One must learn by doing the thing; though you think you know it, you have no certainty until you try. - Sophocles
RFE/RL NEWSLINE

Vol 1, No. 35, Part I, 21 May 1997


Vol 1, No. 35, Part I, 21 May 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

* CHERNOMYRDIN ADDRESSES DUMA ON BUDGET

* MOSCOW APOLOGIZES FOR INTERCEPTION OF CHECHEN
VICE PRESIDENT'S PLANE

* TAJIKISTAN WORRIED ABOUT AFGHAN BORDER

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RUSSIA

CHERNOMYRDIN ADDRESSES DUMA ON BUDGET. Prime
Minister Viktor Chernomyrdin has defended the
government's planned budget cuts in an address to the
State Duma today, RFE/RL's Moscow bureau reports. He
insisted that the government will not fill the budget gap by
printing money. Oleg Morozov of the Russian Regions
faction has proposed an alternative sequestration bill that
would cut spending equally across the board. Morozov told
RFE/RL yesterday that such proportional cuts are in line
with the law on the budget. In contrast, the government has
proposed continuing to fully fund some programs while
cutting others by 55% or 30%. Meanwhile, a Yabloko-
sponsored motion to call a no-confidence vote fell a few
signatures short of the 90 needed to put the vote on
today's agenda. Yesterday, the Communist Duma faction
voted to postpone consideration of a no-confidence
motion against the government at least until June, Interfax
reported.

MOSCOW APOLOGIZES FOR INTERCEPTION OF CHECHEN
VICE PRESIDENT'S PLANE. Russian leaders have formally
apologized for yesterday's incident in which Russian
fighter planes intercepted Chechen Vice President Vakha
Arsanov's plane shortly after it took off from Grozny en
route for The Netherlands. When Arsanov refused to allow
the pilot to land at Mineralnye Vody for a customs
inspection, the plane was forced to return to Grozny.
Russian Security Council secretary Ivan Rybkin blamed the
incident on "over-zealous officials," and Prime Minister
Chernomyrdin issued orders that the flight be allowed to
proceed unimpeded, according to AFP. Arsanov is to
participate in a conference in The Hague on Russian-
Chechen relations.

PRESIDENTIAL SPOKESMAN PREDICTS "BATTLE OF
INTERPRETATIONS" OVER NATO. Boris Yeltsin's
spokesman Sergei Yastrzhembskii says a "battle" is
looming between Moscow and NATO over the interpretation
and implementation of the NATO-Russia Founding Act
agreed last week. In yet another indication that the
"founding act" is far from the last word on the subject,
Yastrzhembskii pointed out that the Russian parliament
might attach "certain conditions" when it takes up the
accord later this month.

RUSSIAN NEGOTIATOR ON DIFFERENCES OVER
RUSSIAN-BELARUSIAN CHARTER. Sergei Shakhrai,
Yeltsin's representative in the Constitutional Court and a
leading negotiator on the Russian-Belarusian charter,
discussed the remaining differences between Moscow and
Minsk in an interview yesterday with an RFE/RL Moscow
correspondent. Shakhrai said that Russia wants a
federative union, to which Belarus is opposed, and thinks
future decisions of a Russian-Belarusian Supreme Council
should be signed by both Yeltsin and Belarusian President
Alyaksandr Lukashenka. The two sides also have yet to
decide where the parliamentary assembly of the Russian-
Belarusian union should be located. Yeltsin and Lukashenka
are scheduled to discuss the charter tomorrow and sign the
document on 23 May.

LEBED SUPPORTS MERGER WITH BELARUS... Former
Security Council Secretary Aleksandr Lebed said he
supports a union with Belarus and believes Lukashenka will
sign a union charter, despite its "drawbacks," ITAR-TASS
reported yesterday. Lebed recently met with Lukashenka
in Minsk. He added that he agrees with charges made by
Moscow Mayor Yurii Luzhkov concerning the alleged
"Western patronage" of Russian opponents of the merger.
Meanwhile, today's Komsomolskaya pravda argued that
Yeltsin should call for a referendum on Russian-Belarusian
union. Duma deputy Nikolai Gonchar, a strong supporter of
integration, has called for holding a referendum on the
matter.

..AS DO MANY REGIONAL LEADERS. Fourteen regional
leaders have signed a letter supporting a Russian-
Belarusian union, which was published yesterday by the
official government newspaper Rossiiskaya gazeta. The
signatories include several Communist-backed or "red"
governors, such as Krasnodar Krai Governor Nikolai
Kondratenko, Amur Oblast Governor Anatolii Belonogov,
and Volgograd Oblast Governor Nikolai Maksyuta. Others
are staunch Yeltsin allies such as Samara Oblast Governor
Konstantin Titov and Kalmykian President Kirsan
Ilyumzhinov.

RUSSIAN-JAPANESE RELATIONS CONTINUE TO
IMPROVE. Tokyo has agreed to defer payment of Russia's
$1.5 billion debt until 31 March 1999 and may extend this
period until 2002. It also says it is ready to release a $90
million first installment of humanitarian aid worth $500
million that it promised Russia in 1991. Meanwhile, Deputy
Prime Minister Vladimir Bulgak said talks yesterday with
Japan's ambassador to Moscow may soon lead to a joint
venture for projects in the energy sector and the
production of communications equipment. Reuters and AFP
report today that Russian forces on the disputed Kuril
Islands will be reduced, possibly in June. Japanese Foreign
Minister Yukihiko Ikeda is to arrive in Moscow tomorrow
for an official visit.

YELTSIN HALTS AIRBORNE TROOP REDUCTIONS. Yeltsin
has ordered that the reorganization of the Airborne Forces
be halted, Russian news agencies reported yesterday,
citing presidential spokesman Yastrzhembskii. In a
message to Prime Minister Viktor Chernomyrdin, Chief of
the General Staff Viktor Samsonov, and Defense Minister
Igor Rodionov, Yeltsin warned that a "hasty" reduction in
the airborne troops could harm their combat potential.
Yeltsin is to chair a meeting of the Defense Council
tomorrow. Col. Gen. Georgii Shpak, the commander of the
Airborne Forces, announced the controversial planned cuts
last month (see RFE/RL Newsline, 7 May 1997).

CONTRACT FOR ARMY SUPPLIES AWARDED AFTER
AUCTION. Four companies have been awarded contracts to
supply sugar to the armed forces following an auction held
yesterday, ITAR-TASS reported. First Deputy Prime
Minister Boris Nemtsov, who has heralded open
competitive bidding as an important weapon against
corruption, attended yesterday's auction. Authorities
publicized it as the first of its kind for army suppliers.
However, today's Moskovskii komsomolets claimed that
the Defense Ministry has held previous auctions before
awarding contracts to suppliers. Moreover, the paper
argued that the main problem afflicting the armed forces
was not lack of competition for military contracts but lack
of funds to pay suppliers. Moskovskii komsomolets also
claimed that a new system for allocating money to the
Defense Ministry, Border Troops, Interior Ministry, and
Ministry for Emergency Situations would benefit selected
banks that are close to the Kremlin.

DEBAKEY SAYS YELTSIN "IN GOOD SHAPE." U.S.
cardiologist Michael DeBakey said Yeltsin is "in good
shape" following a meeting with the president yesterday,
ITAR-TASS reported, citing the Kremlin press service.
DeBakey, who is attending a congress of CIS cardiologists
in Moscow, added that Yeltsin's recovery is proceeding
"faster than expected." AFP reported that DeBakey also
met with Yeltsin two or three months ago but that the
Kremlin did not publicize that consultation. Although
Yeltsin has made more public appearances in recent weeks,
rumors that he is seriously ill continue to circulate in the
Russian press.

CONSTITUTIONAL COURT SAYS CUSTOMS AGENCIES
CAN CONFISCATE CONTRABAND. The Constitutional
Court has ruled that customs authorities have the right to
confiscate illegal imports or exports, ITAR-TASS reported
yesterday. The court said such confiscations are not a
violation of private property rights. At the same time,
citizens have the right to contest the confiscations in
court. The Novgorod Oblast Court earlier asked the
Constitutional Court to examine whether the Customs Code
contradicts the constitutional guarantee that private
property is inviolable.

CRIMINAL CASE OPENED AGAINST ZHIRINOVSKY. The
Moscow city police have opened a criminal case against
Liberal Democratic Party of Russia leader Vladimir
Zhirinovsky, Interfax reported yesterday. Zhirinovsky is
being investigated under Article 213 of the Criminal Code,
which deals with hooliganism, following an incident in which
he struck two television journalists and forced one of them
into his car (see RFE/RL Newsline, 9 May 1997). The State
Duma would have to lift Zhirinovsky's immunity from
criminal prosecution before charges could be brought
against him.

OECD HEAD SAYS RUSSIAN MEMBERSHIP LONG WAY
OFF. Donald Johnston, the secretary-general of the
Organization for Economic Cooperation and Development,
says Russia will probably not be able to join the OECD in the
near future, AFP reported yesterday. Russia requested
admission to the OECD in 1996. Meanwhile, the State
Statistics Committee released figures yesterday
indicating that Russia's GDP during the first four months of
1997 was 810 trillion rubles ($140 billion), the same as for
January-April 1996, Interfax reported.

GOVERNMENT CONCERNED ABOUT REGIONAL TAX
DEBTS. Deputy Finance Minister Vladimir Petrov says the
republics of Tatarstan, Bashkortostan, and Sakha (Yakutia)
failed to transfer a combined total of 1 trillion rubles
($170 million) in collected taxes to the federal government
during the first quarter of 1997, RFE/RL's Moscow bureau
reported yesterday. Appearing at a Duma hearing on the
budget, Petrov said the government may cease to finance
federal programs in those republics until it receives its
share of collected taxes. All three republics have signed
power-sharing agreements with the federal authorities
allowing them to keep a greater portion of revenue
collected on their territory than most Russian regions.
Meanwhile, Bashkortostan's President Murtaza Rakhimov
yesterday questioned the government's economic policy
priorities. According to today's Izvestiya, Rakhimov said
the government should seek to revive domestic industry
and pay wages and pensions before starting to reform
housing and municipal services.

TRANSCAUCASUS AND CENTRAL ASIA

TAJIKISTAN WORRIED ABOUT AFGHAN BORDER.
Alarmed by reports of a mutiny in the ranks of Afghan
General Rashid Dostum's forces and apparent successes by
the Taliban militia in their drive northward, the Tajik
government's power ministries met yesterday in Dushanbe
to discuss ways to increase security along the border,
RFE/RL correspondents in Tajikistan reported. But
presidential press secretary Zafar Saidov later
downplayed those concerns, saying measures on
reinforcing the border with Afghanistan had already been
taken when Andrei Nikolayev, the director of the Russian
Federal Border Services, visited Tajikistan late last month.
A "scheduled" training exercise is under way near the
Tajik-Afghan border, involving Tajik border units, Security
Ministry troops, the presidential guard, and other units of
the Tajik army.

KAZAKSTAN TO RECEIVE LOAN FROM ADB. Kazakstan
will receive a $100 million loan from the Asian
Development Bank, Russian media report. The funds are to
be used to reform the pension system and could be
augmented if Japan agrees to join the project. The loan will
have an annual interest rate of 7% with a two-year grace
period. Earlier this year, the ADB granted Kazakstan loans
worth $85 million.

KYRGYZSTAN TO STOP STATE SUBSIDIES FOR
AGRICULTURE. President Askar Akayev has said that
beginning next year, the state will cease to provide
financial support to the agricultural sector, according to
yesterday's Pravda-5 . Akayev cited misuse and non-
payment of loans . He said it is time that farmers and
herders sought financial aid from the country's banks.

TRANS-CASPIAN PIPELINE IN THE OFFING? The
presidents of Azerbaijan and Kazakstan may sign an
agreement in Almaty next month on construction of a
pipeline on the bed of the Caspian Sea to link up with the
Baku-Supsa export pipeline, ITAR-TASS reported
yesterday. After meeting in Baku on 19 May with President
Heidar Aliev, Nick Zana, director-general of Tengiz-
Chevroil (the U.S.-Kazak company developing Kazakstan's
giant Tengiz field), said his company is prepared to invest
in Azerbaijan to increase oil exports. Small amounts of
Tengiz oil are currently exported via Russia. Earlier this
year, a trial shipment was sent by barge across the Caspian
to Baku and from there by rail through Georgia to Batumi.
Last month, Delovoy mir quoted Zana as saying that
completion in late 1999 of the Caspian pipeline from Tengiz
to Novorossiisk would resolve the transportation problem.

ARMENIAN INDUSTRIALIST UNEASY ABOUT IMF
PROPOSAL. One week before his death yesterday of a
heart attack, Telman Ter-Petrossyan, elder brother of the
Armenian president and director of one of Armenia's
largest industrial plants, expressed concern at IMF
representative Tanos Katsambas's proposal that Armenia
seek new ways of utilizing its work force, particularly in
small enterprises in the service sector, an RFE/RL
correspondent in Yerevan reported. Katsambas made the
proposal at a press conference last week. The IMF and the
Armenian government have reached agreement on reform
targets for this year, including banking reform and tax
collection. The government will order firms to sell part of
their assets if they are unable to pay tax arrears. This is
the second year of a three-year ESAF loan to Armenia
totaling approximately $138 million.

NEW ARMENIAN FINANCE MINISTER APPOINTED.
President Levon Ter-Petrossyan has issued decrees
dismissing Levon Barkhudaryan as minister of finance and
appointing former Central Bank Deputy Chairman Armen
Darbinyan as his successor, ARMENPRESS reported on 19
and 20 May. Introducing Darbinyan to ministry staff, Ter-
Petrossyan thanked Barkhudaryan for his contribution to
Armenia's "clear and consistent" economic policy.

GEORGIAN ORTHODOX CHURCH QUITS WCC. The Holy
Synod of the Georgian Orthodox Autocephalous Church
voted yesterday in favor of leaving the largely protestant
World Council of Churches, RFE/RL's Tbilisi bureau
reported. The priors of four monasteries had threatened to
split from the Georgian church if it did not quit the council.
The Synod dismissed the priors in question for "the most
grievous sin of attempting to divide the church" and barred
them from practicing as priests.

GEORGIAN-CHECHEN TENSIONS. Ruslan Kutaev, special
emissary of Chechen President Aslan Maskhadov, is
currently in Georgia trying to defuse tensions among the
Chechen population of Georgia's Akhmeta Raion,
Nezavisimaya gazeta reports today. The tensions arose
after the Georgian government established a road police
checkpoint outside a village where some 1,000 ethnic
Chechen families live.

AZERBAIJANI OPPOSITION PARTIES SIGN
COOPERATION AGREEMENT. Isa Gambar and Vagif
Kerimov, leaders of the Musavat and National Democratic
Independence Parties, yesterday signed an agreement on
regular consultations and cooperation in the forthcoming
local election campaign and in combating separatism and
bribery, Turan reported. The agreement is the latest of
several cooperation accords between opposition parties,
which have only seven seats in the parliament.

END NOTE

The Internet in Central Asia

by Julie Moffett

The five Central Asian states are only just getting onto the
information superhighway, but progress is being made with
the help of Western nations and organizations. Currently,
Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan, and
Uzbekistan have limited computer networking capabilities.
However, three of those five countries have established
permanent Internet access and all have e-mail capability.

Kazakstan and Uzbekistan were the first of the Central
Asian states to establish a permanent Internet connection
in 1994. Kyrgyzstan followed in 1995. Tajikistan and
Turkmenistan have not yet established permanent Internet
access. However, the two nations, like all the countries of
the former USSR since the early 1990s, have dial-up, non-
permanent access to the Internet.

Like most other countries in the region, the Central Asian
states are hindered by an antiquated and technically
deficient telecommunications infrastructure. There are
currently no digital lines (designed to quickly exchange
data) in Central Asia; all of the telephone lines are analog
(designed to support voice).

One Western organization actively involved in the process
is the Eurasia Foundation, a U.S.-based, privately managed
grant-making organization. Established in 1993 with a grant
from the United States Agency for International
Development (USAID), the foundation has since awarded
more than 70 grants totaling $1.7 million to help establish
or improve Internet capability across the former Soviet
Union.

In 1994, the Foundation provided a substantial grant of
$85,000 to the Project for Economic Reform and
Development in Central Asia (PERDCA). PERDCA used the
money to help establish the Silknet network, which has
since provided e-mail service to subscribers in
Uzbekistan, Tajikistan, and Kyrgyzstan.

The region has also received substantial support from,
among others, the Open Society Institute (OSI)--a private
grant-making foundation funded by Hungarian-U.S. multi-
millionaire George Soros, the International Research and
Exchange Board (IREX), ISAR (formerly known as the
Institute on Soviet-American Relations), Chemonics
International, and the Sacred Earth Network, a U.S.-based
international non-profit environmental organization.

However, there are still several major obstacles to
improved Internet connectivity in Central Asia: poor
telecommunications infrastructure; civil and political
unrest in many areas, which impedes infrastructure reform
and intimidates potential donors; the high cost of
telephone lines; the inability of Central Asian governments
to match funds with Western donors; and a dependence on
international funding that makes it difficult for long-range
planning.

In 1995 in Kazakstan, a Soros program called the Open
Society Institute -- Regional Internet Program (OSI-RIP),
provided 30 secondary schools with the means to use e-
mail and the Internet, purchased additional computer
equipment, and supplemented the wages of local teachers
participating in the project. IREX has set up four public
access sites in Almaty, developed a strong user base, and
trained local staff. Experts estimate Internet users in
Kazakstan to total some 500, and e-mail users some
25,000.

In Kyrgyzstan in 1995 and 1996, OSI-RIP provided 50
schools, one university, three medical institutions and
several other organizations with computer equipment and
access to e-mail. Also in 1996, the Eurasia Foundation
awarded grants, intended mostly for information
networking purposes and totaling nearly $61,000, to a
variety of organizations. Experts estimate Internet users
in Kyrgyzstan to total some 500 and e-mail users some
5,000.

In 1995, OSI-RIP, in coordination with PERDCA and the
Eurasia Foundation, installed the first e-mail system in
Tajikistan. By July 1995, the system was fully operational
with about 60 users. The following year, OSI-RIP expanded
the project to about 700 users. Experts estimate the
number of e-mail users at between 800 and 1,000.

In Turkmenistan the Ashgabad-based Catena Ecological
Club, in cooperation with Sacred Earth Network,
established a network called CAT-Net. The network
currently serves several environmental groups,
individuals, scientists, and journalists in Turkmenistan--all
of whom use the network free of charge. Experts estimate
the number of e-mail users at between 200 and 500.

In Uzbekistan, the government has allowed the state-
owned telecommunications company Uztelekom to enter
into a number of foreign joint-ventures to work toward the
completion of the ambitious "Program for the
Modernization and Development of the Telecommunications
Networks by the Year 2010." The goal of that program is to
increase the number of installed telephone lines and reach
complete digitalization by the year 2010. Last November,
the Uzbek Ministry of Communications named Daewoo
Telecom, a South Korean firm, and Korea Telecom as
partners in a project to replace 350,000 analog telephone
lines in the country and add approximately 100,000 digital
lines within three years. Experts estimate the number of
Internet users in Uzbekistan to be between 250 and 1,000
and e-mail users at some 5,000.




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