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RFE/RL NEWSLINE

Vol 1, No. 47, Part I, 6 June 1997


Vol 1, No. 47, Part I, 6 June 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

* DUMA SLAMS PRIVATIZATION RESULTS

* DUMA RATIFIES UNION TREATY WITH BELARUS

* RELEASE OF FOUR JOURNALISTS ABDUCTED IN CHECHNYA

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RUSSIA

DUMA SLAMS PRIVATIZATION RESULTS. By a vote of 288 votes to 6 with 1
abstention, the State Duma has passed a preliminary version of a resolution
condemning the government's privatization policy from 1992-1996, RFE/RL's
Moscow bureau reported on 5 June. The final version of the non-binding
resolution is expected to be adopted within the next week. It calls for the
reversal of some privatization auctions and for new laws to increase
parliamentary oversight of the sale of state-owned shares in companies.
Communist Duma deputy Mullanur Ganeev, who chaired a special Duma commission
on privatization results, slammed the government for privatizing more than 57%
of Russian enterprises at a total gain to the treasury of only $3-5 billion.
Ganeev said the process was "criminal" and called on the government to ban
foreign investors from what he called strategic sectors in the Russian
economy.

STATE PROPERTY COMMITTEE CHAIRMAN RESPONDS TO CRITICS. Deputy Prime Minister
and State Property Committee Chairman Alfred Kokh objected to the Duma's
description of Russian privatization as "criminal," RFE/RL's Moscow bureau
reported on 5 June. Kokh acknowledged that some state property has been sold
off cheaply and that new owners are not always efficient. However, he said
poorly-drafted legislation--not the "evil intent" of government officials--was
to blame. He added that sales had brought relatively little money to the
treasury to date because the bulk of privatized enterprises were not sold for
cash. Instead, they were sold for vouchers that were distributed to citizens
during the "mass privatization" policy. Kokh said privatization will bring in
11 trillion rubles ($1.9 billion) this year, exceeding budget targets of 5
trillion rubles. He also pledged to cooperate with the Duma in drafting new
privatization legislation.

OFFICIALS ON PRIVATIZATION CRIMES, CAPITAL FLIGHT, SMUGGLING. Addressing the
Duma on 5 June, First Deputy Interior Minister Vladimir Kolesnikov told
deputies that crimes related to privatization rose by 60% in 1996 compared
with the previous year, Russian news agencies reported. He said real estate
schemes involving fraud, bribery, and even murder continued to proliferate.
The same day, First Deputy Central Bank Chairman Aleksandr Khandruev estimated
that $12-15 billion flows out of Russia illegally every year. Khandruev said
this estimate did not include capital funneled out through what he called
semi-legal "gray schemes." In addition, Interior Minister Anatolii Kulikov
told a 5 June government session that $16 billion worth of undeclared goods
were brought to Russia in 1996, depriving the budget of more than $2 billion
in customs tariffs.

DUMA RATIFIES UNION TREATY WITH BELARUS. The State Duma on 6 June ratified the
Russian-Belarusian union treaty signed in May by Russian President Boris
Yeltsin and his Belarusian counterpart, Alyaksandr Lukashenka, Russian news
agencies reported. The treaty sailed through the Duma by a vote of 363 to 2
with 19 abstentions. Most of the Russian political elite supports some kind of
integration with Belarus (see RFE/RL Newsline, 21 and 23 May 1997), although
opposition deputies have argued that the treaty should have called for more
rapid integration.

RELEASE OF FOUR JOURNALISTS ABDUCTED IN CHECHNYA. Four journalists from
ITAR-TASS and Radio Rossii who were abducted in Chechnya in March were freed
early on 6 June, Russian media reported. The four men were handed over to
Dagestani Security Council Chairman Magomed Tolboev and taken to Makhachkala.
Two days earlier, Nezavisimaya gazeta had quoted Chechen Interior Minister
Kazbek Makhashev as charging that Tolboev's earlier attempts to obtain the
journalists' release had been counterproductive. Makhashev also suggested that
Tolboev himself was implicated in their abduction. The newspaper charged that
the Russian government similarly considered that Tolboev was obstructing
attempts to locate and free the four men. The fate of three Russian
journalists abducted near Grozny in May remains unclear.

COMMUNISTS TO INITIATE NO-CONFIDENCE PROCEDURE TO PREEMPT GOVERNMENT? The
Communist Party Duma faction is planning to begin the procedure of calling a
confidence vote, Interfax reported on 5 June, citing an unnamed Duma source.
The source said the move is aimed at preventing the prime minister from
"stealing the initiative" by demanding a confidence vote himself. Under the
constitution, the president can dissolve the Duma if deputies vote no
confidence in the government twice within three months. But if the prime
minister initiates the confidence motion, only one no-confidence vote is
required to give the president legal grounds for disbanding the Duma.
Meanwhile, Duma Speaker Gennadii Seleznev on 5 June asked Chubais and Security
Council Secretary Ivan Rybkin not to "engage in blackmail." Chubais and Rybkin
had suggested that the Duma might be dissolved if deputies did not pass
economic legislation backed by the government.

YELTSIN CALLS FOR "MODERN, COMPETENT" POLICIES IN REGIONS. In a 6 June address
on nationwide radio, President Yeltsin called on Russia's regional leaders to
pursue "modern and competent" economic policies, such as those adopted in
Moscow, St. Petersburg, and Nizhnii Novgorod Oblast. He said that because of
poor oversight, federal aid sent to economically lagging regions often "does
not reach those who need it most." He singled out Primorskii Krai as a region
where poorly thought-out policies had hurt residents. (The krai has seen
numerous energy crises in recent years, the most recent of which led to
massive power cuts throughout May.) Yeltsin also warned regional leaders "who
got extensive powers and immediately opened their own big pockets" that their
income and property declarations will be scrutinized in Moscow. "We will slap
their hands to teach them a lesson," he added.

WORLD BANK APPROVES LOANS FOR RUSSIA. The World Bank's board has approved five
loans to Russia totaling nearly $820 million, Reuters reported on 5 June. In
addition to a $600 million loan for structural reforms in the Russian economy,
the bank approved an $85 million credit to help restructure recently
privatized companies, $71 million earmarked for education, $40 million for the
power sector, and $22.6 million to cover economic analysis for the government.
The bank's board is scheduled to consider a proposed $800 million loan for
Russia's social benefits system in late June. Also on 5 June, World Bank
Managing Director of Operations Caio Koch-Weser appealed to G-7 nations to
provide $12 million to help Russia stop producing ozone-depleting CFCs
(chlorofluorocarbons), RFE/RL's correspondent in Washington reported.
Koch-Weser urged that the issue be on the agenda at the June G-7 summit in
Denver, Colorado.

RUSSIA TO DEMAND REPAYMENT OF DEBTS FROM LIBYA, IRAQ. Addressing a session of
the presidential political consultative council on 5 June, First Deputy Prime
Minister Anatolii Chubais said it is "not normal" that Russia should overlook
the "massive debts" owed by a number of foreign countries. He said that the
Russian government will demand repayment of those debts, according to
Interfax. Chubais singled out Libya and Iraq, which, he said, owed Russia $2.5
billion and $7 billion, respectively.

PRIMAKOV ON ARMS CONTROL. Foreign Minister Yevgenii Primakov says Moscow
supports a ban on bomb-grade fissile material as well as an eventual
prohibition on land mines, Russian and Western news agencies reported on 5
June. Addressing a U.N.-sponsored conference on disarmament in Geneva,
Primakov added that the Russian government is "sparing no effort" to ratify
the START-2 treaty with Washington. START-2 was ratified by the U.S. Congress
last year but faces significant opposition in the Russian Duma. Primakov said
Moscow may soon start negotiations on a START-3 treaty to reduce the number of
U.S. and Russian nuclear weapons to one-fifth of their Cold War levels within
a decade. But he warned against a bipolar vision of geopolitics, saying the
time was approaching when all nuclear powers will have to join arms
negotiations.

CHUBAIS PROMISES TO IMPROVE FUNDING FOR MILITARY. First Deputy Prime Minister
Chubais says that funding for arms production and military research and
development will be six times higher in July than in June, Russian news
agencies reported on 5 June. Chubais, who chairs a recently created government
commission on military financing, did not specify how much would be spent on
the programs. He also promised that the government will soon release a
schedule for paying back wages to soldiers. Funding for the armed forces,
especially for soldiers' wages and military acquisitions, has fallen far below
budgeted levels in recent years.

RESHUFFLE AT DEFENSE MINISTRY TO CONTINUE? Unnamed sources in the Defense
Ministry say several senior generals who were promoted during the last year
under former Defense Minister Igor Rodionov are on the way out, Interfax and
Krasnaya zvezda reported on 4 June. Yeltsin replaced Rodionov with Igor
Sergeev in May. The sources claimed that Sergeev has asked Yeltsin to sign a
decree reappointing some generals who lost their jobs after former Defense
Minister Pavel Grachev was fired and Aleksandr Lebed was appointed Security
Council secretary last June. Meanwhile, presidential spokesman Sergei
Yastrzhembskii has denied media reports saying Grachev may be appointed
Russian ambassador to NATO, Interfax reported on 5 June. Yastrzhembskii said
Grachev is not among those being considered for the job.

RUMORS OF BAN ON U.S. FILMS IN ARMY DENIED. The Defense Ministry's press
service says there is no ban on watching U.S. war movies at Russian military
bases, ITAR-TASS reported on 5 June. Some Russian media have reported that the
armed forces have banned screenings of violent films in an attempt to prevent
soldiers from killing their comrades. A Russian soldier recently killed six of
his comrades in Chita Oblast and a sergeant in Abkhazia killed 10 fellow
soldiers before shooting himself. Izvestiya reported on 6 June that since
April 1995, 63 Russian soldiers have been killed in similar circumstances.

YELTSIN DECREES CHANGE IN BLACK SEA FLEET FLAGS. Flags of the former Soviet
Union will be replaced with post-Soviet Russian flags on Russia's Black Sea
Fleet ships on 12 June, according to a presidential decree issued on 5 June.
The 31 May agreement between Russian and Ukraine on dividing the fleet made
the change possible, Russian news agencies reported. In recent years, 12
June--the anniversary of Russia's 1990 declaration of sovereignty--has been
marked as Russian Independence Day.

KEMEROVO ADOPTS ELECTORAL LAW, IRKUTSK REGISTERS GUBERNATORIAL HOPEFULS.
Kemerovo Oblast Governor Mikhail Kislyuk has signed an electoral law recently
passed by the oblast's legislature, ITAR-TASS reported on 5 June. The move
paves the way for gubernatorial elections to be held there later this year.
Kemerovo is the only oblast still governed by a Yeltsin appointee (see RFE/RL
Newsline, 20 May 1997). Kislyuk eventually dropped his demand that the law set
the minimum turnout for valid elections at 50%, a level rarely seen in
regional elections. Meanwhile, nine candidates have been registered to contest
the 27 July gubernatorial election in Irkutsk Oblast, ITAR-TASS reported on 6
June. The contenders include Irkutsk Mayor Boris Govorin, Communist Party
oblast head Sergei Levchenko, and State Duma deputies Viktor Mashinskii
(Popular Power faction), Yurii Ten (Our Home Is Russia), and Vitalii Shuba
(Russian Regions).

ASEAN HOLDS CONFERENCE IN MOSCOW. The Cooperation Committee of the Association
of Southeast Asian Nations (ASEAN) held its founding conference in Moscow on 5
June, ITAR-TASS reported. Russian Deputy Foreign Minister Grigorii Karasin,
who is a co-chairman of the committee, said Moscow hoped to promote better
relations with the ASEAN countries and to attract members to take part in
projects in Siberia and Russia's Far East. The ASEAN member countries are
Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet
Nam. Burma, Cambodia, and Laos are expected to be admitted in July. Russia is
attending the conference as a "dialogue partner," along with Australia,
Canada, China, India, Japan, New Zealand South Korea, the U.S., and the EU.

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN DEFENSE MINISTRY DENIES PLANS TO INVADE ABKHAZIA. The Defense
Ministry has issued a statement denying press reports that Georgian forces are
preparing for a military attack on Abkhazia, ITAR-TASS reported on 6 June. The
press reports claimed that the reason for First Deputy Defense Minister Dzhoni
Pirtskhalaishvili's resignation was not personal friction between himself and
Defense Minister Vardiko Nadibaidze but Pirtskhaliashvili's opposition to the
planned offensive. Addressing troops on 26 May, the anniversary of the 1918
proclamation of Georgia's independence, Nadibaidze had said that their primary
obligation was to restore Georgia's territorial integrity, if necessary by
force.

ANOTHER DEMONSTRATION IN KYRGYZSTAN. More than 500 people assembled outside
the government building on 5 June and presented a list of demands to the
government, RFE/RL correspondents in Bishkek reported. The protest was
organized by Kyrgyzstan's Committee to Protect Journalists and was joined by a
group representing the homeless in the capital. The protesters demanded the
release of all journalists currently detained or jailed in Kyrgyzstan and an
investigation into the 3 June beating by Kyrgyz militia of four people who had
staged a hunger strike outside the government building. They also want the
resignation of Bishkek Mayor Boris Silayev and his administration and
increased efforts to help Bishkek's homeless. Deputy Prime Minister Mira
Jangaracheva went out to talk to the demonstrators but they said they would
only speak to Prime Minister Apas Jumagulov.

FOREIGN INVESTMENT IN KAZAKSTAN. Kenneth Derr, the president of the U.S.
company Chevron, told an investment conference in Almaty on 5 June that his
firm has already invested $800 million in Kazakstan and plans to invest $20
billion in the Tengiz oil field project over the next 40 years, Interfax
reported. The Tengizchevroil joint venture is already producing 160,000
barrels of oil per day and hopes to increase this to 700,000 barrels per day
by 2010. President Nursultan Nazarbayev told the conference that foreign
companies to date have committed themselves to investing more than $60 billion
in the coming years. He noted that direct investment now totals $6 billion.
and that by 2003, Kazakstan will be producing 100 million tons of oil
annually. Nazarbayev also said the recoverable mineral resources in his
country are estimated at $8.7 trillion.

ARMENIAN PRESIDENT IN ASHGABAT. Levon Ter-Petrossyan arrived in Ashgabat on 5
June for a two-day official visit, ITAR-TASS and Noyan Tapan reported.
Ter-Petrossyan and his Turkmen counterpart, Saparmurat Niyazov, signed an
agreement on avoiding dual taxation and a memorandum on expanding bilateral
cooperation. They also signed a protocol whereby Armenia will provide
Turkmenistan with manufactured goods and gold in payment of its $35 million
debt for Turkmen natural gas supplied in 1994-1995.

FREAK STORMS STRIKE TURKMENISTAN. Heavy rains fell in southern Turkmenistan
from 2-4 June, causing damage in and around the capital, Ashgabat, ITAR-TASS
reported. The level of the Atrek and Firuzinka Rivers rose as much as 3 meters
and brought stones and wood into villages located on their banks. One plane at
Ashgabat's airport slipped off the runway as it was landing and fell on its
side. No casualties were reported. The rain fall is the heaviest recorded for
June since 1929.

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