We have to understand the world can only be grasped by action, not by comtemplation. The hand is more important than the eye....The hand is the cutting edge of the mind. - J. Bronowski
RFE/RL NEWSLINE

Vol 1, No. 12, Part I, 16 April 1997


Vol 1, No. 12, Part I, 16 April 1997

This is Part I of Radio Free Europe/Radio Liberty's Newsline.
Part I is a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II, covering Central, Eastern, and Southeastern
Europe, is distributed simultaneously as a second document.  Back
issues of RFE/RL NewsLine are available through RFE/RL's WWW
pages: http://www.rferl.org/newsline/search/

Back  issues of the OMRI Daily Digest are available through OMRI's
WWW pages: http://www.omri.cz/

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Headlines, Part I

* NO BREAKTHROUGH IN RUSSIAN-NATO TALKS

* YELTSIN TAKING TROPHY ART TO GERMANY?

* TAJIK TALKS BEGIN AGAIN


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RUSSIA

NO BREAKTHROUGH IN RUSSIAN-NATO TALKS. At three-
hour talks yesterday in Moscow, Foreign Minister Yevgenii
Primakov and NATO Secretary-General Javier Solana failed to
overcome differences delaying a charter between Russia and
the Western alliance. The Russian Foreign Ministry later
issued a brief statement saying that "positions on some issues
became closer" but that "difficult questions remain," RFE/RL's
Moscow bureau reported. Both sides hope to sign a charter in
Paris next month ahead of the NATO summit in July, when the
alliance is expected to announce which Central European
countries will be NATO's first new members. In an interview
with the German magazine Stern this week, President Boris
Yeltsin said Moscow would meet the target date for signing the
Paris charter only if that document takes Russian interests
into account. In particular, Russia wants NATO to pledge not
to build military facilities in new member countries.

YELTSIN TAKING TROPHY ART TO GERMANY? In the same
interview with Stern, Yeltsin said he would bring "something"
of the cultural treasures confiscated during World War II when
he flies to Germany today for a summit meeting with
Chancellor Helmut Kohl. He did not specify which art works he
would bring. However, a Foreign Ministry spokesman told
ITAR-TASS yesterday that the ministry knows nothing about
Yeltsin's plans to take cultural valuables to Germany. The
Federation Council is scheduled today to debate a law that
would ban the transfer of cultural treasures to foreign
countries. The State Duma overrode Yeltsin's veto of that law
earlier this month. If the Council also overrides the veto, the
controversy over trophy art could overshadow talks on the
Russia-NATO charter and on Russian-German trade, the main
items on the agenda of the Yeltsin-Kohl summit.

MIXED REACTION TO "BUY RUSSIAN" APPEAL. Following
Yeltsin's appeal yesterday to  buy Russian-made products,
Nikolai Kharitonov, leader of the Agrarian faction in the State
Duma, told RFE/RL that the president should impose higher
customs duties on foreign goods, especially food. Duma
Speaker Gennadii Seleznev said the state must help Russian
farmers sell their products to stores in large cities. Sergei
Belyaev, leader of the Duma faction of Our Home Is Russia,
said he supports selective government assistance to
enterprises but warned against imposing broad protectionist
measures. Meanwhile, Duma Foreign Affairs Committee
Chairman Vladimir Lukin of Yabloko suggested that the onus
is on Russian producers to raise standards. "I'll buy domestic
products when they become better and cheaper than foreign
goods," he said.

AEROFLOT TO BUY MORE BOEINGS. Just hours after
Yeltsin urged citizens to buy domestic goods, Aeroflot director-
general Valerii Okulov confirmed that his airline will purchase
10 Boeing 737 airplanes for $400 million, ITAR-TASS reported
yesterday. Yeltsin appointed Okulov, his son-in-law, to head
the 51% state-owned airline last month. Aeroflot signed a
letter of intent on the deal  last September, prompting protests
among domestic manufacturers. Yevgenii Shaposhnikov, the
airline's director-general at the time, argued that the
government, not Aeroflot, should be responsible for saving
Russia's aircraft manufacturing industry.  Aeroflot acquired its
first foreign planes in 1992.

TULEEV SAYS RUSSIA LOSING CIS MARKETS TO WEST.
CIS Affairs Minister Aman Tuleev says Western companies
have supplanted Russian ones as trading partners in CIS
countries, Interfax reported on 14 April. Tuleev noted that 90%
of Kazak enterprises have capital from partners outside the
CIS and that Kyrgyzstan and Uzbekistan have also "become
reoriented to the West or created their own customs union
inside the CIS." He attributed Russian problems in trading
with Azerbaijan to economic barriers erected by Moscow,
which, he noted, had "pushed Azerbaijan into the arms of the
West." According to Tuleev, the West has invested $30 billion
in former Soviet republics, while the CIS countries'  debts to
Russia total $6 billion.

COMPROMISE ALLOWS GAZPROM EXECUTIVES TO KEEP
CONTROL OVER GOVERNMENT STAKE. Gazprom head Rem
Vyakhirev says the gas monopoly's executives will continue to
manage 35% of the company's shares under a compromise
reached with First Deputy Prime Minister Boris Nemtsov,
Russian news agencies reported yesterday. In exchange,
Gazprom will pay half of its tax debt--about $1.2 billion--by 10
June. Nemtsov's press secretary confirmed Vyakhirev's
announcement in a telephone interview with RFE/RL. Last
week, Nemtsov suggested reviewing the agreement granting
Gazprom managerial control over state-owned shares in the
monopoly. Meanwhile, Prime Minister Viktor Chernomyrdin
said yesterday he is "categorically against" restructuring
Russia's monopolies and denied that he is distancing himself
from forming government policy on the issue, ITAR-TASS
reported. Chernomyrdin was absent from a cabinet meeting
last week at which relations with Gazprom were discussed.

BULGARIAN PRIME MINISTER IN MOSCOW. Stefan
Sofiyanski says an agreement on constructing a new gas
pipeline will double or triple the volume of Russian gas exports
via Bulgaria, Interfax reports. Sofiyanski and Chernomyrdin
signed the agreement in Moscow yesterday. Russia exported
about 6 billion cubic meters through Bulgaria in 1996.
Chernomyrdin and Sofiyanski also discussed further military-
technical cooperation, including the possible sale to Bulgaria
of MiG-29 fighter jets. Chernomyrdin told the Bulgarian
premier that Moscow would respect Bulgaria's decision to
apply for NATO membership, although it remains adamantly
opposed to the expansion of the alliance, ITAR-TASS reported.
Russian First Deputy Prime Minster Boris Nemtsov told
Interfax yesterday after his talks with Sofiyanski that the two
countries have agreed to create a joint free-trade zone.

VODKA PRICES RAISED. The Economics Ministry has
announced an 37.5% increase in the minimum retail price of
vodka in order to curb the black market in vodka and raise
government revenues, Russian and Western agencies reported
yesterday. The price hike affects spirits produced in Russia or
the former Soviet Union whose alcohol content exceeds 28%.
Imports from other countries are not affected. Aleksei Golovkov
of Our Home Is Russia, who is deputy chairman of the Duma
Budget Committee, told RFE/RL's Moscow bureau that the
measure was needed to stem the flow of low-quality imported
vodka, which, he said, was causing the state "enormous"
revenue losses.

NIZHNII NOVGOROD ELECTIONS SET FOR JUNE. The
legislature of Nizhnii Novgorod Oblast will hold gubernatorial
elections on 29 June, RFE/RL's correspondent in Nizhnii
Novgorod reported yesterday. Former Governor Boris Nemtsov
became first deputy prime minister last month. The
legislature's decision is in accordance with the oblast charter,
which stipulates new elections must be held within six months
of the elected governor quitting the post. Yeltsin suggested
postponing the ballot until March 1998, when Nizhnii
Novgorod is scheduled to hold legislative elections. Ivan
Sklyarov, mayor of Nizhnii Novgorod, has already announced
he will run for governor. Recent opinion polls suggest that he
is the front-runner.

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN-ABKHAZ PEACE TALKS TO RESUME?  Georgian
Foreign Minister Irakli Menagharishvili says Tbilisi has
accepted Abkhaz President Vladislav Ardzinba's offer to
resume quadrilateral peace talks in which the UN and Russia
will also take part, ITAR-TASS reported yesterday. The Abkhaz
parliament, however, opposes resuming negotiations until the
Russian trade embargo against Abkhazia is lifted. It also
rejects the decision of the March CIS summit to broaden the
mandate of the CIS peacekeeping forces in Abkhazia.
Menagharishvili said implementation of that decision would be
"an indicator of whether or not the CIS can perform its
function." But he denied that Georgia will consider leaving the
CIS if the decision is not implemented.

TAJIK TALKS BEGIN AGAIN. Representatives of the Tajik
government and opposition have returned to the negotiating
table in Tehran, ITAR-TASS reported today. The current round
of talks is scheduled to decide the legal status of political
parties and movements in Tajikistan. Iranian President Ali
Akbar Hashemi Rafsanjani met with both sides yesterday,
telling them to forget their differences and move toward a final
peace. Opposition accusations that some of its members were
being held in Moscow led to the breakup of the talks last week.

FEWER ORT BROADCASTS TO KYRGYZSTAN. As of today,
Russian Public Television (ORT)  will slash its daily
programming in Kyrgyzstan's Chu Oblast from 18 to six hours,
ITAR-TASS reported. The Russian network's debts to Kyrgyz
relay stations now total 860 million rubles. Kyrgyzstan is
trying to reach an agreement with ORT over settling the debt.
It is also seeking payment from Russia's RTR network and
Radio Mayak, which have debts totaling some 2 billion and
895 million rubles, respectively. ORT's newscast was the most
popular program of its kind in Chu Oblast, where the capital
Bishkek is located.

NEW GEO-POLITICAL ALLIANCES ON RUSSIA'S SOUTHERN
RIM

by Liz Fuller

        Over the five years that have elapsed since the
disintegration  of the USSR,  two alliances among the Soviet
successor states have emerged on Russia's southern borders.
Both of these new groupings comprise political, economic, and
military components.
        The Central Asian Union evolved from a January 1994
agreement between Kazakstan and Uzbekistan providing for
the abolition of customs barriers to create a common economic
space. Kyrgyzstan acceded to that agreement almost
immediately. From its inception, the union was intended as a
model for closer economic integration within the CIS. Over the
past three years, it  has developed supra-national coordinating
structures--including an Executive Committee of Heads of
State and Government and a Council of Foreign Ministers--
that are far more effective than its CIS equivalents. The
leaderships of the three member states reportedly coordinate
their positions on all regional issues.  Moreover, the union has
created a  Central Asian peacekeeping battalion, which has the
official benediction of the UN, and a Central Asian Bank for
Cooperation and Development.
        Moscow apparently does not perceive the Central Asian
Union as posing a major threat to Russian economic interests.
There are several possible reasons for this attitude: Kazak
President Nursultan Nazarbaev's support for integration within
the CIS, the simultaneous membership of Kazakstan and
Kyrgyzstan in the customs union with Russia and Belarus,
and Moscow's observer status within the Central Asian Union,
granted last year. Alternatively, Russia may have other plans
for safeguarding its economic interests in Central Eurasia. One
Moscow policy analyst recently proposed  that Russia join the
Economic Cooperation Organization, whose members are Iran,
Turkey, Pakistan, Afghanistan, Azerbaijan, and the five
Central Asian Soviet successor states.
        In contrast, Moscow was swift  to express disapproval of
a  second nascent "Union of Three," composed of Azerbaijan,
Georgia, and Ukraine. (Kazakstan and Uzbekistan have been
mentioned as possible future members.)  Russian concern over
the Azerbaijan-Georgia-Ukraine alignment, which was formed
late last year and remains informal,  may have several origins.
The alliance is uncompromisingly Western in orientation,  and
its members may even aspire to NATO membership. They are
also interested in military cooperation among themselves:
Ukraine supplies arms to Azerbaijan and has offered to send
peacekeeping forces to both Nagorno-Karabakh and Abkhazia,
thereby undercutting Russia's jealously guarded monopoly on
CIS  "peacekeeping."
        The gravest threat to Russian interests, however, is the
grandiose plan to export Azerbaijan's Caspian oil via Georgia
and the Black Sea to Europe--bypassing Russia altogether.
What is more, the western Union of Three has the implicit
backing of Western states (notably the U.S. and France), which
are eager to circumscribe Russian dominance and to protect
Western economic interests  in the Transcaucasus.
        Nor is Georgia's membership in the western Union of
Three the only aspect of Georgian foreign policy to ring alarm
bells in Moscow.
Georgian President Eduard Shevardnadze is simultaneously
cultivating ties with several of Russia's North Caucasus
republics, including Chechnya. Some Russian observers
suspect Shevardnadze of planning to realize the vision, shared
by his late predecessor Zviad Gamsakhurdia and deceased
Chechen President Dzhokhar Dudaev, of a broader Caucasian
union. They perceive  such a configuration  as a threat to the
territorial integrity of the Russian Federation.
        The emergence and possible implications of the
Azerbaijan-Georgia-Ukraine alignment have not gone
unnoticed in Armenia, which has traditionally been Moscow's
most stalwart ally in the Transcaucasus. But some Russian
commentators have interpreted recent reports of Russian arms
supplies to Armenia as  heralding a fundamental reassessment
of Russian policy in the Transcaucasus to Armenia's
disadvantage. In the wake of those reports, one senior
Armenian official has advocated closer bilateral relations with
Ukraine. (Armenia responded to the reports of Russian arms
deliveries by charging that in recent years, Azerbaijan has
received comparable, if not larger, quantities of military
hardware from Turkey. This suggests that the Armenian
leadership has, for the moment, relinquished its hopes for
rapprochement with Ankara.)
        The ultimate criterion for the viability, if not the survival,
of both the eastern (Central Asian) and western Unions of
Three is not their economic potential but how much of a threat
they pose to Moscow. At last month's CIS summit, Russian
President Boris Yeltsin made it clear that "integration" within
the CIS should take priority over alternative alignments.  CIS
member states, he commented, are "free to seek friends to the
West, to the South, and to the East.  But what kind of
friendship is it that harms your neighbors?"

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               Copyright (c) 1997 RFE/RL, Inc.
                     All rights reserved.
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