Poetry must be human. If it is not human, it is not poetry. - Vicente Aleixandre
RFE/RL NEWSLINE

Vol 1, No. 57, Part I, 20 June 1997


Vol 1, No. 57, Part I, 20 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

* YELTSIN TO GIVE OPENING SPEECH IN DENVER

* DUMA APPROVES TAX CODE IN FIRST READING

* UZBEK PRESIDENT ON RESOLVING NAGORNO-KARABAKH ISSUE

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RUSSIA

YELTSIN TO GIVE OPENING SPEECH IN DENVER... Russian President Boris Yeltsin
has been invited by his U.S, counterpart, Bill Clinton, to deliver the opening
speech at the "Summit of Eight" in Denver, Colorado, on 20-22 June. Yeltsin is
scheduled to attend all sessions of the summit, except those dealing with
financial aid. Yeltsin is hoping to speed up the process of Russia's joining
the World Trade Organization and the Organization for Economic Cooperation and
Development during his weekend in Denver. The Russian press reports Moscow is
participating as a full partner but other participating countries,
particularly Japan, have indicated this is not the case. The German daily "Die
Welt" on 19 June questioned Russia's inclusion among the leading industrial
powers, noting that economically "Russia is not just trailing the others. For
the tenth year in succession, the country's economy is set to decline, with
industrial output decreasing still further."

...BUT WON'T BE ABLE TO AVOID KURIL ISLAND ISSUE. Despite Yeltsin's statement
that he is not prepared to resolve the Kuril Islands issue at the Denver
Summit of Eight, Japan is already gathering support for its position on the
disputed island chain. Tokyo has asked U.S. President Clinton to help solve
the issue. Clinton's responded that it is a matter for the Russians and
Japanese to discuss but noted that "obviously there will have to be some plan
for resolving [it]." Russian Presidential spokesman Sergei Yastrzhembskii said
"if this issue is addressed, it will have to be in the framework of joint
steps undertaken to develop natural resources." Japanese Prime Minister
Ryutaro Hashimoto has said he will seek support from other leaders at the
summit. He reminded them that "the territorial issue is unresolved" and, as a
result, Japanese-Russian relations remain the only "abnormal" ones among the
Group of Eight.

YELTSIN CONFIRMS NOT GOING TO NATO SUMMIT. Speaking to foreign journalists in
Moscow on 19 June, Yeltsin confirmed he will not attend the July NATO summit
in Madrid, Russian news agencies reported. He explained that "we decided that
we needed to recover" after signing the Founding Act on relations between
Russia and NATO (see "RFE/RL Newsline," 27 and 28 May 1997). Yeltsin added
that "Russians would be uncomfortable" if he went to the summit, where the
Western alliance is expected to invite several new members. Russian officials
continue to speak out against NATO expansion. A recent nationwide poll by the
Russian Public Opinion and Market Research Institute found that only 29.7% of
respondents said they were "concerned" about NATO's plans for eastward
expansion, while 44.7% said they were not concerned by such plans,
"Nezavisimoe voennoe obozrenie" reported on 7 June.

DUMA APPROVES TAX CODE IN FIRST READING. The State Duma on 19 June approved
the tax code in the first reading by a vote of 244 to 84 with two abstentions,
ITAR-TASS reported. According to Deputy Finance Minister Sergei Shatalov, the
code would reduce the number of taxes from 75 to 28. Individuals would pay a
12% tax on earnings up to 60 million rubles ($10,400) per year. Income above
that level would be taxed at a rate of 30%. Six of the seven Duma factions,
including the vast majority of Communist deputies, supported passing the code.
Only the Yabloko faction called for rejecting it. Yabloko leader Grigorii
Yavlinskii argued that the code will neither reduce the tax burden nor
simplify the tax system, RFE/RL's Moscow bureau reported. Before departing for
Denver, Yeltsin called the Duma's vote on the tax code "a great victory for
us."

STALEMATE OVER BUDGET CUTS CONTINUES. The conciliatory commission that had
sought a compromise over proposed cuts in 1997 budget spending has decided no
longer to convene, citing an unbridgeable impasse between government and
parliamentary representatives, RFE/RL's Moscow bureau reported on 19 June. The
government, which originally sought 108 trillion rubles ($19 billion) in
spending cuts, was willing to reduce the figure to 88 trillion rubles.
Meanwhile, Duma representatives led by Communist deputy and Economic Policy
Committee Chairman Yurii Maslyukov insisted that cuts do not exceed 42
trillion rubles. Maslyukov's plan, which the Duma is to consider on 20 June,
would reduce spending on all "unprotected" budget items by 20%. The
government's compromise plan would leave some programs untouched while cutting
others by 30% or 45%. (The government initially sought to cut spending on
programs in the last category by 55%.)

DUMA ROUNDUP. The Duma on 19 June passed a law on the status of persons
serving in the military, ITAR-TASS reported. The law would grant servicemen
equal status, regardless of whether they serve in a branch of the armed forces
or in troops subordinate to other federal agencies. It would allow soldiers to
participate in meetings and demonstrations when off duty but would prohibit
involvement in strike actions. In addition, religious organizations could not
be created in military units, although soldiers would be allowed to attend
religious services in their spare time. The Duma also approved a new version
of the law on the subsistence minimum, which outlines procedures for
calculating the subsistence level on a quarterly basis. An earlier version of
the law was rejected by the Federation Council. Finally, the Duma overrode a
presidential veto of a law on state regulation of the agro-industrial complex.

DECREE LOWERS GAS RATES FOR SOME DOMESTIC CONSUMERS. Yeltsin issued a decree
on 19 June ordering the gas monopoly Gazprom to reduce the rates it charges
some domestic industrial consumers by 40%, Russian news agencies reported. The
reduced rates will be offered only to enterprises that pay in cash and in
advance for gas deliveries and also make a formal pledge to pay their debts
for past gas deliveries by the end of 1997. Gazprom executives say the company
is owed some $12 billion by domestic customers. First Deputy Prime Minister
Boris Nemtsov told Interfax that in accordance with the decree, enterprises
seeking to buy gas at the reduced rate would also have to promise to pay their
debts to the federal budget by the end of this year. However, the text of the
decree was not immediately available to confirm Nemtsov's statement.

KULIKOV SUPPORTS PROPOSED MEDIA BOYCOTT OF CHECHNYA. Interior Minister
Anatolii Kulikov has said he supports the proposal by some journalists to
impose a media boycott of Chechnya in protest at the latest series of
kidnappings of some of their colleagues in the breakaway republic, Interfax
reported on 19 June. Kulikov termed the kidnappings a "dangerous and
infectious disease typical of that region," adding that he was against paying
ransoms to the kidnappers. Kulikov also said Russian construction workers and
some 400 servicemen are still being kept prisoner in Chechnya and that their
release was a "priority" for Moscow. According to Kulikov, Chechnya is full of
gangs outside the control of President Aslan Maskhadov, who, he said, is
unwilling to accept help from the Russian law-enforcement bodies. Kulikov
expressed readiness to help Chechen authorities in combating crime.

CENTRAL BANK SAYS CHECHNYA OBSTRUCTING AGREEMENTS. A spokesman for the Central
Bank told ITAR-TASS on 19 June that Chechnya has refused to open an account at
the bank, thereby contravening the 12 May agreement. That accord granted the
Chechen National Bank an independent status and stated that it must have an
account at the Russian Central Bank in order to allow transfers from and to
commercial banks in Russia. The spokesman said the Chechens are insisting on
establishing direct ties with Russian commercial banks and on having direct
access to Russia's currency and equity markets. The spokesman added that the
"unconstructive position" of the Chechen side hinders the transfer of Russian
public funds for social purposes in the breakaway republic.

LUZHKOV HOSTS MAYORS' CONFERENCE IN MOSCOW. Mayors from 29 of the world's
largest cities attended a conference hosted by Moscow Mayor Yurii Luzhkov on
18-19 June. Yeltsin attended a reception for the mayors following the
conference, at which he and Luzhkov traded compliments, Russian news agencies
reported on 19 June. During the conference, Luzhkov signed a cooperation
agreement with the mayor of Bangkok, Thailand. During the last year, Luzhkov
has traveled abroad several times and established contacts with high-level
officials. During a recent visit to Baku, he and Azerbaijani President Heidar
Aliev signed several cooperation agreements between Moscow and Azerbaijan,
"Nezavisimaya gazeta" reported on 17 June.

YELTSIN APPOINTS KVASHNIN HEAD OF GENERAL STAFF. Yeltsin issued a decree
appointing Col.-Gen. Anatolii Kvashnin first deputy defense minister and head
of the General Staff of the armed forces, Russian news agencies reported on 19
June. Kvashnin was appointed provisionally to those posts on 23 May, the day
after his predecessor, Viktor Samsonov, and former Defense Minister Igor
Rodionov were fired. Kvashnin had previously served as commander of the North
Caucasus military district.

ST. PETERSBURG GOVERNOR TO SUE SOBCHAK. Vladimir Yakovlev is to sue former St.
Petersburg Mayor Anatolii Sobchak for slander, RFE/RL's St. Petersburg
correspondent reported on 19 June. In an interview recently published in
"Sovershenno sekretno," Sobchak alleged that members of St. Petersburg's
so-called Tambov criminal group work in a company run by Yakovlev's wife and
boast that the governor is "their man." Sobchak told RFE/RL that he was only
repeating allegations made public by Anatolii Ponedelko, who heads the St.
Petersburg and Leningrad Oblast branch of the Interior Ministry. However,
speaking to RFE/RL, Ponedelko confirmed only that the Procurator-General's
Office is investigating the case. Yakovlev defeated Sobchak in a June 1996
election. Also on 19 June, Interior Minister Kulikov told an RFE/RL
correspondent in Moscow that Sobchak is himself under criminal investigation
by the Procurator-General's Office, but Kulikov did not specify the nature of
the investigation.

CAMPAIGN SCANDAL IN NIZHNII NOVGOROD. State Duma deputy and Communist-backed
gubernatorial candidate Gennadii Khodyrev has charged that the Carnegie
Endowment's Moscow center is financing the gubernatorial campaign of Nizhnii
Novgorod Mayor Ivan Sklyarov, an RFE/RL correspondent in Nizhnii Novgorod
reported on 19 June. Sklyarov, the favorite to win the race, and is supported
by former governor Boris Nemtsov. Anatolii Nekrasov, the chairman of the
oblast electoral commission, denied Khodyrev's claims. Nekrasov gave RFE/RL
copies of all five candidates' financial declarations, which show no foreign
contributors to Sklyarov's campaign. Sklyarov has reported collecting about
1.5 billion rubles ($260,000) so far, while Khodyrev has declared only about
one-third of that amount in campaign contributions.

BANKRUPTCY OFFICIAL ACCUSED OF TAX EVASION. Deputy Procurator-General Yurii
Semin has accused Petr Karpov, deputy head of the Federal Bankruptcy
Administration, of evading taxes by not declaring income totaling $150,000,
Interfax reported on 19 June. Semin said the Procurator-General's Office has
informed the tax police about the case. Karpov was recently released from
custody pending trial for allegedly taking a 5 million ruble ($870) bribe in
1994. Some observers have argued that the case against him is politically
motivated (see "RFE/RL Newsline," 30 May and 4 June 1997). Responding to the
latest accusation, Karpov said law-enforcement officials in Saratov Oblast
confiscated the $150,000 when he was first arrested on the bribery charges in
July 1996. He said he had already explained that he acquired the money by
selling a family apartment and receiving a bank loan to buy a house.

SECURITY SERVICE TO INVESTIGATE "BLACK TUESDAY" CASE. The Federal Security
Service is to investigate whether Russian officials abused their authority to
make money out of the 11 October 1994 crash of the ruble, Interfax reported on
19 June, citing an unnamed law enforcement official. The ruble lost about a
quarter of its value on "Black Tuesday," prompting calls for the resignation
of the government and an eventual cabinet reshuffle, although the Duma failed
to pass a vote of no confidence in the government.

SAFE SEX CAMPAIGN LAUNCHED IN MOSCOW. The Russian government and the French
charity Medicins sans Frontiers have launched a television and billboard
advertising campaign in Moscow to help combat the spread of AIDS, Reuters
reported on 19 June. The advertisements, which feature the slogan "Safe Sex,
My Choice," are aimed at young people and may eventually be brought to other
Russian cities. The rate of HIV infection in Russia has increased dramatically
in recent years (see "RFE/RL Newsline," 29 May 1997).

TRANSCAUCASUS AND CENTRAL ASIA

UZBEK PRESIDENT ON RESOLVING NAGORNO-KARABAKH ISSUE. Islam Karimov on 19 June
said at a joint news conference with Azerbaijani President Heidar Aliev that
there cannot be "two Armenian states in the Caucasus," Interfax reported.
Karimov described Baku's position on the settlement of the Nagorno-Karabakh
conflict as correct and fair. Azerbaijan is demanding restoration of its
sovereignty over the disputed enclave. Aliev, who was wrapping up an official
visit to Tashkent, said Azerbaijani-Uzbek relationships have reached "new
heights" and that the two presidents share views on "numerous" international
issues. A total of 19 bilateral agreements were singed during his visit.

TURKMEN PRODUCTION IN DECLINE. The State Statistics Committee has released
data showing that in the first five months of 1997, industrial production
dropped by 32.7% compared with the same period last year, according to the
Russian daily "Delovoi Mir" on 19 June. While the gas and gas refining
industries registered an increase of 1.8% and 100%, respectively, this was
insufficient to offset declines in output in the electricity sector (19.6%) ,
the chemical and petrochemical industries (25.1%), and cotton (25%). Reduction
in supplies of natural gas to several CIS states that have not yet paid their
debts account for a 44% decrease in natural gas output. Gasoline and diesel
fuel production also dropped 29.7% and 12.4%, respectively.




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