
of a pipeline running through the independence-minded region, the 13-member
consortium said on Friday it was dusting off a list of alternative export
routes. 
But the group vowed to begin producing crude at its Caspian Chirag-1 platform
some time in the second half of September, adding that the thorny issue of
Chechnya's desire to secede from Russia would not derail its $8 billion
project. 
``The exact date is not fixed, but we know that we will definitely be
starting in the second part of September,'' said Tamam Bayatly, spokeswoman
for the Azerbaijan International Operating Company, which is led by an
alliance between British Petroleum Plc and Norway's Statoil. 
Still, AIOC was actively considering other ways to send its first oil to
world markets in the early stages, since Moscow and Chechnya, which is part
of Russia but wishes otherwise, were still arguing over Chechnya's role in
transporting oil. 
``We are still focusing on the northern pipeline,'' said Bayatly, referring
to a pipeline, stretching from Azerbaijan's capital Baku through Chechnya to
Russia's Black Sea port of Novorossiisk, which AIOC had hoped would be ready
by now. 
But the 160 km of the pipeline which run through Chechnya need a three-week
makeover costing $2 million, and that facelift cannot begin until Moscow and
Grozny sort out a raft of issues. 
Deputy Fuel and Energy Minister Sergei Kiriyenko, quoted by Interfax news
agency, said a final deal would be signed September 1, ending months of
tortuous negotiations. 
But some of Russia's most senior officials have signed similar agreements in
the past, only to see them flounder against new Chechen demands. 
Perhaps with that in mind, AIOC's Bayatly listed the top three alternative
options for moving the group's early oil: hastening the refurbishment of
another pipeline running west to the former Soviet republic of Georgia,
putting the oil into Azeri refineries, and loading it on to rail cars to
Russia. 
Chechnya, which waged a bitter, 21-month war against Russian troops until the
latter withdrew in humiliation a year ago, wants independence and a hefty cut
of transit fees for the oil that will pass through its tiny section of the
link. 
The Caucasus republic will earn only $10 million or so a year from the fees
-- a fraction of the $258 billion it claims in war-time material damages and
a bargaining point Grozny is using for leverage to get more money from
Moscow. 
But Emir Gantemirov, a Moscow official of the Chechen oil company, which has
sometimes taken part in the pipeline talks, said a preliminary compromise
with Moscow had been reached. 
``Only the Almighty can say whether the September 1 deal will be signed, but
I think it will be,'' he said, adding that Moscow had agreed to increase
Chechnya's cut from transit fees. 
``There were lots of variations on the agreement that is supposed to be
signed, but I'm more than optimistic about the chances for success.'' 
Chechnya will eventually be irrelevant to AIOC, which plans a new pipeline
for its peak output of up to 800,000 barrels per day by 2007-2010. 
For now, the feisty republic has been a thorn in the side of everyone
involved in the Caspian's benchmark oil project since the war ended last
August. 
As the Sevodnya daily quoted a Russian source as saying on Friday: ``For
Chechnya, the pipeline is a political instrument, which is why it impossible
to resolve questions over the transit of Azeri oil separately from political,
customs, border and other issues.'' 

********

#9
The Times (UK)
30 August 1997
[for personal use only]
Leading article [editorial]
MAGNIFICENT PREDATORS 
Russia's attempts to save Siberian tigers deserve world support 

The tiger has prowled this planet for more than two million years but 
these magnificent predators may not survive another century. It is 
estimated that fewer than 5,000 now remain. Already three species ­ the 
Bali, Caspian and Javan ­ are extinct. The Siberian tiger, Panthera 
tigris altaica, could soon be joining them unless the conservation 
programme newly announced by the Russian Government can succeed in 
effecting far-reaching changes. 
The snowbound forests of the Primorsky and Khabarovsk regions in 
Russia's remote east provide the last habitat for the Siberian tiger. 
But since the end of the Soviet Union, weakened authority and economic 
decline in these bleak territories have encouraged poaching. There is a 
lucrative market for tiger products in China and Korea, where they are 
used for traditional medicines. Tigers' bones are believed to heal 
ulcers and their brains are thought to remedy laziness and acne. A tiger 
carcass can command up to £10,000 on the Asian black market ­ far more 
than an annual Russian salary. 
Wealthy hunters from Moscow and further afield are prepared to pay 
handsomely to bag a big cat. Telescopic rifles in hand, they scour the 
Siberian snows in helicopters. It is the pleasure of the kill they 
relish, but local mafia organisations control the cross-border trade in 
tiger carcasses ­ from Russian poacher via Russian customs officer to 
Chinese sellers and product-makers. For them this trade has become more 
profitable than peddling drugs. Bleakest estimates suggest that some 70 
animals are killed every year. Furthermore, the plunder of the tigers' 
habitat by logging companies ­ several of them illegal ­ threatens not 
only the cats but the fauna on which they prey. 
In 1995 the Russian Government set up a Siberian tiger sanctuary, but 
did not have the budget to maintain it. Foreign donors such as the World 
Wide Fund for Nature were relied upon to finance anti-poaching brigades 
and monitoring units to track the whereabouts of animals by 
radio-collaring. Populations have since increased ­ slowly. 
The Russian Government now takes a welcome step in offering fresh funds 
for the preservation of this glorious species. To many it has seemed 
glib that developed Western nations, no longer harbouring fierce 
predators in the wild, should clamour for the protection of such animals 
in other countries. Democratic Russia's decision to initiate its own 
conservation programme will be applauded across the world. 

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#10
Russian Expert Declares 'OSCE Is Dead' During B-H Debate 

Paris AFP in English
August 28, 1997

Vienna, Aug 28 (AFP) -- A Russian foreign policy expert rocked the
European security grouping, the OSCE, Thursday amid a row between Russia
and other European countries over elections in Bosnia.
"The OSCE is dead," one of the Kremlin's external foreign policy
advisors, Sergey Karaganov, said during a speech to a European forum in
Alpbach, western Austria.
It is a "nice organisation" without any important function, he added.
That drew a quick -- and unofficial -- riposte from the Organisation
for Security and Cooperation in Europe, of which Russia is a member.
"The Russians are maybe a bit disappointed with the OSCE right now,"
an unnamed diplomat in the 55-member European security organisation said.
But Karaganov's comments were a "kneejerk reaction," the diplomat
said.
Moscow has been unhappy with when and how the elections are to be held
and wants to see it take a bigger role in the observation preparations, a
diplomatic source said.
The Serb-run half of Bosnia is in the throes of an escalating power
struggle between Bosnian Serb President Biljana Plavsic and the
hardliner-dominated parliament.
The hardliners have called for a postponement of elections, scheduled
for September 13 and 14, because "military and security conditions" were
worrying.
The OSCE has backed Plavsic and refused to have dealings with the
parliament until after fresh parliamentary elections she called for in
October are held.
In an effort to resolve the crisis ahead of the elections, the Russian
foreign ministry announced Thursday it was sending one of its deputy
ministers, Igor Afanassievski, to the Serb-held part of Bosnia, the
so-called Republika Srpska.
"The situation in Republika Srpska is very complex and only a
balanced, stable, open and well-meaning approach can help to overcome the
problems which are sometimes aggravated by excessive emotion," ministry
spokesman Valeriy Nesterushkin said.

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#11
Upcoming National, Local Byelections Outlined 

Rossiyskiye Vesti
August 28, 1997
[translation for personal use only]
Report by Lyubov Tsukanova: "Nonstop Elections"

The fall-winter 1997 election campaign begins 31 August with the
election of deputies to the Saratov Oblast Duma.
As Central Electoral Commission Chairman Aleksandr Ivanchenko noted,
elections have become a permanent and habitual feature of state life in
Russia, and this is a very important sign of the democratic changes that
have taken place. Elections are in fact being held in the country nonstop,
but the busiest time has turned out to be the fall and winter. This time
Russians are to elect State Duma deputies (to replace those who have quit)
in seven single-seat constituencies, legislative assembly deputies in 22
Federation components, and executive heads in three Russian Federation
components. In 11 regions there will be elections to local self-government
organs. On top of that, in several other Russian Federation components the
representative organ of power is approaching the end of its mandate, but
dates for elections there have not yet been set.
Now that the electoral system has been sorted out and is functioning
steadily, the biggest problem of the coming election campaign will, to all
appearances, be ensuring that the voters turn out. As the summer
by-elections to the State Duma demonstrated, Russians are far keener to
participate in "their own," regional elections, whereas in the three
single-seat constituencies where State Duma deputies had to be elected, the
campaign will have to be rerun because of low voter activity.

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#12
Parameters of New Law on Religion Virtually Ready 

Rossiyskiye Vesti
August 27, 1997
[translation for personal use only]
Unattributed report under the rubric "Further on the Subject":
"Law, Conscience, Compromise"

The main parameters in the new version of the law "On the Freedom of
Conscience and on Religious Associations" have been virtually agreed on. 
This is a result of talks that lasted almost a month between
representatives of the Russian Presidential Staff and leaders of main
religious faiths. Rossiyskiye Vesti has written repeatedly about the most
important stages of this delicate process.
The law in its preceding version was turned down by President Boris
Yeltsin because quite a number of its provisions were at variance with the
country's Constitution. According to Interfax, nearly all remarks and
wishes by both the president and leaders of the main religious
organizations that have traditionally been active in Russia have been taken
into account. The law in its new version makes it possible to secure a
respectful attitude in society for traditional religious values and will
guarantee the rights of believers affiliated to various religions. The
draft law is in full conformity with world practice and with norms of
international law, Interfax sources stressed. At the same time the
document devotes considerable attention to ensuring our society's spiritual
health and puts a barrier to the spread in Russia of totalitarian sects
that cause physical and moral harm to the population.
Representatives of the Russian Orthodox Church, Muslims, Buddhists,
Judaists, Old-Believers, Catholics, Protestants, Baptists, and other faiths
took part in consultations on amending the law. It is expected that the
coordinated version of the law will be discussed at the beginning of
September at an enlarged session of the Council for Interaction With
Religious Associations under the Russian president. It is not ruled out in
the Kremlin that Boris Yeltsin himself will take part in the work of the
council.
According to sources in the entourage of the head of state, there is a
hope that, if final consensus is reached at the council's enlarged session,
the draft law can quickly be submitted for the consideration of the State
Duma and be approved by it. In their opinion, such an approach will show
parliament's respect for representatives of the main religious faiths
existing in Russia.

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#13
Yeltsin names civilian to monitor military reform
By Oleg Shchedrov 
MOSCOW, Aug 29 (Reuter) - President Boris Yeltsin's decision to set up a
watchdog body to monitor military reform could signal an attempt to impose
civilian control over Russia's huge, demoralised armed forces, analysts said
on Friday. 
But it remains to be seen whether the watchdog will have the teeth to do the
job. 
On Thursday Yeltsin named First Deputy Defence Minister Andrei Kokoshin as
``State Military Inspector'' with extensive but still vague powers to control
the process of reforming the country's ineffective military machine. 
The aim is to cut the forces by 500,000 to 1.2 million by the end of 1998 and
pave the way for a professional-only army. 
The president also named Kokoshin, 51, the first and only civilian deputy
defence minister, as the new secretary of his Defence Council of security
officials. He replaces another close aide, Yuri Baturin. Baturin, 48, will
remain a Yeltsin adviser. 
``Yeltsin does not dare to name a civilian defence minister which could cause
turmoil among the top brass, especially in the middle of reform,'' the
newspaper Kommersant-Daily said. 
``Instead he installed a civilian watchdog to control the military,'' it
added. ``Yeltsin chose a civilian who will not trigger an immediate allergic
reaction among the top brass.'' 
In May 1992, Yeltsin, who then formally held the post of Russia's defence
minister, named Kokoshin, an obscure military analyst with strong links in
the military-industrial complex, as his deputy along with paratroop general
Pavel Grachev. 
Russian liberals then hoped Kokoshin's nomination was a step towards
introducing a practice of appointing civilians as defence ministers. But
later Yeltsin chose Grachev, keeping Kokoshin first deputy minister. 
Debates about direct civilian control over the armed forces had been
abandoned until last year when Yeltsin, alarmed by the disastrous state of
the post-Soviet armed forces, vowed during his re-election campaign to speed
up military reform. 
Yeltsin replaced Grachev with General Igor Rodionov, telling him to work out
a reform plan which would turn the Russian armed forces into a tighter and
more effective force by 2000. 
Kokoshin played a key role in working out the radical reform plan based on
the assumption that large-scale global conflict was not likely compared with
the threat of local wars. 
The plan also suggested cuts should provide funds for the reform, thus
removing some of the strain on the national budget. 
Rodionov said such a plan would not work and suggested the Kremlin should
simply pay to maintain the armed forces. The government now knows reform will
mean spending more at first. 
Outraged by attempts to sabotage his military reforms, Yeltsin created the
Defence Council in July 1996 to crush the resistance and named Baturin to
head it. 
After a series of complex political manoeuvres and direct pressure, Yeltsin
sacked Rodionov in May and replaced him with the reform-minded commander of
strategic missile forces Igor Sergeyev, 59, strongly reinforcing the military
reform team. 
Yeltsin this week praised the pace of military reforms spearheaded by
Baturin, Sergeyev and Kokoshin and he has promised more cash to fuel them. 
Kremlin analysts say that Yeltsin now has to regroup his forces for the new
task of boosting reform while keeping it under control within a tight
national budget. 
Defence analysts say the State Military Inspectorate may become a powerful
instrument to impose Yeltsin's will and keep reform on track. But most
suggest this would depend strongly on practical authority given to Kokoshin. 
``The whole problem is whether Kokoshin will get powerful levers to deal with
the ministers or whether he will remain merely Yeltsin's ears and eyes among
them,'' Alexander Konovalov of ORT state television told Reuters. 
``If Kokoshin gets these powers then Thursday's changes will mean a
breakthrough and a powerful boost for reform,'' he said. ``If not, it will be
another sad example of Kremlin musical chairs.'' 

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